EXHIBIT (D)(2)
EXECUTION COPY
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PURCHASE AND SALE AGREEMENT
by and among
ECHELON INTERNATIONAL CORPORATION
and
CERTAIN OF ITS SUBSIDIARIES,
collectively, as Seller,
and
ECHELON RESIDENTIAL LLC,
as Buyer
January 21, 2000
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TABLE OF CONTENTS
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Page
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Section 1. Definitions and References.................................................................. 1
Section 2. Purchase and Sale........................................................................... 10
2.1 Purchase Price............................................................................ 10
2.2 Terms of Payment.......................................................................... 10
2.3 Assumption of Liabilities................................................................. 11
Section 3. Seller's Representations and Warranties..................................................... 11
3.1 Due Organization and Good Standing of Seller.............................................. 12
3.2 Authorization and Validity of Agreement................................................... 12
3.3 Consents and Approvals; No Violations..................................................... 13
3.4 Title to Assets; Encumbrances............................................................. 13
3.5 Ownership of Joint Venture Interests...................................................... 14
3.6 Ownership of Employee Loans............................................................... 14
3.7 Environmental Laws and Regulations........................................................ 14
3.8 Leases.................................................................................... 15
3.9 Litigation................................................................................ 15
3.10 Land Use.................................................................................. 15
3.11 Contracts................................................................................. 16
3.12 Existing Debt............................................................................. 16
3.13 Employee Benefit Plans; Labor Matters..................................................... 16
3.14 Intellectual Property..................................................................... 17
3.15 Insurance................................................................................. 18
3.16 Assets.................................................................................... 18
3.17 Reports and Financial Statements.......................................................... 18
3.18 Absence of Certain Changes................................................................ 19
3.19 Liabilities............................................................................... 19
3.20 Compliance with Laws...................................................................... 19
3.21 Year 2000................................................................................. 20
3.22 No Other Representations or Warranties.................................................... 20
Section 4. Buyer's Representations and Warranties...................................................... 20
4.1 Due Organization and Good Standing of Buyer............................................... 20
4.2 Authorization and Validity of Agreement................................................... 20
4.3 Consents and Approvals; No Violations..................................................... 20
4.4 Condition of the Assets................................................................... 21
4.5 Liens..................................................................................... 22
4.6 Purchase for Investment................................................................... 22
(i)
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4.7 Sufficient Funds.......................................................................... 22
4.8 Title and Survey.......................................................................... 22
4.9 Inspection................................................................................ 22
4.10 No Other Representations or Warranties.................................................... 22
Section 5. Covenants................................................................................... 23
5.1 Compliance................................................................................ 23
5.2 Notices of Violations..................................................................... 23
5.3 Ownership of Assets; Proceeds of Asset Sales.............................................. 23
5.4 Operation of Assets Subsequent to the Agreement Date...................................... 23
5.5 Status of Agreements...................................................................... 25
5.6 Further Assurances........................................................................ 26
5.7 Consents.................................................................................. 27
5.8 Use of Business Names by Buyer............................................................ 27
5.9 Bringdown of Seller's Representations..................................................... 27
5.10 Cooperation Regarding Taxes............................................................... 28
5.11 Insurance................................................................................. 28
5.12 Reasonable Best Efforts................................................................... 29
5.13 Access to Information Concerning Assets................................................... 29
5.14 Notification of Certain Matters........................................................... 30
5.15 HSR Act................................................................................... 30
5.16 Access to Information Pursuant to Distribution Agreement.................................. 30
5.17 Witness Services Under Distribution Agreement............................................. 30
5.18 Retention of Records...................................................................... 30
Section 6. Conditions Precedent to Closing............................................................. 31
6.1 Buyer Conditions.......................................................................... 31
6.2 Seller Conditions......................................................................... 32
Section 7. Closing..................................................................................... 33
7.1 Time and Place............................................................................ 33
7.2 Closing Expenses.......................................................................... 33
7.3 Notification of Escrow Closing Date....................................................... 33
7.4 Documents and/or Deliveries............................................................... 34
7.5 Buyer Documents and/or Deliveries......................................................... 36
7.6 Execution and Delivery of Closing Statements.............................................. 37
7.7 Joint Instructions to Escrow Agent........................................................ 37
7.8 Further Deliveries........................................................................ 37
Section 8. Brokers..................................................................................... 38
Section 9. Termination and Abandonment................................................................. 38
9.1 Termination............................................................................... 38
9.2 Effect of Termination..................................................................... 39
(ii)
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Section 10. Risk of Loss; Indemnity...................................................................... 41
10.1 Casualty................................................................................... 41
10.2 Condemnation............................................................................... 41
10.3 Indemnity.................................................................................. 41
Section 11. Employees and Employee Benefits Matters...................................................... 43
11.1 Transfer of Employees...................................................................... 43
11.2 Assumption of Liabilities.................................................................. 43
11.3 Participation and Crediting of Service Under Employee Plans and Practices.................. 45
Section 12. Miscellaneous................................................................................ 45
12.1 Litigation................................................................................. 45
12.2 Escrow Obligations of Escrow Agent......................................................... 45
12.3 Notices.................................................................................... 47
12.4 Entire Agreement........................................................................... 48
12.5 Successors and Assigns..................................................................... 48
12.6 Headings................................................................................... 49
12.7 Applicable Law............................................................................. 49
12.8 Severability............................................................................... 49
12.9 Counterparts............................................................................... 49
12.10 No Waiver of Default....................................................................... 49
12.11 Confidentiality............................................................................ 50
12.12 Recourse Limited........................................................................... 50
12.13 Business Day............................................................................... 50
12.14 Recordation................................................................................ 51
12.15 Jury Waiver................................................................................ 51
12.16 Public Announcements....................................................................... 51
12.17 Radon Gas.................................................................................. 51
12.18 Bulk Sales Law Waiver...................................................................... 52
12.19 Knowledge.................................................................................. 52
12.20 Amendments, Modifications and Supplements.................................................. 52
12.21 Representations and Warranties............................................................. 52
12.22 Performance and Discharge.................................................................. 52
(iii)
SCHEDULES
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Schedule I - List of Assets and Owners
Schedule II - List of Existing Debt
Schedule III - Leases
Schedule IV - Purchase Price Allocation
Schedule V - Consents
Schedule VI - Liens on Real Estate Assets
Schedule VII - Liens on Joint Venture Interests
Schedule VIII - Required Consents
Schedule IX - Hazardous Materials
Schedule X - Permits
Schedule XI - Real Estate Contracts
Schedule XII - Employee Benefit Plans
Schedule XIII - Employees Subject to Existing Employment Agreement
Schedule XIV - Intellectual Property
Schedule XV - Pending Transactions
Schedule XVI - Land Use
Schedule XVII - Litigation
Schedule XVIII - List of Subsidiary Non-Qualification Information
Schedule XIX - Changes in Operations
Schedule XX - Violations
Schedule XXI - Trial Balance & Consolidated Financial Statements
Schedule XXII - Insurance
Schedule XXIII - Real Estate Related Accounts
Schedule XXIV - Title Insurance Commitments or Other Reports
Schedule XXV - Surveys
(iv)
EXHIBITS
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Exhibit A - Form of Special Warranty Deed
Exhibit B - Form of Xxxx of Sale
Exhibit C - Form of Assignment and Assumption of Permits, Contracts and Leases
Exhibit D - Form of Tenant Estoppel Statement
Exhibit E - Form of Assignment and Assumption Agreement of Mortgage Loans
Exhibit F - Form of Assignment of Trademarks
Exhibit G - Severance Benefits Plan
Exhibit H - Intentionally Omitted
Exhibit I - Form of Title Affidavit
Exhibit J - Form of Gap Indemnity
Exhibit K - Form of FIRPTA Affidavit
Exhibit L - Joint Direction Letter
Exhibit M - Joint Instruction Letter
(v)
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the
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21st day of January, 2000, by and among ECHELON INTERNATIONAL CORPORATION, a
Florida corporation ("Echelon"), and various of its subsidiaries signatory
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hereto (each, a "Subsidiary", and collectively, the "Subsidiaries") (Echelon and
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the Subsidiaries are collectively referred to herein as "Seller"), and ECHELON
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RESIDENTIAL LLC, a Delaware limited liability company ("Buyer"). All
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capitalized terms used herein shall have the meanings set forth in Section 1
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hereof.
WHEREAS, Echelon, either itself or through a Subsidiary, is the owner
of the real estate and other interests and assets more specifically described in
Schedule I (other than Part V thereof) annexed hereto and made a part hereof
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(collectively, the "Assets"); and
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WHEREAS, Seller desires to sell, and Buyer desires to purchase, all of
Seller's right, title and interest in and to the Assets pursuant to and in
accordance with the terms and provisions of this Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller agrees to sell,
assign and transfer to Buyer, and Buyer agrees to purchase and assume from
Seller, for the price and on the terms and subject to the conditions herein set
forth, all of Seller's right, title and interest in and to the Assets and the
Assumed Liabilities.
Section 1. Definitions and References.
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The following terms, as used in this Agreement, have the following
meanings unless the context is inconsistent therewith:
"Agreement" has the meaning set forth in the introductory paragraph
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hereof.
"Agreement Date" means the date upon which this Agreement has been
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executed and delivered by Seller, Buyer and Escrow Agent.
"Asset Sales Proceeds" has the meaning set forth in Section 5.3
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hereof.
"Assets" has the meaning set forth in the first recital hereof, as
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more particularly described on Schedule I (other than Part V thereof), and
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includes, without limitation, any Asset Sales Proceeds; it being understood and
agreed, for avoidance of doubt, that none of the following shall constitute a
portion of the Assets: (i) the Excepted Leases, (ii) the Tax Credit LP
Interests, (iii) the Other Assets, (iv) any and all cash on hand (including,
without limitation, (A) cash with respect to the Excepted Leases and (B) cash
with respect to the Tax Credit LP Interests, but, in any event, excluding the
restricted cash (and cash equivalents) described in item 17 under Part VII of
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Schedule I) and (v) any and all refunds or any reduction of, or credit against,
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Seller's Tax liabilities (other than with respect to Real Estate Taxes) in or
with respect to any taxable year (including all periods prior to the Closing
Date).
"Assumed Liabilities" has the meaning set forth in Section 2.3 hereof.
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"Bringdown Certificate" has the meaning set forth in Section 5.9
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hereof.
"Broker" has the meaning set forth in Section 8 hereof.
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"Business Day" means any day, other than a Saturday, Sunday or a day
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on which banks located in the State of New York shall be authorized or required
by law to close.
"Buyer" has the meaning set forth in the introductory paragraph
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hereof.
"Claim" has the meaning set forth in Section 10.3 hereof.
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"Claim Notice" has the meaning set forth in Section 10.3 hereof.
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"Closing" means the consummation of the transfer, assignment and sale
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and conveyance of the Assets by or on behalf of Seller to Buyer and payment of
the Purchase Price and assumption of the Assumed Liabilities by Buyer to Seller,
pursuant to Section 7 hereof.
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"Closing Date" has the meaning specified in Section 7.1 hereof.
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"COBRA" has the meaning set forth in Section 11.2(a)(1) hereof.
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"Code" has the meaning set forth in Section 3.13 hereof.
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"Combining Trial Balance" means the trial balance set forth in Part I
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of Schedule XXI annexed hereto and made a part hereof.
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"Commercial Property" means the real property, including the
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improvements thereon, described in Part I of Schedule I; provided, that in no
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event shall "Commercial Property" include any or all of the Other Assets.
"Commercial Property Security Deposit Amount" means the aggregate
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amount (as in effect on the Escrow Closing Date) of cash (and cash equivalents)
associated with the customer deposits (but only to the extent same relates to
the Leases) included in general ledger balance sheet account number 25020-000
set forth on the Combining Trial Balance.
"Commission" has the meaning set forth in Section 3.17(a) hereof.
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"Commission Filings" has the meaning set forth in Section 3.17(a)
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hereof.
"Contracts" means, collectively, (i) the contracts, agreements and
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commitments described on Schedule XI annexed hereto and made a part hereof, (ii)
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any contract, agreement or commitment by which Seller is bound primarily
affecting or relating to any of the Total Assets
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(excluding Leases and leases relating to the Residential Properties,
Encumbrances on title and any documents and instruments related to the Existing
Debt) which involves base payments or the performance of services by Seller of
an amount or value (as measured by the revenue derived therefrom during fiscal
year 1998-1999) not in excess of $12,000 annually or is terminable by Seller on
not more than 90 days notice without penalty and (iii) any and all contracts,
agreements and commitments by which Seller is bound primarily affecting or
relating to any of the Total Assets (excluding Leases and leases relating to the
Residential Properties, Encumbrances on title and any documents and instruments
related to the Existing Debt) and which are entered into after the Agreement
Date in compliance with the provisions of this Agreement; provided, that in no
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event shall "Contracts" include any or all of the Other Contracts.
"County" means a political subdivision of the State within which a
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Real Estate Asset is situated.
"Deposit" has the meaning set forth in Section 2.2(a) hereof.
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"Distribution Agreement" means the Distribution Agreement, dated as of
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December 16, 1996, by and between Florida Progress and Echelon.
"Echelon" has the meaning set forth in the introductory paragraph
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hereof.
"Employee Benefit Plans" has the meaning set forth in Section 3.13
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hereof.
"Employee Loans" means the loans described in Part IX of Schedule I.
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"Encumbrance" has the meaning set forth in Section 3.3 hereof.
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"Environmental Claims" means administrative, regulatory or judicial
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actions, suits, demands, demand letters, claims, liens, notices of non-
compliance or violation, investigations or proceedings relating in any way to
any Environmental Law or any permit issued under any such Environmental Law,
including (a) Environmental Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law and (b) Environmental Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state or local statute, law,
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rule, regulation, ordinance, code, policy or rule of common law in effect and in
each case as amended as of the Closing Date, and any judicial or administrative
interpretation thereof as of the Closing Date, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. (S)
9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
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(S) 6901 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
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(S) 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq.;
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the Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe
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Drinking Water Act, 42 U.S.C. (S) 300f et seq.; the Oil Pollution Act of 1990,
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33 U.S.C. (S) 2701 et seq.; and their state and local counterparts and
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equivalents.
"ERISA" has the meaning set forth in Section 3.13 hereof.
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"Escrow Agent" means LandAmerica Financial Group, a Virginia
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corporation.
"Escrow Closing" means the delivery on the Escrow Closing Date to
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Escrow Agent by each of Buyer and Seller of the agreements, documents and
instruments specified in Sections 7.4 and 7.5 hereof, respectively.
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"Escrow Closing Date" means the date specified as such in the initial
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Escrow Date Notification Certificate delivered by Seller to Buyer; provided,
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that if Seller shall deliver one or more subsequent Escrow Date Notification
Certificates in accordance with Section 7.3 hereof, the Escrow Closing Date
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shall mean the date specified as such in the last Escrow Date Notification
Certificate theretofore delivered by Seller to Buyer.
"Escrow Date Notification Certificate" has the meaning set forth in
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Section 7.3 hereof.
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"Escrowed Items" has the meaning set forth in Section 7.7 hereof.
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"Excepted Leases" has the meaning provided in Schedule I.
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"Excess Cash Amount" means the aggregate amount of cash and cash
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equivalents, if any, which is expected (in the sole determination of the Chief
Financial Officer of Echelon made on the Escrow Closing Date) to remain in
Echelon or its subsidiaries after consummation of all transactions contemplated
by this Agreement, the Merger Agreement and the Subscription Agreement;
provided, that in no event shall the Excess Cash Amount include an amount equal
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to $7,000,000 plus the aggregate amount of rent payments, whether in arrears or
in advance, actually received by Seller with respect to the Leveraged Lease
Portfolio (as defined in the Merger Agreement) during the period from February
1, 2000 through the Effective Date (as defined in the Merger Agreement); and
provided, further, in no event shall the Excess Cash Amount be less than $0.
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"Excluded Liabilities" means any liabilities or obligations of Seller
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or its affiliates or predecessors other than the Assumed Liabilities, and in any
event "Excluded Liabilities" shall be inclusive of all liabilities or
obligations for which Seller (or its affiliates or predecessors) is responsible
pursuant to Section 11 hereof and those arising out of or relating to (i) the
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Excepted Leases (including those liabilities and obligations (as of the Closing
Date) referred to in the Combining Trial Balance under the column heading
"Aircraft Assets & Liabilities"), (ii) the Tax Credit LP Interests, (iii) Taxes
(other than Real Estate Taxes), (iv) the Other Assumed Liabilities, (v) this
Agreement or the Merger Agreement (including with respect to any shareholder
litigation relating hereto or thereto), (vi) except to the extent Buyer is
responsible therefor pursuant to Section 11 hereof, all obligations (including
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payments due as a result of a change of control of Echelon or otherwise) under
any employment agreement entered into by Echelon or any of its
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Subsidiaries (including the employment agreements described on Schedule XIII
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annexed hereto and made a part hereof) and (vii) assets or businesses previously
owned by Seller (or its affiliates or predecessors) which were divested or
otherwise disposed of prior to the Agreement Date (including, without
limitation, any liabilities or obligations of Seller (or its affiliates or
predecessors) arising out of or related to (A) the spin-off of Echelon and the
other transactions contemplated by the Distribution Agreement and (B) the first
mortgage bonds secured by certain life care communities previously owned
directly or indirectly by Seller).
"Executive Loans Repayment Amount" means (as of the Escrow Closing
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Date) the aggregate outstanding principal amount, together with any accrued
interest, charges, fees or other amounts related thereto, of any loans extended
by Seller to W. Xxxxxxx Xxxxxxx, Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx and Xxxxx X.
Xxxxx.
"Existing Debt" means the indebtedness described in Schedule II
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annexed hereto and made a part hereof; provided, that, in no event shall
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"Existing Debt" include any or all of the Other Existing Debt.
"Financial Statements" has the meaning set forth in Section 3.17(a)
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hereof.
"Florida Progress" means Florida Progress Corporation, a Florida
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corporation.
"GAAP" has the meaning set forth in Section 3.17(a) hereof.
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"Hazardous Materials" means (a) any petroleum or petroleum products,
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radioactive materials, asbestos in any form that is friable, urea formaldehyde
foam insulation and polychlorinated biphenyls; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous substances",
"restricted hazardous wastes", "toxic substances", "toxic pollutants", or words
of similar import, under any applicable Environmental Law; and (c) any other
substance (other than Radon) prohibited or regulated pursuant to the provisions
of any Environmental Law.
"Xxxxxx Lease" means the Lease Agreement, dated as of January 21,
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2000, between Xxxxxx Affordable Housing of Florida, Inc., a Florida corporation,
and Echelon Commercial LLC, a Delaware limited liability company (in the form
executed on the Agreement Date and thereafter, as amended, modified or
supplemented from time to time with the prior written consent of Echelon).
"herein" or "hereof" means this entire Agreement rather than just the
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sentence, paragraph or section in which used.
"HSR Act" has the meaning set forth in Section 3.3 hereof.
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"Improvements" means all buildings, structures and other improvements
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existing upon the Land.
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"including", "include" or "includes" mean including as an example,
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without limiting the generality of the description.
"Indemnitee" has the meaning set forth in Section 10.3 hereof.
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"Indemnitor" has the meaning set forth in Section 10.3 hereof.
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"Intangible Personal Property" means the Intellectual Property and
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other intangible personal property used primarily in connection with the Total
Assets, and includes, without limitation, (i) the intangible personal property
described on Part VII of Schedule I and (ii) all interest of Echelon and its
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subsidiaries in all assignable credit records, security codes, assignable
telephone numbers, warranties and guarantees; provided, that in no event shall
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"Intangible Personal Property" include any or all of the Other Intangible
Personal Property.
"Intellectual Property" means all trademarks, trade names, service
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marks, copyrights and any applications therefor, inventions, discoveries,
technology, trade secrets, know-how, data, computer software programs or
applications, (including all source and object codes thereto) and all
proprietary information or material that in any material respect is used by
Echelon and/or its subsidiaries in connection with the Total Assets, as more
particularly described in Schedule XIV annexed hereto and made a part hereof;
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provided, that in no event shall "Intellectual Property" include any or all of
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the Other Intellectual Property.
"Joint Venture Interests" means Seller's equity interests in the joint
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ventures described in Part VI of Schedule I.
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"Land" means, singularly or collectively, the various real properties
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underlying the Real Estate Assets, together with all tenements, hereditaments,
easements, privileges, reversions, remainders and other rights and appurtenances
belonging or in any manner appertaining thereto, including all reversionary
interests in and to any adjoining or abutting rights-of-way and all riparian,
littoral and other water rights.
"Leases" means the leases relating to the use or occupancy of portions
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of the Commercial Property which are more particularly described on Schedule III
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annexed hereto and made a part hereof; provided, that in no event shall "Leases"
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include any or all of the Other Leases.
"Litigation" has the meaning set forth in Section 3.9 hereof.
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"Losses" has the meaning set forth in Section 10.3 hereof.
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"Material Adverse Effect" means a material adverse effect on the
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business, results of operations or financial condition of the Total Assets taken
as a whole.
"Merger" means the merger of EIN Acquisition Corp., a Florida
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corporation, with and into Echelon, with Echelon being the surviving
corporation, on the terms and subject to the conditions set forth in the Merger
Agreement.
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"Merger Agreement" means the Agreement and Plan of Merger, dated as of
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January 21, 2000, by and among ETA Holding LLC, a Delaware limited liability
company, EIN Acquisition Corp., a Florida corporation and a direct wholly-owned
subsidiary of ETA Holding LLC, and Echelon (as same is in effect on the
Agreement Date and thereafter, as amended, modified or supplemented from time to
time in accordance with the terms thereof and consistent with the terms of
Section 5.5(b) hereof).
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"Minimum Cash Amount" means $21,275,000.
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"NationsBank Tower" means the 26-story Class A office tower located at
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Xxx Xxxxxxxx Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx.
"Net Sale Proceeds" means, for any Pending Transaction, the gross cash
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proceeds received from such Pending Transaction, net of (i) reasonable and
customary transaction costs (including, without limitation, any underwriting,
brokerage or other customary selling commissions payable to employees or third
parties and all legal, advisory and other fees and expenses, including title,
survey, transfer taxes, property taxes and recording expenses associated
therewith), (ii) the amount of such gross cash proceeds required to be used to
repay any Existing Debt which is secured by or directly related to the
respective assets which were sold, transferred or otherwise disposed of
concurrently with the consummation of such Pending Transaction and (iii) any
pre-closing or post-closing adjustments to the purchase price for the Asset that
is the subject of such Pending Transaction in accordance with the terms and
conditions of the documentation relating to such Pending Transaction.
"Offer" has the meaning specified in the Merger Agreement.
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"Other Assets" means the "Assets" as defined in the Subscription
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Agreement.
"Other Assumed Liabilities" means the "Assumed Liabilities" as defined
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in the Subscription Agreement.
"Other Buyer" means "Company" as defined in the Subscription
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Agreement.
"Other Contracts" means the "Contracts" as defined in the Subscription
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Agreement.
"Other Existing Debt" means the "Assumed Debt" as defined in the
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Subscription Agreement.
"Other Intangible Personal Property" means the "Intangible Personal
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Property" as defined in the Subscription Agreement.
"Other Intellectual Property" means the "Intellectual Property" as
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defined in the Subscription Agreement.
"Other Leases" means the "Leases" as defined in the Subscription
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Agreement.
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"Other Permits" means the "Permits" as defined in the Subscription
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Agreement.
"Other Personalty" means the "Personalty" as defined in the
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Subscription Agreement.
"Other Real Estate Assets" means the "Real Estate Assets" as defined
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in the Subscription Agreement.
"Other Tangible Personal Property" means the "Tangible Personal
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Property" as defined in the Subscription Agreement.
"Pending Transactions" has the meaning set forth in Section 5.3
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hereof.
"Permits" means the licenses or permits required to be maintained by
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Seller for the development, use or occupancy of any portion of any of the Real
Estate Assets, including those certificates of occupancy and other material
licenses and permits described in Schedule X annexed hereto and made a part
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hereof; provided, that in no event shall "Permits" include any or all of the
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Other Permits.
"Person" means and includes an individual, a partnership, a joint
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venture, a corporation, a trust, a limited liability company, an unincorporated
organization, a group and a government or other department or agency thereof.
"Personalty" means the Tangible Personal Property and Intangible
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Personal Property; provided, that in no event shall "Personalty" include any or
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all of the Other Personalty.
"Pre-Approved Expenditures" means the aggregate amount of (i) all
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expenditures of Seller described in Part III of Schedule XV annexed hereto and
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made a part hereof but only to the extent actually paid by Seller in respect of
the respective Assets or Other Assets indicated on such Part III of Schedule XV
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at any time after November 30, 1999 and on or prior to the Escrow Closing Date
and (ii) any and all other expenditures incurred by Seller from time to time but
in each case only to the extent approved by Buyer in its sole discretion;
provided, that in no event shall the aggregate amount of all Pre-Approved
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Expenditures (as of the Escrow Closing Date specified in the initial Escrow Date
Notification Certificate delivered by Seller pursuant to Section 7.3 hereof)
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exceed $7,750,000.
