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EXHIBIT 10.60
EXCHANGE RIGHTS AGREEMENT
This Exchange Rights Agreement (this "Agreement") is made as of October
23, 1997 among Oasis Residential, Inc., a Nevada corporation (the "Managing
Member"), Oasis Martinique, LLC, a Delaware limited liability company (the
"Company"), and each Unitholder (as hereinafter defined) listed on the signature
page attached hereto.
WHEREAS, pursuant to the Contribution Agreement (as hereinafter
defined), simultaneous with the execution and delivery of this Agreement, the
Managing Member is making a certain capital contribution to the Company and the
Original Members (as hereinafter defined) and the Managing Member are entering
into the LLC Agreement (as hereinafter defined); and
WHEREAS, as a material inducement to, and in consideration of, the
Original Members' entry into the transactions contemplated by the immediately
preceding paragraph, the Managing Member has agreed to grant to each Unitholder
certain rights to exchange their LLC Units (as hereinafter defined) in
accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions.
The following terms shall have the following meanings:
"Act" means the Delaware Limited Liability Company Act, as set forth in
Title 6 of the Delaware Code, as the same shall be in effect at the relevant
time.
"Adjustment Factor" means 1.00; provided, however, the Adjustment
Factor shall be subject to adjustment, from time to time, as described in
Section 3 below.
"Appraisal" means the following procedure:
(a) within ten (10) days following any event triggering an Appraisal,
the Managing Member shall notify (the date of the notification being
referred to herein as the "Notification Date") the Unitholder(s) of the
determination by the Managing Member of the value of the Appraisal subject
and such information as the Unitholder(s) shall reasonably need to
determine the value of the Appraisal subject, to the extent the same has
not previously been supplied to the Unitholder(s);
(b) the Unitholder(s) shall have the right to contest such
determination, and if no agreement on the value of the Appraisal subject
reached within twenty (20) days following the Notification Date, then
within ten (10) days following the end of such twenty-day period (the
"Notification Period"), the Managing Member shall designate in a notice to
the Unitholder(s) the name of a Person selected to act as its appraiser;
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(c) within ten (10) days after the Notification Period, the
Unitholder(s) (acting by majority, if applicable) shall appoint a second
Person to act as his, her or its (their) appraiser;
(d) the appraisers thus appointed shall (i) within five (5) days
following the appointment of the appraiser for the Unitholder(s), select a
third appraiser (and if no such appraiser shall have been selected within
such five (5) day period, the Managing Member or the Unitholder(s) may
request the American Arbitration Association (or any successor organization
thereto) to select an appraiser) and (ii) within twenty (20) days following
the appointment of the appraiser for the Unitholder(s), determine the fair
market value of the Appraisal subject; provided, however, that if either
party shall have failed to appoint his, her or its appraiser within the
periods set forth in (b) and (c) above, or if either party's appraiser
shall not have determined the value of the Appraisal subject within the
twenty (20) day period set forth above, then, in the first instance the
determination by the timely appointed appraiser shall be final and, in the
second instance, the determination of the appraiser who has made a timely
determination shall be final;
(e) if the two (2) appraisers have made their determinations within
such twenty (20) day period, then
(i) if the difference between the amounts so determined does not
exceed ten percent (10%) of the lesser of such amounts, the appraisal
value shall be fifty percent (50%) of the sum of the amounts so
determined; and
(ii) if the difference between the amounts so determined equals or
exceeds ten percent (10%) of the lesser of such amounts, the two (2)
appraisers shall make a good faith effort to reduce the difference
between the amounts so determined to less than ten percent (10%) of the
lesser of such amounts; and
(I) if such reduction is achieved within seven (7) days
following the end of the twenty (20) day appraisal period, the fair
market value of the Appraisal subject shall be fifty percent (50%)
of the sum of the amounts so determined, and
(II) if such reduction is not achieved within seven (7) days
following the end of the twenty (20) day appraisal period, (A) the
two (2) appraisers shall, within the following five (5) days,
appoint the third appraiser selected pursuant to paragraph (c)
above and (B) the third appraiser shall, within twenty (20) days of
his appointment, designate one (1) of the two (2) amounts
determined by the two (2) appraisers, respectively, as the fair
market value of the Appraisal subject;
(f) the Managing Member, on the one hand, and the Unitholder(s) on
the other hand, shall pay the fees and expenses of the appraiser appointed
by it and them, respectively, and one-half (1/2) of the fees and expenses
of the third appraiser and one-half (1/2) of all other costs and expenses
incurred in connection with each Appraisal;
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(g) all appraisers must have at least five (5) years of experience
with respect to appraisals of the kind required under this Agreement.
For purposes of this definition of "Appraisal," if the Appraisal is
triggered by the exercise of a Unitholder's put rights as herein provided, the
term "Unitholder(s)" shall refer to the Exercising Unitholder(s); in all other
cases, the term "Unitholder(s)" shall refer to all Unitholder(s).
