<PAGE>   1

                                                                   EXHIBIT 10.58

                             CONTRIBUTION AGREEMENT

                                  BY AND AMONG

                            OASIS RESIDENTIAL, INC.,
                              A NEVADA CORPORATION


                                       AND


                            COSTA MESA PARTNERS, LLC,
                      A DELAWARE LIMITED LIABILITY COMPANY

                                      ISCO,
                        A CALIFORNIA GENERAL PARTNERSHIP,


                              IFT PROPERTIES, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP,


                                  EDWARD ISRAEL


                                       AND


                                  ROBERT COHEN


<PAGE>   2

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>
                                                                                          PAGE
                                                                                          ----
<S>                                                                                       <C> 
ARTICLE I. DEFINITIONS.......................................................................1

ARTICLE II. THE TRANSACTION; CLOSING.........................................................7

        Section 2.1. Time and Place..........................................................7
        Section 2.2. Actions of OAS At the Closing...........................................7
        Section 2.3. Actions of the Company, ISCO and IFT at Closing.........................7
        Section 2.4. Transaction Taxes and Closing Costs.....................................8
        Section 2.5. Credit and Proration....................................................9
        Section 2.6. Condition Precedent....................................................11

ARTICLE III. COVENANTS......................................................................11

        Section 3.1. Employee Matters.......................................................11
        Section 3.2. Further Assurances.....................................................11
        Section 3.3. Retained Pre-Closing Assets............................................12

ARTICLE IV. REPRESENTATIONS AND WARRANTIES..................................................12

        Section 4.1. Representations and Warranties of ISCO, IFT, Israel and Cohen..........12
        Section 4.2. Representations and Warranties Regarding the Property..................17
        Section 4.3. Knowledge Defined......................................................18
        Section 4.4. Representations and Warranties of OAS..................................18
        Section 4.5. Exclusive Representations and Warranties...............................20

ARTICLE V. INDEMNIFICATION..................................................................20

        Section 5.1. Indemnification........................................................20

ARTICLE VI. BROKERAGE COMMISSIONS...........................................................22

ARTICLE VII. MISCELLANEOUS..................................................................23

        Section 7.1. Public Disclosure......................................................23
        Section 7.2. Assignment.............................................................23
        Section 7.3. Notices................................................................23
        Section 7.4. Modifications..........................................................24
        Section 7.5. Entire Agreement.......................................................24
        Section 7.6. Counterparts...........................................................24
        Section 7.7. Facsimile Signatures...................................................24
        Section 7.8. Severability...........................................................24
        Section 7.9. Applicable Law.........................................................24
        Section 7.10. Captions..............................................................24
        Section 7.11. Construction..........................................................24
        Section 7.12. Exhibits..............................................................24
        Section 7.13. Date of Performance...................................................24
        Section 7.14. Nature of Representation..............................................25
</TABLE>

                                       i

<PAGE>   3

                                    Exhibits
                                    --------

"A"     -      Disclosure Schedule
"B"     -      Operating Agreements
"C"     -      Rent Roll
"D"     -      Description of Land
"E"     -      Press Release
"F"     -      Leases
"G"     -      Amended and Restated Limited Liability Company Agreement
"H"     -      Exchange Rights Agreement
"I"     -      Permitted Encumbrances
"J"     -      Continuing Guaranty


                                       ii

<PAGE>   4

                             CONTRIBUTION AGREEMENT


               THIS CONTRIBUTION AGREEMENT (the "Agreement") is entered into as
of October 23, 1997 (the "Effective Date"), by and among OASIS RESIDENTIAL,
INC., a Nevada corporation ("OAS"), COSTA MESA PARTNERS, LLC, a Delaware limited
liability company (the "Company"), ISCO, a California general partnership
("ISCO"), IFT Properties, Ltd., a California limited partnership ("IFT"), Edward
Israel ("Israel"), and Robert Cohen ("Cohen") (collectively, OAS, the Company,
ISCO, IFT, Israel, and Cohen are hereinafter sometimes referred to as the
"Parties," and each of them, a "Party").

               WHEREAS, the Company was formed prior to the Effective Date and
succeeded to the ownership of the Property (as defined herein) by Costa Mesa
Partners, a California general partnership (the "Partnership") upon the
conversion of the Partnership into a limited liability company; and

               WHEREAS, ISCO and IFT are the sole members of the Company; and

               WHEREAS, Israel or members of Israel's family own beneficially,
either directly or indirectly, interests in IFT and Cohen or members of Cohen's
family own beneficially, either directly or indirectly, interests in ISCO; and

               WHEREAS, the Parties desire that OAS make an investment in the
Company upon the terms and conditions and with the effect described in this
Agreement;

               NOW, THEREFORE, in consideration of and subject to the mutual
promises, agreements, terms and conditions made herein, the Parties agree as
follows:


                                   ARTICLE I.
                                   DEFINITIONS
                                   -----------

               The following capitalized terms, when used in this Agreement,
shall have the meanings specified below. Any of those terms, unless the context
otherwise requires, may be used in the singular or plural, depending upon the
reference.

               "ACTION" shall mean any action, claim, suit, litigation,
proceeding, labor dispute, arbitral action, governmental audit, inquiry,
criminal prosecution, investigation or unfair labor practice charge or
complaint.

               "AFFILIATE" means with respect to any Person, any Person directly
or indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, "control" when used with respect to
any Person means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.

<PAGE>   5

               "AGREEMENT" has the meaning set forth in the preamble of this
Agreement.

               "AMENDED LLC AGREEMENT" means that certain Amended and Restated
Limited Liability Company Agreement in the form attached hereto as Exhibit "G."

               "ASSETS" means all of the right, title and interest in and to the
business, properties, assets and rights of any kind, whether tangible or
intangible, real, personal or mixed and constituting, or used or useful in
connection with, or related to, the business of the Company or in which the
Company has any interests, including, without limitation, all of the Company's
right, title and interest in and to the Property.

               "BOND FEES" means all credit enhancement fees, issuer fees,
remarketing fees, compliance monitoring fees, trustee fees (including periodic
expenses of the trustee), rating agency fees, rebate arbitrage fees and other
fees or costs associated with the Bonds.

               "BONDS" means the Orange County Housing Authority Apartment
Development Revenue Bonds, Issue BB of 1985, as amended or reissued.

               "CLAIM" has the meaning set forth in Section 5.1(d) hereof.

               "CLAIM NOTICE" has the meaning set forth in Section 5.1(d)
hereof.

               "CLOSING" has the meaning set forth in Section 2.1 hereof.

               "CLOSING DATE" has the meaning set forth in Section 2.1 hereof.

               "CLOSING PLACE" has the meaning set forth in Section 2.1 hereof.

               "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.

               "COHEN" has the meaning set forth in the preamble of this
Agreement.

               "COMPANY" has the meaning set forth in the preamble of this
Agreement.

               "CONTRACTS" has the meaning set forth in Section 4.1(h).

               "DAMAGES" has the meaning set forth in Section 5.1(a) hereof.

               "DEFAULT" means (a) a breach of or default under any Contract or
other agreement, document or instrument, (2) the occurrence of an event that
with or without the passage of time or the giving of notice or both would
constitute a breach of or default under any Contract or other agreement,
document or instrument, or (3) the occurrence of an event that with or without
the passage of time or the giving of notice or both would give rise to a right
of termination, renegotiation or acceleration under any Contract or other
agreement, document or instrument.

                                       2
<PAGE>   6

               "DEVELOPER NOTE" means that certain Amended Promissory Note dated
April 9, 1986 in the original principal amount of $55,000,000 payable by Costa
Mesa Partners, a California general partnership, to the order of the Orange
County Housing Authority, California, evidencing the obligation to repay a loan
made by the Orange County Housing Authority, California to Costa Mesa Partners
with the proceeds of the Bonds.

               "DISCLOSURE SCHEDULE" means the schedule attached hereto as
Exhibit "A" which sets forth the exceptions to the representations and
warranties of the Company, Israel and Cohen contained in Article IV hereof and
certain other information called for by this Agreement. The Disclosure Schedule
shall be deemed to include all other matters expressly disclosed in this
Agreement, including the Exhibits to this Agreement, and in the Amended LLC
Agreement, including the Exhibits to the Amended LLC Agreement.

               "EFFECTIVE DATE" has the meaning set forth in the preamble of
this Agreement.

               "EMPLOYEE MATTERS" means any failure by the Company or the
Partnership to comply in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment, wages, hours of work and occupational safety and health, or to avoid
engaging in any unfair labor practices as defined in the National Labor
Relations Act or other applicable law, ordinance or regulation.

               "ENVIRONMENTAL LAW" means any and all federal, state, municipal
and local laws, statutes, ordinances, rules, regulations, guidances, policies,
orders, decrees, judgments, whether statutory or common law, as amended from
time to time, now or hereafter in effect, or promulgated, pertaining to the
environment, public health and safety and industrial hygiene, including the use,
generation, manufacture, production, storage, release, discharge, disposal,
handling, treatment, removal, decontamination, clean-up, transportation or
regulation of any Hazardous Substance, including the Clean Air Act, the Clean
Water Act, the Toxic Substances Control Act, the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and Recovery
Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Safe Drinking
Water Act and the Occupational Safety and Health Act.