"Purchase Price" has the meaning set forth in Section 2.1 hereof.
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"Radon" has the meaning set forth in Section 12.17 hereof.
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"Real Estate Assets" means, collectively, the Residential Property
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(including the Residential Property with respect to which Seller owns any Joint
Venture Interest), the Commercial Property and the Undeveloped Land, together
with the Personalty, Contracts, Leases and Permits relating thereto, as more
particularly described in Parts I, II and III of Schedule I; it being understood
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and agreed that in any event neither the Union Bank Building nor any of the
Other Real Estate Assets shall constitute a portion of the Real Estate Assets.
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"Real Estate Taxes" means any ad valorem taxes levied upon the Total
-----------------
Assets based upon the ownership, leasing, renting or operation of the Total
Assets; provided, however, that Real Estate Taxes shall not include any net
-------- -------
income, capital, stock, succession, transfer, franchise, gift, estate or
inheritance taxes. For avoidance of doubt, Real Estate Taxes shall include,
without limitation, real estate taxes, sales and use taxes, personal property
taxes, sewer rents, water rents, assessments (special or otherwise), transit
taxes, any tax or excise on rent or any other tax (however described) imposed
directly on account of the ownership, leasing, management or operation of, or
rental received for use and occupancy of, any or all of the Total Assets,
whether any such taxes are imposed by the United States, the State or County in
which the Asset or Other Asset, as the case may be, is located or any local
governmental municipality, authority or agency, or any other political
subdivision of any thereof.
"Release" means disposing, discharging, injecting, spilling, leaking,
-------
leaching, dumping, emitting, escaping, emptying, seeping, placing and the like,
into or upon any land or water or air, or otherwise entering into the
environment.
"Required Consents" means the consents, loan document modification
-----------------
agreements, documents and instruments to be delivered by the parties identified
in Schedule VIII annexed hereto and made a part hereof consenting to the
transactions contemplated by this Agreement and containing terms and provisions
no more onerous to Buyer than those set forth in Schedule VIII and otherwise in
form and substance reasonably satisfactory to Buyer.
"Residential Property" means the real property described in Part II of
-------------------- --
Schedule I.
-
"Savings Plan" has the meaning set forth in Section 11.2(a)(2) hereof.
------------ ----------
"Seller" has the meaning set forth in the introductory paragraph.
------
"7th Avenue Property" means that certain industrial warehouse located
-------------------
at 0000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx.
"Subscription Agreement" means the Subscription Agreement, dated as of
----------------------
January 21, 2000, by and among Xxxxxx Affordable Housing of Florida, Inc., a
Florida corporation, and Echelon and its subsidiaries signatory thereto.
"Subsidiary" means each of the entities signatory hereto other than
----------
Echelon, Buyer and Escrow Agent.
"Surveys" means the surveys with respect to the Real Estate Assets
-------
described on Schedule XXV annexed hereto and made a part hereof.
---
"Tangible Personal Property" means the personal property used
--------------------------
primarily in connection with the Total Assets (including, without limitation,
the tangible personal property described in Part VIII of Schedule I) other than
---- -
the Intangible Personal Property; provided, that in no event shall "Tangible
--------
Personal Property" include any or all of the Other Tangible Personal Property.
-9-
"Tax Credit LP Interest Purchase Agreement" means the Purchase
-----------------------------------------
Agreement, dated as of January 13, 2000, by and between Xxxxxx Affordable
Housing, Inc., a Delaware corporation, Echelon Affordable Housing, Inc., a
Florida corporation, and Echelon.
"Tax Credit LP Interests" means Seller's equity interests in the
-----------------------
limited partnerships described in Part V of Schedule I.
- -
"Tax Return" means any return, report, information return or other
----------
document (including any related or supporting information) filed or required to
be filed with any taxing authority with respect to Taxes.
"Taxes" means all taxes, charges, fees, levies, penalties or other
-----
assessments imposed by any United States federal, state, local or foreign taxing
authority, including, without limitation, income, excise, property, sales and
use, transfer, franchise, payroll, withholding, social security or other taxes,
including any interest, penalties or additions attributable thereto.
"Tender Offer Expiration Date" means the date (as extended from time
----------------------------
to time in accordance with the terms of the Merger Agreement) on which the Offer
expires.
"Title Commitments" means the ALTA owner's title insurance commitments
-----------------
with respect to the Real Estate Assets described on Schedule XXIV annexed hereto
----
and made a part hereof.
"Total Assets" means the Assets and the Other Assets, collectively.
------------
"Transferred Employee" has the meaning set forth in Section 11.1
-------------------- ----
hereof.
"Undeveloped Land" means the real property described in Part III of
---------------- ---
Schedule I.
-
"Union Bank Building" means the 3 1/2-story office building located at
-------------------
0000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx.
"WARN" has the meaning set forth in Section 11.2(d) hereof.
---- -------
Section 2. Purchase and Sale.
-----------------
2.1 Purchase Price. The aggregate purchase price to be paid by Buyer
--------------
to acquire the Assets (the "Purchase Price") shall be equal to (u) $47,921,172,
--------------
minus (v) the Minimum Cash Amount, minus (w) the Excess Cash Amount, minus (x)
----- ----- -----
the Commercial Property Security Deposit Amount, minus (y) the Executive Loans
-----
Repayment Amount, plus (z) the Pre-Approved Expenditures. The Purchase Price
----
shall be allocated among the Assets, and between the real estate and personal
property comprising the Assets, as set forth on Schedule IV annexed hereto and
--
made a part hereof.
-10-
2.2 Terms of Payment. The Purchase Price will be paid as follows:
----------------
(a) On the Agreement Date, Buyer will deliver to Escrow Agent
$4,275,750 (the "Deposit") which will be held in an interest-bearing account
-------
with an institution the deposits in which are insured by an agency of the United
States or, upon joint instructions of Seller and Buyer, invested in securities
of the United States; provided that, in each case, interest accruing thereon
--------
will constitute part of the Deposit.
(b) The Deposit shall be credited to Buyer against the Purchase Price
and will be non-refundable in all instances except as provided in Sections 5.9,
---
9.2, 10.1, and 10.2 hereof and the balance of the Purchase Price will be paid by
--- ---- ----
Buyer to Seller in U.S. dollars in immediately available funds at the time of
Closing in accordance with the terms and conditions of this Agreement. The
actual amount of the balance of the Purchase Price payable hereunder shall be
calculated by making reference to the notice to be delivered pursuant to Section
7.4(h) hereof.
------
2.3 Assumption of Liabilities. On the terms and subject to the
-------------------------
conditions of this Agreement, on the Closing Date, Buyer shall, or shall cause
one or more of its affiliates to, assume and pay, perform and discharge when
due, without duplication, (i) the Existing Debt (as in effect on the Closing
Date), including any prepayment obligations, (ii) any and all liabilities and
obligations of Seller arising out of or related to the Litigation (whether
before, on or after the Closing Date), (iii) any Real Estate Taxes (whether due
or to become due), (iv) any and all liabilities and obligations for which Buyer
is responsible pursuant to Section 11, (v) any and all liabilities and
--
obligations of Seller arising out of or related to the Permits, Contracts and
Leases (in each case, whether before, on or after the Closing Date), (vi) any
and all liabilities and obligations (including unpaid transaction costs)
relating to any of the Total Assets sold, transferred or otherwise disposed of
pursuant to a Pending Transaction, (vii) any and all liabilities and obligations
of Seller (as of the Closing Date) referred to in the Combining Trial Balance
under the column heading "Real Estate Assets & Liabilities", (viii) any and all
liabilities and obligations of Seller pursuant to Section 11 of the Subscription
Agreement, (ix) any and all liabilities and obligations of Seller arising out of
or related to the Distribution Agreement (excluding all of the Ancillary
Agreements, as defined in the Distribution Agreement), but only to the extent
same arises out of or relates to the Real Estate Assets and/or the Other Real
Estate Assets which were previously conveyed to Seller pursuant to the
Distribution Agreement but in any event excluding (A) any and all liabilities
and obligations of Seller arising out of or related to the Florida Progress
Business and the Echelon Business (as said terms defined in the Distribution
Agreement), except for the assumption of liabilities and obligations by Buyer
pursuant to the preceding provisions of this subclause (ix), (B) any and all
liabilities and obligations of Seller arising out of or related to permits,
contracts or leases which do not constitute Permits, Contracts or Leases
hereunder and (C) any and all liabilities and obligations with respect to
employee agreements and employee matters, except to the extent Buyer is
responsible therefor pursuant to Section 11 and (x) any and all other
--
liabilities and obligations of Seller arising out of or relating primarily to
any of the Total Assets (including any and all liabilities and obligations of
Seller arising out of the ownership, possession, construction, use, access,
leasing, maintenance, management, replacement, renewal, repair, operation,
enjoyment, alterations, modifications,
-11-
additions, accessions, improvements, appurtenances, replacements and
substitutions thereof and thereto but excluding any and all liabilities and
obligations of Seller which are expressly not assumed by Buyer pursuant to
preceding subclause (ix)) (collectively, the "Assumed Liabilities"); provided,
------------------- --------
that the Assumed Liabilities shall not include any of (i) the Excluded
Liabilities, all of which shall be retained by Seller, and (ii) the Other
Assumed Liabilities, all of which shall be assumed by the Other Buyer.
Section 3. Seller's Representations and Warranties. Seller makes the
---------------------------------------
following representations and warranties to Buyer, which representations and
warranties shall not survive the Escrow Closing Date (it being expressly
understood and agreed that, notwithstanding anything to the contrary (express or
implied) set forth herein, in the case of any breach by Seller of any of the
following representations and warranties, Buyer's sole right shall be the
exercise (if it is entitled to do so) of its right of termination pursuant to
Section 9.1(f) hereof (and Buyer's sole remedies in connection therewith shall
------
be those expressly set forth in Section 9.2 hereof) and Seller shall not at any
---
time (whether before, on or after the Escrow Closing Date) have any further
liability whatsoever with respect to any such breach of the following
representations and warranties):
3.1 Due Organization and Good Standing of Seller. (a) Echelon is a
--------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to own, lease and operate its properties, including the Assets,
and to carry on its business as now being conducted. True and complete copies
of Echelon's Amended and Restated Articles of Incorporation and By-laws, each as
in effect on the Agreement Date, have been previously made available for review
to Buyer. Except as set forth on Schedule XVIII annexed hereto and made a part
-----
hereof, Echelon is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
necessary.
(b) Each Subsidiary is an entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization and each
such entity has all requisite corporate, partnership or limited liability
company power and authority to own, lease and operate its properties, including
the Assets, and to carry on its business as now being conducted. True and
complete copies of each Subsidiary's certificate of incorporation, by-laws or
equivalent organizational documents, in each case as in effect on the Agreement
Date, have been previously made available for review to Buyer. Except as set
forth on Schedule XVIII, each Subsidiary is duly qualified or licensed to do
-----
business and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary.
(c) Each of the entities in which Echelon or its relevant Subsidiary
owns a Joint Venture Interest is an entity duly organized, validly existing and
good standing under the laws of the jurisdiction of its organization and each
such entity has all requisite corporate, partnership or limited liability
company power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. True and complete copies of
-12-
each such entity's certificate of incorporation, by-laws or equivalent
organizational documents, in each case as in effect on the Agreement Date, have
been previously made available for review to Buyer. Except as set forth on
Schedule XVIII, each such entity is duly qualified or licensed to do business
-----
and is in good standing in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it make such
qualification necessary.
3.2 Authorization and Validity of Agreement. Seller has the power
---------------------------------------
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and, subject only to those prohibitions and consents described in
Schedule V, to consummate the transactions contemplated hereby. The execution,
-
delivery and performance of this Agreement by Seller, and the consummation by it
of the transactions contemplated hereby, have been duly authorized and no other
action on its part is necessary to authorize the execution, delivery and
performance of this Agreement by it and the consummation of the transactions
contemplated hereby (other than complying with those prohibitions and consents
described in Schedule V). This Agreement has been duly executed and delivered
-
by Seller and, assuming that this Agreement constitutes a valid and binding
obligation of Buyer, is a valid and binding obligation of Seller enforceable
against Seller in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
3.3 Consents and Approvals; No Violations. Assuming any filings
-------------------------------------
required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), applicable to the sale of Assets to Buyer are made and
-------
any applicable waiting period thereunder has been terminated or has expired, the
execution and delivery of this Agreement by Echelon and its Subsidiaries and the
consummation by Echelon and its Subsidiaries of the transactions contemplated
hereby will not: (a) violate any provision of the Amended and Restated Articles
of Incorporation or By-Laws of Echelon or the comparable governing documents of
any Subsidiary, in each case, as amended; (b) violate any statute, ordinance,
rule, regulation, order or decree of any court or of any governmental or
regulatory body, agency or authority applicable to Echelon or any Subsidiary or
by which any of the Assets may be bound; (c) except as set forth on Schedule V,
-
require any filing with, or permit, consent or approval of, or the giving of any
notice to, any governmental or regulatory body, agency or authority; or (d)
except as set forth on Schedule V, result in a violation or breach of, conflict
-
with, constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, payment, purchase, sale
or acceleration) under, or result in the creation of any lien, security
interest, mortgage, charge, claim or encumbrance (each, an "Encumbrance") upon
-----------
any of the Assets under, any of the terms, conditions or provisions of, any
note, bond, mortgage, indenture, license, franchise, permit, agreement, lease,
franchise agreement or other instrument or obligation to which Echelon or any
Subsidiary is a party, or by which it or any of their respective Assets are
bound.
3.4 Title to Assets; Encumbrances. Echelon or its relevant
-----------------------------
Subsidiary, as applicable, has good and marketable title to the Land and the
Improvements thereon and has good title to the other Assets (other than with
respect to the Employee Loans, with respect to which no representation or
warranty is being made pursuant to this Section 3.4), subject to no
---
-13-
Encumbrance or other restriction of any kind or character, except for (a) liens
reflected on Schedule VI annexed hereto and made a part hereof, (b) zoning,
--
planning or other governmental restrictions, easements or permits or other
restrictions or limitations on the use of the Real Estate Assets, in each case
which would not have, individually or in the aggregate, a Material Adverse
Effect, (c) statutory liens or liens of landlords, carriers, warehousemen,
mechanics, suppliers, materialmen or repairmen arising in the ordinary course of
business and which would not have, individually or in the aggregate, a Material
Adverse Effect and (d) liens for current Taxes, assessments or governmental
charges or levies on property not yet delinquent. The Commercial Property, the
Residential Property and the Undeveloped Land are owned in fee by Seller and the
Real Estate Assets are the only real property interests that are owned by Seller
or in which Seller has a leasehold or other interest, except for the Tax Credit
LP Interests, certain real property leases under which Seller is the tenant (as
more particularly described in Schedule V) and the Union Bank Building.
-
3.5 Ownership of Joint Venture Interests. Echelon or the Subsidiary
------------------------------------
of Echelon set forth on Schedule VII, as applicable, is the owner and holder of
---
the Joint Venture Interests described on Schedule VII, free and clear of all
---
Encumbrances of every kind other than those described in Schedule VII annexed
---
hereto and made a part hereof. Except as set forth on Schedule VII, Seller has
---
received no written notice that the organizational documents of the joint
ventures to which the Joint Venture Interests relate are not in full force and
effect, and Seller is not in default of its obligations under such
organizational documents. True and complete copies of the organizational
documents of the joint ventures to which the Joint Venture Interests relate have
been made available for review to Buyer. Schedule VII includes a true and
---
complete list of all Joint Venture Interests owned by Echelon and its
Subsidiaries, the percentage interest in the entity owned by Echelon or such
Subsidiary, as the case may be, and the percentage interests owned by the other
shareholders, partners or members, as the case may be, in such entity.
3.6 Ownership of Employee Loans. Echelon is the owner and holder of
---------------------------
the Employee Loans, free and clear of all Encumbrances and claims of every kind.
True and complete copies of the documents evidencing the Employee Loans have
been made available for review to Buyer. Except as set forth in Part IX of
--
Schedule I, the documents evidencing the Employee Loans are in full force and
-
effect and no defaults on the part of the borrowers or Echelon thereunder have
occurred and are continuing. Except as set forth in Part IX of Schedule I, all
-- -
payments of principal and interest in respect of the Employee Loans are current.
Part IX of Schedule I sets forth the outstanding principal balance of each of
-- -
the Employee Loans as of the date indicated therein. Seller has not satisfied,
canceled or subordinated any of the promissory notes evidencing the Employee
Loans, in whole or in part.
3.7 Environmental Laws and Regulations. Except as set forth on
----------------------------------
Schedule IX annexed hereto and made a part hereof, and subject to Section 12.17
-- -----
hereof, to the knowledge of Seller:
(i) Hazardous Materials have not been generated, used,
treated or stored by Seller on the Real Estate Assets or the Other
Real Estate Assets, except for quantities generated, used, treated or
stored in compliance with
-14-
Environmental Laws and as required in connection with the normal
operations and maintenance of such Real Estate Assets or Other Real
Estate Assets, as the case may be;
(ii) Hazardous Materials have not been Released or disposed
of by Seller on the Real Estate Assets or the Other Real Estate
Assets, except for quantities Released or disposed of in compliance
with Environmental Laws and as required in connection with the normal
operation and maintenance of such Real Estate Assets or Other Real
Estate Assets, as the case may be;
(iii) Seller is in compliance with Environmental Laws and
the requirements of permits issued under such Environmental Laws with
respect to the Real Estate Assets and the Other Real Estate Assets;
(iv) There are no pending or threatened Environmental
Claims against Seller with respect to the Real Estate Assets or the
Other Real Estate Assets;
(v) There are no past or present actions, activities,
circumstances, conditions, events or incidents (including, without
limitation, the release, emission, discharge, presence or disposal of
any Hazardous Materials) which would form the basis for any
Environmental Claim against Seller or against any Person whose
liability for any Environmental Claim Seller has retained or assumed
whether contractually or by operation of law, in each case to the
extent same relates to the Real Estate Assets or the Other Real Estate
Assets;
(vi) Seller has delivered to or otherwise made available
for inspection by Buyer true, complete and correct copies and results
of any reports, studies, analyses, tests or monitoring in the
possession of Seller pertaining to Hazardous Materials in, on, beneath
or adjacent to any Real Estate Assets or any Other Real Estate Assets;
and
(vii) There are no underground storage tanks located on the
Real Estate Assets or the Other Real Estate Assets.
3.8 Leases. Schedule III sets forth all Leases affecting any
------ ---
portions of any of the Commercial Property and with respect to each Lease, as of
the Agreement Date, the name of the tenant, the location and the gross leasable
area of any space leased, the monthly rent due thereunder, the Lease termination
date and the amount of any security deposits. True and complete copies of such
Leases and the leases relating to the Residential Properties have been made
available for review to Buyer. Except as set forth on Schedule III, each Lease
---
is in full force and effect, all rents and additional rents due thereunder have
been paid to date, and Seller has neither sent nor received any notice of a
material default under any Lease at a Commercial Property which remains
outstanding. The Commercial Property, the Residential Property and the
Undeveloped Land are not subject to any ground leases.
-15-
3.9 Litigation. Schedule XVII annexed hereto and made a part hereof
---------- ----
contains a current list of all actions, suits, arbitrations and proceedings
pending, or to Seller's knowledge threatened, against or concerning the Total
Assets (collectively, "Litigation"). To Seller's knowledge, there are no
----------
judgments, orders or decrees entered in any lawsuit or proceeding against or
concerning the Total Assets, other than as set forth on Schedule XVII. Seller
----
has received no written notice of any pending or threatened condemnation, taking
or similar proceeding affecting the Total Assets, or any pending public
improvements which would result in, nor has Seller received written notice of,
special assessments affecting the Total Assets.
3.10 Land Use. With respect to the Real Estate Assets, Seller has not
--------
received any written notice from any governmental authority, and Seller
otherwise has no knowledge, that a Real Estate Asset is not in substantial
compliance with the County regulations and restrictions applicable to the zoning
district within which it is situated, and, except as described in Schedule XVI
---
annexed hereto and made a part hereof, Seller has no actual knowledge of any
covenants, restrictions or other agreements with or in favor of any governmental
authority or other Person limiting in any material respect the use of any of the
Real Estate Assets for the purposes permitted by the regulations governing the
applicable zoning district.
3.11 Contracts. Except for the Leases, Encumbrances on title and the
---------
documents and instruments relating to the Existing Debt, Schedule XI sets forth
--
all agreements, contracts and commitments by which Seller is bound primarily
affecting or relating to the Total Assets other than such contracts, agreements
or commitments that involve base payments or the performance of services by
Seller of an amount or value (as measured by the revenue derived therefrom
during fiscal year 1998-1999) not in excess of $12,000 annually or are
terminable by Seller on not more than 90 days notice without penalty. True and
complete copies of all of the agreements, contracts and commitments referred to
in Schedule XI have been made available for review to Buyer. Except as
--
otherwise set forth on Schedules V and XI, each agreement, contract and
- --
commitment referred to in Schedule XI is in force and effect and (a) there
--
exists no default or event of default thereunder (or any event, occurrence,
condition or act on the part of Seller which, with the giving of notice, the
lapse of time or the happening of any other event or condition, would become a
default or event of default thereunder) and (b) no approval or consent of, or
notice to, any Person is needed in order that each such contract or agreement
shall continue in force and effect in accordance with its terms without penalty,
acceleration or rights of early termination by reason of the consummation of the
transactions contemplated by this Agreement.
3.12 Existing Debt. Echelon or its relevant Subsidiary, as
-------------
applicable, is the borrower under the Existing Debt encumbering the Assets owned
by it, as more particularly set forth on Schedule II. Except as set forth on
--
Schedule II, the documents evidencing and securing the Existing Debt are in full
--
force and effect and no defaults on the part of the borrower or the lender
thereunder have occurred and are continuing. Except for the Existing Debt and
except for debt incurred in connection with Pending Transactions, no other
indebtedness for borrowed money encumbers any of the Assets. Except as set
forth on Schedule II, all payments of principal and interest in respect of the
--
Existing Debt are current. True and complete copies of all agreements
evidencing and securing the Existing Debt have been made available for review to
Buyer.
-16-
3.13 Employee Benefit Plans; Labor Matters. Each employee benefit
-------------------------------------
plan within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all stock purchase, stock
-----
option, severance, employment, change-in-control, fringe benefit, collective
bargaining, bonus, incentive, deferred compensation and all other employee
benefit plans, programs, policies or agreements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transactions contemplated by this Agreement or
otherwise) maintained by Seller (including for purposes of this Section 3.13,
----
all employers that would be treated, together with Seller, as a single employer
within the meaning of Section 414(b) and (c) of the Internal Revenue Code of
1986, as amended (the "Code")) or to which Seller contributes or has current or
----
contingent liability (collectively, the "Employee Benefit Plans") is listed on
----------------------
Schedule XII annexed hereto and made a part hereof. Seller does not contribute
---
and has not contributed during the past six years to any "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA, and Seller is not subject to
any withdrawal liability under Title IV of ERISA with respect to any such plan.
No Employee Benefit Plan is subject to Title IV of ERISA or Section 412 of the
Code. Seller has not incurred and does not reasonably expect to incur any
liability under Title IV of ERISA. No Employee Benefit Plan provides for post-
employment or post-retirement health or medical or life insurance benefits for
retired or former employees of Seller or its affiliates, except as required to
avoid excise tax under Section 4980B of the Code. Except as set forth on
Schedule XII: (i) each Employee Benefit Plan is in substantial compliance with
---
applicable law and has been administered and operated in all material respects
in accordance with its terms; (ii) each Employee Benefit Plan which is intended
to be "qualified" within the meaning of Section 401(a) of the Code has received
a favorable determination letter from the Internal Revenue Service and, to the
knowledge of Seller, no event has occurred and no condition exists which would
result in the revocation of any such determination; (iii) neither Seller, nor
any other "disqualified person" or "party in interest" (as defined in Section
4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has engaged in
any transaction in connection with any Employee Benefit Plan that would result
in the imposition of a material penalty pursuant to Section 502(i) of ERISA or a
material tax pursuant to Section 4975 of the Code and no event has occurred and
no condition exists that would otherwise subject Seller to any material excise
tax, penalty, fine or lien imposed by ERISA or the Code with respect to an
Employee Benefit Plan; and (iv) no claim, action or litigation, has been made,
commenced or, to the knowledge of Seller, threatened with respect to any
Employee Benefit Plan (other than routine claims for benefits payable in the
ordinary course, and appeals of denied such claims). Except as provided by or
under the agreements and arrangements described on Schedules XII and XIII, the
--- ----
execution of this Agreement and the consummation of the transactions
contemplated hereby will not result in any material payment to or accelerate the
vesting of benefits of any employee of Seller under any Employee Benefit Plan or
other plan, policy or agreement of Seller. With respect to each Employee Benefit
Plan, Seller has delivered or made available for review to Buyer or its counsel
a true and complete copy of, to the extent applicable: (a) the plan document
(including any amendments thereto) and any related trust agreement or other
funding instrument, (b) the most recent Internal Revenue Service determination
letter, (c) the summary plan description and (d) the annual report most recently
filed on Internal Revenue Service Form 5500-series.