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Los Angeles, California, Las Vegas, Nevada or New
York, New York are authorized or required by law to close.
"Cash Consideration" means, with respect to an Exercising Unitholder,
the excess, if any, of (i) the product of (a) the number of Tendered Units and
(b) the Unit Cash Amount as of the Tender Date over (ii) the product of (c) the
number of REIT Shares, if any, delivered to such Exercising Unitholder pursuant
to Section 4 and (d) the current market price per REIT Share as determined
pursuant to paragraph (e) of Section 3, as of the Tender Date.
"Charter" means the Articles of Incorporation of the Managing Member,
as amended, supplemented or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time or any successor statute thereto, as interpreted by the
applicable Regulations thereunder. Any reference to a specific section or
sections of the Code shall be deemed to include a reference to any corresponding
provision of future law.
"Company" means Oasis Martinique, LLC, a Delaware limited liability
company.
"Contribution Agreement" means that certain Contribution Agreement,
dated as of the date hereof, by and between the parties hereto and to which a
form of this Agreement is attached as an exhibit.
"Delivery Date" means that date which is twelve (12) Business Days
after the applicable Tender Date; provided; however, that notwithstanding the
foregoing, in the event that on such Tender Date an Appraisal is required in
connection with the exercise of the put rights, the Delivery Date shall in no
event be earlier than five (5) Business Days after the conclusion of that
Appraisal.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder, all as the same shall be in effect at the relevant time.
"Exercise Notice" means a notice of a Unitholder of exercise of his,
her or its put rights as herein provided in the form of Exhibit B attached
hereto.
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"Exercising Unitholder(s)" means any Unitholder(s) exercising his, her
or its (their) put rights pursuant to this Agreement.
"LLC Agreement" means the Amended and Restated Limited Liability
Company Agreement of the Company, attached as Exhibit "G" to the Contribution
Agreement, as the same may be amended from time to time.
"LLC Unit" shall have the meaning ascribed to such term in the LLC
Agreement.
"Member" means any member of the Company.
"No Put Period" means the period expiring at 11:59 p.m., Los Angeles
Time, on December 24, 1998.
"Original Members" means ISCO, a California general partnership, and
IFT Properties, Ltd., a California limited partnership.
"Managing Member" means Oasis Residential, Inc., a Nevada corporation.
"Person" means any individual, partnership, corporation, trust,
unincorporated organization, or any other entity or a government or agency or
political subdivision thereof.
"REIT Share" means, subject to the provisions of Section 3(b), a share
of the Managing Member's common stock, par value $.01 per share.
"REIT Shares Number" means that number of REIT Shares equal to the
product of (a) the Tendered Units and (b) the then applicable Adjustment Factor.
"Selected Index" means the Vanguard Index 500 Fund, or one of the
following indices selected by the holders of a majority of the LLC Units making
such selection: the Xxxxxx 1000 Fund (SNXFX) or the Fidelity Spartan U.S. Equity
Index Fund (FUSEX).
"Tender Date" means the date an Exercise Notice is received by the
Managing Member.
"Tendered Units" shall mean the LLC Units tendered pursuant to the
Exercise Notice.
"Transferee" means any Person to whom one or more LLC Units which were
initially owned by an Original Member have been Transferred. The term
"Transferee" shall include each transferee, assignee and distributee (whether or
not in liquidation of the distributing Person), transferee of a transferee
through one or more predecessor transfers and, by way of illustration and not
limitation, each Person who becomes a transferee as a result of a secured
creditor exercising its rights under a security agreement and/or applicable law,
in each case, whether the transfer to the transferee was effected with or
without consideration, by gift or bequest, by operation of law or otherwise.
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"Transfer" when used with respect to an LLC Unit for purposes of this
Agreement, means any sale, assignment, bequest, conveyance, devise, gift
(outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange
(other than upon exercise of a Unitholder's put rights hereunder), transfer or
other disposition or act of alienation, whether voluntary or involuntary or by
operation of law, provided, however, that any grant of a security interest shall
constitute a Transfer only upon exercise by the secured creditor of its rights
under a security agreement and/or applicable law. The terms "Transferred" and
"Transferring" have correlative meanings.
"Unit Cash Amount" means, with respect to any exercise by a Unitholder
of his, her or its put rights hereunder, that amount of cash equal to the
product of (a) the current market price per REIT Share as determined pursuant to
paragraph (e) of Section 3, as of the Tender Date and (b) the then applicable
Adjustment Factor, as of the Tender Date.
"Unitholders" means those persons who are "Holders" (as that term is
defined in the LLC Agreement.