               "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.

               "EXCHANGE AGREEMENT" means that certain Exchange Rights Agreement
by and among OAS, the Company, ISCO and IFT in the form attached hereto as
Exhibit "H."

               "GOVERNMENT AUTHORITY" means as to a certain Person, the United
States, the state, county, city and political subdivision in which the Person
operates or in which any of the Person's assets are located or which exercise
jurisdiction over the Person or any of its assets, and any court administrator,
agency, department, commission, board, bureau or instrumentality of any of them
which exercises jurisdiction over the Person or its assets.



                                       3

<PAGE>   7

               "GOVERNMENT REQUIREMENT" means any law, ordinance, order, rule,
regulation, decree or similar edict of a Government Authority, including without
limitation Environmental Laws, occupational, health, safety, zoning and other
land use ordinances and regulations.

               "HAZARDOUS SUBSTANCE" means collectively, any petroleum,
petroleum product or byproduct or any substance, material or waste regulated or
listed pursuant to any Environmental Law.

               "IFT" has the meaning set forth in the preamble of this
Agreement.

               "IMPROVEMENTS" means the buildings, structures, fixtures and
other improvements affixed to or located on the Land.

               "INTANGIBLES" means the (i) Operating Agreements, and (ii) all
assignable existing warranties and guaranties (express or implied) issued to
Company in connection with the Improvements or the Personal Property, and (iii)
all assignable existing permits, licenses, approvals and authorizations issued
by any Government Authority in connection with the Property.

               "ISCO" has the meaning set forth in the preamble of this
Agreement.

               "ISRAEL" has the meaning set forth in the preamble of this
Agreement.

               "LAND" means that certain parcel of land situated in the City of
Costa Mesa, Orange County, California more particularly described in Exhibit
"D", together with all rights and appurtenances pertaining to such property.

               "LEASE" means as to a party, any and all of such party's right
title and interest in and to the leases, licenses, and occupancy agreements
covering all or a portion of the Real Property.

               "LIABILITIES" means any direct or indirect liability,
indebtedness, obligation, commitment, expense, claim, deficiency, guarantee or
endorsement of any type, whether accrued, absolute, contingent, matured,
unmatured or otherwise.

               "LLC UNIT" means a fractional share of the Membership Interests
of all Members (except the managing member of the Company) of the Company.

               "MEMBERS" means the Persons owning Membership Interests in the
Company.

               "MEMBERSHIP INTEREST" means an ownership interest in the Company
representing a Capital Contribution by a Member and includes any and all
benefits to which the holder of such a Membership Interest may be entitled as
provided in the Amended LLC Agreement.

               "NOTICES" shall have the meaning set forth in Section 7.3 hereof.

               "OAS" has the meaning set forth in the preamble of this
Agreement.

                                       4
<PAGE>   8

               "OAS'S BROKER" has the meaning set forth in Article VI hereof.

               "OPERATING AGREEMENTS" means all assignable contracts and
agreements listed and described on Exhibit "B" attached hereto relating to the
upkeep, repair, maintenance or operation of the Land, Improvements, or Personal
Property.
               "ORGANIZATIONAL DOCUMENTS" means collectively, as applicable, the
articles or certificate of incorporation, certificate of limited partnership or
certificate of limited liability company, by-laws, partnership agreement,
operating company agreement, limited liability company agreement, trust
agreement, statement of partnership, fictitious business name filings and all
other organizational documents relating to the creation, formation or existence
of a business entity, together with resolutions of the board of directors,
partner or member consents, trustee certificates, incumbency certificates and
all other documents or instruments approving or authorizing the transactions
contemplated in this Agreement.

               "PARTIES" has the meaning set forth in the preamble of this
Agreement.

               "PARTNERSHIP" has the meaning set forth in the preamble of this
Agreement.

               "PARTY" has the meaning set forth in the preamble of this
Agreement.

               "PERMITTED ENCUMBRANCES" means collectively, (i) liens for Taxes,
assessments and governmental charges not yet past due or delinquent, (ii) the
reservations, restrictions and other exceptions to title as set forth in the
Grant Deed to the Property, and (iii) such other title exceptions set forth on
Exhibit "I" hereto.

               "PERSON" means an individual or a corporation, partnership,
trust, unincorporated organization, association, limited liability company or
other entity.

               "PERSONAL PROPERTY" means all tangible personal property owned by
the Company located upon the Land or within the Improvements, including, without
limitation, any and all appliances, furniture, carpeting, draperies and
curtains, tools and supplies, and other items of personal property owned by the
Company, located on and used exclusively in connection with the operation of the
Land and the Improvements.

               "PROPERTY" means all property associated with the Villa
Martinique apartment community located at 2855 Pinecreek Drive, Costa Mesa,
California, and more particularly described herein as, collectively, the Land,
the Improvements, the Personal Property, the Leases, the Rents, the Security
Deposits and the Intangibles.

               "PROPERTY VALUATION" means Seventy-Two Million Dollars
($72,000,000.00).

               "REAL PROPERTY" means the Land and the Improvements.

               "REGULATIONS" means the applicable income tax regulations under
the Code, whether such regulations are in proposed, temporary or final form, as
such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).

                                       5
<PAGE>   9

               "RELATED DOCUMENTS" means all other agreements or documents, the
execution or completion and delivery of which are reasonably contemplated by
this Agreement, whether by specific references or otherwise, including without
limitation the Amended LLC Agreement and the Exchange Agreement.

               "RENT ROLL" means the rent roll attached hereto as Exhibit "C".

               "RENTS" means all sums due under the Leases of the Property.

               "REPRESENTATIVES" means, with respect to any Person, that
Person's directors, officers, employees, agents, partners, advisors, lenders,
accountants or independent contractors.

               "RETAINED PRE-CLOSING ASSETS" means all of the Partnership's and
the Company's right, title and interest in and to (i) all receivables from third
parties existing as of the close of business on the day prior to the Closing
Date (excluding any receivables for which ISCO and IFT shall receive a credit in
the computation of the Credit and Proration Amount pursuant to Section 2.5
hereof), (ii) all claims against third parties (including Israel, Cohen, IFT and
ISCO and their respective attorneys and Representatives) which arise out of
conditions or events which both (aa) existed or occurred prior to the Closing
Date and (bb) are unrelated to the Property and the construction, maintenance,
operation, use and condition of the Property (excluding any claims for which
ISCO and IFT shall receive a credit in the computation of the Credit and
Proration Amount to Section 2.5 hereof) and (iii) all other claims against
Israel, Cohen, ISCO or IFT or their attorneys or Representatives other than
those claims, if any, arising out of the transactions provided for in this
Agreement or the Related Documents.

               "SEC DOCUMENTS" has the meaning set forth in Section 5.3(f)
hereof.

               "SECURITY DEPOSITS" means any and all security deposits held
pursuant to the Leases of the Real Property.

               "SUBSIDIARY" means with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.

               "TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Section 59A of
the Code), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value-added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty (or penalties), or addition thereto, whether disputed or not. The term
"Tax" also includes any amounts payable pursuant to any tax sharing agreement to
which any relevant Person is liable as a successor or pursuant to contract.

               "TBC" means Tokai Bank of California.

                                       6
<PAGE>   10

               "TERMINATED EMPLOYEES" has the meaning set forth in Section
3.1(b).


                                   ARTICLE II.
                            THE TRANSACTION; CLOSING
                            ------------------------

               Section 2.1. Time and Place. The consummation of the transaction
contemplated hereby (the "Closing") shall be held at the offices of Latham &
Watkins, 650 Town Center Drive, Costa Mesa, California (the "Closing Place"), on
the date hereof (the "Closing Date").

               Section 2.2. Actions of OAS At the Closing. At the Closing, OAS
shall:

                      (a) deliver duly executed counterparts of the Amended LLC
Agreement and the Exchange Agreement to the other parties thereto;

                      (b) transfer to the Company, by wire transfer or other
immediately available funds, the amount of one million dollars ($1,000,000) as a
capital contribution to the Company as contemplated by Section 4.1 of the
Amended LLC Agreement, to be placed in the Reserve for Capital Improvements (as
defined in the Amended LLC Agreement) and disbursed in accordance with the
Amended LLC Agreement;

                      (c) deliver to the Company, ISCO and IFT a copy of (i)
OAS's Articles of Incorporation and By-laws, certified by the secretary of OAS
to be true and correct copies, (ii) a Certificate of Good Standing of OAS from
the Secretary of State of Nevada, and (iii) resolutions of the Board of
Directors of OAS, certified by the secretary of OAS to be a true and correct
copy, authorizing the transactions contemplated by this Agreement, the Exchange
Agreement and the Amended LLC Agreement;

                      (d) deliver to ISCO and IFT a copy of the Continuing
Guaranty executed by OAS in the form attached hereto as Exhibit "J",

                      (e) cause the Letter of Credit provided for by the Amended
LLC Agreement to be issued, in all material respects, in the form attached
thereto;

                      (f) transfer to ISCO and IFT, by wire transfer or other
immediately available funds, the Credit and Proration Amount, if any, calculated
to be due to ISCO and IFT pursuant to Section 2.5; and

                      (g) execute and deliver such additional documents as shall
be reasonably required to consummate the transactions contemplated by this
Agreement.