-17-
3.14 Intellectual Property. (a) Schedule XIV sets forth a true and
--------------------- ---
complete list of all Intellectual Property, specifying, if applicable, the
registration or application numbers for each such Intellectual Property, owned
by or licensed to Echelon and/or its subsidiaries. Other than as set forth on
Schedule XIV, neither Echelon nor any of its subsidiaries owns or uses any other
---
item of intellectual property which is material to the Total Assets.
(b) Except as set forth on Schedule XIV, Echelon and/or its
---
subsidiaries own or have the valid and enforceable right to use all Intellectual
Property in the manner such Intellectual Property is being used or held for use
by Echelon and/or its subsidiaries.
(c) Except as set forth on Schedule XVII, neither Echelon nor any of
----
its subsidiaries (or any of their respective affiliates) is a defendant in any
investigation or proceeding relating to, or otherwise has been notified of, any
alleged claim of infringement with respect to the Intellectual Property and, to
Seller's knowledge, use of the Intellectual Property in connection with the
Total Assets as currently conducted does not infringe upon any third party
proprietary rights.
(d) There is no outstanding claim or suit brought by Echelon or its
subsidiaries (or any of their respective affiliates) for infringement by any
other Person of any of the Intellectual Property.
(e) Except as set forth on Schedule XIV, there are no licenses,
---
sublicenses or other agreements relating to the Intellectual Property pursuant
to which Echelon or its subsidiaries (or any of their respective affiliates) is
authorized to use any Intellectual Property owned or controlled by a third
party, and no third party is authorized to use any Intellectual Property owned
or controlled by Echelon or its subsidiaries (or any of their respective
affiliates). Echelon and its subsidiaries are not, nor as a result of the
execution, delivery or performance of their obligations hereunder will Echelon
or its subsidiaries be, in violation of, or lose any rights pursuant to, any
license or agreement described in Schedule XIV.
---
(f) To the knowledge of Seller, there has not been and there is not
currently any unauthorized use, infringement or misappropriation of any of the
Intellectual Property by any other Person, including any employee or former
employee of Echelon and/or its subsidiaries.
3.15 Insurance. Schedule XXII annexed hereto and made a part hereof
--------- -------------
sets forth a true and complete listing of all insurance policies maintained by
Seller on and as of the Agreement Date relating to the Real Estate Assets or the
Other Real Estate Assets, with the amounts insured (and any deductibles) set
forth therein.
3.16 Assets. The Total Assets are all of the assets used in Seller's
------
real estate business or which are reasonably necessary for Seller's real estate
business to function and operate as an on-going concern in substantially the
same manner as Seller's real estate business has recently functioned and
operated as an on-going concern; it being understood and agreed, for avoidance
of doubt, that, for purposes of this Section 3.16, none of the Excepted Leases
----
or the Tax Credit LP Interests relate to Seller's real estate business.
-18-
3.17 Reports and Financial Statements. (a) Since December 18, 1996,
--------------------------------
Seller has filed all forms, reports and documents with the Securities and
Exchange Commission (the "Commission") required to be filed by it pursuant to
----------
the federal securities laws and the Commission rules and regulations thereunder,
and all forms, reports and documents filed with the Commission by Seller have
complied in all material respects with all applicable requirements of the
federal securities laws and the Commission rules and regulations promulgated
thereunder. Seller has, prior to the date of this Agreement, made available for
review to Buyer true and complete copies of all forms, reports, registration
statements and other filings filed by Seller with the Commission since December
18, 1996 (such forms, reports, registration statements and other filings,
together with any exhibits, any amendments thereto and information incorporated
by reference therein, are sometimes collectively referred to as the "Commission
----------
Filings"). Except to the extent amended or superseded by a subsequent filing
-------
with the Commission made prior to the date hereof, as of their respective dates,
the Commission Filings did not contain any 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 the circumstances under which they were
made, not misleading. The audited consolidated balance sheets (and related
audited consolidated statements of operations, audited consolidated statement of
shareholders' equity and audited consolidated statement of cash flows) for each
of the years in the two-year period ended December 31, 1998 and the unaudited
consolidated balance sheet (and related consolidated statement of operations,
consolidated statement of shareholders' equity and consolidated statement of
cash flows) as of September 30, 1999 (such statements, collectively, the
"Financial Statements"), included in the Commission Filings, were prepared in
--------------------
accordance with generally accepted accounting principles ("GAAP") (as in effect
----
from time to time) applied on a consistent basis in all material respects,
(except as may be indicated therein or in the notes or schedules thereto) and
fairly present, in all material respects, the consolidated financial position of
Echelon and its consolidated subsidiaries as of the dates thereof and the
results of their operations and changes in cash flows for the periods then ended
(subject, in the case of unaudited statements, to the absence of notes and
normal year-end adjustments).
(b) Part I of Schedule XXI sets forth the trial balance of the
- ---
assets, liabilities and shareholders' equity accounts of Echelon and its
consolidated Subsidiaries as of September 30, 1999. Each such account reflected
on the trial balance has been included in or allocated between (x) Seller's
leveraged lease portfolio and (y) Seller's real estate portfolio, as agreed to
by the parties hereto.
(c) Part II of Schedule XXI sets forth the condensed consolidated
-- ---
financial statements of Echelon and its consolidated Subsidiaries as of and for
the three and nine month periods ended September 30, 1999 together with the
report of KPMG LLP dated October 15, 1999. The balance sheet included in such
condensed consolidated financial statements was prepared from and is consistent
with the trial balance referred to in Section 3.17(b) hereof.
-------
3.18 Absence of Certain Changes. Except as previously disclosed in
--------------------------
the Commission Filings, as set forth on Schedule XIX annexed hereto and made a
---
part hereof or as otherwise contemplated by this Agreement, since September 30,
1999 (i) there has not been any Material Adverse Effect, other than any change
(x) arising out of changes in general economic
-19-
conditions or (y) arising out of economic changes which affect, in general, the
markets in which Echelon operates and (ii) the businesses of Echelon and each of
its subsidiaries have been conducted only in the ordinary course.
3.19 Liabilities. Seller has no material claims, liabilities or
-----------
indebtedness outstanding which would be required to be reflected on a balance
sheet prepared in accordance with GAAP except (i) as set forth in the Financial
Statements, or referred to in the footnotes thereto, (ii) as set forth on
Schedule XXI, (iii) for liabilities incurred subsequent to September 30, 1999 in
---
the ordinary course of business or (iv) as otherwise disclosed in the Commission
Filings.
3.20 Compliance with Laws. Except as set forth in the Commission
--------------------
Filings or as set forth on Schedule XX annexed hereto and made a part hereof,
--
Seller is in compliance with all applicable laws, regulations, orders, judgments
and decrees (other than with respect to Taxes, environmental matters, employee
benefits and federal securities laws, which are the subject of specific
representations contained in this Agreement).
3.21 Year 2000. There is not reasonably expected to be a Material
---------
Adverse Effect caused by the failure to be Year 2000 Compliant with respect to
computer systems, computer software or technology that are internal to Seller.
There is not reasonably expected to be a Material Adverse Effect caused by the
failure to be Year 2000 Compliant of any products or services of Seller sold or
licensed to customers of Seller. For purposes of this Agreement, "Year 2000
---------
Compliant" means that a product or system is (i) able to receive, record, store,
---------
process, calculate, manipulate and output dates from and after January 1, 2000,
time periods that include January 1, 2000 and information that is dependent on
or relates to such dates or time periods, in the same manner and with the same
accuracy, functionality, data integrity and performance as when dates or time
periods prior to January 1, 2000 are involved and (ii) able to store and output
date information in a manner that is unambiguous as to century.
3.22 No Other Representations or Warranties. Except for the
--------------------------------------
representations and warranties contained in this Section 3 and in Section 8
- -
hereof, neither Seller nor any other Person makes any other express or implied
representation or warranty on behalf of Seller or any of its affiliates.
Section 4. Buyer's Representations and Warranties. Buyer makes the
--------------------------------------
following representations and warranties to Seller, which representations and
warranties shall not survive the Escrow Closing Date, except for (x) those
representations and warranties set forth in Sections 4.4, 4.5 and 4.6 hereof
--- --- ---
which shall survive for a period of one year after the Closing Date and (y)
those representations, warranties and agreements set forth in Section 4.9 hereof
---
which shall survive as set forth therein:
4.1 Due Organization and Good Standing of Buyer. Buyer is a limited
-------------------------------------------
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware. Buyer has all requisite limited liability
company power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Buyer is duly qualified or
licensed to do business in Delaware and will, on or prior to the Closing Date,
qualify to do business in each jurisdiction where the Assets are located.
-20-
4.2 Authorization and Validity of Agreement. Buyer has the power and
---------------------------------------
authority to execute and deliver this Agreement, to perform its obligations
hereunder and consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by Buyer, and the consummation by it
of the transactions contemplated hereby, have been duly authorized by the member
or manager of Buyer and no other limited liability company action on the part of
Buyer is necessary to authorize the execution, delivery and performance of this
Agreement by Buyer and the consummation of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Buyer and is a valid and
binding obligation of Buyer enforceable against Buyer in accordance with its
terms, except to the extent that its enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
4.3 Consents and Approvals; No Violations. Assuming any filings
-------------------------------------
required under the HSR Act applicable to the sale of Assets to Buyer are made
and any applicable waiting period thereunder has been terminated or has expired,
the execution and delivery of this Agreement by Buyer and the consummation by
Buyer of the transactions contemplated hereby will not: (a) violate any
provision of the certificate of formation or operating agreement of Buyer; (b)
violate any statute, ordinance, rule, regulation, order or decree of any court
or of any governmental or regulatory body, agency or authority applicable to
Buyer or by which any of its properties or assets may be bound; (c) require any
filing with, or permit, consent or approval of, or the giving of any notice to,
any governmental or regulatory body, agency or authority; or (d) result in a
violation or breach of, conflict with, constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, payment or acceleration) under, or result in the creation of any
Encumbrance upon any of the property or assets of Buyer under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease, franchise agreement or other instrument or
obligation to which Buyer is a party, or by which it or its assets are bound
except, in the case of clauses (b), (c) and (d), above, for any such filing,
permit, consent, approval or notice, the failure to obtain or make which, and
except for any breach, violation or Encumbrance which, would not prevent or
materially delay the consummation of the transactions contemplated by this
Agreement.
4.4 Condition of the Assets. Buyer has conducted all due diligence
------------------------
that Buyer deems necessary or desirable with respect to the Total Assets, the
Assumed Liabilities, the Other Assumed Liabilities, this Agreement and the
transactions contemplated hereby in order for it to enter into this Agreement
and consummate the transactions contemplated hereby. Except for the limited
representations of Seller specifically set forth in Section 3 hereof, Buyer will
-
rely solely upon such due diligence in acquiring the Assets and in assuming the
Assumed Liabilities. Without limiting the generality of the foregoing, Buyer
acknowledges that Seller makes and will make no representation or warranty
concerning environmental conditions heretofore, now or hereafter existing on
properties adjoining or proximate to the Total Assets. Notwithstanding anything
in this Agreement, it is expressly understood and agreed that Buyer is acquiring
the Assets "AS IS", "WHERE IS" and "WITH ALL FAULTS", and that Seller has not
made and does not and will not make any representations or warranties, express
or implied, including any
-21-
with respect to the quality, physical condition, expenses, legal status, zoning,
value, utility or development or operating potential of the Total Assets, or the
absence of any Hazardous Substances on, in, under or near the Total Assets, or
any other matter or thing affecting or relating to the Total Assets, the Assumed
Liabilities, the Other Assumed Liabilities or this Agreement (including, without
limitation, warranties of merchantability and/or of fitness for a particular
purpose) which might be pertinent in considering whether to purchase the Assets,
assume the Assumed Liabilities or to make and enter into this Agreement, except,
in each case, to the extent of the limited representations set forth in Section
3 hereof. Seller is not liable or bound in any manner by any warranties, either
-
expressed or implied, guaranties, or any promises, statements, representations
or information pertaining to the Total Assets or to the value thereof made or
furnished by any broker or any real estate agent, employee, servant or other
Person representing or purporting to represent Seller. As of the Agreement Date,
Buyer is not aware of any events, facts or circumstances which, individually or
in the aggregate, have or would have a Material Adverse Effect.
4.5 Liens. Buyer acknowledges that it is acquiring the Assets
-----
subject to the matters described in Schedules VI, VII and VIII and the Existing
-- --- ----
Debt described in Schedule II, and such other matters as are permitted pursuant
--
to the terms of this Agreement.
4.6 Purchase for Investment. Buyer will acquire the Joint Venture
-----------------------
Interests for its own account for investment and not with a view toward any
resale or distribution thereof, without prejudice, however, to the rights of
Buyer at all times to sell or otherwise dispose of all or any part of such
securities under an effective registration statement under the Securities Act of
1933, as amended, or under an exemption from such registration available under
the Securities Act of 1933, as amended.
4.7 Sufficient Funds. Buyer has sufficient funds available to it to
----------------
purchase the Assets pursuant to this Agreement and will not, prior to Closing,
incur third party debt to finance any portion of the Purchase Price (it being
understood and acknowledged that concurrently with the execution and delivery of
this Agreement by the parties hereto, each of the Subscription Agreement and the
Xxxxxx Lease (in each case, executed copies of which have heretofore been made
available to Seller) shall have been executed and delivered by the respective
parties thereto.)
4.8 Title and Survey. Prior to the Agreement Date, Buyer has
----------------
reviewed (i) the Title Commitments or other reports with respect to the Real
Estate Assets described on Schedule XXIV and (ii) the Surveys with respect to
----
the Real Estate Assets described on Schedule XXV. Buyer hereby acknowledges its
---
approval as of the Agreement Date of the condition of title to the Real Estate
Assets, subject to Seller's fulfilling its obligation to deliver the documents
described in Sections 7.4(b)(x) through (b)(xiii), inclusive, hereof.
--------- ---------
4.9 Inspection. Prior to the Agreement Date, Buyer has inspected the
----------
Total Assets and any operating files maintained by Seller or its property
managers in connection with the ownership, leasing, maintenance and/or
management of the Total Assets, including, without limitation, the Leases, lease
files, operating agreements, insurance policies, bills, invoices,
-22-
receipts and other general records relating to the Total Assets, correspondence,
surveys, plans and specifications, warranties for services and materials
provided, environmental assessments and similar materials, in each case, as
Buyer has deemed necessary in connection with making its determination to
execute and deliver this Agreement. Buyer hereby indemnifies Seller and holds
Seller harmless from and against any claim for liabilities, costs, expenses
(including reasonable attorney's fees), damages or injuries arising out of or
resulting from physical injury or damages to persons or property resulting from
the inspections of the Total Assets by Buyer or its agents other than injury or
damages resulting from Seller's gross negligence or willful misconduct, and such
indemnity shall survive Closing or any termination of this Agreement.
4.10 No Other Representations or Warranties. Except for the
--------------------------------------
representations and warranties contained in this Section 4 and in Section 8
- -
hereof, neither Buyer nor any other Person makes any other express or implied
representation or warranty on behalf of Buyer or any of its affiliates.
Section 5. Covenants.
---------
5.1 Compliance. During the period commencing on the Agreement Date
----------
and ending on the Closing Date, Seller will, in all material respects, comply
with and abide by all of the covenants, conditions and requirements set forth or
imposed by, related to or arising out of all statutes, laws, ordinances, rules,
regulations, plans and specifications, permits, agreements, contracts,
authorizations or approvals related or applicable to any portion of the Assets,
and will use commercially reasonable efforts to maintain all contracts, permits
and other agreements affecting the Assets in good standing and free from
delinquency or material default, other than those which are modified, rescinded
or terminated in the ordinary course of business or in connection with Pending
Transactions and those the rescission, modification or termination of which
would not reasonably be expected to have a Material Adverse Effect.
5.2 Notices of Violations. During the period commencing on the
---------------------
Agreement Date and ending on the Closing Date, in the event that Seller receives
any notice from any County, or any other governmental or quasi-governmental
authority having jurisdiction over any of the Real Estate Assets, of a violation
or alleged violation of any statute, law, ordinance, rule, permit, regulation or
agreement governing the planning, development, construction, occupancy, use or
maintenance of any portion of any of the Real Estate Assets, or of any permit,
approval or authorization issued in connection therewith or of any contemplated
or pending investigation with respect thereto, Seller promptly will deliver a
copy of such notice to Buyer; and Buyer will have the option (but will not be
required) either to (a) participate with Seller in responding to such notice or
(b) seek independently to intervene in any proceeding of which notice has been
given for the purpose of protecting Buyer's interests in and with respect to any
of the Real Estate Assets.
5.3 Ownership of Assets; Proceeds of Asset Sales. During the period
--------------------------------------------
commencing on the Agreement Date and ending on the Closing Date, Seller shall
not without the prior consent of Buyer (which consent shall not be unreasonably
withheld, conditioned or delayed) directly or indirectly sell, transfer,
encumber or otherwise dispose of any of the Assets
-23-
or any portion thereof to any Person, other than sales, transfers or other
dispositions of Assets (i) constituting non-material equipment or personalty
made in the ordinary course of business, (ii) as contemplated by Sections 10.1
----
and 10.2 hereof, (iii) constituting overdue accounts receivable arising in the
----
ordinary course of business, but only in connection with the compromise or
collection thereof consistent with sound business practices (and not as a part
of any bulk sale or financing of receivables) or (iv) pursuant to any or all of
the transactions described in Schedule XV (collectively, the "Pending
-- -------
Transactions"); provided, that the Net Sale Proceeds from any sale, transfer,
------------
encumbrance or disposition of Assets, in whole or in part, pursuant to any
Pending Transaction consummated after the Agreement Date and prior to the
Closing Date (collectively, the "Asset Sales Proceeds") shall be promptly
--------------------
delivered by Seller to Escrow Agent, and such Asset Sales Proceeds shall be held
in an interest-bearing account with an institution the deposits in which are
insured by an agency of the United States or, upon joint instructions of Seller
and Buyer, invested in securities of the United States; provided that, in each
--------
case, interest accruing thereon will constitute part of such Asset Sales
Proceeds.
5.4 Operation of Assets Subsequent to the Agreement Date. Seller
----------------------------------------------------
agrees that, except for Pending Transactions (including all transactions
incident thereto as set forth on Schedule XV, such as (i) the incurrence of
--
indebtedness for borrowed money and (ii) the incurrence of capital expenditures)
and except as required or contemplated by this Agreement, the Subscription
Agreement, the Tax Credit LP Interest Purchase Agreement or the Merger Agreement
or otherwise consented to or approved by Buyer (which consent or approval shall
not be unreasonably withheld, conditioned or delayed), during the period
commencing on the Agreement Date and ending on the Closing Date:
(a) Echelon will, and will cause its Subsidiaries to, operate, manage
and maintain the Assets and otherwise conduct its business relating to the
Assets only according to its ordinary course of business consistent with past
practice and will use reasonable best efforts to preserve intact its business
organization, keep available the services of its officers and employees and
maintain satisfactory relationships with licensors, suppliers, distributors,
clients, landlords, tenants, joint venture partners, employees and others having
business relationships with it;
(b) Echelon shall not, and shall cause its Subsidiaries not to, (i)
make any change in or amendment to its articles of incorporation or by-laws or
comparable governing documents (including, without limitation, documents
governing Seller's Joint Venture Interests, but excluding documents governing
Seller's Tax Credit LP Interests); (ii) authorize for issuance, issue, sell or
deliver (or agree or commit to issue, sell or deliver), whether pursuant to the
issuance or granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise, any shares of its capital stock (other than in connection
with (A) the exercise of certain options outstanding on the date hereof or (B)
the exercise of subscription rights set forth in the Echelon International
Corporation 1996 Employee Stock Purchase Plan (as in effect on the date hereof
and as may be amended as contemplated by the Merger Agreement)); (iii) sell or
pledge any stock owned by it in any of its Subsidiaries or any other entity in
which it has an equity interest (including the issuers of the Joint Venture
Interests, but excluding the issuers of Tax Credit LP Interests); (iv) enter
into any contract or commitment with respect to capital expenditures; (v)
acquire (by merger, consolidation, or acquisition of stock or assets or
-24-
otherwise) any corporation, partnership or other business or division thereof
(or any interest therein); provided, that any subsidiary of Echelon may be
--------
merged with and into Echelon or any other subsidiary of Echelon; (vi) acquire a
material amount of assets or securities; (vii) except to the extent required
under existing Employee Benefit Plans as in effect on the date of this
Agreement, (A) increase the compensation or fringe benefits of any of its
directors, officers or employees, (B) grant any severance or termination pay not
currently required to be paid under existing severance plans, (C) enter into any
employment, consulting or severance agreement or arrangement with any present or
former director, officer or other employee of Seller or (D) establish, adopt,
enter into or amend or terminate any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
directors, officers or employees; (viii) except as provided in Sections 5.3 and
---
5.5 hereof, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose
---
of, encumber or subject to any lien, any material assets or incur or modify any
new or existing indebtedness for borrowed money; (ix) make any material Tax
election or settle or compromise any material Tax liability, in each case only
to the extent same would adversely affect the Assets; (x) except as required by
applicable law or GAAP, make any material change in its method of accounting;
(xi) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of
Echelon or any of its Subsidiaries that owns any Assets (other than in
connection with (A) the Merger or (B) any merger of a subsidiary of Echelon with
and into Echelon or any other subsidiary of Echelon); (xii) except pursuant to
any contract relating to any Pending Transaction, make any loans, advances or
capital contributions to, or investment in, any other Person; (xiii) declare,
set aside or pay any dividends on, or make any other distributions in respect
of, any of its capital stock other than dividends and distributions by a direct
or indirect subsidiary of Echelon to its parent; (xiv) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock; (xv) enter into any agreement providing for the acceleration of
payment or performance or other consequence as a result of the transactions
contemplated hereby or any other change of control of Echelon or its
subsidiaries other than with respect to the satisfaction of Existing Debt; (xvi)
purchase, redeem or otherwise acquire any shares of capital stock of Seller or
any rights, warrants or options to acquire any such shares or other securities;
or (xvii) agree, in writing or otherwise, to take any of the foregoing actions;
and
(c) Echelon shall not, and shall not permit any of its Subsidiaries
to, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of,
encumber or subject to any lien any of the Assets associated with the general
ledger accounts listed in Schedule XXIII annexed hereto and made a part hereof
-----
for any purpose (including, without limitation, for the purpose of satisfying
any Excluded Liabilities) except as related to, and for the benefit of, the
Assets.
5.5 Status of Agreements. (a) During the period commencing on the
--------------------
Agreement Date and ending on the Closing Date, except in connection with Pending
Transactions, the Required Consents or as set forth on Schedule V or otherwise
-
consented to or approved by Buyer (which consent or approval shall not be
unreasonably withheld, conditioned or delayed), Seller will not do any of the
following:
-25-
(i) cancel or amend or modify in any material respect, (x)
any Contract or Lease affecting any of the Real Estate Assets or (y)
any agreements, documents or instruments relating to the Existing
Debt;
(ii) enter into any new contract, agreement or commitment
(other than (x) a contract, agreement or commitment that involves base
payments or the performance of services by Seller of an amount or
value (as measured by the revenue derived therefrom during fiscal year
1998-1999) not in excess of $12,000 annually or terminable by Seller
on not more than 90 days notice without penalty, or (y) a contract,
agreement or commitment that is entered into (A) in order to preserve
public safety as to one or more Assets or (B) as a result of an
emergency situation or force majeure event affecting one or more
Assets), any new Lease (other than a Lease demising space of less than
5000 square feet on terms and conditions consistent with the current
leasing practices of the subject property and otherwise consistent
with good business practice) affecting any of the Real Estate Assets
or any new agreements, documents or instruments relating to the
Existing Debt; or
(iii) intentionally do any act or omit to do any act that
will cause a material breach of any Contract or Lease or agreements,
documents or instruments relating to the Existing Debt.
(b) During the period commencing on the Agreement Date and ending on
the Closing Date, Echelon will not, without the prior consent of Buyer (not to
be unreasonably withheld, conditioned or delayed), amend, modify or supplement
the Merger Agreement (including the Schedules and Exhibits thereto) or grant any
consent or waiver under the Merger Agreement, in each case that would in any
manner materially and adversely affect the rights, obligations and interests of
Buyer under this Agreement (it being expressly understood and agreed that in no
event shall Section 4.07 or Section 5.01 of the Merger Agreement be amended,
modified or supplemented (and in no event shall Seller grant any consent or
waiver with respect to any such Section) without the prior consent of Buyer (not
to be unreasonably withheld, conditioned or delayed)). The parties hereto
acknowledge that Buyer is a third party beneficiary of the agreements made by
Echelon pursuant to Section 4.07 of the Merger Agreement and that Seller shall
be required to provide Buyer with any and all information required to be
provided to Parent (as defined in the Merger Agreement) pursuant to Section
4.07(c) of the Merger Agreement. Nothing in this Section 5.5(b), however, shall
------
in any manner whatsoever require that the Board of Directors of Echelon take any
action or refrain from taking any action, in each case which is permitted under
Section 4.07 of the Merger Agreement.