2. Put Rights. After the No Put Period, Unitholders may exercise their
put rights hereunder, in whole or in part, at any time and from time to time, by
delivery to the Managing Member of an Exercise Notice. With each Exercise
Notice, an Exercising Unitholder shall tender no less than one thousand (1,000)
LLC Units or, if such Unitholder holds less than one thousand (1,000) LLC Units,
no less than all of his, her or its LLC Units. Each Unitholder shall have put
rights hereunder as long as such Unitholder holds any LLC Units. Each LLC Unit
tendered shall be exchanged, at the election of the Managing Member exercised,
in its sole and absolute discretion, pursuant to Section 6, for REIT Shares,
Cash Consideration, or a combination thereof, in accordance with Sections 4 or
5, as the case may be. Such exchange shall be deemed to have been effected
immediately prior to the close of business on the Tender Date, and at such time
the rights of the Exercising Unitholder as the holder of the LLC Units tendered
shall cease in accordance with, and to the extent of, the provisions of Section
8(b) and in the event that (a) the Managing Member elects to deliver REIT
Shares, the Person or Persons in whose name or names any certificate or
certificates for REIT Shares shall be issuable upon such exchange shall be
deemed to have become the holder or holders of record of the shares represented
thereby, or (b) the Managing Member elects to deliver cash, the Person or
Persons entitled to such cash shall have the irrevocable right to receive the
applicable Cash Consideration on the applicable Delivery Date. The Managing
Member shall also have the right to call LLC Units in exchange for REIT Shares,
Cash Consideration, or a combination thereof hereunder pursuant to the
provisions of Section 8.6 of the LLC Agreement.
3. Adjustment of Adjustment Factor. The Adjustment Factor shall be
subject to adjustment (rounded to the nearest one-hundredth (1/100)), and the
Unitholder's right to receive REIT Shares shall be subject to modification, from
time to time on or prior to the relevant Tender Date as follows:
(a) In case the Managing Member shall at any time (i) split or
subdivide its outstanding REIT Shares, or (ii) effect a reverse stock
split or otherwise
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combine its outstanding REIT Shares, or (iii) pay a dividend in REIT
Shares to holders of REIT Shares, the Adjustment Factor in effect
immediately prior to such action shall be adjusted so that the holder
of any LLC Unit thereafter tendered for exchange shall be entitled to
receive that number of REIT Shares which he would have received
immediately following such action had such LLC Unit been tendered for
exchange immediately prior thereto. Any such adjustment shall become
effective immediately after the record date in the case of a dividend
and shall become effective immediately after the effective date in the
case of a split, subdivision or combination.
(b) In case of any reclassification or change in the REIT Shares
(other than a change from no par value to par value, or from par value
to no par value, or a change in par value, or as a result of a split,
subdivision or combination of shares), or in case of any consolidation
or merger of the Managing Member into another corporation or other
entity, or in the case of any merger of another corporation or other
entity into the Managing Member (other than a merger with a corporation
or other entity in which merger the Managing Member is the continuing
corporation and which does not result in any reclassification,
conversion, exchange or cancellation of outstanding REIT Shares), or in
case of any sale or conveyance to another corporation or other entity
of all or substantially all of the property of the Managing Member, the
holder of each LLC Unit then outstanding shall have the right
thereafter, subject to the terms and conditions of this Agreement, to
exchange such LLC Unit only into the kind and amount of shares of stock
and other securities, property and cash receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by
a holder of the number of REIT Shares into which such LLC Unit might
have been exchanged immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance; and, if necessary, effective
provision shall be made in the Articles of Incorporation or other
governing document(s) of the resulting or surviving corporation or
other entity or otherwise so that the provisions set forth in this
Agreement shall thereafter be applicable, as nearly as practicable, to
any such other shares of stock and other securities, property and cash
(subject, in the case of cash, to further adjustment as described in
the final sentence of this paragraph (b)) deliverable upon exchange of
the LLC Units remaining outstanding; and any such resulting or
surviving corporation or other entity shall expressly assume the
obligation to deliver, upon the exercise of the put rights as herein
provided, such shares, securities, property or cash as the holders of
the LLC Units remaining outstanding may be entitled to and to make
provisions for the protection of the put rights as herein provided. In
case securities or property other than REIT Shares shall be issuable or
deliverable upon exchange as aforesaid, then all references to REIT
Shares in this paragraph (b) shall be deemed to apply, so far as
appropriate and as nearly as practicable, to such other securities or
property. In case cash shall be deliverable pursuant to this paragraph
(b) upon exchange, the amount of cash payable to an Exercising
Unitholder shall be that amount of cash that would be payable to such
Exercising Unitholder if he, she or it had exercised the put rights
hereunder immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance, which amount shall be
increased or decreased by the percentage increase or decrease (rounded
to the nearest one-thousandth (1/1000) of one percent (1%)), as the
case may be, of the applicable price per share (with adjustment, if
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appropriate, to reflect any splits, combinations or similar changes) of
the Selected Index from the date of such reclassification, change,
consolidation, merger, sale or conveyance to the Tender Date.