               Section 2.3. Actions of the Company, ISCO and IFT at Closing. At
the Closing, the Company, ISCO and IFT shall:

                      (a) deliver to OAS a copy of the Certificate of Conversion
of Costa Mesa Partners, certified by the Secretary of State of Delaware, into
the Company, and further 


                                       7
<PAGE>   11

certified by Israel and Cohen as being a true, correct and complete copy thereof
and to be the only agreement, document or instrument executed in connection with
the conversion of Costa Mesa Partners into the Company;

                      (b) deliver to OAS a copy of (i) the Certificate of
Formation of the Company, certified by the Secretary of State of Delaware, (ii)
a Certificate of Good Standing of the Company from the Secretary of State of
Delaware and the Secretary of State of California, and (iii) a copy of the
limited liability company agreement of the Company and all amendments and
supplements thereto, certified by Israel and Cohen as being true, correct and
complete copies thereof;

                      (c) deliver to OAS duly executed counterparts of the
Amended LLC Agreement and the Exchange Agreement to the extent it or he is a
party thereto;

                      (d) deliver to OAS a Chicago Title Insurance Company
policy of title insurance (or a commitment to issue such a policy) satisfactory
to OAS showing good and indefeasible title to the Property in fee simple vested
in the Company as of the Closing, subject only to the Permitted Encumbrances;

                      (e) transfer to OAS, by wire transfer or other immediately
available funds, the Credit and Proration Amount, if any, calculated to be due
to OAS pursuant to Section 2.5;

                      (f) have delivered to OAS, before the Closing Date
guaranties by IFT and ISCO, in accordance with Section 8.4.C of the Amended LLC
Agreement, of the obligations of OAS under the guaranty described in Section
2.2(d); and

                      (g) execute and deliver such additional documents as shall
be reasonably required to consummate the transactions contemplated by this
Agreement.

               Section 2.4. Transaction Taxes and Closing Costs.

                      (a) ISCO, IFT, Israel and Cohen shall pay the fees of any
counsel or accountant representing them or representing, prior to the Closing,
the Partnership or the Company, whether individually or collectively.

                      (b) ISCO, IFT, Israel and Cohen shall also pay the
following costs and expenses:

                             (i) the cost of the Title Policy; and

                             (ii) the cost of all documentary transfer taxes or
        other real property transfer impositions (if any) which are associated
        with, related to, or a result of, the transaction contemplated by this
        Agreement or Related Documents, whether such costs are assessed or
        imposed prior to, at, or after the Closing Date.

                                       8
<PAGE>   12

                      (c) OAS shall pay the fees of any counsel or accountant
representing it in connection with the transactions contemplated by this
Agreement. OAS shall also pay the fees for OAS's Broker identified in Article VI
hereof.

                      (d) All costs and expenses incident to the transactions
contemplated by this Agreement and the Closing and not specifically described
above, shall be paid by the Party incurring the same.

               Section 2.5. Credit and Proration.

                      (a) All income and expenses of the Property shall be
apportioned as of 12:01 a.m. on the Closing Date based on whether such income or
expenses are attributable to period(s) before or after the Closing Date. Such
prorated items include without limitation the following:

                             (i) all Rents;

                             (ii) taxes and assessments (including personal
        property taxes on the Personal Property) levied against the Property;

                             (iii) utility charges respecting the Property (if
        any), such charges to be apportioned at the Closing on the basis of the
        most recent meter reading occurring prior to the Closing (dated not more
        than fifteen (15) days prior to the Closing) or, if unmetered, on the
        basis of a current bill for each such utility;

                             (iv) all amounts payable under the Operating
        Agreements;

                             (v) all other sums or charges payable by the
        Tenants under the Leases which accrue prior to the Closing but are not
        then due and payable, shall be prorated as of the Closing;

                             (vi) any other operating expenses or other items
        pertaining to the Property, including (x) Property employee salaries,
        expenses, reimbursements, bonuses or other benefits paid or payable, (y)
        interest paid or payable on the Bonds, and (z) Bond Fees.

                      (b) Notwithstanding anything contained in Section 2.5(a)
hereof:

                             (i) At the Closing, (x) ISCO and IFT shall credit
        to OAS the sum of the amount of (A) any Security Deposits actually held
        by the Company, ISCO, IFT, Israel or Cohen, pursuant to the Leases (to
        the extent such Security Deposits have not been applied against
        delinquent Rents or otherwise as provided in the Leases, and OAS will
        use reasonable efforts to collect delinquent Rents relating to periods
        prior to the Closing Date and apply them in the manner provided in
        Section 2.5(b)(ii) hereof) and (B) any Rents which have been prepaid for
        any period after the month in which the Closing


                                       9
<PAGE>   13

        occurs, and (y) OAS shall credit to ISCO and IFT all deposits posted
        with utility companies or any other provider of goods or services
        serving the Property, if any;

                             (ii) Unpaid and delinquent Rent collected by OAS or
        ISCO, IFT, Israel or Cohen after the Closing Date shall be delivered as
        follows: (x) if ISCO, IFT, Israel or Cohen collects any unpaid or
        delinquent Rent for the Property, ISCO, IFT, Israel and Cohen, jointly
        and severally, shall, within fifteen (15) days after the receipt
        thereof, deliver to OAS any such Rent to which OAS is entitled hereunder
        relating to the Closing Date and any period thereafter; (y) if OAS
        collects any unpaid or delinquent Rent from the Property, OAS shall,
        within fifteen (15) days after the receipt thereof, deliver to ISCO or
        IFT any such Rent which ISCO and IFT is entitled to hereunder relating
        to the period prior to the Closing Date. The Parties agree that all Rent
        received by the Parties after the Closing Date shall be applied first to
        actual out-of-pocket costs of collection incurred by the collecting
        Party; second, to Rents due from the tenant for the month in which such
        payment is received; third, to Rents and other tenant charges
        attributable to any period after the Closing which are past due on the
        date of receipt; and finally, to Rents and other tenant charges
        delinquent as of the Closing Date. OAS will not be obligated to
        institute any legal proceedings, including an action for unlawful
        detainer, or other collection procedures to collect delinquent Rents;

                             (iii) At the Closing, ISCO and IFT shall credit to
        OAS any amounts which have been prepaid or credited to ISCO, IFT, Israel
        or Cohen pursuant to any Operating Agreements (including without
        limitation that certain Lease Agreement dated December 6, 1995 with Web
        Service Co., Inc.) for any period after the Closing; and

                             (iv) There shall be no credits or debits with
        respect to principal payments on the Developer Note or Bond principal or
        sinking fund payments.

                      (c) Except as otherwise provided herein, any revenue or
expense amount which cannot be ascertained with certainty as of the Closing Date
shall be prorated on the basis of the Parties' reasonable estimates of such
amount, and shall be the subject of a final proration sixty (60) days after the
Closing, or as soon thereafter as the precise amounts can be ascertained. Each
Party shall promptly notify the other Parties when it or he becomes aware that
any such estimated amount has been ascertained. Once all revenue and expense
amounts have been ascertained, OAS shall prepare, and certify as correct, a
final proration statement which shall be subject to the approval of ISCO, IFT,
Israel and Cohen. Upon acceptance and approval of any final proration statement
submitted by OAS, such statement shall be conclusively deemed to be accurate and
final.

                      (d) The provisions of this Section 2.5 shall survive the
Closing.

               The net amount, if any, which results from the credit and
proration calculations pursuant to subsections (a) and (b) of this Section 2.5
shall be referred to herein as the "Credit and Proration Amount."



                                       10
<PAGE>   14

               Section 2.6. Condition Precedent.

               It shall be a condition precedent to the performance of the
obligations of the Parties at the Closing that Israel, Cohen, ISCO and IFT shall
have received, in a form acceptable to them, a release from Tokai Bank of all
obligations of Israel, Cohen, ISCO and IFT (if any) under the Developer Note and
under any guarantee of the Developer Note executed by them. Any such release
shall in no event be effective unless and until the Closing actually occurs.


                                  ARTICLE III.
                                    COVENANTS
                                    ---------

               Section 3.1. Employee Matters.