5.6 Further Assurances. On or after the Closing Date and without
------------------
further consideration, each of Seller and Buyer shall execute, acknowledge and
deliver such further agreements, assignments, deeds, certificates, assumptions,
transfers and assurances and shall take, or cause to be taken, such further
actions, in each case, as shall be reasonably requested by Buyer or Seller from
time to time for the more effective transfer, assignment and conveyance to Buyer
of any of the Assets or the Assumed Liabilities, including without limitation,
obtaining the
-26-
consent of third parties (without obligating Buyer or Seller or their respective
affiliates to spend money or assume obligations in connection therewith), as, in
the reasonable opinion of Buyer or Seller, as the case may be, or their
respective counsel, are necessary to transfer, assign and convey the Assets to
Buyer, the assumption by Buyer of the Assumed Liabilities, the consummation of
the transactions contemplated by this Agreement or otherwise in the effectuation
of the intentions and purposes of this Agreement; provided, that all reasonable
--------
out-of-pocket costs and expenses incurred in connection with any of the
foregoing actions shall be for the account of the party requesting such actions
subject, in each case, to providing reasonable documentation of such out-of-
pocket costs and expenses, unless such actions relate to the Assumed
Liabilities, in which case all reasonable out-of-pocket costs and expenses in
connection therewith shall be for the account of Buyer (irrespective of whether
such actions were at the request of Seller or Buyer). In addition to and not in
limitation of the foregoing provisions of this Section 5.6, Buyer shall,
---
promptly following Closing, (i) establish all bank accounts necessary to hold
the security deposits delivered by tenants pursuant to the Leases, and shall
fund such accounts out of its own funds in amounts equal to the security
deposits held by Seller in respect thereof at Closing (including any interest
accrued thereon), (ii) deliver notices to the tenants who deposited such
security deposits under such Leases, confirming that Buyer is holding such
security deposits, the accounts where same are held and the amount of such
security deposits and (iii) take any and all other actions as required by
applicable law with respect to the security deposits, if any, delivered by
tenants pursuant to the Leases or the leases relating to the Residential
Properties. The provisions of this Section 5.6 shall survive Closing for a
---
period of one year from the Closing Date.
5.7 Consents. To the extent that a claim can be made successfully
--------
that the transactions contemplated hereby will constitute the assignment of any
contract, lease, commitment, sales order, purchase order, account, license,
permit or undertaking requiring the consent of another party thereto, this
Agreement shall not constitute an agreement to assign the same if an attempted
assignment would constitute a breach thereof. During the period commencing on
the Agreement Date and ending on the Closing Date, Seller agrees that it will
use its commercially reasonable efforts (without obligating Seller or its
affiliates to spend money or assume obligations in connection therewith) to
obtain the written consent of the other necessary parties to the assignment of
such contracts, leases, commitments, sales orders, purchase orders, accounts,
licenses, permits and undertakings, and if such consent is not obtained, Seller
will use commercially reasonable efforts (without obligating Seller or its
affiliates to spend money or assume obligations in connection therewith) to
cooperate with Buyer in any lawful arrangement designed to provide Buyer the
benefits under any such documents.
5.8 Use of Business Names by Buyer. From and after the Closing Date,
------------------------------
Seller acknowledges that Buyer has the absolute and exclusive proprietary right
to the name "Echelon" as used in relation to the Assets or any name confusingly
similar to the foregoing and to all trademarks, trade names, logos and signage
incorporating "Echelon" or any name confusingly similar to the foregoing. All
rights of Seller and its respective affiliates in and to any trademarks, trade
names, logos, tag lines and signage incorporating "Echelon" and the goodwill
represented thereby and pertaining thereto have been assigned to Buyer pursuant
to this Agreement. Accordingly, Seller agrees that it will not, and will cause
its affiliates not to, use (i) the name
-27-
"Echelon" or any name confusingly similar to the foregoing or any trademark,
logo, tag lines or signage incorporating the name "Echelon" or any name
confusingly similar to the foregoing and (ii) the Intellectual Property in any
manner, including in connection with the sale of any products or services or
otherwise in the conduct of its business. Notwithstanding the foregoing, for a
period of 180 days after the Closing Date, Seller shall have the right to use
the word "Echelon" as its tradename, but only for the purposes of identifying
itself as the appropriate business entity in dealing with third Persons (i) to
facilitate the sale of the Assets to Buyer and the transfer of the Other Assets
to the Other Buyer and (ii) in connection with the management of, and any sale
to any third party purchaser of, Seller's interest in the assets subject to the
Excepted Leases, and not for any other purpose, including, without limitation,
use of "Echelon" as a trademark for the purpose of marketing or promoting any
product or service.
5.9 Bringdown of Seller's Representations. On the Escrow Closing
-------------------------------------
Date, Seller shall deliver to Buyer a certificate (a "Bringdown Certificate")
---------------------
executed by the President, any Vice President or a managing member of each of
Echelon and its subsidiaries signatory hereto certifying that, as of the Escrow
Closing Date, the representations and warranties made by Seller in this
Agreement are true and correct in all material respects, except for a change in
facts and circumstances which requires a change in any such representation and
warranty, and in such event the certificate shall specify any such change in
reasonable detail. Seller's representations and warranties set forth in such
certificate shall not survive the Escrow Closing Date (it being expressly
understood and agreed that, notwithstanding anything to the contrary (express or
implied) set forth herein, in the case of any breach by Seller of any of
Seller's representations and warranties, Buyer's sole right shall be the
exercise (if it is entitled to do so) of its right of termination pursuant to
Section 9.1(f) hereof (and Buyer's sole remedies in connection therewith shall
------
be those expressly set forth in Section 9.2 hereof) and Seller shall not at any
---
time (whether before, on or after the Escrow Closing Date) have any further
liability whatsoever with respect to any such breach of Seller's representations
and warranties). If, and only if, all of the changes in Seller's representations
and warranties set forth in such Bringdown Certificate (other than any changes
related to Pending Transactions), taken in the aggregate, would have a Material
Adverse Effect, then Buyer shall have the right by written notice to Seller
actually received by Seller not later than the expiration of the Offer as
described in the Merger Agreement to terminate this Agreement pursuant to
Section 9.1(f) hereof. In the event that Seller shall deliver one or more new
------
Escrow Date Notification Certificates pursuant to the terms of Section 7.3
---
hereof setting forth a new Escrow Closing Date, Seller shall, on each such new
each such new Escrow Closing Date, deliver to Buyer a new Bringdown Certificate
certifying as to the matters set forth above in this Section 5.9 as of such new
---
Escrow Closing Date.
5.10 Cooperation Regarding Taxes. After the Closing Date, Buyer and
---------------------------
Seller shall cooperate with each other and with each other's agents, including
accounting firms and legal counsel, in connection with matters relating to Taxes
of Buyer, Seller and their affiliates including (i) the preparation and filing
of any Tax Returns, (ii) determining the liability for and amount of any Taxes
due (including estimated Taxes) or the right to and amount of any refund of
Taxes, (iii) examinations of Tax Returns, and (iv) any administrative or
judicial proceeding in respect of Taxes assessed or proposed to be assessed.
Such information and documents shall be delivered without representation or
warranty and shall include, without limitation, records,
-28-
returns, schedules, documents, work papers or other relevant materials. Buyer
and Seller shall also make available to each other, as reasonably requested and
on a mutually convenient basis, personnel (including officers, directors,
employees and agents of Buyer or Seller or their respective affiliates) to
provide such assistance as might be reasonably required in connection of the
matters set forth in (i), (ii), (iii) and (iv) above. Any information provided
under this Section 5.10 shall be kept confidential by the party receiving the
----
information or documents, except as may otherwise be necessary in connection
with the filing of Tax Returns or in connection with any communications with a
tax authority or any administrative or judicial proceedings relating to Taxes or
any Tax Return. Buyer and Seller and their respective affiliates shall make
available to each other for inspection and copying during normal business hours
upon reasonable notice all Tax records in their possession to the extent
reasonably required by the other party in connection with the preparation,
review or audit of Tax Returns, Tax litigation and claims, and the resolution of
items under this Agreement. All reasonable out-of-pocket costs and expenses
incurred in connection with any of the foregoing actions shall be for the
account of the party requesting such actions (subject to providing reasonable
documentation of such out-of-pocket costs and expenses). The provisions of this
Section 5.10 shall survive Closing for a period of one year after the Closing
----
Date.
5.11 Insurance. (a) For six years from the Closing Date, Echelon
---------
shall maintain in effect Echelon's current directors' and officers' liability
insurance covering those Persons who are covered on the Agreement Date by
Echelon's directors' and officers' liability insurance policy (a copy of which
has been heretofore delivered to Buyer); provided that Seller may substitute for
--------
such policies, policies with at least the same coverage containing terms and
conditions which are no less advantageous and provided that said substitution
does not result in any gaps or lapses in coverage with respect to matters
occurring prior to the Closing Date; provided, further, that in no event shall
-------- -------
Seller be required to expend pursuant to this Section 5.11(a) more than an
-------
amount per year equal to 200% of the current annual premiums paid by Seller for
such insurance (it being understood and agreed that if the annual premiums
exceed such amount, Seller shall be required to obtain a policy with the
greatest coverage available for a cost not exceeding such amount). The
provisions of this Section 5.11(a) shall survive Closing for a period of six
-------
years after the Closing Date.
(b) During the period commencing on the Agreement Date and ending on
the Closing Date, Seller will maintain the insurance policies relating to the
Real Estate Assets set forth on Schedule XXII; provided, that Seller may
---- --------
discontinue or reduce any such insurance to the extent that (x) it is no longer
available at commercially reasonable rates or (y) similarly situated companies
are, in general, reducing or eliminating such insurance in a manner consistent
with the changes being effected by Seller, unless, in each case, Buyer shall
have requested in writing that Seller not discontinue or reduce, as the case may
be, such insurance and shall have paid to Seller in immediately available funds
all costs (including, without limitation, all premiums) and expenses of Seller
in connection with not discontinuing or reducing, as the case may be, such
insurance (it being expressly understood and agreed that in the event of
termination of this Agreement pursuant to Section 9.1 hereof, Buyer shall not be
---
entitled to any refund or reimbursement of any amounts previously paid by it to
Seller as contemplated above).
-29-
5.12 Reasonable Best Efforts. During the period commencing on the
-----------------------
Agreement Date and ending on the Closing Date, subject to the terms and
conditions provided herein, each of Buyer and Seller shall cooperate and use
their respective reasonable best efforts to take, or cause to be taken, all
appropriate action, and to make, or cause to be made, all filings necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, their respective reasonable best efforts to obtain, prior to the
Closing Date, all licenses, permits, approvals, authorizations, qualifications
and orders of governmental authorities and parties to Contracts with Seller as
are necessary for consummation of the transactions contemplated by this
Agreement.
5.13 Access to Information Concerning Assets. During the period
---------------------------------------
commencing on the Agreement Date and ending on the Closing Date, Seller shall,
upon reasonable notice, afford Buyer and its counsel, accountants, consultants
and other authorized representatives, reasonable access (subject to the rights
of tenants under the Leases and the leases relating to the Residential
Properties) during normal business hours to the employees, properties, books and
records of Seller in order that Buyer may have the opportunity to make such
investigations as it shall desire of the Assets. Seller shall furnish promptly
to Buyer (a) a copy of each report, schedule, registration statement and other
document filed by it during such period pursuant to the requirements of Federal
or state securities laws and (b) all other information in Seller's possession
concerning the Assets as Buyer may reasonably request. Seller agrees to cause
its officers and employees to furnish such additional financial and operating
data and other information and respond to such inquiries, in each case as Buyer
shall from time to time reasonably request in relation to the Assets.
5.14 Notification of Certain Matters. During the period commencing on
-------------------------------
the Agreement Date and ending on the Closing Date, Seller shall give prompt
notice to Buyer, and Buyer shall give prompt notice to Seller, of the
occurrence, or failure to occur, of (x) any event, which occurrence or failure
to occur would likely cause any representation or warranty contained in this
Agreement to be untrue in any material respect and (y) the existence of any
Material Adverse Effect. During the period commencing on the Agreement Date and
ending on the Closing Date, each of Seller and Buyer shall give prompt notice to
the other party of any notice or other communication from any third party
alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement.
5.15 HSR Act. Buyer and Seller shall, as soon as practicable and in
-------
any event within five Business Days following the Agreement Date, make any
required filings under the HSR Act and shall use their reasonable best efforts
to respond as promptly as practicable to all inquiries received with respect
thereto, including, without limitation, a request for additional information or
documentary material.
5.16 Access to Information Pursuant to Distribution Agreement. From
--------------------------------------------------------
and after the Closing Date, Buyer shall afford to Seller and its authorized
accountants, counsel and other designated representatives reasonable access
during normal business hours to the personnel, properties, books and records
received by Buyer or its subsidiaries from Seller at time
-30-
of Closing insofar as same relates to the Total Assets and is reasonably
required by Seller or Florida Progress in connection with the satisfaction by
either of them of their respective obligations under the Distribution Agreement.
5.17 Witness Services Under Distribution Agreement. At all times from
---------------------------------------------
and after the Closing Date, Buyer shall use its commercially reasonable efforts
to make available to Seller, upon reasonable written request, its and its
subsidiaries' officers, directors, employees and agents as witnesses to the
extent that such Persons may be required in connection with the prosecution or
defense of any actual or threatened action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or other
regulatory or administrative agency, body or commission or any arbitration
tribunal insofar as such action, suit, arbitration, inquiry, proceeding or
investigation relates to the Total Assets and is reasonably required by Seller
or Florida Progress in connection with the satisfaction by either of them of
their respective obligations under the Distribution Agreement. Buyer shall be
entitled to receive from Seller, upon the presentation of invoices therefor,
payments for such amounts, relating to disbursements and other out-of-pocket
expenses (which shall be deemed to exclude the costs of salaries and benefits of
employees who are witnesses), as may be reasonably incurred in providing such
witness services.
5.18 Retention of Records. Except as otherwise agreed between Buyer
--------------------
and Seller in writing, Buyer shall, and shall cause its subsidiaries to, retain
all information relating directly and primarily to the Total Assets that is
delivered to or obtained by Buyer pursuant to the terms of this Agreement that
is less than ten years old until such information is at least ten years old
except that if, prior to the expiration of such period, information in the
possession or control of Buyer is to be destroyed or disposed of, and such
information is at least three years old, prior to destroying or disposing of any
such information, (1) Buyer shall provide no less than 30 days' prior written
notice to Seller specifying the information proposed to be destroyed or disposed
of and (2) if, prior to the scheduled date for such destruction or disposal,
Seller requests in writing that any of the information proposed to be destroyed
or disposed of be delivered to Seller, Buyer promptly shall deliver the
requested information to a location specified by Seller, at Seller's sole cost
and expense.
Section 6. Conditions Precedent to Closing.
-------------------------------
6.1 Buyer Conditions. The obligation of Buyer to close the
----------------
transaction which is the subject of this Agreement is subject to the fulfillment
as of the Closing Date or as of the Escrow Closing Date, as applicable, of each
of the following conditions, unless any unfulfilled condition is waived in
writing by Buyer:
(a) Officer's Certificate. Echelon shall have delivered to
---------------------
Buyer a certificate executed by the President, any Vice President or a managing
member of each of Echelon and its subsidiaries signatory hereto certifying that,
as of the Escrow Closing Date, Seller has performed in all material respects
each of its obligations and complied in all material respects with each
agreement and covenant of Seller to be performed or complied with by it
-31-
under this Agreement on or prior to such date, including the delivery of the
certificate required under Section 5.9 hereof.
---
(b) Delivery of Documents and Other Items. On or prior to the
-------------------------------------
Escrow Closing Date, all documents and other items specified in Section 7.4
---
hereof shall have been delivered to Escrow Agent.
(c) Merger. The Merger shall have been consummated on or prior
------
to the Closing Date.
(d) Transfer of Other Assets. The transfer of the Other Assets
------------------------
to the Other Buyer as contemplated by the Subscription Agreement in exchange for
the consideration provided therein shall have been consummated on or prior to
the Closing Date.
(e) Purchase and Sale of Tax Credit LP Interests. The purchase
--------------------------------------------
and sale of the Tax Credit LP Interests as contemplated by the Tax Credit LP
Interest Purchase Agreement shall have been consummated on or prior to the
Closing Date.
(f) Leasing of the Other Assets. The leasing of the Other
---------------------------
Assets as contemplated by the Xxxxxx Lease shall have been consummated on or
prior to the Closing Date.
(g) Required Consents. All Required Consents shall have been
-----------------
executed and delivered by the parties providing such Required Consents on or
prior to the Escrow Closing Date.
(h) HSR Act. Any applicable waiting period (and any extension
-------
thereof) under the HSR Act applicable to the sale of Assets to Buyer shall have
expired or been terminated as of the Escrow Closing Date.
(i) No Injunction. No preliminary or permanent injunction or
-------------
other order shall have been issued by any court or by any governmental or
regulatory agency, body or authority which prohibits the consummation of the
transactions contemplated by this Agreement and which is in effect on the
Closing Date; provided, that, in the case of a decree, injunction or other
--------
order, each of the parties shall have used reasonable best efforts to prevent
the entry of any such injunction or other order and to appeal as promptly as
possible any decree, injunction or other order that may be entered.
(j) Statutes. No law, statute, rule, regulation, executive
--------
order, decree or order of any kind shall have been enacted, entered, promulgated
or enforced by any court or governmental authority which prohibits the
consummation of the transactions contemplated by this Agreement as of the
Closing Date.
6.2 Seller Conditions. The obligation of Seller to close the
-----------------
transaction which is the subject of this Agreement is subject to the fulfillment
as of the Closing Date or as of the Escrow Closing Date, as applicable, of each
of the following conditions, unless any unfulfilled condition is waived in
writing by Seller:
-32-
(a) Officer's Certificate. Buyer shall have delivered to Seller
---------------------
a certificate of the President or any Vice President of Buyer certifying that,
as of the Escrow Closing Date, Buyer has performed in all material respects each
of its obligations and complied in all material respects with each agreement and
covenant of Buyer to be performed or complied with by it under this Agreement on
or prior to such date.
(b) Delivery of Documents and Other Items. On or prior to the
-------------------------------------
Escrow Closing Date, all documents and other items (including payment of the
Purchase Price) specified in Section 7.5 hereof shall have been delivered to
---
Escrow Agent.
(c) Merger. The Merger shall have been consummated on or prior
------
to the Closing Date.
(d) Transfer of Other Assets. The transfer of the Other Assets
------------------------
to the Other Buyer as contemplated by the Subscription Agreement in exchange for
the consideration provided therein shall have been consummated on or prior to
the Closing Date.
(e) Purchase and Sale of Tax Credit LP Interests. The purchase
--------------------------------------------
and sale of the Tax Credit LP Interests as contemplated by the Tax Credit LP
Interest Purchase Agreement shall have been consummated on or prior to the
Closing Date.
(f) Leasing of the Other Assets. The leasing of the Other
---------------------------
Assets as contemplated by the Xxxxxx Lease shall have been consummated on or
prior to the Closing Date.
(g) Required Consents. All Required Consents shall have been
-----------------
executed and delivered by the parties providing such Required Consents on or
prior to the Escrow Closing Date.
(h) HSR Act. Any applicable waiting period (and any extension
-------
thereof) under the HSR Act applicable to the sale of Assets to Buyer shall have
expired or been terminated as of the Escrow Closing Date.
(i) No Injunction. No preliminary or permanent injunction or
-------------
other order shall have been issued by any court or by any governmental or
regulatory agency, body or authority which prohibits the consummation of the
transactions contemplated by this Agreement and which is in effect on the
Closing Date; provided, that, in the case of a decree, injunction or other
--------
order, each of the parties shall have used reasonable best efforts to prevent
the entry of any such injunction or other order and to appeal as promptly as
possible any decree, injunction or other order that may be entered.
(j) Statutes. No law, statute, rule, regulation, executive
--------
order, decree or order of any kind shall have been enacted, entered, promulgated
or enforced by any court or governmental authority which prohibits the
consummation of the transactions contemplated by this Agreement as of the
Closing Date.
-33-
Section 7. Closing.
-------
7.1 Time and Place. The Closing will take place at the offices of
--------------
White & Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the
date of consummation of the Merger, or at such other place and time as shall be
agreed upon by the parties hereto (the actual date of the Closing being
hereinafter referred to as the "Closing Date").
------------
7.2 Closing Expenses. All costs and expenses associated with the
----------------
purchase and sale of the Assets contemplated herein, including without
limitation, environmental and property condition reports (but only to the extent
procured prior to the Agreement Date with the approval of Seller), title
insurance premiums, survey preparation costs, transfer taxes (including all
stamp, transfer, documentary, sales, use, registration and other Taxes),
document recordation and filing charges, escrow expenses and other customary
costs of Closing, shall be paid by Seller. Each of Buyer and Seller shall be
responsible for its due diligence costs and expenses (including, without
limitation, the payment of the fees and disbursements of its attorneys) and
Seller shall make any required payments to the Broker in accordance with Section
8 hereof.
-
7.3 Notification of Escrow Closing Date. Seller shall deliver to
-----------------------------------
Buyer a certificate (an "Escrow Date Notification Certificate") specifying the
------------------------------------
Escrow Closing Date (which in no event shall be earlier than the 30th day after
the Agreement Date) on which the Escrowed Items are to be delivered to Escrow
Agent, such Escrow Date Notification Certificate to be delivered by Seller to
Buyer no later than one day prior to such Escrow Closing Date; provided that if
--------
the Tender Offer Expiration Date shall not have occurred on or prior to the
third Business Day after such Escrow Closing Date, Escrow Agent shall, upon
written request from Buyer, return the Escrowed Items to the party which had
previously deposited same with Escrow Agent, whereupon Seller shall have the
right to deliver a new Escrow Date Notification Certificate to Buyer upon the
terms set forth above specifying a new Escrow Closing Date. Seller shall have
the right to deliver one or more Escrow Date Notification Certificates upon the
terms set forth above until such time as the Tender Offer Expiration Date shall
have occurred or, if earlier, such time as this Agreement shall have been
terminated pursuant to Section 9.1 hereof.