(c) In case the Managing Member shall issue to all holders of its
REIT Shares rights or warrants entitling them to subscribe for or
purchase, or issue to such holders securities convertible into, REIT
Shares at a price per share less than the then current market price per
REIT Share (as determined in accordance with the provisions of
paragraph (e) below) at the record date mentioned below (each such
right or warrant, a "Distributed Right"), the Adjustment Factor shall
be adjusted so that the same shall equal the factor determined by
multiplying the Adjustment Factor in effect immediately prior thereto
by a fraction, of which the numerator shall be the number of REIT
Shares outstanding on the record date mentioned below plus the number
of additional REIT Shares offered for subscription or purchase under
the Distributed Rights, and of which the denominator shall be the
number of REIT Shares outstanding on such record date plus the number
of REIT Shares which the aggregate offering price of the total number
of REIT Shares so offered under the Distributed Rights would purchase
at such current market price per REIT Share. Such adjustment shall be
made whenever any Distributed Rights are issued, and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such Distributed Rights, provided,
however, that as any Distributed Rights issued to holders of the
Managing Member's REIT Shares expire or become no longer exercisable,
the Adjustment Factor shall be adjusted as of the date of such
expiration or the date such Distributed Rights become no longer
exercisable, as the case may be, to reflect a reduced number of shares
offered for subscription to purchase under the Distributed Rights.
(d) In case the Managing Member shall distribute to all holders of
REIT Shares, (i) shares of its capital stock other than REIT Shares,
(ii) evidence of its indebtedness or assets (excluding cash dividends
or distributions) or (iii) rights or warrants (each a "Right") to
subscribe or purchase shares of its capital stock other than REIT
Shares, securities convertible into shares of its capital stock other
than REIT Shares, evidences of indebtedness or assets (excluding those
referred to in paragraph (c) above), then in each such case the
Adjustment Factor in effect thereafter shall be determined by
multiplying the Adjustment Factor in effect immediately prior thereto
by a fraction, of which the numerator shall be the total number of
outstanding REIT Shares multiplied by the then current market price per
REIT Share (as determined in accordance with the provisions of
paragraph (e) below) on the record date mentioned below, and of which
the denominator shall be the total number of outstanding REIT Shares
multiplied by such current market price per REIT Share, less the fair
market value (as determined by Appraisal), of the capital stock, assets
or evidences of indebtedness so distributed or of such Rights. Such
adjustment shall be made whenever any such distribution is made, and
shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution,
provided, however, that as any Rights distributed to holders of the
Managing Member's REIT Shares expire or become no longer exercisable,
the Adjustment Factor shall be adjusted as of the date of such
expiration or
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the date such Rights become no longer exercisable, as the case may be,
to reflect a reduced number of Rights.
(e) For the purpose of any computation under this Agreement, the
current market price per REIT Share at any date shall be deemed to be
the average of the daily closing prices for the ten (10) consecutive
business days commencing fifteen (15) business days before the day in
question. The closing price for each day shall be the closing price of
REIT Shares on the principal national securities exchange on which the
REIT Shares are then trading or if such REIT Shares are not then so
trading, the closing price of the REIT Shares as shown by the National
Association of Securities Dealers, Inc. National Market or, if no such
closing price is available, at the average of the closing bid and asked
prices of such REIT Shares in the over-the-counter market, as shown by
the National Association of Securities Dealers, Inc., Automated
Quotation System, (or comparable system) or in the absence of any of
the foregoing, the fair market value as determined by Appraisal.
4. Delivery of REIT Shares. In the event that the Managing Member
elects, pursuant to Section 6, to deliver to the Exercising Unitholder REIT
Shares, the Managing Member shall deliver to the Exercising Unitholder, on the
Delivery Date, the number of REIT Shares equal to such Exercising Unitholder's
REIT Shares Number (or, on the Delivery Date, such lesser number of REIT Shares
as the Managing Member shall elect in the Response Notice), together with the
Cash Consideration. The REIT Shares so delivered shall be duly authorized,
validly issued, fully paid and nonassessable, freely transferable, and free of
any claim, pledge, lien, encumbrance or restriction (including, without
limitation, any restriction under federal or state securities laws), other than
those contained in the Charter, any claim, pledge, lien, encumbrance or
restriction contained in an agreement to which such exercising Unitholder is
party or otherwise imposed as a result of actions taken by the Unitholder. The
Managing Member shall pay any documentary, stamp or similar issue or transfer
tax due on the issue of REIT Shares upon exchange; provided, however, that the
Exercising Unitholder shall pay any such tax which is due because such shares
are to be issued in a name other than that of such Exercising Unitholder. No
fractional REIT Share shall be issued on any exercise of a put right, but in
lieu thereof, the Managing Member shall pay therefor in cash an amount equal to
the current market price of such fractional interest on the Tender Date as
determined in accordance with the provisions of paragraph (e) of Section 3.