                      (a) The Company shall not be obligated to continue the
employment of any employee of the Company following the Closing. Subject to the
provisions of Section 3.1(b), the Company shall be obligated to pay, without
reimbursement, the salary and other benefits payable to any employee who OAS
elects to cause the Company to continue to employ following the Closing. Nothing
in this Agreement shall confer upon any employee of the Company any right with
respect to continued employment by the Company nor shall anything in this
Agreement interfere with the right of the Company, at its sole cost and without
reimbursement (except as provided in Section 3.1(b)), to terminate the
employment of any employee of the Company at any time, with or without cause, or
restrict the Company in any way in modifying the terms and conditions of the
employment of any employee of the Company.

                      (b) Set forth in the Disclosure Schedule is a list of the
employees of the Company identified by OAS as the Employees whose employment by
the Company will be terminated by the Company prior to, or as soon as
practicable following, the Effective Date (the "Terminated Employees"). The
Company shall give notice of termination of employment to the Terminated
Employees prior to the Closing. ISCO, IFT, Israel and Cohen jointly and
severally agree to pay (or reimburse the Company, promptly upon request by the
Company), for all severance and termination payments and benefits paid to the
Terminated Employees (other than payments of normal salary for services rendered
through the date of termination of employment, which shall be paid by the
Company without reimbursement). ISCO, IFT, Israel and Cohen shall be entitled to
determine the monetary terms of any Termination of a Terminated Employee if the
amounts payable to the Terminated Employee in connection with the termination
are paid directly to the Employee by ISCO, IFT, Israel or Cohen.

               Section 3.2. Further Assurances. ISCO, IFT, OAS and the Company
agree after the Closing (i) to use all commercially reasonable good faith
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement, the Amended LLC Agreement and
the Exchange Agreement, (ii) to execute any documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the 



                                       11
<PAGE>   15

transactions contemplated hereunder or thereunder, and (iii) to cooperate with
each other in connection with the foregoing.

               Section 3.3. Retained Pre-Closing Assets. The Parties to this
Agreement intend and agree that all of the Retained Pre-Closing Assets shall be
solely the property of ISCO and IFT and, accordingly, the Company hereby
quitclaims and assigns to ISCO and IFT, without representation or warranty of
any kind or nature, all right, title and interest it may have, if any, in and to
the Retained Pre-Closing Assets.


                                   ARTICLE IV.
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

               Section 4.1. Representations and Warranties of ISCO, IFT, Israel
and Cohen. ISCO and IFT hereby, jointly and severally, make the following
representations and warranties to OAS as of the Effective Date and Closing Date
and Israel and Cohen hereby, jointly and severally, make the representations and
warranties set forth below in Section 4.1(q), (r), (s) and (t) as of the
Effective Date and Closing Date:

                    (a) Organization and Authority. The Company has been duly
organized and is validly existing under the laws of the State of Delaware and is
duly qualified to transact business as a foreign company and is in good standing
in the State of California. The Company has the full right and authority to
enter into this Agreement, the Amended LLC Agreement and the Exchange Agreement
and to consummate or cause to be consummated the transactions contemplated by
this Agreement. The Partnership has been converted into the Company pursuant to
Section 18-214 of the Delaware Limited Liability Company Act;

                    (b) Members. ISCO and IFT are the only Members of the
Company and no other person or entity (other than Riveroaks Newport Associates,
a California limited partnership, to the extent provided in, and only to the
extent provided in, the Settlement Agreement, as that terms is defined in
Section 8.8 of the Amended LLC Agreement) has any Membership Interest in the
Company and no person or entity has any option or right to acquire any
membership interest in or right of first refusal or preemptive right with
respect to the transfer or issuance of any membership interest in the Company.

                    (c) Subsidiaries. The Company has no Subsidiaries and does
not own any stock, partnership interest, joint venture interest or any other
security or ownership interest issued by any other Person;

                    (d) Authorization. Each of the Company, ISCO and IFT has all
requisite power, authority and capacity to execute and deliver this Agreement,
the Amended LLC Agreement and the Exchange Agreement, to perform its respective
obligations hereunder and thereunder and to consummate the transactions
contemplated hereunder and thereunder. The execution, delivery and performance
of this Agreement, the Amended LLC Agreement and the Exchange Agreement by the
Company, ISCO and IFT and the consummation by the Company, ISCO and IFT of the
transactions contemplated hereunder and thereunder have been duly and 



                                       12
<PAGE>   16

validly authorized by all necessary action on the part of the Company, ISCO and
IFT and no other proceedings on the part of the Company, ISCO or IFT are
necessary to authorize the execution, delivery and performance of this
Agreement, the Amended LLC Agreement and the Exchange Agreement or the
consummation of transactions contemplated hereunder and thereunder. This
Agreement has been duly executed and delivered by the Company, ISCO and IFT and
constitutes, and the Amended LLC Agreement and Exchange Agreement, when executed
and delivered by the Company, ISCO and IFT, as contemplated hereby will
constitute, the legal, valid and binding obligations of the Company, ISCO and
IFT, enforceable against the Company, ISCO and IFT in accordance with their
respective terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and except as the
availability of equitable remedies may be limited by the application of general
principles of equity (regardless of whether such equitable principles are
applied in a proceeding at law or in equity).

                    (e) No Conflict or Violation. The execution and delivery of
this Agreement, the Amended LLC Agreement and the Exchange Agreement by the
Company, ISCO and IFT does not and will not, and the performance by the Company,
ISCO and IFT of their respective obligations hereunder and thereunder and the
consummation by the Company, ISCO and IFT of the transactions pursuant hereto
and thereto will not (i) conflict with or violate its limited liability company
or partnership agreement or (ii) result in a violation or breach of or result in
a default under (or an event which with the giving of notice or the lapse of
time or both would constitute a default under) or require any consent, approval
or authorization under, or result in the creation of a lien or other encumbrance
on the Property pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company, ISCO or IFT is a party or by which the Company, ISCO or
IFT or the Property may be bound.

                    (f) Consents and Approvals. No consent, approval,
authorization or permit of, or declaration, filing or registration with any
governmental authority or any other Person, is required to be made or obtained
by the Company, ISCO or IFT in connection with the execution, delivery and
performance of this Agreement, or by ISCO or IFT in connection with the
execution, delivery and performance of the Amended LLC Agreement or the Exchange
Agreement, except as set forth on the Disclosure Schedule.

                    (g) No Undisclosed Liabilities. Except as set forth in the
Disclosure Schedule, the Company has no Liabilities.

                    (h) Contracts and Commitments. Except for the Contracts to
which the Company is a party (the "Contracts") set forth in the Disclosure
Schedule, the Company is not a party to any written or oral:

                             (i) contract, agreement, commitment or personal
        property lease which requires the Company to make payments thereunder in
        excess of $25,000;



                                       13
<PAGE>   17

                             (ii) contracts, agreements or commitments which
        have an unexpired term in excess of 12 months from the date hereof;

                             (iii) employment contracts, severance agreements or
        other contracts involving salary, other compensation or benefits
        (including, without limitation, provision of free living accommodations
        or accommodations at less than the current market rate or provision of
        automobiles, or relocation allowance, office allowances, cellular phones
        and credit cards) or bonus payments, severance payments or the creation
        of any liability to make payments to which any current or former
        employee of the Partnership or the Company is a party; or

                             (iv) contracts, agreements or commitments for the
        provision of services which, if terminated at anytime by the Company,
        would subject the Company or require the Company to pay damages,
        penalties, fees, compensation, termination payments or other amounts in
        excess of $5,000 for a single contract, agreement or commitment or
        $25,000 for all contracts, agreements and commitments; or

                             (v) contract, agreement, commitment or other
        arrangements with ISCO, IFT, Israel, Cohen or Affiliate thereof or
        Person related thereto.

                    (i) Litigation, Proceedings and Applicable Law. Except as
set forth in the Disclosure Schedule, there is no action, investigation, suit or
other proceeding pending or, to the best knowledge of Israel or Cohen,
threatened against or affecting the Partnership or the Company or any of the
Property or before any Government Authority or arbitrator which (i) if adversely
determined would have a material adverse effect on the Property, business,
condition (financial or otherwise), results of operations or prospects of the
Company taken as a whole, or (ii) could reasonably be expected to prevent or
substantially delay consummation of the transactions contemplated hereunder or
otherwise prevent the Company, ISCO, IFT, Israel or Cohen from performing its or
his obligations under this Agreement. Except as set forth in the Disclosure
Schedule, the Company is not in Default with respect to any judgment, order,
writ, injunction or decree of any Governmental Authority which could reasonably
be expected to have a material adverse effect on the Property, business,
condition (financial or otherwise), results of operations or prospects of the
Company taken as a whole. Except as set forth in the Disclosure Schedule, there
is no outstanding order, ruling, decree, judgment or stipulation by or with any
court, administrative agency, arbitration panel or other similar authority to
which the Partnership, the Company or the Property is subject, which adversely
affects or could adversely affect (i) the Property, business, condition
(financial or otherwise), results of operations or prospects of the Company or
(ii) the ability of the Parties to consummate the transactions contemplated by
this Agreement, the Amended LLC Agreement or the Exchange Agreement.