---
7.4 Documents and/or Deliveries. On or prior to the Escrow Closing
---------------------------
Date, as a condition to Closing, the following shall be delivered to Escrow
Agent, which shall have been executed by Seller to the extent applicable (other
than those agreements, documents and instruments described in Sections
7.4(b)(vi), (b)(viii), (b)(ix), (c)(i), and (d)(i) hereof, all of which shall
---------- --------- ------- ------ ------
have been made available to Buyer during normal business hours at one or more
locations previously identified to Buyer (which location shall, in the case of
the agreements, documents and instruments described in Sections 7.4(b)(vi),
----------
(c)(i) and (d)(i) hereof, be 000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xx. Xxxxxxxxxx,
------ ------
Florida) and which shall remain in such locations until the Closing Date):
(a) with respect to Echelon and each Subsidiary: (i) good
standing certificates and authority to do business certificates issued by the
relevant authorities in all relevant jurisdictions, in each case, dated not more
than thirty (30) days prior to the Closing Date; (ii) certified corporate
resolutions of Echelon and corporate or limited liability company
-34-
resolutions of each Subsidiary, or of the general partner in each Subsidiary
that is a limited partnership, as applicable, authorizing the execution and
delivery of this Agreement by Echelon or such Subsidiary and the consummation of
the transactions contemplated hereby; and (iii) incumbency certificates for the
officers of Echelon and each Subsidiary executing the documents to be executed
and delivered pursuant to this Agreement;
(b) with respect to the Real Estate Assets: (i) a special
warranty deed conveying title to the Real Estate Assets substantially in the
form annexed hereto as Exhibit A; (ii) a xxxx of sale with respect to the Real
-
Estate Assets substantially in the form annexed hereto as Exhibit B; (iii) an
-
assignment and assumption agreement with respect to Permits, Contracts and
Leases being assumed by Buyer in relation to the Real Estate Assets,
substantially in the form annexed hereto as Exhibit C; (iv) third-party consents
-
sought in connection with the consummation of the purchase and sale of the Real
Estate Assets but only to the extent actually obtained by Seller (it being
expressly understood and agreed, for avoidance of doubt, that so long as Seller
shall have complied with Section 5.7 hereof, no such third-party consents (other
---
than the Required Consents) shall be required to be obtained and in no event
shall any such third-party consents (other than the Required Consents) be a
condition precedent to the consummation of the transactions contemplated
hereby); (v) tenant estoppel statements, dated within one hundred and twenty
(120) days of the Closing Date, with respect to tenants occupying 50% of the
rentable square footage at the Commercial Property in the form specified in the
tenant's Lease or, if none, substantially in the form annexed hereto as Exhibit
D (it being understood that Seller does not warrant or guarantee any of the
-
information contained in tenant estoppel certificates); (vi) the originals (or
copies, if originals are unavailable) of existing Leases and all tenant files,
Contracts and files and records pertaining to any of the Real Estate Assets as
are in Seller's possession or in the possession of the current property manager
for any of the Real Estate Assets; provided, however, that Buyer will make all
-------- -------
originals available to Seller after Closing to the extent required by Seller in
connection with accounting, taxation, litigation or other proceedings involving
Seller's prior ownership of the any of the Real Estate Assets; (vii) notices to
the tenants renting space at the Real Estate Assets confirming that such Real
Estate Assets have been acquired by Buyer, in such form as Seller and Buyer
shall agree; (viii) originals (or copies, if originals are unavailable) of all
governmental licenses, permits and approvals relating to the occupancy or use of
any of the Real Estate Assets in the possession of Seller or Seller's current
property manager; (ix) those site plans, soil and substrata studies,
architectural renderings, plans and specifications, engineering plans and
studies, floor plans, landscape plans, utility schemes, tax bills and receipts
for current real estate taxes, keys and all other books, financial statements,
documentation, files or records covering, affecting or relating to the Real
Estate Assets in Seller's possession; (x) a Title Affidavit in the form annexed
hereto as Exhibit I; (xi) a Gap Indemnity in the form annexed hereto as Exhibit
-
J if required by the title insurance company; (xii) a FIRPTA Affidavit in the
-
form annexed hereto as Exhibit K; (xiii) such documents or other evidence as may
-
be required to satisfy all requirements raised in the Title Commitments;
provided, however, Seller shall not be required to satisfy requirements raised
-------- -------
in the Title Commitments relating to Real Estate Taxes, Existing Debt (other
than the delivery of the Required Consents relating to any Existing Debt in
accordance with the terms of this Agreement), Other Existing Debt, mechanics'
liens (other than the delivery of an affidavit certifying as to the status of
construction relating to any Real Estate Asset) or other matters which Buyer is
taking subject to pursuant to the terms of this Agreement;
-35-
and (xiv) transfer tax forms and affidavits as may be required by governmental
authorities in connection with the recordation of the special warranty deeds;
(c) with respect to the Joint Venture Interests: (i) originals
(or copies, if originals are unavailable) of all articles of incorporation, by-
laws, limited liability company agreements, limited liability company operating
agreements, partnership agreements, venture agreements and other organizational
documents relating to the joint ventures to which the Joint Venture Interests
relate and (ii) all documents and instruments required effectively to transfer
such Joint Venture Interests to Buyer, including, without limitation, consents
from co-venturers sought pursuant to the terms of the relevant joint venture
documentation, as more particularly identified on Schedule V (it being expressly
-
understood and agreed, for avoidance of doubt, that so long as Seller shall have
complied with Section 5.7 hereof, no such consents (other than the Required
---
Consents) shall be required to be obtained and in no event shall any such
consents (other than the Required Consents) be a condition precedent to the
consummation of the transactions contemplated hereby);
(d) with respect to the Existing Debt: (i) originals (or copies,
if originals are unavailable) of all documents and instruments evidencing and
securing the Existing Debt and (ii) all documents and instruments required to
effect the assignment and assumption of the borrower's interest in the Existing
Debt from Seller to Buyer, including without limitation, if applicable, consents
sought from the holders of the Existing Debt, as more particularly identified on
Schedule V (it being expressly understood and agreed, for avoidance of doubt,
-
that so long as Seller shall have complied with Section 5.7 hereof, no such
---
consents (other than the Required Consents) shall be required to be obtained and
in no event shall any such consents (other than the Required Consents) be a
condition precedent to the consummation of the transactions contemplated
hereby);
(e) with respect to the Employee Loans: (i) the promissory note
relating to each such Employee Loan, duly endorsed, or attaching an allonge
executed by Seller in favor of Buyer, in either case without recourse to Seller;
(ii) original, executed counterparts of all other documents and instruments
relating to such Employee Loan; and (iii) any consents sought from the obligors
of such Employee Loans, if applicable, as more particularly identified on
Schedule V (it being expressly understood and agreed, for avoidance of doubt,
-
that so long as Seller shall have complied with Section 5.7 hereof, no such
---
consents (other than the Required Consents) shall be required to be obtained and
in no event shall any such consents (other than the Required Consents) be a
condition precedent to the consummation of the transactions contemplated
hereby);
(f) with respect to the transfer of any Intellectual Property,
including trademarks, an assignment and assumption agreement substantially in
the form annexed hereto as Exhibit F;
-
(g) originals of all Required Consents (but only to the extent
theretofore obtained by Seller);
-36-
(h) a notice from the Chief Financial Officer of Echelon (which
notice shall be conclusive absent manifest error) setting forth the aggregate
amount of each of (i) the Excess Cash Amount, (ii) the Commercial Property
Security Deposit Amount, (iii) the Executive Loans Repayment Amount and (iv) the
Pre-Approved Expenditures; and
(i) with respect to the transfer of any of the Assets, such other
documents and instruments as are customary in connection with the transfer of
assets of the same type and which the parties deem reasonably necessary or
desirable to effect the consummation of the transactions contemplated hereby;
provided, however, that (i) Seller shall not be required to provide any
-------- -------
representations, warranties or indemnitees with respect to the Assets or title
thereto beyond those set forth in this Agreement, (ii) Seller shall not be
required to provide any representations or warranties which survive the Escrow
Closing Date and (iii) so long as Seller shall have complied with Section 5.7
---
hereof, no consents (other than the Required Consents) shall be required to be
obtained and in no event shall any such consents (other than the Required
Consents) be a condition precedent to the consummation of the transactions
contemplated hereby.
7.5 Buyer Documents and/or Deliveries. On or prior to the Escrow
---------------------------------
Closing Date, Buyer will deliver (subject only to receipt by Buyer of the
relevant Bringdown Certificate and Escrow Date Notification Certificate) the
following to Escrow Agent, which shall have been executed by Buyer to the extent
applicable:
(a) the balance of the Purchase Price payable in accordance with
Section 2.2(b) hereof;
------
(b) certified copies of resolutions of Buyer authorizing the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby;
(c) with respect to the transfer of any of the Assets, the
documents and instruments required to effect the assumption thereof, as more
particularly described in Sections 7.4(b)(iii), (c)(ii), (d)(ii) and (f) hereof;
----------- ------- ------- ---
(d) with respect to the transfer of any of the Assets and the
assumption of the Assumed Liabilities, such other documents and instruments as
are customary in connection with the transfer of assets and assumption of
liabilities of the same type and which the parties deem reasonably necessary or
desirable to effect the consummation of the transactions contemplated hereby;
provided, however, that (i) Seller shall not be required to provide any
-------- -------
representations, warranties or indemnitees with respect to the Assets or title
thereto beyond those set forth in this Agreement, (ii) Seller shall not be
required to provide any representations or warranties which survive the Escrow
Closing Date and (iii) so long as Seller shall have complied with Section 5.7
---
hereof, no consents (other than the Required Consents) shall be required to be
obtained and in no event shall any such consents (other than the Required
Consents) be a condition precedent to the consummation of the transactions
contemplated hereby; and
(e) transfer tax forms and affidavits as may be required by
governmental authorities in connection with the recordation of the special
warranty deeds.
-37-
7.6 Execution and Delivery of Closing Statements. At Closing, in
--------------------------------------------
addition to any other documents required to be executed and delivered in
counterparts by both parties, Seller and Buyer will execute and deliver to each
other closing statements accounting for sums disbursed at Closing.
7.7 Joint Instructions to Escrow Agent. Not later than the Escrow
----------------------------------
Closing Date, Buyer and Seller shall execute and deliver to Escrow Agent a joint
direction letter in the form annexed hereto as Exhibit L, which shall be
irrevocable, (a) listing with specificity all items delivered by Buyer and/or
Seller pursuant to Sections 7.4 and 7.5 hereof (including, without limitation,
--- ---
(x) the balance of the Purchase Price and (y) the aggregate amount of Asset
Sales Proceeds) (all such items, together with the Deposit, collectively
referred to herein as the "Escrowed Items") and (b) setting forth irrevocable
--------------
instructions from Buyer and Seller to the effect that (x) immediately following
the filing by Escrow Agent of the Articles of Merger with respect to the Merger
with the Department of State of the State of Florida or the receipt of notice by
Escrow Agent that such filing has occurred, the Escrowed Items shall be promptly
delivered by Escrow Agent to the party entitled to same (including, without
limitation, that (A) the Purchase Price shall be delivered to the Surviving
Corporation (as defined in the Merger Agreement) or to such account as the
Surviving Corporation may designate and (B) the aggregate amount of Asset Sales
Proceeds shall be delivered to Buyer) as set forth in such joint direction
letter, (y) if this Agreement has been terminated pursuant to Section 9.1
---
hereof, the Escrowed Items shall be promptly delivered by Escrow Agent to the
party which had previously deposited same with Escrow Agent and (z) if Tender
Offer Expiration Date does not occur on or prior to the third Business Day after
the Escrow Closing Date, the Escrowed Items shall be promptly delivered by
Escrow Agent to the party which had previously deposited same with Escrow Agent.
7.8 Further Deliveries. Simultaneously with the delivery of the
------------------
joint instructions set forth in Section 7.7 of this Agreement, Buyer shall
---
execute and deliver (a) to Escrow Agent, together with Other Buyer, a joint
instruction letter in the form annexed hereto as Exhibit M and (b) to EIN
Acquisition Corp. a legal opinion addressed to Agent for the benefit of the
Lenders (in each case as such terms are defined in the Credit Agreement (as
defined in the Merger Agreement)) with respect to those matters contained in
Sections 4.1, 4.2 and 4.3(a), (b) and (c) of this Agreement.
Section 8. Brokers. Each party represents and warrants to the other
-------
that it has not consulted, dealt with or negotiated with any Person except
Seller has engaged Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation (the
"Broker") to whom a commission is or could be due in connection with the sale of
-------
the Assets by Seller to Buyer, or any other matter associated with this
Agreement. Seller has made a separate agreement with Broker and will pay all
sums, if any, due to Broker in connection with this Agreement. Each party
hereby agrees to indemnify and hold harmless the other from any losses, damages,
costs, liabilities or expenses, including reasonable costs and attorneys' fees
incurred in trial, appellate or post-judgment proceedings, related to or arising
out of any breach of the representations, warranties and agreements set forth in
this Section 8 made by it. Anything to the contrary notwithstanding, the
-
representations,
-38-
warranties and agreements in this Section 8 will survive Closing of the
-
transactions which are the subject of this Agreement, or any earlier termination
of this Agreement.
Section 9. Termination and Abandonment.
---------------------------
9.1 Termination. This Agreement may be terminated and the
-----------
transactions contemplated by this Agreement may be abandoned:
(a) by mutual consent of Buyer and Seller at any time prior to the
Tender Offer Expiration Date;
(b) by either Buyer or Seller at any time prior to the Closing Date,
if any court or governmental or regulatory agency shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the consummation of any of the transactions contemplated
by this Agreement and such order, decree or ruling or other action shall have
become final and nonappealable;
(c) by either Buyer or Seller, if the Closing Date fails to occur
within 90 days following the Agreement Date, unless such failure of the Closing
Date to occur shall be as a result of a material breach of any representation,
warranty, obligation, covenant, agreement or condition set forth in this
Agreement on the part of the party seeking to terminate this Agreement;
(d) by either Buyer or Seller at any time prior to the Closing Date,
if the Merger Agreement shall have been terminated and be of no further force
and effect;
(e) by either Buyer or Seller at any time prior to the Tender Offer
Expiration Date, if any of the Subscription Agreement, the Xxxxxx Lease or the
Tax Credit LP Interest Purchase Agreement shall have been terminated and be of
no further force and effect;
(f) by Buyer on or at any time prior to the Escrow Closing, in the
event (i) that Buyer exercises its right of termination as provided in Section
5.9 or (ii) in the event of (A) a breach by Seller of its representations and
---
warranties set forth herein (other than arising out of or related to Pending
Transactions) which, taken in the aggregate, would have a Material Adverse
Effect or (B) a breach by Seller of its material covenants or agreements set
forth herein, in each case which (1) cannot or has not been cured prior to the
earlier of (x) 15 days after the giving of written notice of such breach to
Seller and (y) two Business Days prior to the Tender Offer Expiration Date and
(2) has not been waived by Buyer; or
(g) by Seller on or at any time prior to the Escrow Closing, in the
event of a breach by Buyer of any representation, warranty, covenant or
agreement contained in this Agreement, which (A) cannot or has not been cured
prior to the earlier of (i) 15 days after the giving of written notice of such
breach to Buyer, and (ii) two Business Days prior to the Tender Offer Expiration
Date and (B) has not been waived by Seller, except, in any case where such
failures are not reasonably likely to affect adversely the ability of Buyer to
consummate the transactions contemplated by this Agreement.
-39-
9.2 Effect of Termination. (a) In the event of the termination of
---------------------
this Agreement pursuant to Section 9.1 hereof by Buyer or Seller, as the case
---
may be, written notice thereof shall forthwith be given to the other party
specifying the provision hereof pursuant to which such termination is made, and
this Agreement shall become void and have no effect and the parties will have no
further rights or obligations hereunder, except that Sections 7.2, 9.2, 12.7,
--- --- ----
12.11 and 12.15 shall survive any termination of this Agreement.
----- -----
(b) (i) In the event of a termination of this Agreement pursuant to
Section 9.1(a), (b), (c), (d), (e) or (f) above, the Deposit shall be returned
------ --- --- --- --- ---
to Buyer.
(ii) In the event of a termination of this Agreement pursuant to
Section 9.1(d) above following the termination of the Merger Agreement pursuant
------
to Section 5.01(a) of the Merger Agreement (but only if Parent and Echelon shall
have entered into an alternative transaction within 180 days after such
termination of the Merger Agreement pursuant to which Parent (or an affiliate
thereof) would directly or indirectly acquire Echelon, the Excepted Leases or
all or substantially all of the assets or equity of Echelon and its
Subsidiaries) or Section 5.01(f), (g) or (k) of the Merger Agreement, Seller
shall pay to Buyer a sum of $3,500,000.
(iii) In the event of a termination of this Agreement pursuant to (x)
Section 9.1(d) above following the termination of the Merger Agreement pursuant
------
to Section 5.01(a) of the Merger Agreement (but only if Parent and Echelon shall
have entered into an alternative transaction within 180 days after such
termination of the Merger Agreement pursuant to which Parent (or an affiliate
thereof) would directly or indirectly acquire Echelon, the Excepted Leases or
all or substantially all of the assets or equity of Echelon and its
Subsidiaries) or Section 5.01(e), (f), (g), (j) or (k) of the Merger Agreement
or (y) Section 9.1(f) above, Buyer shall be entitled to receive from Seller
------
reimbursement for its reasonable out-of-pocket costs and expenses incurred in
connection with the transactions contemplated by this Agreement in the sum of up
to $1,000,000 (subject to providing reasonable documentation of such costs and
expenses); provided, that, notwithstanding the foregoing, in the event of the
--------
termination of the Merger Agreement pursuant to Section 5.01(j) of the Merger
Agreement as a result of the termination of the Subscription Agreement by
Echelon pursuant to Section 9.1(g) thereof, Buyer shall not be entitled to
------
receive from Seller reimbursement for its out-of-pocket costs and expenses
incurred in connection with the transactions contemplated by this Agreement.
(iv) In the event of a termination of this Agreement pursuant to
Section 9.1(d) above following the termination of the Merger Agreement pursuant
------
to Section 5.01(h) or (i) of the Merger Agreement, Buyer shall be entitled to
receive 50% of any recovery of damages (as determined by a court of competent
jurisdiction in a final and non-appealable decision) or proceeds of any
settlement of a claim or any other amounts, in each case that Seller may
actually receive in connection with any proceeding by Seller against Parent for
damages arising out of the matters set forth in Section 5.01(h) or (i) of the
Merger Agreement; provided that, in no event (A) shall Buyer be entitled
--------
pursuant to this Section 9.2(b)(iv) to receive from Seller an amount in excess
----------
of $3,500,000 and (B) shall Seller be obligated to commence or pursue any
proceeding against Parent or any other Person for recovery of damages or other
amounts arising out of the matters set forth in Section 5.01(h) or (i) of the
Merger Agreement and in the event that Seller
-40-
shall elect in its sole discretion to commence and pursue any such proceeding
against Parent or any other Person, Buyer shall not be entitled to participate
in any manner whatsoever in any such proceeding nor shall Seller be obligated to
cooperate, coordinate or consult with Buyer in any manner whatsoever (including,
without limitation, with respect to any settlement or other compromise of any
claims).
(v) In the event of a termination of this Agreement pursuant to
Section 9.1(f) above, Buyer may proceed against Seller for recovery of its
------
actual damages (as determined by a court of competent jurisdiction in a final
and non-appealable decision); provided that, in no event (A) shall any such
--------
actual damages (i) exceed an amount equal to $3,500,000 or (ii) include any out-
of-pocket costs and expenses incurred by Buyer in connection with the
transactions contemplated by this Agreement and (B) shall Seller be liable for
loss of profits, or indirect, consequential or special damages arising out of,
or in connection with the transactions contemplated by, this Agreement.
(vi) In the event of a termination of this Agreement pursuant to
Section 9.1(g), Seller's sole remedy will be to receive a sum equal to the
------
Deposit as agreed and liquidated damages, it being agreed that in such event
Seller's actual damages would be incapable of precise ascertainment.
(vii) Except as expressly set forth above in this Section 9.2, neither
---
Buyer nor Seller shall be entitled to any remedy in connection with the
termination of this Agreement (including, without limitation, specific
performance).
(c) Any payment required to be made by Seller or Buyer, as the case
may be, pursuant to Section 9.2(b) shall be made by such party within three
------
Business Days after receipt by it of notice from the other party setting forth,
in reasonable detail, (i) a description of the event(s) giving rise to the
payment obligation and (ii) calculation of the payment obligation.
Section 10. Risk of Loss; Indemnity.
-----------------------
10.1 Casualty. In the event that any portion of the Real Estate
--------
Assets is damaged or destroyed prior to the Tender Offer Expiration Date, and if
such damage or destruction would have, individually or in the aggregate, a
Material Adverse Effect (after giving effect to receipt of insurance proceeds),
Buyer may by written notice to Seller actually received by Seller not later than
the earlier to occur of (x) 12:01 a.m. (New York time) on the Tender Offer
Expiration Date and (y) the thirtieth day following Buyer's receipt of written
notice of such damage or destruction (such receipt of written notice by Seller
to be promptly thereafter acknowledged), terminate this Agreement, whereupon the
Deposit will be returned to Buyer and thereafter this Agreement will be null and
void and the parties will have no further rights or obligations hereunder.
Except as otherwise expressly provided in the immediately preceding sentence,
Buyer shall proceed to Closing with no reduction in the Purchase Price
notwithstanding any damage or destruction occurring with respect to the Real
Estate Assets, and Seller will deliver and/or assign to Buyer on the Closing
Date any insurance proceeds with respect to such damage or destruction to the
extent Seller is entitled to same; provided that Buyer shall be afforded
--------
reasonable opportunity by Seller to participate in any discussions with third
parties
-41-
relating to such insurance proceeds and such insurance proceeds shall not be
settled or otherwise compromised by Seller without the approval of Buyer (not to
be unreasonably withheld, conditioned or delayed). Seller shall notify Buyer of
any damage to or destruction of the Real Estate Assets promptly after Seller
learns of the same.
10.2 Condemnation. In the event that any portion of the Real Estate
------------
Assets or access thereto is taken by eminent domain or condemnation proceeding
prior to the Tender Offer Expiration Date, and if such taking or condemnation
would have, individually or in the aggregate, a Material Adverse Effect (after
giving effect to receipt of award proceeds), Buyer may by written notice to
Seller actually received by Seller not later than the earlier to occur of (x)
12:01 a.m. (New York time) on the Tender Offer Expiration Date and (y) the
thirtieth day following Buyer's receipt of written notice of such damage or
destruction (such receipt of written notice by Seller to be promptly thereafter
acknowledged), terminate this Agreement, whereupon the Deposit will be returned
to Buyer and thereafter this Agreement will be null and void and the parties
will have no further rights or obligations hereunder. Except as otherwise
expressly provided in the immediately preceding sentence, Buyer shall proceed to
Closing with no reduction in the Purchase Price notwithstanding any taking or
condemnation occurring with respect to the Real Estate Assets, and Seller will
deliver and/or assign to Buyer on the Closing Date any award with respect to
such taking or condemnation to the extent Seller is entitled to same; provided
--------
that Buyer shall be afforded reasonable opportunity by Seller to participate in
any discussions with third parties relating to such condemnation proceeds and
such condemnation proceeds shall not be settled or otherwise compromised by
Seller without the approval of Buyer (not to be unreasonably withheld,
conditioned or delayed). Seller shall notify Buyer of any eminent domain or
condemnation proceeding in respect of the Real Estate Assets promptly after
Seller learns of the same.
10.3 Indemnity. Subject to Section 11, each of Buyer and Seller (in
--------- --
such capacity, "Indemnitor") agrees to indemnify and hold the other party (in
----------
such capacity, "Indemnitee") harmless from and against any loss, cost,
----------
liability, damage or expense including, without limitation, reasonable
attorneys' fees and costs in all trial and appellate proceedings ("Losses")
------
incurred in connection with any claim by a third party, including, without
limitation, any current or former shareholder, director, officer, employee or
agent of Seller (a "Claim"), made, or arising out of (x) in the case of Buyer
-----
(as Indemnitor), the Assumed Liabilities or the Other Assumed Liabilities or any
failure by Buyer or Other Buyer, as the case may be, for any reason to pay,
perform and discharge any Assumed Liabilities or Other Assumed Liabilities, as
the case may be, or (y) in the case of Seller (as Indemnitor), the Excluded
Liabilities or any failure by Seller for any reason to pay, perform or discharge
any Excluded Liabilities.
Within not more than ten (10) days after the date upon which the
Indemnitee receives a complaint filed against it or a formal written demand of
it, the Indemnitee will deliver written notice (a "Claim Notice") to the
------------
Indemnitor, describing in reasonable detail the facts giving rise to such Claim
and stating that the Indemnitee intends to seek indemnification for such Claim
from the Indemnitor pursuant to this Agreement. The Indemnitor will have the
right to settle all Claims upon terms and conditions acceptable to the
Indemnitor; provided that (i) such settlement includes an unconditional release
--------
of the Indemnitee from all liability with respect to
-42-
such Claim and (ii) such settlement does not involve the imposition of equitable
remedies or the imposition of any material obligations on the Indemnitee other
than financial obligations for which the Indemnitee will be indemnified
hereunder.
Upon timely receipt of a Claim Notice from the Indemnitee with respect
to any Claim, the Indemnitor may assume the defense thereof with counsel of the
Indemnitor's choice reasonably satisfactory to the Indemnitee, and will not be
required to engage more than one law firm to defend the Claim in question;
provided that such counsel is reasonably approved in writing by the Indemnitee,
--------
and without regard to whether such counsel also represents Indemnitor in
defending such Claim. The Indemnitee will cooperate in all reasonable respects
in such defense. Subject to the foregoing duty of cooperation, the Indemnitee
will have the right to employ separate counsel in any action or Claim and to
participate in the defense thereof; provided that the fees and expenses of
--------
counsel employed by the Indemnitee will be at the Indemnitee's sole cost and
expense, except as otherwise herein provided.
If the Indemnitor does not notify the Indemnitee in writing within ten
(10) days after receipt of a Claim Notice that the Indemnitor elects to
undertake the defense thereof, the Indemnitee will have the right, at the
expense of the Indemnitor, to defend the Claim with counsel of the Indemnitee's
choice.
The parties hereto acknowledge that the law firm defending a Claim may
have an inherent conflict of interest where the Indemnitor and Indemnitee have
not agreed upon the Indemnitee's right to indemnification. Therefore,
notwithstanding any provision herein to the contrary, unless an Indemnitor has
acknowledged in writing its obligation to indemnify the Indemnitee, the
Indemnitor will, and will cause the law firm defending the Claim to, at all
times keep the Indemnitee fully advised of the status of settlement negotiations
and/or defense of the Claim, and promptly provide to the Indemnitee copies of
all documents and correspondence related to the Claim. If, at any time, the
Indemnitee believes in good faith that the law firm defending the Claim is not
fairly representing the Indemnitee's position with respect to such Claim and/or
is prejudicing the Indemnitee's rights with respect to the Claim for
indemnification, the Indemnitee may, at the Indemnitor's sole expense, retain
separate counsel of the Indemnitee's choice, and such separate counsel will be
entitled fully to participate in the defense of such Claim on behalf of the
Indemnitee.