5. Delivery of Cash Consideration. In the event that (a) the Managing
Member elects, pursuant to Section 6, to deliver to the Exercising Unitholder(s)
cash in whole or in part, or (b) the Managing Member elects to deliver REIT
Shares (or is deemed to have elected to deliver REIT Shares as provided in
Section 6) and, for any reason whatsoever, does not deliver the REIT Shares
Number (or such lesser number of REIT Shares elected by the Managing Member
pursuant to Section 4) that meets the requirements of Section 4 on or before the
Delivery Date, the Managing Member shall deliver to the Exercising
Unitholder(s), on the Delivery Date, the Cash Consideration (which shall be
computed by deeming the product described in part (ii) of the definition of Cash
Consideration to be zero) in immediately available United States funds.
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6. Managing Member's Response Notice. Promptly upon receipt of an
Exercise Notice from an Exercising Unitholder (and in no event later than ten
(10) Business Days after such receipt), the Managing Member shall deliver to the
Exercising Unitholder a completed and duly executed Response Notice in the form
of Exhibit A attached hereto. The Managing Member shall simultaneously deliver
to the Company a copy of such duly executed Response Notice. In the event the
Managing Member fails to deliver to the Exercising Unitholder a duly executed
Response Notice within such ten (10) Business Day period, the Managing Member
shall be deemed to have irrevocably elected to deliver to the Exercising
Unitholder, on the Delivery Date, the REIT Shares Number in accordance with
Section 4.
7. Delivery; Distributions.
(a) On the Delivery Date, the Managing Member shall deliver to the
Exercising Unitholder (or any other Person designated in the Exercise
Notice), pursuant to the instructions in the Exercise Notice and in
accordance with the Response Notice, the REIT Shares Number (or such
lesser number of REIT Shares determined and delivered in accordance
with Section 4) and Cash Consideration required to be delivered
pursuant to this Agreement. If any REIT Shares are so delivered, the
Managing Member shall deliver a stock certificate or certificates
evidencing the REIT Shares to be issued and registered in the name of
the Exercising Unitholder or his, her or its designee.
(b) The Managing Member's obligation to deliver REIT Shares and the
Cash Consideration, as the case may be, pursuant to this Agreement is
not subject to any conditions or rights of offset or rebate whatsoever,
except that the Managing Member shall be entitled to offset against
such REIT Shares and the Cash Consideration , and the Cash
Consideration (plus and thereafter, to the extent then necessary, such
REIT Shares) shall be reduced by, the aggregate amount payable, if any,
by the Exercising Unitholder to the Company pursuant to Sections
5.1.C(2), 4.6.B, 8.8, 10.2.B, 10.2.C, 10.2.D, and 10.4 of the LLC
Agreement at the time of delivery of the REIT Shares and the Cash
Consideration, to the extent such amount has not been paid, offset, or
funded by the Exercising Unitholder by the Delivery Date (collectively,
the "LLC Offset"). For purposes of the LLC Offset, a REIT Share shall
be deemed to have a value equal to the Unit Cash Amount of a REIT Share
as of the applicable Tender Date.
8. Rights as a Member.
(a) Prior to the Tender Date, each Exercising Unitholder shall
continue to own such Unitholder's tendered LLC Units, and will continue
to be treated as the holder of such tendered LLC Units for all purposes
of the LLC Agreement, including, without limitation, for purposes of
voting, consent, allocations and distributions. Prior to the Tender
Date, the Exercising Unitholder shall have no rights as a shareholder
of the Managing Member with respect to the REIT Shares issuable in
connection with the exercise of the put rights. If the Tender Date is a
record date for the payment of a dividend by the Managing Member, the
Exercising Unitholder shall be treated as a holder of any REIT Shares
issuable pursuant hereto on the Tender Date and not as a Unitholder of
the
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tendered LLC Units (and (i) the Exercising Unitholder shall be
entitled to receive the dividend payable on such REIT Shares with
respect to such record date and (ii) the Managing Member shall also pay
to the Exercising Unitholder the excess, if any, of (A) the dividend
which would be payable on the REIT Shares Number with respect to such
record date over (B) the amount of the dividend to which the Exercising
Unitholder is entitled under (i) above). The intention of the preceding
parenthetical is that, if the Tender Date is such a record date, the
Exercising Unitholder be entitled to receive an amount equal to the
full dividend which would be payable with respect to such record date
on the REIT Shares Number (no more and no less), whether the Exercising
Unitholder receives all cash, all REIT Shares, or a combination thereof
for the Tendered Units.]