                    (j) Compliance with Law. Except as set forth in the
Disclosure Schedule, to the best knowledge of Israel and Cohen, (i) the Company
and the Partnership has complied and the Company is now in compliance with all
Government Requirements, except for failure to comply, if any, which
individually or in the aggregate do not, and, insofar as Israel and 


                                       14
<PAGE>   18

Cohen can reasonably foresee, in the future will not, have a material adverse
effect on the Property, business, condition (financial or otherwise), results of
operations or prospects of the Company, taken as a whole, (ii) no claims or
complaints have been received by the Partnership or the Company from any
Government Authorities or other Persons that the Partnership or the Company was
or is in violation of any Government Requirement and to the best knowledge of
Israel and Cohen, no such claims or complaints are threatened, and (iii) neither
the Partnership, ISCO, IFT, Israel, Cohen or the Company has received any notice
from any Government Authorities of any pending proceedings to take all or any
part of the Property by condemnation or right of eminent domain and, to the best
knowledge of Israel and Cohen, no such proceedings are threatened.

                    (k) Books and Records. To the best knowledge of ISCO and
IFT, the Company and the Partnership have made and kept books, records and
accounts which accurately reflect the respective activities of the Company and
the Partnership and the transactions and dispositions of their assets. To the
best knowledge of ISCO and IFT, neither the Company nor the Partnership has
engaged in any transaction, maintained any bank account or used any corporate
funds except for transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the Partnership and
the Company.

                    (l) Operating Agreements. The Operating Agreements listed on
Exhibit "B" are all of the agreements concerning the operation and maintenance
of the Property or affecting the Property under which the Company will be
obligated to pay or will be paid or receive in excess of Five Thousand Dollars
($5,000).

                    (m) Leases. To the best of their knowledge, the Rent Roll
attached hereto as Exhibit "C" is accurate in all material respects and lists
all of the Leases affecting the Property as of the date stated therein.

                    (n) Other Business. Neither the Partnership nor the Company
has conducted or conducts any business other than the construction, ownership,
development and operation of the Property located on the Land.

                    (o) Tax Matters.

                             (i) No Tax Payable by the Partnership or Company.
        There are no material unpaid Taxes arising from the operation of the
        Partnership's or the Company's business (or as a result of the
        Partnership or the Company succeeding to the Liabilities of any other
        Person by operation of law pursuant to a conversion, purchase of stock,
        merger, consolidation or similar transaction) during any period prior to
        the Closing Date for which the Company is or will become liable or which
        are or will become a lien against any of the Assets following the
        Closing Date other than Taxes which are not yet delinquent that are set
        forth on the Disclosure Schedule.

                             (ii) Tax Returns. True, complete and accurate
        copies of all of the federal and California Partnership income and
        franchise tax returns of the Partnership filed for 1996 and all years
        prior thereto have heretofore been delivered to OAS.

                                       15
<PAGE>   19

                             (iii) Tax Audits. Except as set forth on the
        Disclosure Schedule, neither the Partnership nor the Company has
        received from the Internal Revenue Service or from the Tax authorities
        of any state, county, local or other jurisdiction (i) any notice of
        underpayment of Taxes or other deficiency which has not been paid; (ii)
        any objection to any Tax return or report filed by the Partnership or
        the Company; or (iii) any notice of audit with respect to any Tax, nor
        is the Partnership or the Company currently the subject of any such
        audit. There are no outstanding agreements or waivers extending the
        statutory period of limitations applicable to any Tax return or report
        filed by either the Partnership or the Company.

                             (iv) Foreign Persons. Neither ISCO nor IFT is a
        "foreign person" within the meaning of Section 1445(f)(3) of the Code,
        and each of ISCO and IFT will furnish to OAS and the Company, if
        requested by OAS, an affidavit in form satisfactory to OAS confirming
        the same.

                             (v) Leases. Attached as Exhibit "F" is the standard
        form or forms of Lease to which the Company or the Partnership is a
        party and neither the Company nor the Partnership is a party to any
        Lease containing terms that differ in any material respect from the form
        or forms of Leases attached as Exhibit "F."

                             (vi) Partnership Status. True and correct copies of
        (i) the partnership agreement of the Partnership in effect immediately
        prior to conversion of the Partnership into the Company (the
        "Partnership Agreement") and (ii) each limited liability company
        agreement of the Company in effect during the existence of the Company
        (other than the Amended LLC Agreement) (collectively, the "Company
        Agreements") have been delivered to OAS. Neither the Partnership
        Agreement nor any of the Company Agreements has been amended or modified
        in any respect.

                             (vii) Other. Except as set forth on the Disclosure
        Schedule, neither the Partnership nor the Company has (i) applied for
        any Tax ruling or (ii) entered into a closing agreement with any Taxing
        authority.

                    (p) Employee Benefit Plans. Except as set forth in the
Disclosure Schedule, there are no employee benefit plans or arrangements
pursuant to which the Company has any liability or has had any liability within
the five years prior to the Closing Date, including without limitation, any
employee pension benefit plans, or plans and arrangements providing for welfare
benefits, retirement benefits, deferred compensation, severance compensation,
profit sharing bonuses or post retirement insurance pursuant to which the
Company has any liability or has had any liability with the five years prior to
the Closing Date. There is no entity that, together with the Company is, or
within the five years prior to the Closing Date was, required to be treated as a
single employer under Section 414 of the Code.

                    (q) Authority of Israel and Cohen. Each of Israel and Cohen
has all requisite power, authority and capacity to execute and deliver this
Agreement, to perform his respective obligations hereunder and to consummate the
transactions contemplated hereunder. This Agreement has been duly executed and
delivered by Israel and Cohen and constitutes the 


                                       16
<PAGE>   20

legal, valid and binding obligations of Israel and Cohen, enforceable against
the Israel and Cohen in accordance with its terms, except as such enforceability
may be limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally, and except as the availability of equitable remedies may be limited
by the application of general principles of equity (regardless of whether such
equitable principles are applied in a proceeding at law or in equity).

                    (r) No Conflict or Violation With Respect to Israel and
Cohen. The execution and delivery of this Agreement by Israel and Cohen does
not, and the performance by Israel and Cohen of their respective obligations
hereunder and the consummation by Israel and Cohen of the transactions pursuant
hereto will not, result in a violation or breach of or result in a Default under
or require any consent, approval or authorization under, or result in the
creation of a lien or other encumbrance on the Property pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Israel or Cohen is a party
or by which Israel or Cohen may be bound.

                    (s) Consents and Approvals. No consent, approval,
authorization or permit of, or declaration, filing or registration with any
governmental authority or any other Person, is required to be made or obtained
by Israel or Cohen in connection with the execution, delivery and performance of
this Agreement, except as set forth on the Disclosure Schedule.

                    (t) No Release. Neither the Partnership nor the Company has
released ISCO, IFT, Israel or Cohen or their Representatives or attorneys from
any claims arising out of the transactions provided for in this Agreement or the
Related Documents.

               Section 4.2. Representations and Warranties Regarding the
Property. Except for the representations and warranties of ISCO and IFT
contained in this Section 4.2, the Company, ISCO, IFT, Israel and Cohen have
made no representations or warranties, implied or express, regarding the
Property and OAS is accepting the Property in its "AS-IS-WHERE-IS" condition,
subject to any facts, circumstances, conditions and defects whether or not
capable of being observed or ascertained. Without limiting the generality of the
foregoing, except as expressly provided otherwise in this Section 4.2, the
Company, ISCO, IFT, Israel and Cohen expressly disclaim any representation or
warranty (implied or express) with respect to the condition of the Improvements
(and all of the mechanical, electrical, heating, plumbing and other aspects
thereof) and the manner of the construction of the Improvements, their fitness
for a particular use or whether any latent or patent defects exist. OAS, except
as expressly provided otherwise in this Section 4.2, expressly waives any claims
against the Company, ISCO, IFT, Israel and Cohen for construction defects,
whether latent or patent, in the Improvements and acknowledges that the Company,
ISCO, IFT, Israel and Cohen shall have no obligation of any kind to it to repair
or correct any such conditions or defects or to compensate OAS in any manner for
the same.

               OAS further acknowledges that it has heretofore undertaken, or
caused to be undertaken on its behalf, all such physical inspections,
examinations and reviews of the Property as it deems necessary or appropriate
under the circumstances and is strictly relying solely upon 


                                       17
<PAGE>   21

such inspections, examinations and reviews as well as the advice of its retained
professional consultants and legal counsel. By virtue of the foregoing, the OAS,
subject only to the representations and warranties of ISCO and IFT contained in
this Section 4.2, hereby assumes the full risk of any loss or damage occasioned
by any fact, circumstances, conditions or defects pertaining to the Property or
any portion or part thereof whether or not the same is capable of being observed
or ascertained.