The Indemnitee will cooperate fully with the Indemnitor as to all
Claims, will make available to the Indemnitor as reasonably requested all
information, records and documents relating to all Claims and will preserve all
such information, records and documents until final, nonappealable resolution of
any Claim. The Indemnitee will also make available to the Indemnitor, as
reasonably requested, its personnel (including technical), agents and other
representatives who are responsible for preparing or maintaining information,
records or other documents, or who may have particular knowledge with respect to
any Claim. The Indemnitee will also cooperate with the Indemnitor in attempting
to minimize the Losses subject to indemnification by considering in good faith
any request to pursue, and/or assign to Indemnitor, any rights of contribution
or to reimbursement, whether contractual or otherwise.
-43-
Section 11. Employees and Employee Benefits Matters.
---------------------------------------
11.1 Transfer of Employees. Within a reasonable period of time prior
---------------------
to the Closing Date, Buyer shall offer employment, commencing as of the Closing
Date, to all of the employees of Echelon and its subsidiaries as of the date
hereof (and still employed by Echelon and/or its subsidiaries on the date of
such offer of employment) on such terms and conditions as Buyer may determine;
provided, however, that with respect to any such employee currently on long-term
-------- -------
disability or other approved leave of absence, such offer shall be effective
upon such employee's resumption of active employment. Each such employee who
accepts such offer of employment is referred to hereinafter as a "Transferred
-----------
Employee", and all such employees collectively as the "Transferred Employees".
-------- ---------------------
Notwithstanding the foregoing, following the Closing Date, Buyer may terminate
the employment of any Transferred Employee (subject to the payment by Buyer of
any severance benefits payable to such Transferred Employee in connection with
such termination under a plan substantially in accordance with the terms set
forth in Exhibit G annexed hereto).
-
11.2 Assumption of Liabilities. (a)(1) From and after the Closing
-------------------------
Date, Buyer shall assume, and shall honor, pay, perform and satisfy when due any
and all liabilities, obligations and responsibilities to, or in respect of, each
Transferred Employee, and each former employee and officer of Echelon and its
subsidiaries, arising under the terms of, or in connection with, any Employee
Benefit Plan, in each case, in accordance with the terms thereof in effect
immediately prior to the date hereof, with respect to events or claims arising
at any time; provided, that nothing contained herein shall constitute a
--------
commitment or obligation on the part of Buyer to continue any such Employee
Benefit Plan after the Closing Date except that Buyer shall provide, or shall
cause to be provided, effective commencing on the Closing Date, coverage to all
current and former employees of Echelon and its subsidiaries (including any
employees who do not accept the offer of employment described in Section 11.1
----
hereof), and their spouses and dependents, under a group health plan which does
not contain any waiting period or exclusion or limitation with respect to any
pre-existing conditions, and Buyer shall be solely responsible for compliance
with the requirements of Section 4980B of the Code and part 6 of subtitle B of
Title I of ERISA ("COBRA"), including, without limitation, the provision of
-----
continuation coverage, with respect to all such current and former employees,
spouses and dependents, for whom a qualifying event occurs before, on or after
the Closing Date. The terms "group health plan", "continuation coverage",
"qualifying event" and "qualified beneficiary" are used in this Section
11.2(a)(1) with the respective meanings ascribed thereto in COBRA.
----------
(2) On the Closing Date, Buyer shall assume sponsorship of the
Echelon International Corporation Savings Plan (the "Savings Plan") and the
------------
related trust, and the liabilities thereunder, with respect to all persons
entitled to benefits under the provisions of the Savings Plan, and Echelon shall
cause all right, title, interest, authorities, obligations, duties, liabilities
and assets of Echelon and its subsidiaries in, to and under the Savings Plan and
the related trust to be transferred to and assumed by Buyer and any successor
trustee, respectively, in accordance with applicable law. At Closing, the
parties shall execute and deliver such documents and instruments as may be
required to effect such assumption and transfer and to ensure that all assets of
the Savings Plan, as the same exist immediately prior to the Closing
-44-
Date, shall be transferred with the Savings Plan to the extent provided in this
Section 11(a)(2). Effective upon Closing, Buyer will be substituted for Echelon
--------
as the plan sponsor under the Savings Plan. For a period of at least twelve (12)
months following the Closing Date, Buyer covenants and agrees to maintain the
Savings Plan in accordance with the terms of the Savings Plan as in effect on
the date hereof, except to the extent that Buyer is required to amend the
Savings Plan to comply with applicable law.
(3) Buyer shall be solely responsible for and shall indemnify and
hold Echelon and its subsidiaries harmless from any obligations or Losses
relating to claims made by any of the Transferred Employees for their
compensation, severance or termination pay, benefits or notice under any
applicable Federal, state or local law or under any plan, policy, practice or
agreement, in each case, that accrues after the Closing Date and arises as a
result of their employment or separation from employment with Buyer or its
subsidiaries after the Closing Date.
(b) Subject to Section 11.2(a) hereof, Echelon shall be solely
-------
responsible for and shall indemnify and hold Buyer harmless from any obligations
or Losses relating to claims made by any current or former employee of Echelon
and its subsidiaries, including, without limitation, the Transferred Employees,
for their compensation, severance or termination pay, benefits or notice under
any applicable Federal, state or local law or under any plan, policy, practice
or agreement, in each case, that accrue through the Closing Date as a result of
their employment or separation from employment with Echelon or its subsidiaries.
On or prior to the Closing Date, Echelon shall satisfy all obligations
(including payments due as a result of a change of control of Echelon or
otherwise) then due and payable under any employment agreement entered into by
Echelon or any of its subsidiaries (including the employment agreements
described on Schedule XIII) and shall deliver to Buyer copies of any and all
----
employee estoppel letters delivered in connection therewith.
(c) Accrued but unpaid vacation, sick or other paid time off with
respect to all employees of Echelon and its subsidiaries as of the Closing Date,
including, without limitation, the Transferred Employees, shall, to the extent
permitted by applicable law, be assumed by Buyer and paid by Buyer in accordance
with the terms of the applicable policies and procedures of Echelon and its
subsidiaries in effect on the date hereof.
(d) In the event of any "plant closing" or "mass layoff" by Buyer, as
defined by the Federal Worker Adjustment Retraining Notification Act, 29 U.S.C.
(S) 2101 et seq. ("WARN"), or any state law equivalent, which shall occur after
-- ---- ----
the Closing Date, Buyer shall comply with all of the requirements of WARN and
any applicable state law equivalent and shall indemnify Echelon and its
subsidiaries from and against any Losses incurred by Echelon and its
subsidiaries as the result of any action against Buyer or Echelon (and/or its
subsidiaries) under WARN.
11.3 Participation and Crediting of Service Under Employee Plans and
---------------------------------------------------------------
Practices. Following Closing, (a) Buyer shall waive any waiting periods,
---------
exclusions, or pre-existing condition limitations that may otherwise be
applicable to Transferred Employees, and
-45-
their spouses and eligible dependents, under any benefit plans of Buyer, and
(ii) Buyer shall honor or cause to be honored all premiums, co-payments and
deductibles paid by the Transferred Employees, and their spouses and eligible
dependents, during the plan year in which Closing occurs under the employee
welfare benefit plans and arrangements of Echelon and its subsidiaries up to
(and including) the Closing Date. Following Closing, each employee benefit plan
or arrangement and employee compensation policy or practice sponsored by Buyer
or its affiliates shall credit, for all purposes (except for benefit accruals
under any defined benefit pension plans), all service of the Transferred
Employees, and other employees and officers of Echelon and its subsidiaries,
with Echelon and its subsidiaries (and their respective predecessors) to the
same extent such service was taken into consideration under comparable employee
benefit plans of Echelon and its subsidiaries.
Section 12. Miscellaneous.
-------------
12.1 Litigation. In the event of any litigation between Seller and
----------
Buyer concerning the terms of this Agreement, the prevailing party will be
entitled to reimbursement of its costs and expenses, including reasonable
attorneys' fees incurred in trial, appellate and post-judgment proceedings. The
provisions of this Section 12.1 will survive Closing, expiration or termination
----
of this Agreement.
12.2 Escrow Obligations of Escrow Agent. Seller and Buyer acknowledge
----------------------------------
that Escrow Agent undertakes hereunder to perform only such duties as are
expressly set forth herein and no implied duties or obligations will be inferred
against Escrow Agent. The Purchase Price (including the Deposit), the Asset
Sales Proceeds and the other Escrowed Items will be held and disbursed by Escrow
Agent as follows:
(a) Escrow Agent may (i) act in reliance upon any writing or
instrument or signature which it, in good faith, believes to be genuine,
(ii) assume the validity and accuracy of any statement or assertion
contained in such a writing or instrument and (iii) assume that any person
purporting to give any writing, notice, advice or instruction in connection
with the provisions hereof has been duly authorized to do so.
(b) Seller and Buyer agree, jointly and severally, to indemnify and
hold harmless Escrow Agent from and against any and all claims,
liabilities, losses, actions, suits or proceedings at law or in equity, or
any other expenses, fees or charges of any character or nature whatsoever,
which Escrow Agent may incur or with which it may be threatened solely by
reason of its acting as escrow agent hereunder, except to the extent
resulting from Escrow Agent's gross negligence, fraud or intentional
misconduct; and in connection therewith, to indemnify Escrow Agent against
any and all expenses, including reasonable attorneys' fees and the cost of
defending any action, suit or proceedings or resisting any claim; provided,
--------
however, that if such expenses are incurred by Escrow Agent in connection
-------
with litigation between Seller and Buyer, the responsibility for
indemnifying Escrow Agent for such expenses will belong solely to the non-
prevailing party.
-46-
(c) Escrow Agent will not make any disbursement of the Purchase Price
(including the Deposit) or any Asset Sales Proceeds (except, in each case
as set forth in succeeding subsection (d)) without giving written notice to
the party which will not receive the disbursement at least ten (10)
Business Days in advance of the disbursement. The failure of the party not
receiving the disbursement to object (on or prior to the seventh day after
receipt of such notice) to the disbursement by written notice to the other
party and to Escrow Agent will constitute binding acquiescence of such
party to the disbursement. If there is any disagreement about the
interpretation of this Agreement, or about the rights and obligations, or
the propriety, of any action contemplated by Escrow Agent hereunder, or if
Escrow Agent shall have received inconsistent instructions as to the
disbursement of the Purchase Price (including the Deposit) or the Asset
Sales Proceeds, in each case except as set forth in succeeding subsection
(d), Escrow Agent will not disburse the Purchase Price (including the
Deposit) or Asset Sales Proceeds, as the case may be, and will file an
action in interpleader to resolve such disagreement or inconsistency, as
the case may be. Escrow Agent will be indemnified (by Seller or Buyer,
whichever is the non-prevailing party) as set forth in the foregoing
subsection (b) in connection with such interpleader action, and will be
fully protected in suspending all or a part of its activities under this
Agreement until a final judgment in the interpleader action is received.
(d) Notwithstanding anything to the contrary set forth in foregoing
subsection (c) or elsewhere in this Agreement (including, without
limitation, receipt of inconsistent instructions from Buyer or Seller as to
the disbursement of any Escrowed Item), Escrow Agent shall take the
following actions: (i) upon receipt of all Escrowed Items specified in the
joint direction letter described in Section 7.7 hereof, Escrow Agent will
---
promptly (and in any event, within one Business Day) notify Buyer and
Seller of such receipt of all Escrowed Items, (ii) immediately following
the filing by Escrow Agent of the Articles of Merger with respect to the
Merger with the Department of State of the State of Florida or the receipt
of notice by Escrow Agent that such filing has occurred, Escrow Agent shall
deliver the Escrowed Items to the party entitled to same (including,
without limitation, delivery of (x) the Purchase Price to Seller or to such
account as Seller may designate and (y) the Asset Sales Proceeds to Buyer)
as set forth in the joint direction letter described in Section 7.7 hereof,
---
(iii) immediately following receipt of written notice from Seller or Buyer
that this Agreement has been terminated pursuant to Section 9.1 hereof, the
---
Escrowed Items shall be promptly delivered by Escrow Agent to the party
which had previously deposited same with Escrow Agent and (iv) immediately
following receipt of written notice from Buyer that the Tender Offer
Expiration Date did not occur on or prior to the third Business Day after
the Escrow Closing Date, the Escrowed Items shall be promptly delivered by
Escrow Agent to the party which had previously deposited same with Escrow
Agent.
(e) Escrow Agent may consult with counsel of its own choice and will
have full and complete authorization and protection for any action taken or
suffered by it hereunder in good faith and in accordance with the opinion
of such counsel. Escrow Agent
-47-
otherwise will not be liable for any mistakes of fact or error of judgment,
or for any acts or omissions of any kind unless caused by its willful
misconduct or gross negligence.
(f) Escrow Agent may resign upon 15 days' written notice to Seller
and Buyer, and if a successor escrow agent is not appointed by Buyer and
Seller within such 15-day period, Escrow Agent may petition a court of
competent jurisdiction to name a successor.
12.3 Notices. All notices, requests, demands, claims, waivers and
-------
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered in
person or mailed, certified or registered mail with postage prepaid, or sent by
telecopier and courier service for next Business Day delivery, as follows:
(a) if to Seller, to it at:
Echelon International Corporation
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. XxXxxxx
with a copy to:
Echelon International Corporation
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx Xxxxxxx, Esq.
with a copy to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Xx., Esq.
-48-
and a copy to:
EIN Acquisition Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxx
with a copy to:
Xxxxx Raysman Xxxxxxxxx Xxxxxx and Xxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
(b) if to Buyer, to it at:
c/o Equis Financial Group
Xxx Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx
with a copy to:
Steel Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, P.A.
(c) if to Escrow Agent, to it at:
LandAmerica Financial Group
0000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
-49-
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third Business Day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
12.4 Entire Agreement. This Agreement and the exhibits, schedules and
----------------
other documents referred to herein or delivered pursuant hereto, collectively
contain the entire understanding of the parties hereto with respect to the
subject matter contained herein and supersede all prior agreements and
understandings, oral and written, with respect thereto.
12.5 Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the parties hereto, and their respective
successors and permitted assigns; and no third party shall have any rights,
privileges or other beneficial interests herein or hereunder. Buyer shall not
be entitled to assign this Agreement or any of its rights, duties or interests
herein or hereunder to any other Person; provided, however, that Buyer may, not
-------- -------
less than five Business Days prior to the Closing Date, designate one or more of
its wholly-owned subsidiaries or affiliates controlled by it to be the
transferee of one or more Assets and/or the Assumed Liabilities (without
limiting the foregoing, it is understood and agreed that Buyer may designate
Echelon Commercial LLC, a Delaware limited liability company and an affiliate of
Buyer, to acquire title to the 7th Avenue Property), in each case so long as (x)
such transfer, assignment or assumption does not impose any incremental burden
on Seller under this Agreement or delay (or otherwise impede) the consummation
of the transactions contemplated by this Agreement and (y) Buyer remains liable
to Seller for all of its obligations hereunder with respect to the Assumed
Liabilities and the Other Assumed Liabilities notwithstanding such transfer,
assignment or assumption.
12.6 Headings. The descriptive headings of the several Sections of
--------
this Agreement are inserted for convenience only, do not constitute a part of
this Agreement and shall not affect in any way the meaning or interpretation of
this Agreement.
12.7 Applicable Law. This Agreement and the legal relations between
--------------
the parties hereto shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflict of laws rules
thereof.
12.8 Severability. If any term, provision, covenant or restriction
------------
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
12.9 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
-50-
12.10 No Waiver of Default. No waiver by a party of any breach of
--------------------
this Agreement or of any warranty or representation hereunder by the other party
will be deemed to be a waiver of any other breach by such other party (whether
preceding or succeeding and whether or not of the same or similar nature), and
no acceptance of payment or performance by a party after any breach by the other
party will be deemed to be a waiver of any breach of this Agreement or of any
representation or warranty hereunder by such other party, whether or not the
first party knows of such breach at the time it accepts such payment or
performance. No failure or delay by a party to exercise any right it may have
by reason of the default of the other party will operate as a waiver of default
or modification of this Agreement or will prevent the exercise of any right by
the first party while the other party continues so to be in default.
12.11 Confidentiality. It is agreed that (x) Seller will, at all
---------------
times, keep in strict confidence all non-public information (other than
information made public as a result of a breach of its obligations pursuant to
this Section 12.11) obtained by it with respect to Buyer and/or the Assets and
-----
(y) Buyer will, at all times prior to the Closing Date, keep in strict
confidence all non-public information (other than information made public as a
result of a breach of its obligations pursuant to this Section 12.11) obtained
-----
by it with respect to Seller pursuant to or in connection with this Agreement or
any confidentiality agreement executed by Buyer related to the Assets (including
all information obtained by such Person with respect to the tenants and other
occupants of any of the Real Estate Assets and all information attached hereto
with respect to the Joint Venture Interests, the Employee Loans and the Existing
Debt). Each of Seller and Buyer agrees to instruct its agents, employees,
advisers and consultants to comply with the provisions of this Section 12.11 and
-----
any confidentiality agreement executed in connection with the Assets.
Notwithstanding the foregoing, each of Seller and Buyer may disclose any such
non-public information obtained by it to its directors, bankers, advisors,
attorneys, accountants and agents so long as such parties agree in writing for
the benefit of the other parties hereto to keep the information confidential in
accordance with the terms of this Section 12.11. In addition, each of Seller
-----
and Buyer may disclose any such non-public information as may be required by
law. If the purchase and sale of the Assets contemplated by this Agreement is
not completed for any reason, Buyer will, upon request of Seller, promptly
return to Seller all instruments and materials or copies of instruments and
materials delivered pursuant hereto and obtained by Buyer. The provisions of
this Section 12.11 will survive any termination of this Agreement.
-----
12.12 Recourse Limited. Notwithstanding anything to the contrary in
----------------
this Agreement, neither any present or future constituent shareholder, member,
partner, officer, director, employee or agent of the parties hereto or of any
corporation, limited liability company or partnership that is the owner of any
equity interest in the parties hereto will be personally liable, directly or
indirectly, under or in connection with this Agreement, or any document,
instrument or certificate securing or otherwise executed in connection with this
Agreement, or any amendments or modifications to any of the foregoing made at
any time or times, heretofore or hereafter, or in respect of any matter,
condition, injury or loss related to this Agreement or the Assets (provided that
--------
Echelon shall be so liable to the extent Echelon constitutes the holder of
equity interests in its Subsidiaries); and each party hereto (and their
respective successors and assigns) waives any such personal liability.
-51-
12.13 Business Day. If any date herein set forth for the performance
------------
of any obligations by Seller or for the delivery of any instrument or notice as
herein provided should be on a day other than a Business Day, the compliance
with such obligations or delivery will be deemed acceptable on the next
occurring Business Day.
12.14 Recordation. Buyer and Seller agree that neither this
-----------
Agreement nor any memorandum hereof will be recorded in any public records, and
that any such recording would constitute a default subject to Section 9.1
---
hereof.
12.15 Jury Waiver. IN ANY CIVIL ACTION, COUNTERCLAIM OR PROCEEDING,
-----------
WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS
AGREEMENT, AND ANY AND ALL TRANSACTIONS CONTEMPLATED HEREUNDER, THE PERFORMANCE
HEREOF, OR THE RELATIONSHIP CREATED HEREBY, WHETHER SOUNDING IN CONTRACT, TORT,
STRICT LIABILITY OR OTHERWISE, TRIAL WILL BE TO A COURT OF COMPETENT
JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS
MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING
THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND UNDERSTANDS THE
EFFECT OF THIS JURY WAIVER PROVISION.
12.16 Public Announcements. At all times prior to the Closing Date,
--------------------
Seller, on the one hand, and Buyer, on the other hand, agree to consult promptly
with each other prior to issuing any press release or otherwise making any
public statement with respect to the transactions contemplated hereby (other
than for the Schedule TO, the Schedule 14D-9 and any other public filing made in
connection with the transactions contemplated by the Merger Agreement), and
shall not issue any such press release or make any such public statement prior
to such consultation and review by the other party of a copy of such release or
statement; provided, that (x) a party may, without the prior consent of any
--------
other party, issue a press release or make such public statement as may be
required by law or any rule of or agreement with any national securities
exchange or automated quotation system to which such party is subject and (y)
subject to Seller's obligations under the Merger Agreement, Seller will give
Buyer and its counsel the opportunity to review and comment upon the Schedule
TO, the Schedule 14D-9 and any other public filing made in connection with the
transactions contemplated by the Merger Agreement but only to the extent that
same directly relates to the identity and description of Buyer or to the
description of the principal terms and conditions of this Agreement.
12.17 Radon Gas. Radon is a naturally occurring radioactive gas
---------
that, when it has accumulated in a building in sufficient quantities, may
present health risks to persons who are exposed to it over time ("Radon").
-----
Levels of Radon that exceed federal and state guidelines have been found in
buildings in Florida. Additional information regarding Radon and Radon
-52-
testing may be obtained from the local county public health unit. The matters
set forth in this Section 12.17 shall constitute an exception to the
-----
representation and warranty of Seller set forth in Section 3.7 hereof.
---
12.18 Bulk Sales Law Waiver. Each party hereto agrees to waive
---------------------
compliance by the other with the provisions of the bulk sales law or comparable
law of any jurisdiction to the extent that the same may be applicable to the
transactions contemplated hereby.
12.19 Knowledge. When any representation or warranty contained in
---------
this Agreement is expressly qualified by the knowledge of Seller or Echelon,
such knowledge means the actual knowledge of Xxxxxx X. XxXxxxx, W. Xxxxxxx
Xxxxxxx, Xxxxx X. Xxxxx, Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx, J. Xxxx Xxxxxx,
Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxx or K. Xxxxx Xxxxxx.
12.20 Amendments, Modifications and Supplements. This Agreement
-----------------------------------------
(including all Schedules and Exhibits thereto) may be amended, modified and
supplemented only in writing executed by the parties hereto.
12.21 Representations and Warranties. The respective representations
------------------------------
and warranties of Seller, on the one hand, and Buyer, on the other hand,
contained herein or in any certificates or other documents delivered pursuant
hereto shall not be deemed waived or otherwise affected by any investigation
made by any party. Except as expressly provided in Section 8 hereof (and, in
-
the case of Buyer, Sections 4.4, 4.5, 4.6 and 4.9 hereof), each and every such
--- --- --- ---
representation and warranty shall expire with, and be terminated and
extinguished by, the Escrow Closing Date and thereafter neither Seller nor Buyer
shall be under any liability whatsoever with respect to any such representation
or warranty. Furthermore, notwithstanding anything to the contrary (express or
implied) set forth herein (other than Section 8 hereof), in the case of any
-
breach by Seller of any of its representations and warranties, Buyer's sole
right shall be the exercise (if it is entitled to do so) of its right of
termination pursuant to Section 9.1(f) hereof (and Buyer's sole remedies in
------
connection therewith shall be those expressly set forth in Section 9.2 hereof)
---
and Seller shall not at any time (whether before, on or after the Escrow Closing
Date) have any further liability whatsoever with respect to any such breach of
its representations and warranties. This Section 12.21 shall have no effect
-----
upon any other obligation of the parties hereto, whether to be performed before
or after the Closing Date.
12.22 Performance and Discharge. The acceptance by Buyer of the
-------------------------
agreements, instruments and other documents contemplated in this Agreement
conveying title to, or assigning Seller's rights and interests in, the Assets
shall be deemed to be a full performance and discharge of every agreement and
obligation on the part of Seller to be performed under this Agreement, except
those, if any, where are herein specifically stated to survive delivery of such
agreements, instruments and other documents.
[SIGNATURE PAGE FOLLOWS]
-53-
IN WITNESS WHEREOF, the parties have caused this Purchase and Sale
Agreement to be executed on the date(s) hereinafter set forth.