(b) As of the Tender Date, (i) the Unitholder shall have no further
claim or interest in and with respect to the LLC Units tendered by such
Exercising Unitholder, except for all rights, title, interests, claims,
causes of action, and the like of such Exercising Unitholder which are
specified in Section 8.5 of the LLC Agreement, (ii) the Unitholder
shall be released from all liabilities arising at any time out of such
Unitholder's LLC Units tendered and/or such Unitholder's status and
interest as a Unitholder as a result thereof, except as otherwise
specified in the LLC Agreement, and (iii) the Units tendered by such
Exercising Unitholder shall be canceled.
9. Consistent Treatment as Sale. Each of the Managing Member, any
Exercising Unitholder and the Company shall treat the exercise of an Exercising
Unitholder's put rights hereunder for federal income tax purposes as a sale of
the Exercising Unitholder's Tendered Units to the Managing Member.
10. Representations and Warranties of Unitholders. On each date that an
Exercising Unitholder delivers to the Managing Member an Exercise Notice, such
Exercising Unitholder represents and warrants to the Managing Member as follows:
(a) The Unitholder has the authority to exercise all rights and
powers under this Agreement, including the right and power to deliver
the Exercise Notice, tender LLC Units and receive all consideration
provided hereunder, and has obtained all consents, approvals, permits
and other clearances required pursuant to any agreement to which such
Unitholder is a party to complete the transactions contemplated
hereunder. This Agreement and the performance of all of the
transactions by the Unitholder contemplated hereunder have been duly
authorized, and this Agreement has been duly executed and delivered by
the Unitholder.
(b) Upon receipt by the Unitholder of the REIT Shares Number (or
such lesser number of REIT Shares determined and delivered in
accordance with Section 4) and the Cash Consideration, the Unitholder
will convey good and marketable title to each and every LLC Unit
tendered hereunder, free and clear of any liens, claims, encumbrances,
restrictions, interests or rights of any other Person, except for the
restrictions on transfer of LLC Units described in the LLC Agreement or
under federal or state securities laws or otherwise imposed as a result
of actions taken by the Managing Member.
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(c) The Unitholder (other than a Unitholder who has not acquired any
LLC Unit in a transaction constituting a "sale" within the meaning of
Section 2(3) of the Securities Act or who is a Family Member (as such
term is defined in the LLC Agreement) of the transferor and has
acquired the LLC Units by gift) is an "accredited investor" within the
meaning of Rule 501(a) of Regulation D under the Securities Act. The
Unitholder acknowledges that he, she or it has the financial ability to
bear the economic risk of his, her or its investment in the Managing
Member, has adequate means for providing for his, her or its current
needs and personal contingencies and has no need for liquidity with
respect to the investment in the Managing Member.
11. Representations and Warranties of the Managing Member. On the date
hereof, and on each date that a Unitholder receives REIT Shares or other
securities or cash under this Agreement, the Managing Member represents and
warrants to the Exercising Unitholder (or any other Person designated in the
Exercise Notice as a Person to receive REIT Shares) as follows:
(a) The Managing Member is duly incorporated and validly existing,
in good standing, under the laws of the state of Nevada, with full
power and authority to exercise all rights and powers under this
Agreement, including the right and power to deliver the Response
Notice, issue REIT Shares, deliver any and all consideration to be
delivered hereunder and to acquire the LLC Units tendered pursuant to
this Agreement, and has obtained all consents, approvals, permits and
other clearances required to complete the transactions contemplated
hereunder. This Agreement and the performance of all of the
transactions contemplated hereunder have been duly authorized, and this
Agreement has been duly executed and delivered, by the Managing Member.
(b) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms or provisions of or constitute a default
under any statute, any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which the Managing Member
is a party or by which it is bound, the Managing Member's Charter or
By-laws, or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Managing Member or any of
its subsidiaries or any of their properties, except for any such
breach, violation or default that would not adversely affect the
ability of the Managing Member to perform its obligations under this
Agreement.
(c) The REIT Shares issuable upon exchange of the LLC Units have
been duly authorized and reserved for issuance and, when issued upon
any such exchange, will be validly issued, fully paid and
nonassessable, freely transferable, and free of any claim, pledge,
lien, encumbrance or restriction (including, without limitation, any
restriction under federal or state securities laws), other than those
contained in the Charter, any claim, pledge, lien, encumbrance or
restriction contained in an agreement to which such Exercising
Unitholder is a party or otherwise imposed as a result of actions taken
by
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the Unitholder. The shareholders of the Managing Member have no
preemptive rights with respect to any shares of capital stock of the
Managing Member, including, without limitation, the REIT Shares
issuable hereunder.