               However, ISCO and IFT, jointly and severally, hereby expressly
represent and warrant to OAS that, to the best of their respective knowledge, as
of the Effective Date and Closing Date:

                    (a) Governmental Notice. Except as described in the
Disclosure Schedule, none of them has received written notice from any
governmental or quasi-governmental agency requiring the correction of any
condition with respect to the Property (or any part thereof) by reason of a
violation of any Governmental Requirement which has not been corrected.

                    (b) Construction Documents. Any survey, mechanical and
structural plans and specifications, soil reports, and leases delivered to OAS
are true and correct.

                    (c) Governmental Action. Except as described in the
Disclosure Schedule, they have received no written notice from the City of Costa
Mesa or the County of Orange or the State of California, or any of their
respective agencies, of any governmental action contemplated to be taken thereby
which will result in a material adverse change in the operation and use of the
Property.

               Section 4.3. Knowledge Defined. For purposes of this Agreement,
references to the "knowledge" or "best knowledge" of ISCO, IFT, Israel and Cohen
shall refer only to the actual knowledge of Israel and Cohen after consultation
with the manager of the Property with respect to the matters covered by the
representation or warranty or other relevant provision concerned.

               Section 4.4. Representations and Warranties of OAS. OAS hereby
makes the following representations and warranties to the Company, IFT, ISCO,
Israel and Cohen as of the Effective Date and Closing Date:

                    (a) Due Organization. OAS is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has all requisite power and authority to own, lease and operate its properties
and conduct its business as it is presently being conducted. OAS is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which such qualification is necessary under the applicable
law as a result of the conduct of its business or the ownership of its
properties except where the failure to be so qualified would not have a material
adverse effect on OAS.

                    (b) Authorization. OAS has all requisite corporate power and
authority to execute and deliver this Agreement, the Amended LLC Agreement and
the 


                                       18
<PAGE>   22

Exchange Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated by this Agreement. The execution, delivery and
performance of this Agreement, the Amended LLC Agreement and the Exchange
Agreement by OAS and the consummation by OAS of the transaction contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on the part of OAS and no other corporate proceedings on the part of OAS are
necessary to authorize the execution, delivery and performance of this
Agreement, the Amended LLC Agreement or the Exchange Agreement or the
consummation of the transactions contemplated hereby or thereby. This Agreement
has been duly executed and delivered by OAS and constitutes, and the Amended LLC
Agreement and Exchange Agreement, when executed and delivered by OAS will
constitute, the legal, valid and binding obligation of OAS, enforceable against
it in accordance with their respective terms, except as such enforceability may
be limited by any applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally,
and except as the availability of equitable remedies may be limited by the
application of general principles of equity (regardless of whether such
equitable principles are applied in a proceeding at law or in equity).

                    (c) Consents and Approvals. No consent, approval,
authorization or permit of, or declaration, filing or registration with, any
governmental authority or any other person is required to be made or obtained by
OAS in connection with the execution, delivery and performance of this
Agreement, the Amended LLC Agreement or the Exchange Agreement, except for any
filings required to be made under federal or state securities laws in connection
with the sale of shares of OAS Common Stock in exchange for LLC Units as
provided in the Exchange Agreement or the Amended LLC Agreement.

                    (d) No Conflict or Violation. The execution and delivery of
this Agreement by OAS do not, and the performance by OAS of its obligations
hereunder and the consummation by OAS of the transactions pursuant hereto will
not, (i) conflict with or violate the articles of incorporation or bylaws of OAS
or (ii) result in a violation or breach of or constitute a Default under or
require any consent, approval or authorization under any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which OAS or any of its Subsidiaries is a party or
by which OAS or any of its Subsidiaries is bound, except in the case of clause
(ii) for any such conflicts, breach or Default or other occurrences which would
not, individually or in the aggregate, result in a material adverse effect on
OAS.

                    (e) OAS Common Stock. All of the shares of OAS Common Stock
issuable in exchange for LLC Units under the Exchange Agreement or the Amended
LLC Agreement have been duly authorized and reserved for such issuance and, when
issued in accordance with the terms thereof, will be validly issued, fully paid
and nonassessable shares of OAS Common Stock listed on the New York Stock
Exchange.

                    (f) SEC Documents. The OAS Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, the OAS Quarterly Reports on Form 10-Q
for the quarterly periods ended March 31, 1997 and June 30, 1997 and all other
documents filed by OAS pursuant 


                                       19
<PAGE>   23

to Section 13 of the Exchange Act subsequent to December 31, 1996 (collectively
the "SEC Documents"), when read together at the date hereof, do not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
circumstances under which they were made, not misleading, except that the SEC
Documents contain no disclosure of the transactions contemplated by this
Agreement, the Amended LLC Agreement or the Exchange Agreement.

               Section 4.5. Exclusive Representations and Warranties. The
Parties agree that the only representations and warranties made by any Party to
any other Party in connection with the transactions provided for in this
Agreement, the Amended LLC Agreement and the Exchange Agreement are those
representations and warranties set forth expressly in this Agreement, the
Amended LLC Agreement and the Exchange Agreement, and each Party hereby waives
any right it may have now or at any time in the future to assert a claim that
any representation or warranty, other than a representation or warranty set
forth in this Agreement, the Amended LLC Agreement or the Exchange Agreement,
has been breached or is inaccurate in any respect.


                                   ARTICLE V.
                                 INDEMNIFICATION
                                 ---------------

               Section 5.1. Indemnification.

                    (a) ISCO, IFT, Israel, and Cohen, jointly and severally,
shall indemnify, save and hold harmless OAS and each of its respective
Representatives, from and against any and all costs, losses, Liabilities,
obligations, damages, lawsuits, claims, demands, and expenses (whether or not
arising out of third-party claims), including, without limitation, interest,
penalties, reasonable attorneys' fees and all amounts paid in investigation,
defense or settlement of any of the foregoing (but excluding lost profits and
diminution in value and excluding amounts for which the indemnified party has
actually received reimbursement under an insurance policy or policies)
("Damages") in excess of $50,000 in the aggregate, incurred in connection with,
arising out of or resulting from (i) any breach or inaccuracy of any
representation or warranty made by the Company, ISCO, IFT, Israel or Cohen in
this Agreement (but not in any other agreement) or (ii) any breach of any
covenant or agreement made by the Company, ISCO, IFT, Israel or Cohen in this
Agreement (but not in any other agreement, except as provided in the following
clause (iii)), (iii) the breach of any covenant or agreement of IFT and ISCO set
forth in Section 8.8, 10.2.B, 10.2.C and 10.2.D in the Amended LLC Agreement or
(iv) the matter described in item 3 or item 4 of the Disclosure Schedule,
provided, however, that the foregoing $50,000 limitation shall not apply to
Damages incurred in connection with, arising out of or resulting from any matter
described in the foregoing clause (iv) (the "Full Indemnity Matter") and the
indemnified parties shall be indemnified under this Section 5.1(a) for all
Damages incurred in connection with, arising out of or resulting from the Full
Indemnity Matter, irrespective of the amount of the Damages. The term "Damages"
as used in this Agreement is not limited to matters asserted by third parties
but includes Damages incurred or sustained in the absence of third party claims.



                                       20
<PAGE>   24

                    (b) OAS shall indemnify and save and hold harmless the
Company, ISCO, IFT, Israel and Cohen and each of their respective
Representatives from and against any and all Damages in excess of $50,000 in the
aggregate incurred in connection with, arising out of or resulting from (i) any
breach or inaccuracy of any representation or warranty made by OAS in this
Agreement, (ii) any Employee Matter (other than any Employee Matter relating to
a Terminated Employee) occurring on or following the Closing Date or (iii) any
breach of any covenant or agreement made by OAS in this Agreement.

                    (c) Each indemnified party shall cooperate in all reasonable
respects with each indemnifying party and its Representatives (including without
limitation its attorneys) in the investigation, trial and defense of any lawsuit
or action and any appeal arising therefrom; provided, however, that such
indemnified party may, at its own cost, participate in negotiations,
arbitrations and the investigation, trial and defense of such lawsuit or action
and any appeal arising therefrom. The parties shall cooperate with each other in
any notifications to insurers.