SELLER:
-------
WITNESSED BY: ECHELON INTERNATIONAL CORPORATION,
a Florida corporation
_____________________
Name:________________ By:___________________________
Name:_________________________
Title:________________________
_____________________ Date: January ____, 2000
Name:________________
ECHELON DOWNTOWN I, INC., a Florida
corporation
By:___________________________
Name:_________________________
Title:________________________
Date: January ____, 2000
ECHELON RESIDENTIAL INVESTMENTS, INC.,
a Florida corporation
By:___________________________
Name:_________________________
Title:________________________
Date: January ____, 2000
ECHELON RESIDENTIAL SERVICES, INC.,
a Florida corporation
By:___________________________
Name:_________________________
Title:________________________
Date: January ____, 2000
ECHELON GENERAL PARTNER, INC., a Florida
corporation
By:___________________________
Name:_________________________
Title:________________________
Date: January ____, 2000
WITNESSED BY: ECHELON AT BRIARGATE, INC., a Florida
corporation
___________________
Name:______________ By:____________________________
Name:__________________________
___________________ Title:_________________________
Date: January ____, 2000
Name:______________
WITNESSED BY: ECHELON AT TWENTY MILE VILLAGE, INC.,
a Florida corporation
____________________
Name:_______________ By:______________________________
Name:____________________________
____________________ Title:___________________________
Date: January ____, 2000
Name:_______________
NEW FOURTH RESIDENTIAL LIMITED PARTNERSHIP,
a Texas Limited Partnership
WITNESSED BY:
By: Echelon General Partner, Inc., a Florida
Corporation, its general partner
____________________
Name:_______________ By:______________________________
Name:____________________________
____________________ Title:___________________________
Date: January ____, 2000
Name:_______________
WITNESSED BY: XXXXXXX CREEK LIMITED PARTNERSHIP, a
Texas Limited Partnership
By: Echelon General Partner II, Inc., a
Florida Corporation, its general partner
____________________
Name:_______________ By:______________________________
Name:____________________________
____________________ Title:___________________________
Date: January ____, 2000
Name:_______________
WITNESSED BY: KELLER-COUNTRY BROOK LIMITED PARTNERSHIP,
a Texas Limited Partnership
By: Echelon General Partner II, Inc., a
Florida Corporation, its general partner
____________________
Name:_______________ By:______________________________
Name:____________________________
____________________ Title:___________________________
Date: January ____, 2000
Name:_______________
WITNESSED BY: XXXXXXXX-XXXXX SF LIMITED PARTNERSHIP,
a Texas Limited Partnership
By: Echelon General Partner II, Inc., a
Florida Corporation, its general partner
____________________
Name:_______________ By:______________________________
Name:____________________________
____________________ Title:___________________________
Date: January ____, 2000
Name:_______________
WITNESSED BY: MID-TOWN RESIDENTIAL LIMITED PARTNERSHIP,
a Texas Limited Partnership
By: Echelon General Partner II, Inc., a
Florida Corporation, its general partner
____________________
Name:_______________ By:______________________________
Name:____________________________
____________________ Title:___________________________
Date: January ____, 2000
Name:_______________
WITNESSED BY: RIVER PARK ESTATES, LLC, a Delaware
Limited Liability Company
By: Echelon Residential Incorporated, a Florida
Corporation, its managing member
__________________
Name:_____________ By:_______________________
Name:_____________________
__________________ Title:____________________
Name:_____________ Date: January ____, 2000
BUYER:
-----
WITNESSED BY: ECHELON RESIDENTIAL LLC, a Delaware limited
liability company
__________________
Name:_____________ By: Equis Corporation, a Massachusetts
corporation, its managing member
__________________
Name:_____________
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
Escrow Agent hereby agrees to hold and disburse the Purchase Price
(including the Deposit), the Asset Sales Proceeds and the other Escrowed Items
in accordance with and subject to the provisions of the foregoing Purchase and
Sale Agreement.
LANDAMERICA FINANCIAL GROUP
By:_______________________
Name:_____________________
Title:____________________
Date: January ____, 2000
The following entities are executing this Agreement for the purpose of
acknowledging their agreement to convey any of the assets described herein which
they may have an ownership interest in:
ECHELON DEVELOPMENT CORPORATION
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
ECHELON REAL ESTATE SERVICES, INC.
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
PCC DEL, INC.
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
ECHELON RESIDENTIAL INCORPORATED
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
ECHELON GENERAL PARTNER, INC.
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
SOUTH CORE COMMERCIAL, INC.
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
SOUTH CORE PARKING, INC.
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
ECHELON AFFORDABLE DEVELOPMENT, INC.
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
ECHELON CARILLON ONE, INC.
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
ECHELON AT CARILLON TWO, INC.
By:________________________
Name:______________________
Title:_____________________
Date: January ____, 2000
ECHELON CARILLON THREE, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Date: January ____, 2000
ECHELON AT XXXXXXX, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Date: January ____, 0000
XXXXXXXXX XXXXXX HEALTH CLUB, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Date: January ____, 2000
ECHELON GENERAL PARTNER AFFORDABLE
HOUSING, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Date: January ____, 0000
XXXXXXX XX XXX XXXX XXX, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Date: January ____, 2000
ECHELON AT NORTHLAKE, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Date: January ____, 2000
ECHELON AT THE RESERVE I, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Date: January ____, 2000
ECHELON AT THE RESERVE II, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Date: January ____, 2000
ECHELON AT WOODLAND PARK, INC.
n/k/a ECHELON GATEWAY, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
Date: January ____, 2000
ECHELON AT THE HARBORAGE, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
Date: January ____, 2000
ECHELON RESIDENTIAL INVESTMENTS II, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
Date: January ____, 0000
XXXX XXXXXX CAPITAL, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
Date: January ____, 2000
BAYBRIDGE APARTMENTS, LTD.
By:___________________________________
Name:_________________________________
Title:________________________________
Date: January ____, 2000
200 CARILLON, L.L.C.
By:___________________________________
Name:_________________________________
Title:________________________________
Date: January ____, 0000
XXXXX XXXXXXX XXXXXXXXXXX LIMITED
PARTNERSHIP
By:___________________________________
Name:_________________________________
Title:________________________________
Date: January ____, 2000
RESIDENTIAL 00/XX/ XXXXXXXX XXXXX
XXXXXXXX LIMITED PARTNERSHIP
By:___________________________________
Name:_________________________________
Title:________________________________
Date: January ____, 2000
MISSION RANCH LIMITED PARTNERSHIP
By:_________________________________
Name:_______________________________
Title:______________________________
Date: January ____, 2000
EXHIBIT A
FOLIO NUMBER: ____________
FORM OF
SPECIAL WARRANTY DEED
---------------------
THIS SPECIAL WARRANTY DEED is made this ______ day of ____________,
2000, by ______________________, a _______________ ("Grantor"), whose address is
-------
_____________________________________, to _______________________, a
______________ ("Grantee"), whose address is _________________________________.
-------
W I T N E S S E T H:
THAT GRANTOR, for and in consideration of the sum of ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, does hereby grant, bargain, sell, transfer and
deliver to Grantee, its successors and assigns forever, the real property (the
"Property") described in Exhibit A attached hereto and made a part hereof.
--------- -
TOGETHER, with all the tenements, hereditaments and appurtenances
belonging or in anyway appertaining thereto.
TO HAVE AND TO HOLD the same in fee simple forever.
AND GRANTOR hereby specially warrants the title to the Property, and
will defend the same against the lawful claims of all persons whomsoever
claiming by, through or under Grantor, but none others.
IN WITNESS WHEREOF, GRANTOR has caused this Special Warranty Deed to
be executed as of the date first above written.
WITNESSED BY: GRANTOR:
______________________________ By:
Name:_________________________
______________________________ By:___________________________
Name:_________________________
Name:_________________________ Title:
This instrument prepared by and when recorded return to:
_____________________________
_____________________________
_____________________________
_____________________________
STATE OF ___________ )
) ss:
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____ day of
______, 2000, by ________________, as ______________ of _______________, a
__________ corporation, _____________ of _________________, a
___________________, on behalf of the _____________, who is personally known to
me or who has produced a driver's license as identification.
________________________________________
Name:
Notary Public, State of ________________
My commission expires:
IN WITNESS WHEREOF, this Xxxx of Sale has been signed, sealed and
delivered by the parties as of the date first above written.
WITNESSED BY: SELLER:
______________________________ By: ________________________________
Name:_________________________
By:___________________________
______________________________ Name:_________________________
Title:________________________
Name:_________________________
WITNESSED BY: BUYER:
______________________________ By:_________________________________
Name:_________________________
By:___________________________
______________________________ Name:_________________________
Title:________________________
Name:________________________
EXHIBIT B
FORM OF
XXXX OF SALE
------------
Made and entered into this ____ day of __________, 2000, by and
between _____________, a _____________ ("Seller"), and __________________, a
------
____________ ("Buyer").
-----
W I T N E S S E T H:
WHEREAS, Seller and Buyer entered into that certain Purchase and Sale
Agreement (the "Agreement"), dated as of January ____, 2000, for, inter alia,
--------- ----- ----
the sale and purchase of the real property more specifically described in
Exhibit A attached hereto and made a part hereof (the "Property"); and
- --------
WHEREAS, in accordance with the terms of the Agreement, Seller desires
to assign, transfer, set over and deliver to Buyer all of Seller's right, title
and interest in, and Buyer desires to assume all duties and obligations of
Seller with respect to, all items of personalty situated at or on the Property,
excluding any personal property owned or leased by tenants of the Property
(collectively, the "Personalty");
----------
NOW, THEREFORE, in accordance with the Agreement and in consideration
of the sum of ten Dollars ($10.00) and other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties do
hereby agree as follows:
1. Seller does hereby grant, bargain, transfer, set over and deliver
unto Buyer all of Seller's right, title and interest in and to the Personalty.
2. Buyer hereby acknowledges and agrees that it is purchasing the
Personalty in its "as is" condition. Seller makes no representation or warranty
of any kind with respect to the Property or the Personalty, except as otherwise
expressly set forth herein or in the Agreement.
3. This Xxxx of Sale shall be governed by the laws of the State of
_______ and shall be binding upon, and inure to the benefit of, the parties
hereto and their respective heirs, legal representatives, successors and
assigns.
Seller hereby warrants title to the Property against the lawful claims
of all persons claiming by, through or under Seller, but none others.
EXHIBIT C
FORM OF
ASSIGNMENT AND ASSUMPTION OF PERMITS, CONTRACTS AND LEASES
----------------------------------------------------------
THIS ASSIGNMENT AND ASSUMPTION OF PERMITS, CONTRACTS AND LEASES (this
"Assignment") is made and entered into as of the ____ day of _______________,
----------
2000, by and between _____________, a _________________ ("Assignor"), and
--------
_______________________, a ___________________ ("Assignee").
--------
W I T N E S S E T H :
WHEREAS, Assignor and Assignee entered into that certain Purchase and
Sale Agreement (the "Agreement"), dated as of January ____, 2000, for, inter
--------- -----
alia, the sale and purchase of certain real property more particularly described
----
in Exhibit A attached hereto and made a part hereof (the "Property"); and
- --------
WHEREAS, in accordance with the terms of the Agreement, Assignor
desires to assign, transfer, set over and deliver to Assignee all of Assignor's
right, title and interest in, and Assignee desires to assume all duties and
obligations of Assignor with respect to, the Permits, Contracts and Leases
listed on Exhibit B attached hereto and made a part hereof;
-
NOW, THEREFORE, in accordance with the Agreement and in consideration
of the sum of ten Dollars ($10.00) and other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties do
hereby agree as follows:
1. Assignment. Assignor does hereby assign, transfer, set over and
----------
deliver unto Assignee all of Assignor's right, title and interest in and to the
Permits, Contracts and Leases. Assignee makes no representation or warranty of
any kind with respect to the Permits, Contracts and Leases, except as otherwise
expressly set forth herein or in the Agreement.
2. Assumption. Assignee hereby accepts the foregoing assignment and
----------
hereby assumes all duties and obligations under the same arising on or after the
date hereof.
3. Assignor Indemnification. Assignor hereby agrees to indemnify,
------------------------
defend and hold harmless Assignee from and against any loss, cost, damage, or
expense arising from or in connection with any liability or obligation related
to the Permits, Contracts and Leases arising by virtue of acts or omissions by
Assignor which have accrued or occurred prior to the date hereof.
4. Assignee Indemnification. Assignee hereby agrees to indemnify,
------------------------
defend and hold harmless Assignor from and against any loss, cost, damage, or
expense arising from or in connection with any liability or obligation related
to the Permits, Contracts and Leases arising by virtue of acts or omissions by
Assignee which accrue or occur on or after the date hereof.
5. Governing Law; Parties Bound. This Agreement shall be governed by
----------------------------
the laws of the State of __________. This Assignment shall be binding upon, and
inure to the benefit of, the parties to this Assignment and their respective
heirs, legal representatives, successors and assigns.
IN WITNESS WHEREOF, this Assignment has been signed, sealed and
delivered by the parties as of the date first above written.
WITNESSED BY: ASSIGNOR:
______________________________ By: ________________________________
Name:_________________________
By:___________________________
______________________________ Name:_________________________
Title:________________________
Name:_________________________
WITNESSED BY: ASSIGNEE:
______________________________ By:_________________________________
Name:_________________________
By:___________________________
______________________________ Name:_________________________
Title:________________________
Name:________________________
EXHIBIT D
FORM OF
TENANT ESTOPPEL STATEMENT
-------------------------
DATE: ______________, [1999] [2000]
TO: ________________________, a
________________________ ("Buyer")
-----
RE: Lease (the "Lease"), dated ___________, by and between
-----
___________ as landlord ("Landlord") and ___________ as tenant
--------
("Tenant"), with respect to _______________________________ (the
--------
"Leased Premises")
----------------
Gentlemen:
As Tenant under the Lease, the undersigned hereby acknowledges for the
benefit of Buyer, which is about to purchase the Leased Premises, and Buyer's
lender, if any, the truth and accuracy of the following statements pertaining to
said Lease:
1. Date of Lease:
2. Description of Any and All Amendments, Modification or
Assignments of the Lease:
3. Term of Lease / Date of Expiration:
4. Current Monthly Rent / Common Area Maintenance / Other Charges:
5. Security Deposit / Last Month's Rent / Other Prepaid Amounts:
6. Guarantor(s), if any:
7. The Lease is in full force and effect.
8. Tenant is in exclusive possession of the Leased Premises under the terms of
the Lease.
9. All rent, charges or other payments due Landlord under the Lease have been
paid through ________________, [1999] [2000]. Rent has not been paid more
than one (1) month in advance.
10. There are not any uncured defaults on the part of Landlord or Tenant under
the Lease and, to the best of Tenant's knowledge and belief, no event has
occurred which, with notice and/or lapse of time, would cause such a
default to occur by either Landlord or Tenant.
11. All tenant improvements and other improvements to be constructed by
Landlord under the Lease have been fully completed and accepted by Tenant.
12. Tenant does not have any outstanding option to renew the Lease, option to
expand the Leased Premises or option to purchase any part of the Leased
Premises other than as follows:
13. The Lease, together with any modifications listed in item 2 hereof, sets
forth the entire agreement between Landlord and Tenant. There are no other
documents or agreements affecting the rights of the parties except as
follows: ___________________________
14. To the best of Tenant's knowledge and belief, the Lease is valid and
enforceable in accordance with its terms and none of the provisions thereof
that inure to the benefit of Landlord have been waived by Landlord and
there are no offsets or defenses to the payment of rent by Tenant under the
Lease.
15. Tenant is the sole owner of the entire leasehold estate under the Lease and
has not assigned the Lease or any interest therein, nor has Tenant sublet
all or any portion of the Leased Premises.
16. Tenant has obtained the required occupational licenses, certificates of
occupancy or other similar licenses required for Tenant to operate its
business on the Leased Premises.
17. This certification shall be binding upon Tenant, its successors and
assigns, and shall inure to the benefit of Buyer, its successors and
assigns, the Buyer's lender, if any, and all parties claiming through or
under such persons.
TENANT:
____________________________________
By: ___________________________
Name:___________________________
Title:__________________________
EXHIBIT E
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT OF MORTGAGE LOAN
----------------------------------------------------
THIS ASSIGNMENT AND ASSUMPTION OF MORTGAGE LOAN (this "Assignment") is
----------
made and entered into as of the ____ day of _______________, 2000, by and
between _________________ ("Assignor"), having an address at _________________
--------
and _______________________, a ___________________ ("Assignee"), having an
--------
address at _______________________.
W I T N E S S E T H :
WHEREAS, pursuant to that certain [Mortgage], dated _______, ____,
between Assignor, as lender/mortgagee, to [Name of Borrower], as
borrower/mortgagor (the "Borrower"), and recorded in the Office of the Clerk of
--------
_______ County on _______ in Liber _______, Page ________, Assignor made a loan
to the Borrower in the sum of $______________ (the "Mortgage Loan");
-------------
WHEREAS, Assignor and Assignee entered into that certain Purchase and
Sale Agreement (the "Agreement"), dated as of January 21, 2000, for, inter alia,
--------- ----- ----
the transfer of the Mortgage Loan; and
WHEREAS, in accordance with the terms of the Agreement, Assignor
desires to assign, transfer, set over and deliver to Assignee all of Assignor's
right, title and interest in, and Assignee desires to assume all duties and
obligations of Assignor with respect to the Mortgage Loan and the mortgage loan
documents relating thereto and described on Exhibit A attached hereto and made a
part hereof (the "Mortgage Loan Documents");
-----------------------
NOW, THEREFORE, in accordance with the Agreement and in consideration
of the sum of ten Dollars ($10.00) and other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties do
hereby agree as follows:
1. Assignment. Assignor does hereby assign, transfer, set over and
----------
deliver unto Assignee all of Assignor's right, title and interest in and to the
Mortgage Loan and the Mortgage Loan Documents, together with all other documents
and instruments relating thereto. The foregoing assignment is made without
representation or warranty of any kind, except as otherwise set forth herein or
in the Agreement.
2. Assumption. Assignee hereby accepts the foregoing assignment
----------
and hereby assumes all duties and obligations under the Mortgage Loan Documents
arising on or after the date hereof.
3. Assignor Indemnification. Assignor hereby agrees to indemnify,
------------------------
defend and hold harmless Assignee from and against any loss, cost, damage, or
expense arising from or in connection with any liability or obligation related
to the Mortgage Loan and the Mortgage Loan Documents arising by virtue of acts
or omissions by Assignor which have accrued or occurred prior to the date
hereof.
4. Assignee Indemnification. Assignee hereby agrees to indemnify,
------------------------
defend and hold harmless Assignor from and against any loss, cost, damage, or
expense arising from or in connection with any liability or obligation related
to the Mortgage Loan and the Mortgage Loan Documents arising by virtue of acts
or omissions by Assignee which accrue or occur on or after the date hereof.
5. Governing Law; Parties Bound. This Assignment shall be governed
----------------------------
by the laws of the State of ________ and shall be binding upon, and inure to the
benefit of, the parties to this Assignment and their respective heirs, legal
representatives, successors and assigns.
IN WITNESS WHEREOF, this Assignment has been signed, sealed and
delivered by the parties as of the date first above written.
WITNESSED BY: ASSIGNOR:
______________________________ By:________________________
Name:_________________________
By:________________________
______________________________ Name:______________________
Title:_____________________
Name:_________________________
WITNESSED BY: ASSIGNEE:
______________________________ By:________________________
Name:_________________________
By:________________________
______________________________ Name:______________________
Title:_____________________
Name:________________________
STATE OF ___________ )
) ss:
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____ day of
______, 2000, by ________________, as ______________ of _______________, a
__________ corporation, _____________ of _________________, a
___________________, on behalf of the _____________, who is personally known to
me or who has produced a driver's license as identification.
__________________________________
Name:
Notary Public, State of ________________
My commission expires:
STATE OF ___________ )
) ss:
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____ day of
______, 2000, by _________________, as ______________ of __________________, a
________ corporation, ______________ of ______________________, a ___________,
on behalf of the _________________, who is personally known to me or who has
produced a driver's license as identification.
__________________________________
Name:
Notary Public, State of ________________
My commission expires:
EXHIBIT F
FORM OF
ASSIGNMENT OF TRADEMARKS
------------------------
This ASSIGNMENT OF TRADEMARKS is made and entered into as of the ____
day of _____, 2000, by and between _____________ ("Assignor"), and __________
--------
("Assignee").
----------
WHEREAS, Assignor owns all right, title and interest in and to the
trademarks, service marks and trade names listed in Schedule A annexed hereto
(the "Marks"); and
-----
WHEREAS, Assignee is desirous of acquiring the Marks, and any
applications and registrations thereof;
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, Assignor does hereby assign, sell and transfer to
Assignee its entire right, title and interest in and to the Marks, together with
the goodwill of the business symbolized by the Marks, and any applications and
registrations thereof.
Dated: (Assignor)
_________________________________
By:______________________________
Name:
Title:
STATE OF ___________ )
) ss:
COUNTY OF ___________ )
On this _____day of ______ 2000, before me personally appeared
__________________, to me known who, being by me duly sworn, did depose and say
that he is the _________________ (title) of ________________, Inc., Assignor,
described herein and which executed the foregoing instrument and that he signed
his name thereto.
________________________
Notary Public
EXHIBIT G
SEVERANCE BENEFITS PLAN
-----------------------
Except for those employees who are covered by employment agreements with Echelon
International Corporation, each Transferred Employee that is terminated as part
of any work force reduction plan implemented by Buyer within twelve (12) months
of the Closing Date will receive:
* Two weeks base salary for each year of service with Echelon International
Corporation (pro rated, not truncated);
* One week base salary for each $10,000 of base salary (pro rated, not
truncated);
* Payment for any accrued but unpaid vacation time;
* However, in no event will the payment be less than 4 weeks base salary; and
* Any earned, but unpaid, bonus payment for 2000.
EXHIBIT H
INTENTIONALLY OMITTED
---------------------
EXHIBIT I
FORM OF
TITLE AFFIDAVIT
---------------
STATE OF ___________ )
) ss:
COUNTY OF ___________ )
The undersigned, [PROPERTY OWNER], hereinafter called Affiant, being duly sworn,
says that:
1. Affiant is the owner in fee simple of the premises described on Exhibit A
-
attached hereto.
2. Affiant has present possession of all the premises subject to lessees or
tenants in possession.
3. Affiant states further that no work has been done or materials furnished to
said premises, or any part thereof, or demolition of existing improvements
conducted thereon, for the past six (6) months and that there are no
outstanding claims for the furnishings of material or labor for the
erection, construction, alteration or demolition of any building on the
premises whereby the same are now or might become subject to mechanic's or
other liens, except as listed on Exhibit B attached hereto.
-
4. Affiant further represents that it has not received notice of an assessment
for any public improvements affecting the property prior to the date of
closing that would give rise to a special property tax assessment against
the property described on Exhibit A after the date of closing.
-
5. Affiant is not currently in bankruptcy under the U.S. Code, and further
represents to its knowledge that there are no pending proceedings or
unsatisfied judgments of record, nor any tax liens filed against Affiant,
except as shown on Exhibit C attached hereto; that if there are any
judgments, bankruptcies, probate proceedings, state or federal tax liens of
record against parties with same or similar names, they are not against
Affiant.
6. Affiant agrees not to place of record any lien or encumbrance upon the
above-mentioned property from the date hereof to the date of recordation of
documents executed and delivered in connection with the above commitment.
This affidavit is made for the purpose of inducing one or more of LANDAMERICA
FINANCIAL GROUP's title insurers to issue an Owner's policy of title insurance
on the premises without exception to rights of parties in possession or
intervening matters which do or do not appear of record between the date of
closing and recordation.
By:__________________________________
Title:_________________________________
Subscribed and sworn to before me this _____ day of ____________, ____
________________________________
Notary Public
________________________________
Address
________________________________
Commission expires:
EXHIBIT J
FORM OF
GAP INDEMNITY
-------------
TITLE NO. ______________
THIS INDEMNITY, given by [Property Owner] (hereinafter called Indemnitor)
to [LANDAMERICA FINANCIAL GROUP] (hereinafter called Company) on _____________,
2000.
WHEREAS, Indemnitor has requested Company to issue its policy(s) of title
insurance insuring an interest in or title to certain real estate in
______________ County (City) _____________, described in Policy/Commitment No.
_____________ issued by Company and/or described in Exhibit A attached hereto
and made a part hereof without exception to, or providing certain affirmative
insurance against, the following matters (hereinafter referred to as the
Exception):
Defects, liens, encumbrances, adverse claims or other matters, if any,
created, first appearing in the public records on attaching subsequent to
the effective date hereby but prior to the date the proposed insured
acquires for value of record the estate or interest or mortgage thereon
covered by this commitment, other than mechanics' and materialman's claims.
AND WHEREAS, Company is unwilling to so issue such policy(s) unless
indemnified by Indemnitor as hereinafter provided;
AND WHEREAS, Indemnitor has, as an inducement to Company, offered to
indemnify Company against loss or damage which Company may become liable for by
reason of the omission or deletion of the Exception in said Policy or Commitment
against loss, damage, cost or expense which may result from the matters referred
to in the Exception;
NOW, THEREFORE, the condition of this obligation is such that if
Indemnitor, its heirs, administrators, executors, successors, and assigns, or
any of them, shall and do at all times hereinafter well and sufficiently save,
defend, keep harmless, and indemnify Company, its successors and assigns of and
from all loss, damage, cost, change, liability or expense, including court costs
and reasonable attorneys' fees, which it may sustain, suffer or be put to under
its policy or policies of title insurance or otherwise on account of the
omission or deletion of, or affirmative insurance in connection with, the
Exception due to or arising from any act or omission of Indemnitor and in the
event any claims or liens in connection with the Exception are filed of record
which are so due to the action or omission of Indemnitor; shall cause same to be
paid and discharged of record without delay, or otherwise disposed of to
Company's reasonable satisfaction, then this obligation shall be null and void,
otherwise to remain in full force and effect until the date of policy issuance.
The conditions, covenants, and terms of this Indemnity attached hereto as
Schedule A are incorporated herein by reference.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
this ______ day of __________, 2000.