12. Covenants of the Managing Member. The Managing Member covenants and
agrees as follows:
(a) As long as any LLC Units are outstanding, the Managing Member
agrees (i) to have, at all times, authorized and reserved for issuance
that number of REIT Shares equal to the product of (I) the number of
outstanding LLC Units and (II) the Adjustment Factor then in effect and
(ii) to take all actions necessary (x) so that any REIT Shares issued
upon the exercise of any put rights hereunder shall be duly authorized,
validly issued, fully paid and nonassessable, freely transferable, and
free of any claim, pledge, lien, encumbrance or restriction (including,
without limitation, any restriction under federal or state securities
laws), other than any pledge, lien, encumbrance or restriction
contained in an agreement to which such Exercising Unitholder is a
party or otherwise imposed as a result of actions taken by the
Unitholder, and (y) to maintain, at all times, its status as a "real
estate investment trust" as defined in Section 856 of the Internal
Revenue Code of 1986, as amended (except if there is (A) a
consolidation or merger of the Managing Member into another corporation
or other entity which is not such a real estate investment trust or (B)
a sale or conveyance to another corporation or other entity of all or
substantially all of the property of the Managing Member).
(b) During the existence of the put rights, the Unitholders shall
receive in a timely manner all reports filed by the Managing Member
with the Securities and Exchange Commission and all communications
transmitted from time to time by the Managing Member to its
stockholders generally.
13. Indemnification. The Managing Member agrees to indemnify each
Unitholder and his, her or its affiliates, officers, directors, partners,
employees, agents and representatives against all losses, claims, damages,
liabilities and expenses whatsoever and reasonable fees and expenses of counsel
incurred in investigating, preparing or defending against, and aggregate amounts
paid in settlement of any litigation, action, investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether or
not a party, or any claim whatsoever based upon, arising from or in connection
with the breach of any representation or warranty made by the Managing Member
under this Agreement. Each Exercising Unitholder agrees to indemnify the
Managing Member and his, her or its affiliates, officers, directors, partners,
employees, agents and representatives against all losses, claims, damages,
liabilities and expenses whatsoever and reasonable fees and expenses of counsel
incurred in investigating, preparing or defending against, and aggregate amounts
paid in settlement of any litigation, action, investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case whether or
not a party, or any claim whatsoever based upon, arising from or in connection
with the breach of any representation or warranty made by the Exercising
Unitholder under this Agreement. The procedures for indemnification set forth in
Section 8.8 D(ii) of the LLC Agreement shall govern any claim for under this
Section 13.
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14. Miscellaneous.
(a) Governing Law. This Agreement shall be governed, construed and
enforced in all respects by the laws of the State of California,
without regard to choice of law rules.
(b) Entire Agreement. This Agreement and the provisions of the
forms of Exercise Notice and Response Notice attached hereto, together
with the LLC Agreement, the Contribution Agreement, and all other
agreements and documents specifically referred to herein, or therein,
constitute the full and entire understanding and agreement with regard
to the subjects hereof and thereof, and supersede any previous
agreements regarding the matters covered herein and therein. In the
event of any inconsistency between this Agreement and any other
agreement, this Agreement shall govern.
(c) Notices. Each notice, demand, request, request for approval,
consent, approval, disapproval, designation or other communication
(each of the foregoing being referred to herein as a "notice") required
or desired to be given or made under this Agreement shall be in writing
(except as otherwise provided in this Agreement) and shall be effective
and deemed to have been received (a) when delivered in person or (b)
when sent by facsimile transmission with receipt acknowledged (i) if to
a Unitholder, to the Unitholder at such Unitholder's address set forth
in Exhibit A hereto or, if not set forth in Exhibit A, in the records
of the Company, or at such other address or to such telefax number as
such Unitholder shall have furnished to the Managing Member and the
Company in writing, or (ii) if to the Managing Member or the Company,
to the Managing Member or the Company at the address of the Managing
Member's principal executive offices and addressed to the attention of
the President, or at such other address or to such telefax number as
the Managing Member or the Company shall have furnished to the
Exercising Unitholder in writing.
(d) Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full
force and effect without said provision; provided, however, that no
such severability shall be effective if it materially changes the
economic benefit of this Agreement to any Person.
(e) Construction. Words such as "herein," "hereinafter," "hereof"
and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise
requires.
(f) Effectiveness and Binding Effect. This Agreement shall become
effective upon the execution and delivery of counterparts by the
Managing Member, the Company and the Original Members, and shall
thereafter be binding upon and inure to the
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benefit of the Managing Member, the Company and the Unitholders and
their respective successors, assigns, heirs, executors, administrators
and legal representatives.
(g) Additional Holders of LLC Units. If the Company issues LLC
Units in accordance with and subject to the consents required by the
LLC Agreement to Persons who are not parties to this Agreement, the
Managing Member may elect to cause such Persons to become parties to
this Agreement, in which case (a) this Agreement shall be amended
without the consent of any other party to make such Persons parties to
this Agreement and (b) such Persons shall execute and deliver a
counterpart of this Agreement.