                    (d) If a claim for Damages (a "Claim") is to be made by a
party entitled to indemnification hereunder against the indemnifying party, the
party claiming such indemnification shall give written notice (a "Claim Notice")
to the indemnifying party as soon as practicable after the party entitled to
indemnification becomes aware of any fact, condition or event which may give
rise to Damages for which indemnification may be sought under this Section 5.1.
Such Claim Notice shall specify the nature and amount of the Claim asserted, if
actually known to the party entitled to indemnification hereunder. If any
lawsuit or enforcement action is filed against any party entitled to the benefit
of indemnity hereunder, written notice thereof shall be given to the
indemnifying party as promptly as practicable (and in any event within 15
calendar days after the service of the citation or summons). The failure of any
indemnified party to give timely notice hereunder shall not affect rights to
indemnification hereunder, except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, if the
indemnifying party shall acknowledge in writing to the indemnified party that
the indemnifying party shall be obligated under the terms of its indemnity
hereunder in connection with such lawsuit or action, then the indemnifying party
shall be entitled, if it so elects at its own cost, risk and expense, (i) to
take control of the defense and investigation of such lawsuit or action, (ii) to
employ and engage attorneys of its own choice to handle and defend the same
unless the named parties to such action or proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and the
indemnified party has been advised in writing by counsel that there may be one
or more legal defenses available to such indemnified party that are different
from or additional to those available to the indemnifying party, in which event
the indemnified party shall be entitled, at the indemnifying party's cost, risk
and expense, to separate counsel of its own choosing, and (iii) to compromise or
settle such Claim, provided, however, that such compromise or settlement shall
be made only with the written consent of the indemnified party if the amount
payable in the compromise or settlement exceeds $5,000,000, such consent not to
be unreasonably withheld. If the indemnifying party fails to assume the defense
of such Claim within 15 calendar days after receipt of the Claim Notice, the
indemnified party against which such Claim has been asserted will (upon
delivering notice to such effect to the indemnifying party) have the right to
undertake, at the indemnifying party's cost and expense, the defense, compromise
or settlement of such 


                                       21
<PAGE>   25

claim on behalf of and for the account and risk of the indemnifying party;
provided, however, that such Claim shall not be compromised or settled without
the written consent of the indemnifying party if the amount payable in the
compromise or settlement exceeds $5,000,000, which consent shall not be
unreasonably withheld. In the event the indemnified party assumes the defense of
the Claim, the indemnified party will keep the indemnifying party reasonably
informed of the progress of any such defense, compromise or settlement. The
indemnifying party shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 5.1 and for any final judgment
for Claims subject to indemnification under this Section 5.1 (subject to any
right of appeal), and the indemnifying party agrees to indemnify and hold
harmless an indemnified party from and against any Damages by reason of such
settlement or judgment.

                    (e) Notwithstanding anything to the contrary contained in
this Agreement, (i) no indemnifying party shall be liable for Damages (other
than Damages incurred in connection with, arising out of or resulting from a
Full Indemnity Matter (as defined in Section 5.1(a)), as to which the two-year
limitation set forth in this clause (i) of Section 5.1(e) shall not apply)
unless a Claim Notice notifying the indemnifying party of the fact, condition or
event which may give rise to the Damages for which indemnification is sought is
given to the indemnifying party on or prior to the second anniversary of the
Effective Date or, with respect to any Damages arising out of a breach of any
representation or warranty set forth in Section 4.1(o), prior to the expiration
of the applicable statute of limitations for the liabilities to which such
representation or warranty relates, and (ii) the sole remedy available to the
Parties for Damages arising out of a breach of this Agreement are those remedies
set forth in this Article V.


                                   ARTICLE VI.
                              BROKERAGE COMMISSIONS
                              ---------------------

               With respect to the transaction contemplated by this Agreement,
OAS represents that its sole broker is Churchill Mortgage ("OAS's Broker"), and
the Company, ISCO, IFT, Israel, and Cohen, jointly and severally, represent that
none of them is represented by a broker. Neither the Company, ISCO, IFT, Israel
nor Cohen shall be responsible for the payment of a real estate brokerage
commission to OAS's Broker, but rather OAS shall pay the full amount of any such
brokerage commission owing to OAS's Broker. Each Party hereto agrees that if any
Person, other than OAS's Broker, makes a claim for brokerage commissions or
finder's fees related to the transactions contemplated by this Agreement, and
such claim is made by, through or on account of any acts or alleged acts of said
Party or its Representatives, said Party will protect, indemnify, defend and
hold the other Parties free and harmless from and against any and all loss,
liability, cost, damage and expense (including reasonable attorneys' fees) in
connection therewith.


                                       22
<PAGE>   26

                                  ARTICLE VII.
                                  MISCELLANEOUS
                                  -------------

               Section 7.1. Public Disclosure. Upon the Closing, OAS will issue
a press release in the form attached as Exhibit "E" hereto.

               Section 7.2. Assignment. No Party may assign its rights or
obligations under this Agreement without the written consent of the other
Parties. Any attempt to so assign its rights or obligations shall be null and
void. Subject to the foregoing, the terms and provisions of this Agreement will
apply to and bind the permitted successors and assigns of the Parties.

               Section 7.3. Notices. Any notice pursuant to this Agreement shall
be given in writing by (a) personal delivery, (b) reputable overnight delivery
service with proof of delivery, (c) United States Mail, postage prepaid,
registered or certified mail, return receipt requested, or (d) legible facsimile
transmission, sent to the intended addressee at the address set forth below, or
to such other address or to the attention of such other person as the addressee
shall have designated by written notice sent in accordance herewith. Any notice
so given shall be deemed to have been given upon receipt or refusal to accept
delivery. In the event this Agreement requires that notice be given to the
Company, ISCO, IFT, Israel or Cohen, OAS shall be entitled to rely on notice
given to Israel as notice to Israel, IFT and the Company, and notice given to
Cohen as notice to Cohen, ISCO and the Company. Unless changed in accordance
with the provisions of this Section 7.3, the addresses for notices given
pursuant to this Agreement shall be as follows:

        If to OAS:                      Oasis Residential, Inc.
                                        4041 East Sunset Road
                                        Henderson, Nevada 89014
                                        Attention:  President
                                        Telephone No.   (702) 436-9800
                                        Facsimile No.:  (702) 435-9445

        If to the Company, IFT
        or Israel:                      Edward Israel
                                        10474 Santa Monica Blvd., #405
                                        Los Angeles, California 90025
                                        Telephone No.:  (310) 475-4599
                                        Facsimile No.:  (310) 474-8533

        If to the Company, ISCO
        or Cohen:                       Robert Cohen
                                        c/o Four Seasons Hotel
                                        300 South Doheny
                                        Los Angeles, California 90048
                                        Telephone No.:  (310) 278-8548
                                        Facsimile No.:  (310) 278-3637

                                       23
<PAGE>   27

               Section 7.4. Modifications. This Agreement cannot be changed
orally, and no agreement shall be effective to waive, change, modify or
discharge it in whole or in part unless such agreement is in writing and is
signed by the Parties against whom enforcement of the waiver, change,
modification or discharge is sought.

               Section 7.5. Entire Agreement. This Agreement, including the
exhibits and schedules hereto, contains the entire agreement between the Parties
pertaining to the subject matter hereof and supersedes all prior written or oral
agreements and understandings between the Parties pertaining to that subject
matter.

               Section 7.6. Counterparts. This Agreement may be executed in
counterparts, all such executed counterparts shall constitute the same
agreement, and the signature of any Party to any counterpart shall be deemed a
signature to, and may be appended to, any other counterpart.

               Section 7.7. Facsimile Signatures. In order to expedite the
transaction contemplated herein, telecopied signatures may be used in place of
original signatures on this Agreement or any document delivered pursuant hereto.
The Company, ISCO, IFT, Israel, Cohen and OAS intend to be bound by the
signatures on the telecopied document, are aware that the other Parties will
rely on the telecopied signatures, and hereby waive any defenses to the
enforcement of the terms of this Agreement based on the form of signature.

               Section 7.8. Severability. If any provision of this Agreement is
determined by a court of competent jurisdiction to be invalid or unenforceable,
the remainder of this Agreement shall nonetheless remain in full force and
effect; provided that the invalidity or unenforceability of such provision does
not materially adversely affect the benefits accruing to any Party hereunder.

               Section 7.9. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.

               Section 7.10. Captions. The section headings appearing in this
Agreement are for convenience of reference only and are not intended, to any
extent and for any purpose, to limit or define the text of any section or any
subsection hereof.

               Section 7.11. Construction. The Parties acknowledge that the
Parties and their counsel have reviewed and revised this Agreement and that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting Party shall not be employed in the interpretation
of this Agreement or any exhibits or amendments hereto.

               Section 7.12. Exhibits. All exhibits and schedules attached to
this Agreement are incorporated herein by reference.

               Section 7.13. Date of Performance. If the date on which any
performance required hereunder is other than a business day, then such
performance shall be required as of the next following business day.