INDEMNITOR
[PROPERTY OWNER]
By: __________________________
_____________________________(SEAL)
Address: __________________________
__________________________
Telephone: ________________________
SCHEDULE A TO EXHIBIT J
-----------------------
THE CONDITIONS, COVENANTS, AND TERMS OF THE ATTACHED INDEMNITY ARE:
1. Indemnitor agrees that Company may, in its discretion, report to its
proposed insured the existence of the matters set forth as the Exception and
refuse to so issue such policy(s) of title insurance unless Company is furnished
with satisfactory acknowledgment by the proposed insured that said proposed
insured is aware of the existence of the matters set forth as of title
insurance. The obligations of Indemnitor under this instrument shall continue
until Company has ascertained through a lien search conducted as soon as
possible following the issuance of the policy, that no matters of record have
been filed between the date of the Commitment and the date of the policy.
Company also agrees to conduct a lien search and update the effective date of
the Commitment to a date immediately prior to the date of closing of the
transaction pursuant to which the policy will be issued.
2. Indemnitor agrees that if at any time Company deems it necessary in
order to satisfy its obligations under said policy(s), it may, with notice to
Indemnitor, pay, satisfy, compromise or do any other act reasonably necessary to
obtain a release or discharge of the Exception to the title (provided however,
that such Exception is due to the act or omission of Indemnitor, and Indemnitor
has had a reasonable opportunity to satisfy the obligation itself.) Indemnitor
hereby authorizes and empowers Company to advance and pay any sums reasonably
necessary to obtain a release, discharge or satisfaction of the matters set
forth as the Exception to the title. Indemnitor shall promptly furnish such
funds so expended by Company following demand therefor.
3. If Company shall sustain or incur loss or damage because Indemnitor
failed to provide sufficient funds upon demand by Company, Indemnitor shall
become indebted to Company in amount equal to the loss and expense sustained or
incurred by Company and agrees to repay Company that amount on demand, together
with interest thereon, from the date of demand, at the legal rate for judgments
in the state where the real estate is located.
4. If Indemnitor fails timely to take such steps as in the opinion of
Company are reasonably necessary to remove the matters set forth herein as the
Exception to the title, on or before agreed date as provided herein, Company is
authorized in its reasonable discretion to take whatever steps, including but
not limited to the commencement of legal action or payment of money, that it
determines necessary to remove said matters, and in connection therewith
Indemnitor shall, upon demand, advance to Company all funds necessary, including
all costs, attorneys' fees, and other expenses.
5. Company shall have the right with the reasonable approval of Indemnitor
to select and approve any and all counsel who may be retained by Company or by
Indemnitor to defend any action brought by any party as a result of Company
issuing its policy(s) without showing said Exception, or insuring against loss,
damage, cost or expense which may result from the matters referred to in said
Exception, or any counsel retained by Company or Indemnitor to bring any action
or to perform any work to correct the matters shown in the Exception, and
Indemnitor agrees promptly to pay the counsel to selection or approved by
Company.
6. In this instrument, wherever the context so requires, the singular
number includes the plural, and where there is more than one person included as
Indemnitor the obligations of this agreement shall be binding on all such
persons jointly and severally. "Policy" shall be deemed to include a binder or
commitment; and "Commitment" shall be deemed to include binder.
7. If any provision hereof is held to be void or unenforceable under the
laws of any place covering its construction or enforcement, this instrument
shall not be void or vitiated thereby, but shall be construed to be in force
with the same effect as though such provision were omitted.
8. The liability of Indemnitor under this instrument is direct and primary
and is not conditioned or contingent upon prior pursuit of any remedies by
Company except demand for performance upon Indemnitor. Indemnitor shall be
liable for and shall pay promptly to Company all costs, expenses and reasonable
attorneys' fees incurred by Company in enforcing its rights hereunder.
9. This instrument shall be binding upon Indemnitor, and its successors
and assigns and shall inure to the benefit of Company, its successors or
assigns, including, without limitation, any other insurer involved in
reinsuring, in any matter, any liabilities of Company under any policy(s) of
title insurance or endorsement(s) thereto issued in reliance hereon.
10. Written notice shall be deemed to have been duly served if delivered
to the person or to a member of the firm or to an officer of the corporation for
whom it was intended, or if delivered at or sent by registered or certified mail
to the appropriate address shown herein.
EXHIBIT K
FORM OF
FIRPTA AFFIDAVIT
----------------
CERTIFICATION OF NONFOREIGN STATUS
----------------------------------
Section 1445 of the Internal Revenue Code provides that a transferee
(buyer) of a U.S. real property interest must withhold tax if the transferor
(seller) is a foreign person. To inform the transferee (buyer) that withholding
of tax is not required upon the disposition of U.S. real property interest, the
undersigned hereby certify the following:
1. The undersigned are not nonresident aliens for purposes of U.S.
Income taxation;
2. The undersigned's U.S. taxpayer identifying numbers are
identified on Schedule A; and
3. The undersigned's address is:
c/o Xxxxx Xxxxxxxxx Xxxxxxx, Esq.
General Counsel & Senior Vice President
Echelon International Corporation
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
The undersigned understand that this Certification may be disclosed to
the Internal Revenue Service by the transferee and that any false statement it
has made here could be punished by fine, imprisonment, or both.
Under penalties of perjury the undersigned declare that they have
examined this Certification and to the best of their knowledge and belief it is
true, correct, and complete.
Dated: __________ ___, 2000
[INSERT HERE THE LIST OF SUBS FOR
PURCHASE AND SALE AGREEMENT]
By:_____________________________
Name:___________________________
Title:____________________________
EXHIBIT L
JOINT DIRECTION LETTER
[February] __, 2000
LandAmerica Financial Group
0000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Dear Xx. Xxxxxxx:
Reference is made to (a) the Purchase and Sale Agreement dated January
__, 2000 (the "Purchase and Sale Agreement") by and among Echelon International
Corporation and certain of its subsidiaries, collectively, as Sellers
(collectively, in such capacity, referred to herein as the "Seller"), and
Echelon Residential LLC, as Buyer (the "Buyer"), and (b) the Subscription
Agreement dated January __, 2000 (the "Subscription Agreement") by and among
Echelon International Corporation and certain of its subsidiaries, collectively,
as Transferor (collectively, in such capacity, referred to herein as the
"Transferor"), and Xxxxxx Affordable Housing of Florida, Inc., as Transferee
(the "Transferee"). Unless otherwise defined or provided, capitalized terms
herein shall have the meanings ascribed to such terms in the Purchase and Sale
Agreement or Subscription Agreement, respectively, as the case may be.
This Joint Direction Letter is delivered to LandAmerica Financial
Group as Escrow Agent under the Purchase and Sale Agreement and under the
Subscription Agreement (in such capacity, referred to herein as "Escrow Agent")
pursuant to Section 7.7 of the Purchase and Sale Agreement and Section 7.7 of
the Subscription Agreement and, once delivered by the parties hereto, shall be
irrevocable in all respects.
1. Each of the Seller, the Buyer, the Transferor and the Transferee
hereby expressly acknowledges, agrees, represents and warrants and, to the
extent the following waivers and confirmation may only be validly made by any
other signatory hereto but not by it, based upon and in reliance upon the
acknowledgement, agreement, representations and warranties of such other parties
hereby made, that, except for the conditions described in Sections 6.1(c), (i)
and (j) and 6.2(c), (i) and (j) of the Purchase and Sale Agreement and Sections
6.1(c), (i) and (j) and 6.2(c), (i) and (j) of the Subscription Agreement, each
of the conditions to the closing of the transactions described in the Purchase
and Sale Agreement and the Subscription Agreement (including, without
limitation, conditions based upon (x) the accuracy as of any date of the
representations and warranties of any party thereto, (y) compliance by any party
thereto with its covenants or other obligations thereunder, and (z) the
deliveries to Escrow Agent of the Escrowed Items required thereby) have been
satisfied or waived as of the date hereof.
2. Each of the Seller and the Buyer hereby represents and warrants
that (a) to the best of its knowledge, after due inquiry, none of the conditions
described in Sections 6.1(i)
and (j), and 6.2 (i) and (j) of the Purchase and Sale Agreement has occurred,
and (b) the Purchase and Sale Agreement has not been amended, supplemented,
terminated (pursuant to Section 9 thereof or otherwise) or otherwise modified,
except such amendments, supplements or modifications as (i) are permitted by the
Merger Agreement, (ii) would not reduce the aggregate Purchase Price and would
not affect Sections 7.7, 7.8 or 12.2 of the Purchase and Sale Agreement and
(iii) are attached as exhibits hereto.
3. Each of the Transferor and Transferee hereby represents and
warrants that (a) to the best of its knowledge, after due inquiry, none of the
conditions described in Sections 6.1(i) and (j), and 6.2(i) and (j) of the
Subscription Agreement has occurred, and (b) the Subscription Agreement has not
been amended, supplemented, or terminated (pursuant to Section 9 thereof or
otherwise) or otherwise modified, except such amendments, supplements or
modifications as (i) are permitted by the Merger Agreement, (ii) would not
reduce the aggregate cash portion of the Transfer Value and would not affect
Sections 7.7, 7.8 or 12.2 of the Subscription Agreement and (iii) are attached
as exhibits hereto.
4. The Seller and the Buyer each hereby further confirm to Escrow
Agent that (a) listed on Schedule I hereto is a list of all items required to be
delivered by the Buyer and/or the Seller to Escrow Agent under Sections 7.4 and
7.5 of the Purchase and Sale Agreement (the "Purchase Escrowed Items"), (b) all
such items, including the Purchase Price, have been delivered to Escrow Agent
under the Purchase and Sale Agreement, (c) the amount of the Purchase Price is
$______, and (d) the aggregate amount of Asset Sales Proceeds (as such term is
defined in the Purchase and Sale Agreement) is $______.
5. The Transferor and the Transferee each hereby further confirm that
(a) listed on Schedule II hereto is a list of all items required to be delivered
by the Transferor and/or the Transferee under Sections 7.4 and 7.5 of the
Subscription Agreement (the "Subscription Escrowed Items"), (b) all such items,
including the Transfer Value, have been delivered to Escrow Agent under the
Subscription Agreement, and (c) the amount of the cash portion of the Transfer
Value, after giving effect to any Reduction in Transfer Value as the result of
the consummation on or prior to the date hereof of any Pending Transactions (as
such term is defined in the Subscription Agreement) is $_____[, the Reduction in
Transfer Value is $______ and the Excess Amount (as such term is defined in the
Subscription Agreement is $_______]).
6. The Buyer and the Seller hereby irrevocably instruct you as
follows:
(a) Immediately following the filing by Escrow Agent of the Articles
of Merger with respect to the Merger with the Department of State of the State
of Florida or the receipt by Escrow Agent of notice that such filing has
occurred, the Purchase Escrowed Items shall be promptly delivered by Escrow
Agent to the party entitled to same and, in particular,
(i) the Purchase Price shall be delivered, by wire transfer of
immediately available funds, to the Surviving Corporation or as it
shall direct; and
(ii) the aggregate amount of Asset Sales Proceeds shall be delivered,
by wire transfer of immediately available funds, to the Buyer or
as it shall direct.
(b) If (i) the Purchase and Sale Agreement has been terminated
pursuant to Section 9.1 thereof, or (ii) the Tender Offer Expiration Date does
---
not occur on or prior to the third Business Day after the date hereof, the
Purchase Escrowed Items shall be promptly delivered by Escrow Agent to the party
which had previously deposited same with Escrow Agent, and these instructions
shall cease to have any effect.
7. The Transferor and the Transferee hereby irrevocably instruct
Escrow Agent as follows:
(a) Immediately following the filing by Escrow Agent of the Articles
of Merger with respect to the Merger with the Department of State of the State
of Florida or the receipt by Escrow Agent of notice that such filing has
occurred, the Subscription Escrowed Items shall be promptly delivered by Escrow
Agent to the party entitled to same and, in particular,
(i) the Preferred Stock shall be delivered to the Surviving
Corporation;
(ii) the cash portion of the Transfer Value plus the amount of any
Reduction in Transfer Value shall be delivered, by wire transfer
of immediately available funds, to the Surviving Corporation or
as it shall direct;
(iii) an amount equal to fifteen (15%) percent of the Excess Amount
shall be delivered, by wire transfer of immediately available
funds, to Echelon Commercial LLC or as it shall direct; and
(iv) an amount equal to eighty-five (85%) percent of such Excess
Amount shall be delivered, by wire transfer of immediately
available funds, to the Transferee for credit to the Cash
Collateral Account (as such term is defined in the Xxxxxx
Lease).
(b) If (i) the Subscription Agreement has been terminated pursuant to
Section 9.1 thereof, or (ii) the Tender Offer Expiration Date does not occur on
---
or prior to the third Business Day after the date hereof, the Subscription
Escrowed Items shall be promptly delivered by Escrow Agent to the party which
had previously deposited same with Escrow Agent, and these instructions shall
cease to have any effect.
8. These instructions may not be revoked, modified, superseded or
amended, without the prior written consent of each of the Seller, the Buyer, the
Transferee, the Transferor, and EIN Acquisition Corp.
Please acknowledge your receipt hereof and of each of the Purchase
Escrowed Items, and Subscription Escrowed Items, including the Purchase Price
and the Transfer Value, and your agreement, irrevocably, to comply herewith, by
signing the enclosed copies of this letter and delivering copies hereof to each
of the Buyer, the Seller, the Transferee, the Transferor, and EIN Acquisition
Corp. EIN Acquisition Corp. is joining in the execution hereof for the purpose
of acknowledging its receipt hereof and agreement to be bound hereby, subject to
all of the terms and conditions hereof.
IN WITNESS WHEREOF, this irrevocable Joint Direction Letter has been
signed this __ day of [February], 2000.
ECHELON INTERNATIONAL CORP., [list all
subsidiaries parties to Purchase and Sale
Agreement], as Seller
By:__________________________________________
Name:
Title:
ECHELON INTERNATIONAL CORP.,
[list all subsidiaries party to Subscription
Agreement], as Transferor
By:__________________________________________
Name:
Title:
ECHELON RESIDENTIAL LLC, as Buyer
By:__________________________________________
Name:
Title:
XXXXXX AFFORDABLE HOUSING OF
FLORIDA, INC., as Transferee
By:__________________________________________
Name:
Title:
ACKNOWLEDGED AND AGREED:
LANDAMERICA FINANCIAL GROUP
By:______________________________
Name:________________________
Title:_______________________
RECEIPT ACKNOWLEDGED:
EIN ACQUSITION CORP.
By:______________________________
Name:________________________
Title:_______________________
EXHIBIT M
---------
JOINT INSTRUCTION LETTER
[February] __, 2000
LandAmerica Financial Group
0000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Dear Xx. Xxxxxxx:
Reference is made to (a) the Purchase and Sale Agreement dated January __,
2000 (the "Purchase and Sale Agreement") by and among Echelon International
Corporation and certain of its subsidiaries, collectively, as Sellers
(collectively, in such capacity, referred to herein as the "Seller"), and
Echelon Residential LLC, as Buyer (the "Buyer"), (b) the Subscription Agreement
dated January __, 2000 (the "Subscription Agreement") by and among Echelon
International Corporation and certain of its subsidiaries, collectively, as
Transferor (collectively, in such capacity, referred to herein as the
"Transferor"), and Xxxxxx Affordable Housing of Florida, Inc., as Transferee
(the "Transferee"), and (c) that certain Joint Direction Letter of even date
herewith made by the Seller, the Buyer, the Transferor and the Transferee and
delivered to you pursuant to Sections 7.7 of the Purchase and Sale Agreement and
Section 7.7 of the Subscription Agreement (the "Joint Direction Letter").
Unless otherwise defined or provided, capitalized terms herein shall have the
meanings ascribed to such terms in the Purchase and Sale Agreement or
Subscription Agreement, respectively, as the case may be.
This Joint Instruction Letter is delivered to LandAmerica Financial Group
as Escrow Agent under the Purchase and Sale Agreement and under the Subscription
Agreement (in such capacity, referred to in herein as "Escrow Agent") pursuant
to Section 7.8 of the Purchase and Sale Agreement and Section 7.8 of the
Subscription Agreement and, once delivered by the parties hereto, shall be
irrevocable in all respects. A copy of this Joint Instruction Letter shall be
delivered by Escrow Agent to EIN Acquisition Corp., a Florida corporation,
("EIN") and to Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank
Nederland", New York Branch, for the benefit of itself and Utrecht-America
Finance Co. (collectively "Lender") and may be relied upon by EIN and Lender as
if it had been addressed to them directly.
1. Each of the Buyer and the Transferee hereby expressly acknowledges,
agrees, represents and warrants and, to the extent the following waivers and
confirmation may only be validly made by the other party hereto or by any other
signatory to the Joint Direction Letter but not by it, based upon and in
reliance upon, but not in any event
subject to, the waivers and acknowledgements of such other parties hereby and
thereby made, that, except for the conditions described in Sections 6.1(c), (i)
and (j) and 6.2(c), (i) and (j) of the Purchase and Sale Agreement and Sections
6.1(c), (i) and (j) and 6.2(c), (i) and (j) of the Subscription Agreement, each
of the conditions to the closing of the transactions described in the Purchase
and Sale Agreement and the Subscription Agreement (including, without
limitation, conditions based upon (x) the accuracy as of any date of the
representations and warranties of any party thereto, (y) compliance by any party
thereto with its covenants or other obligations thereunder, and (z) the
deliveries to Escrow Agent of the Escrowed Items required hereby or thereby)
have been satisfied or waived as of the date hereof.
2. The Buyer hereby represents and warrants that (a) to its knowledge,
none of the conditions described in Sections 6.1(i) and (j), and 6.2 (i) and (j)
of the Purchase and Sale Agreement has occurred, and (b) the Purchase and Sale
Agreement has not been amended, supplemented, terminated (pursuant to Section 9
thereof or otherwise) or otherwise modified, except such amendments, supplements
or modifications as (i) are permitted by the Merger Agreement, (ii) would not
reduce the aggregate Purchase Price and would not affect Sections 7.7, 7.8, or
12.2 of the Purchase and Sale Agreement and (iii) are attached as exhibits
hereto. On the Closing Date under the Purchase and Sale Agreement, Buyer agrees
to deliver to Escrow Agent a certificate reconfirming for the benefit of Escrow
Agent, EIN and Lender the representations and warranties of the preceding
sentence together with the other items required to be delivered to EIN as
provided in Section 7.8 of the Purchase and Sale Agreement.
3. The Transferee hereby represents and warrants that (a) to its
knowledge, none of the conditions described in Sections 6.1(i) and (j), and
6.2(i) and (j) of the Subscription Agreement has occurred, and (b) the
Subscription Agreement has not been amended, supplemented, or terminated
(pursuant to Section 9 thereof or otherwise) or otherwise modified, except such
amendments, supplements or modifications as (i) are permitted by the Merger
Agreement, (ii) would not reduce the aggregate cash portion of the Transfer
Value and would not affect Sections 7.7, 7.8, or 12.2 of the Subscription
Agreement and (iii) are attached as exhibits hereto. On the Closing Date under
the Subscription Agreement, the Transferee agrees to deliver to Escrow Agent a
certificate reconfirming for the benefit of Escrow Agent, EIN and Lender the
representations and warranties of the preceding sentence together with the other
items required to be delivered to EIN as provided in Section 7.8 of the
Subscription Agreement.
4. The Buyer hereby further confirms that (a) listed on Schedule I hereto
is a list of all items required to be delivered by the Buyer and/or the Seller
to Escrow Agent under Sections 7.4 and 7.5 of the Purchase and Sale Agreement
(the "Purchase Escrowed Items"), (b) all such items, including the Purchase
Price, have been delivered to Escrow Agent under the Purchase and Sale
Agreement, (c) the amount of the Purchase Price is $______, (d) the aggregate
amount of Asset Sales Proceeds (as such term is defined in the
Purchase and Sale Agreement) is $_______, and (e) the Joint Direction Letter
required by Section 7.7 of the Purchase and Sale Agreement has been delivered by
the Buyer and the Seller to Escrow Agent.
5. The Transferee hereby further confirms that (a) listed on Schedule II
hereto is a list of all items required to be delivered by the Transferor and/or
the Transferee under Sections 7.4 and 7.5 of the Subscription Agreement (the
"Subscription Escrowed Items"), (b) all such items, including the Transfer
Value, have been delivered to Escrow Agent under the Subscription Agreement, (c)
the amount of the cash portion of the Transfer Value, after giving effect to any
Reduction in Transfer Value as the result of the consummation on or prior to the
date hereof of any Pending Transactions (as such term is defined in the
Subscription Agreement) is $_____[, the Reduction in Transfer Value is $______
and the Excess Amount (as such term is defined in the Subscription Agreement is
$_______]), and (d) the Joint Direction Letter required by Section 7.7 of the
Subscription Agreement has been delivered by the Transferor and the Transferee
to Escrow Agent.
6. The Buyer hereby irrevocably, and without condition except as provided
in this paragraph, instructs Escrow Agent as follows:
(a) immediately following the filing by Escrow Agent of the Articles of
Merger with respect to the Merger with the Department of State of the State of
Florida or the receipt by Escrow Agent of notice that such filing has occurred,
the Purchase Escrowed Items shall be promptly delivered by Escrow Agent to the
party entitled to same and, in particular,
(i) the Purchase Price shall be delivered, by wire transfer of
immediately available funds, to the Surviving Corporation or as it
shall direct; and
(ii) the aggregate amount of Asset Sales Proceeds shall be delivered, by
wire transfer of immediately available funds, to the Buyer as
follows: [Echelon Residential LLC wire instructions].
(b) If (i) the Purchase and Sale Agreement has been terminated pursuant
to Section 9.1 thereof, or (ii) the Tender Offer Expiration Date does not occur
---
on or prior to the third Business Day after the date hereof, the Purchase
Escrowed Items shall be promptly delivered by Escrow Agent to the party which
had previously deposited same with Escrow Agent, and these instructions shall
cease to have any effect.
7. The Transferee hereby irrevocably, and without condition except as
provided in this paragraph, instructs Escrow Agent as follows:
(a) immediately following the filing by Escrow Agent of the Articles of
Merger with respect to the Merger with the Department of State of the State of
Florida or the receipt by Escrow Agent of notice that such filing has occurred,
the Subscription Escrowed Items shall be promptly delivered by Escrow Agent to
the party entitled to same and, in particular,
(i) the Preferred Stock shall be delivered to the Surviving
Corporation;
(ii) the cash portion of the Transfer Value plus the amount of any
Reduction in Transfer Value shall be delivered, by wire transfer
of immediately available funds, to the Surviving Corporation or as
it shall direct;
(iii) an amount equal to fifteen (15%) percent of any Excess Amount
shall be delivered, by wire transfer of immediately available
funds, to Echelon Commercial LLC as follows: [Echelon Commercial
LLC wire instructions]; and
(iv) an amount equal to eighty-five (85%) percent of such Excess Amount
shall be delivered, by wire transfer of immediately available
funds, to the Transferee for credit to the Cash Collateral Account
(as such term is defined in the Xxxxxx Lease) as follows: [Xxxxxx
Affordable Housing of Florida Inc., Cash Collateral Account wire
instructions].
(b) If (i) the Subscription Agreement has been terminated pursuant to
Section 9.1 thereof, or (ii) the Tender Offer Expiration Date does not occur on
---
or prior to the third Business Day after the date hereof, the Subscription
Escrowed Items shall be promptly delivered by Escrow Agent to the party which
had previously deposited same with Escrow Agent, and these instructions shall
cease to have any effect.
8. These instructions may not be revoked, modified, superseded or amended,
without the prior written consent of each of the Buyer, the Transferee, EIN and
Lender.
Please acknowledge your receipt hereof and of each of the Joint Direction
Letter, Purchase Escrowed Items, and Subscription Escrowed Items, including the
Purchase Price and the Transfer Value, and your agreement, irrevocably, to
comply herewith, by signing the enclosed copies of this letter and delivering
copies hereof to each of the Buyer, the Transferee, EIN and Lender. EIN and
Lender and joining in the execution hereof for the purpose of acknowledging
their receipt hereof and agreement to be bound hereby, subject to all of the
terms and conditions hereof.
IN WITNESS WHEREOF, this irrevocable Joint Instruction Letter has been
signed this __ day of [February], 2000.
ECHELON RESIDENTIAL LLC, as Buyer
By:___________________________________
Name:
Title:
XXXXXX AFFORDABLE HOUSING OF
FLORIDA, INC., as Transferee
By:___________________________________
Name:
Title:
ACKNOWLEDGED AND AGREED:
LANDAMERICA FINANCIAL GROUP
By:____________________________
Name:_______________________
Title:______________________
RECEIPT ACKNOWLEDGED:
EIN ACQUSITION CORPORATION
By:____________________________
Name:_______________________
Title:______________________
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A
"RABOBANK NEDERLAND", NEW YORK BRANCH
By:____________________________
Name:_______________________
Title:______________________