(h) Headings. Headings are for descriptive purposes only and shall
not control or alter the meaning of this Agreement as set forth in the
text.
(i) Attorneys' Fees. In the event of any litigation among the
parties hereto to enforce or interpret any provision hereof, the
unsuccessful party to such litigation covenants and agrees to pay the
successful party all costs and expenses reasonably incurred, including,
without limitation, reasonable attorneys' fees, including any such fees
and expenses relating to the enforcement of any judgment.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement of
the date first written above.
OASIS RESIDENTIAL, INC.,
a Nevada corporation
By:
-----------------------------------
President
OASIS MARTINIQUE, LLC,
a Delaware limited liability company
By: Oasis Residential, Inc., a Nevada
corporation, its Managing Member
By:
-------------------------------
President
UNITHOLDERS
ISCO, a California general partnership
By: AMERICAN REALPROP, a California
general partnership
By:
---------------------------
Xxxxxx Xxxxx,
Authorized Signature
IFT PROPERTIES, LTD., a California
limited partnership
By:
-------------------------------
Xxxxxx Israel, General Partner
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EXHIBIT A
RESPONSE NOTICE
--------------------, ------
[Date]
TO: [Exercising Unitholder] and [Company]
On and subject to the terms, provisions and conditions of that certain
Exchange Rights Agreement dated as of September ___, 1997 among Oasis
Residential, Inc., a Nevada corporation (the "Managing Member"), Oasis
Martinique, LLC, a Delaware limited liability company (the "Company"), and each
of the Unitholders who are parties thereto, the Managing Member hereby elects to
acquire ___________ LLC Units from _________________________ (the "Unitholder")
pursuant to that certain Exercise Notice delivered to the Managing Member by the
Unitholder, by delivery to the Unitholder (or any Person designated in the
Exercise Notice) of the following number of REIT Shares, with the balance, if
any, due upon acquisition of the LLC Units payable as Cash Consideration :
________________ REIT Shares
Oasis Residential, Inc.,
a Nevada corporation
By: ________________________________
Its: _______________________________
Print Name: ________________________
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EXHIBIT B
EXERCISE NOTICE
--------------------, ------
[Date]
To: Oasis Residential, Inc.
On and subject to the terms, provisions and conditions of that certain
Exchange Rights Agreement ("Agreement") dated as of September ___, 1997 among
Oasis Residential, Inc., a Nevada corporation (the "Managing Member"), Oasis
Martinique, LLC, a Delaware limited liability (the "Company"), and each of the
Unitholders who are parties thereto, the undersigned Unitholder hereby exercises
such Unitholder's put rights pursuant to the Agreement by tendering ______ LLC
Units described below.
DESCRIPTION OF LLC UNITS
Name(s) and LLC Unit Certificate(s) Enclosed
Address(es) of (Attach additional list if necessary)
Unitholder(s)
LLC Units
LLC Unit Represented
Certificate by LLC Unit LLC Units
Number(s) Certificate(s) Being Tendered
----------- -------------- --------------
Unless otherwise indicated, all LLC Units, evidenced by any LLC Unit
Certificate(s) delivered to the Managing Member are being tendered.
The undersigned Unitholder represents, warrants and agrees that:
(a) as of the date hereof, the undersigned Unitholder, to the best of
its knowledge after reasonable inquiry, owns, directly, indirectly, and by
attribution under Code Section 318 (as modified by Code Section 856(d)(5)), not
more than the following number(s) of shares of each class and/or type of
securities (e.g., common stock, preferred stock, convertible securities,
options, warrants, and/or other rights to acquire securities) of the Managing
Member:
CLASS AND/OR TYPE OF SECURITY NUMBER
----------------------------- ------
---------------------------------------- ------------------------------
---------------------------------------- ------------------------------
---------------------------------------- ------------------------------
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(b) as of the date hereof, the undersigned Unitholder, to the best of
its knowledge after reasonable inquiry, owns, directly, indirectly, and by
attribution under Code Section 544 (as modified by Code Section 856(h)), not
more than the following number(s) of shares of each class and/or type of
securities (e.g., common stock, preferred stock, convertible securities,
options, warrants, and/or other rights to acquire securities) of the Managing
Member:
CLASS AND/OR TYPE OF SECURITY NUMBER
----------------------------- ------
---------------------------------------- ------------------------------
---------------------------------------- ------------------------------
---------------------------------------- ------------------------------
Dated: Name of Unitholder:
----------------------------
------------------------------------
------------------------------------
(Signature of Unitholder)
------------------------------------
(Street Address)
------------------------------------
(City) (State) (Zip)
------------------------------------
(Social Security Number or
identifying number)
Signature Guaranteed by:
------------------------------------
Issue REIT Shares in the name of
------------------------------------
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