                                       24
<PAGE>   28

               Section 7.14. Nature of Representation. The Parties acknowledge
and agree that the law firms of Kaye, Scholer, Fierman, Hays & Handler, LLP and
Akin, Gump, Strauss, Hauer & Feld LLP (collectively the "Law Firms") have
represented Israel, Cohen, IFT and ISCO (collectively, the "Clients") in
connection with the transactions provided for in or contemplated by this
Agreement, the Amended LLC Agreement and the Exchange Agreement and that the Law
Firms have not represented the Partnership or the Company in connection with any
of those transactions. Consequently, the Parties agree that (i) the
attorney-client privilege with respect to any communications between the Law
Firms and the Clients or their Representatives, consultants, attorneys and
Affiliates (collectively, with the Clients, the "Client Parties") and the work
product privilege with respect to the Clients shall belong solely to the
respective Clients and may be waived solely by the respective Clients and shall
not belong to and cannot be waived by the Partnership or the Company or any
other Person, including OAS, (ii) no privileged communication between the Law
Firms, or either of them, on the one hand, and the Client Parties, or any of
them, on the other, shall be deemed to have been disclosed to the Partnership or
the Company and no attorney-client privilege with respect to those
communications or work product privilege with respect to the Clients shall be
deemed to have been waived on account of any alleged disclosure of the
communication to the Partnership or the Company, and (iii) neither the Company,
nor any Person, including OAS, shall be entitled to disqualify the Law Firms, or
either of them, from representing the Clients, or any of them, on the basis (or
the asserted basis) that the Law Firms have represented the Partnership or the
Company in the past, it being understood that neither the Company nor any
Person, including OAS, shall be precluded from disqualifying the Law Firms, or
either of them, from representing the Clients, or any of them, on any other
basis.

                           [intentionally left blank]

                      [signatures appear on following page]


                                       25
<PAGE>   29

               IN WITNESS WHEREOF, the Parties have duly executed this
Contribution Agreement as of the Effective Date.

<TABLE>
<S>                                              <C>                                 
ISCO, a California general partnership           OASIS RESIDENTIAL, INC., a Nevada 
                                                   corporation
    By:  Costa Mesa Associates, a California
         general partnership                     By:
                                                    ---------------------------------
                                                 Its:  President
         By:
            ----------------------------------
              General Partner

COSTA MESA PARTNERS, LLC, a Delaware limited     IFT PROPERTIES, LTD,
liability company                                a California limited partnership

         By:
            ----------------------------------
              Edward Israel, Authorized          By:
              signatory                             ---------------------------------
                                                    Edward Israel, General Partner



-----------------------------------------        ------------------------------------
ROBERT COHEN                                     EDWARD ISRAEL
(only as to Sections 2.4(a), 2.4(b), 3.1,        (only as to Sections 2.4(a), 2.4(b),
4.1(q)-(t), Article V, Article VI and             3.1, 4.1(q)-(t), Article V, Article 
Article VII)                                      VI and Article VII)
</TABLE>


<PAGE>   30

                                   EXHIBIT "A"

                               DISCLOSURE SCHEDULE
                               -------------------

                                 [SEE ATTACHED]




<PAGE>   31


                                   EXHIBIT "B"

                              OPERATING AGREEMENTS
                              --------------------

                                 [SEE ATTACHED]





<PAGE>   32

                                   EXHIBIT "C"

                                    RENT ROLL
                                    ---------

                                 [SEE ATTACHED]





<PAGE>   33

                                   EXHIBIT "D"

                               DESCRIPTION OF LAND
                               -------------------

                                 [SEE ATTACHED]



<PAGE>   34

                                                                      OR-9637274
                                                          TITLE OFFICER - REIMER
                                                                 AMENDMENT NO. 3

DESCRIPTION

THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF ORANGE, CITY OF COSTA MESA, AND IS DESCRIBED AS FOLLOWS:

PARCEL 1 OF PARCEL MAP NO. 84-390, AS SHOWN ON A MAP FILED IN BOOK 200, PAGES 34
AND 35 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY,
CALIFORNIA.

ALSO EXCEPT ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER THAT
PORTION OF SAID LAND LYING WESTERLY OF THAT CERTAIN COURSE AND SOUTHERLY
PROLONGATION THEREOF, IN THE BOUNDARY OF SAID PARCEL 2, SHOWN ON SAID PARCEL MAP
AS HAVING A BEARING AND DISTANCE OF "N 0 DEGREES 00' 50" E, 25.90 FT.", SAID
COURSE BEING THE CENTERLINE OF COLLEGE STREET, BY VARIOUS DEEDS OF RECORD.

ALSO EXCEPTING THEREFROM, ALL URANIUM, THORIUM AND ALL OTHER MATERIALS
DETERMINED PURSUANT TO SECTION 5(B)(1) OF THE ATOMIC ENERGY ACT OF 1946 (60
STAT. 761) TO BE PECULIARLY ESSENTIAL TO THE PRODUCTION OF FISSIONABLE MATERIAL,
CONTAINED IN WHATEVER CONCENTRATION, IN DEPOSITS IN THE LANDS COVERED BY THIS
INSTRUMENT, TOGETHER WITH THE RIGHT OF THE UNITED STATES, THROUGH ITS AUTHORIZED
AGENTS OR REPRESENTATIVES, AT ANY TIME TO ENTER UPON THE LAND AND PROSPECT FOR,
MINE AND REMOVE THE SAME, MAKING JUST COMPENSATION FOR ANY DAMAGE OR INJURY
OCCASIONED THEREBY, AS EXCEPTED IN THE DEED FROM THE UNITED STATES OF AMERICA,
RECORDED JUNE 13, 1949 IN BOOK 1860, PAGE 60 OF OFFICIAL RECORDS, AND RECORDED
AUGUST 30, 1949 IN BOOK 1895, PAGE 373 OF OFFICIAL RECORDS.

EXCEPTING THEREFROM, ALL URANIUM, THORIUM AND ALL OTHER MATERIALS DETERMINED
PURSUANT TO SECTION 5(B)(1) OF THE ATOMIC ENERGY ACT OF 1946 (60 STAT. 761) TO
BE PECULIARLY ESSENTIAL TO THE PRODUCTION OF FISSIONABLE MATERIAL, CONTAINED IN
WHATEVER CONCENTRATION, IN DEPOSITS IN THE LANDS COVERED BY THIS INSTRUMENT,
TOGETHER WITH THE RIGHT OF THE UNITED STATES, THROUGH ITS AUTHORIZED AGENTS OR
REPRESENTATIVES, AT ANY TIME TO ENTER UPON THE LAND AND PROSPECT FOR, MINE AND
REMOVE THE SAME, MAKING JUST COMPENSATION FOR ANY DAMAGE OR INJURY OCCASIONED
THEREBY, AS EXCEPTED IN THE DEED FROM THE UNITED STATES OF AMERICA, RECORDED
AUGUST 18, 1949 IN BOOK 1891, PAGE 32 OF OFFICIAL RECORDS.


                                       1
<PAGE>   35

                                   EXHIBIT "E"

                                  PRESS RELEASE
                                  -------------

                                 [SEE ATTACHED]


<PAGE>   36

                              FORM OF PRESS RELEASE
                              ---------------------





Oasis Residential, Inc. (NYSE:OAS) - announced today it has acquired the
managing member interest in a limited liability company ("LLC") that owns the
714 unit Villa Martinique apartment community in Costa Mesa, California.

The LLC has issued 886,022 LLC units, exchangeable for shares of OAS common
stock on a one-for-one basis. OAS also assumed existing tax-exempt bond debt of
$51.4 million issued by Orange County, California. The "low floater" bonds
mature in 2009 and have an interest rate subject to weekly repricing based upon
a spread of 125 basis points over a 7 day tax-exempt bond floating rate index.
The Company also contributed approximately $1.5 million in cash for transaction
and LLC formation costs, thus resulting in a total investment of approximately
$73.5 million.

OAS intends to increase its investment in the community, which will be renamed
Oasis Martinique, by approximately $2.5 million in order to fund a capital
refurbishment program designed to increase net operating income at the
community. The ten-year old community was designed by the Newport Beach
architectural firm, McLarand Vasquez, & Associates and offers one and two
bedroom units in four-story, elevator-served buildings constructed over a
two-level subterranean parking garage. The community was 97% occupied at
closing. The addition of Oasis Martinique increases the Company's holdings in
Orange County to 852 units and approximately $87.5 million. The acquisition fits
with management's strategic diversification plan which calls for increased
investment in Southern California and Denver matched with selective dispositions
in Las Vegas.




<PAGE>   37

                                   EXHIBIT "F"


                                     LEASES
                                     ------


                                 [SEE ATTACHED]


<PAGE>   38

                                   EXHIBIT "G"

            AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
            --------------------------------------------------------



                                 [SEE ATTACHED]



<PAGE>   39

                                   EXHIBIT "H"

                            EXCHANGE RIGHTS AGREEMENT
                            -------------------------



                                 [SEE ATTACHED]

<PAGE>   40

                                   EXHIBIT "I"

                             PERMITTED ENCUMBRANCES
                             ----------------------

               The following are Permitted Encumbrances as defined in and for
purposes of the Agreement. The item numbers listed below correspond to the item
numbers listed as exceptions in that certain preliminary title report dated
October 1, 1997, issued by Chicago Title Company, reference number 996241-56,
which report is attached hereto and incorporated herein by reference.

               "Permitted Encumbrances":

               Item numbers 6, 9, 11, 13, 14, 15, 16, 17, 18, 20, 21, 32, 33,
36, 37 and 40.

<PAGE>   41

                                   EXHIBIT "J"

                               CONTINUING GUARANTY
                               -------------------



                                 [SEE ATTACHED]