SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported) January 21, 2000
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ECHELON INTERNATIONAL CORPORATION
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(Exact Name of the Registrant as Specified in Charter)
Florida 001-12211 59-2554218
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
450 Carillon Parkway, Suite 200 St. Petersburg, Florida 33716
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(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code (727) 803-8200
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 1. Changes in Control of Registrant.
On January 22, 2000, Echelon International Corporation issued a press
release stating that it had entered into a definitive agreement pursuant to
which EIN Acquisition Corp. will initiate a tender offer for all the outstanding
shares of Echelon for a cash price of $34.00 per share. The offer is subject to,
among other things, the escrow closing of the real estate transactions described
in the press release. A copy of the press release is attached hereto as Exhibit
(c)(5).
Item 7. Financial Statements and Exhibits
(c) Exhibits
(c)(1) Agreement and Plan of Merger, dated as of January 21, 2000,
by and among Echelon, Parent and Purchaser.
(c)(2) Purchase and Sale Agreement, dated as of January 21, 2000,
by and among Echelon, certain subsidiaries of Echelon and
Echelon Residential LLC.
(c)(3) Subscription Agreement, dated as of January 21, 2000, by and
among Echelon, certain subsidiaries of Echelon and Heller
Real Estate.
(c)(4) Purchase Agreement, dated as of January 21, 2000, by and
among Echelon, Echelon Affordable Housing, Inc. and Heller
Affordable Housing.
(c)(5) Press release issued by Echelon on January 22, 2000.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ECHELON INTERNATIONAL CORPORATION
Date: January 24, 2000 By: /s/ Susan G. Johnson
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Name:Susan G. Johnson
Title: Senior Vice President, General
Counsel and Corporate Secretary
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ETA HOLDING LLC,
EIN ACQUISITION CORP.
AND
ECHELON INTERNATIONAL CORPORATION
Dated as of January 21, 2000
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
THE OFFER.................................................................2
1.01 The Offer...................................................2
1.02 Company Actions.............................................4
ARTICLE II
THE MERGER AND RELATED MATTERS............................................5
2.01 The Merger..................................................5
2.02 Effective Time..............................................5
2.03 Effect of Merger............................................6
2.04 Conversion of Stock.........................................6
2.05 Dissenting Stock............................................6
2.06 Surrender of Certificates...................................7
2.07 Payment.....................................................8
2.08 No Further Rights of Transfers..............................8
2.09 Stock Option and Other Plans................................8
2.10 Articles of Incorporation of the Surviving Corporation;
Use of "Echelon" Name.....................................9
2.11 By-Laws of the Surviving Corporation.......................10
2.12 Directors and Officers of the Surviving Corporation........10
ARTICLE III
REPRESENTATIONS AND WARRANTIES...........................................10
3.01 Representations and Warranties of the Company.................10
(a) Due Organization, Good Standing and Power................10
(b) Authorization and Validity of Agreement..................11
(c) Capitalization...........................................11
(d) Consents and Approvals; No Violations....................12
(e) Company Reports and Financial Statements.................13
(f) Absence of Certain Changes...............................14
(g) Title to Properties; Encumbrances........................14
(h) Compliance with Laws.....................................16
(i) Litigation...............................................16
(j) Employee Benefit Plans...................................16
(k) Taxes....................................................17
(l) Liabilities..............................................17
(m) Intellectual Properties..................................18
(n) Material Contracts.......................................18
(o) Broker's or Finder's Fee.................................18
(p) Environmental Laws and Regulations.......................18
(q) State Takeover Statutes..................................20
(r) Rights Agreement.........................................21
(s) Year 2000................................................21
(t) Opinion of Financial Advisor.............................21
(u) Disclosure...............................................21
(v) Distribution Agreement...................................21
3.02 Representations and Warranties of Parent and Sub..............22
(a) Due Organization; Good Standing and Corporate Power.......22
(b) Authorization and Validity of Agreement...................22
(c) Consents and Approvals; No Violations.....................22
(d) Capitalization............................................23
(e) Broker's or Finder's Fee..................................23
(f) Financing.................................................23
(g) Parent Not an Affiliated Shareholder......................23
(h) Size of Person............................................24
(i) Capital Contributions; Cash On Hand; Special Purpose
Entities................................................24
(j) Going Concern; Solvency...................................24
ARTICLE IV
COVENANTS................................................................24
4.01 Access to Information Concerning Properties and Records;
Delivery of Financial Information..........................24
4.02 Confidentiality...............................................25
4.03 Conduct of the Business of the Company Pending the Effective
Date.......................................................25
4.04 Shareholder Approval..........................................27
4.05 Reasonable Best Efforts.......................................27
4.06 No Solicitation of Other Offers...............................28
4.07 Notification of Certain Matters...............................29
4.08 HSR Act.......................................................30
4.09 Employment Agreements.........................................30
4.10 Directors' and Officers' Insurance; Indemnification...........30
4.11 Guaranty of Performance.......................................31
4.12 Financing; Capital; Capitalization; Solvency; Going Concern...31
4.13 Rights Agreement..............................................31
4.14 State Takeover Statutes.......................................32
4.15 No Other Representations or Warranties........................32
4.16 Insurance.....................................................32
4.17 Closing Certificate...........................................32
4.18 Preclearance of Articles of Merger............................33
4.19 Merger of Surviving Corporation with and into Delaware Sub....33
ARTICLE V
TERMINATION AND ABANDONMENT..............................................34
5.01 Termination...................................................34
5.02 Effect of Termination.........................................36
ARTICLE VI
MISCELLANEOUS............................................................37
6.01 Fees and Expenses.............................................37
6.02 Representations and Warranties................................37
6.03 Extension; Waiver.............................................37
6.04 Public Announcements..........................................38
6.05 Notices.......................................................38
6.06 Entire Agreement..............................................39
6.07 Binding Effect; Benefit; Assignment...........................39
6.08 Amendment and Modification....................................39
6.09 Further Actions...............................................40
6.10 Headings......................................................40
6.11 Counterparts..................................................40
6.12 Applicable Law................................................40
6.13 Severability..................................................40
6.14 Certain Definitions...........................................40
6.15 Transfer Taxes................................................41
6.16 Waiver of Jury Trial..........................................41
ANNEX A - Tender Offer Conditions
EXHIBIT A - Form of Tax Credit LP Interest Purchase Agreement
EXHIBIT B - Form of Purchase and Sale Agreement
EXHIBIT C - Form of Subscription Agreement
EXHIBIT D - Form of LandAmerica Escrow Agreement
EXHIBIT E - Form of Rabobank Escrow Agreement
EXHIBIT F - Form of Closing Certificate(including Schedule A thereto)
SCHEDULE I - Insurance Coverage
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January 21, 2000 (this
"Agreement"), by and among ETA HOLDING LLC, a Delaware limited liability company
("Parent"), EIN ACQUISITION CORP., a Florida corporation and a direct
wholly-owned subsidiary of Parent ("Sub"), and ECHELON INTERNATIONAL
CORPORATION, a Florida corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company's capital stock by Parent
on the terms and conditions set forth herein;
WHEREAS, in contemplation thereof, it is proposed that Sub will make a
tender offer (the "Offer") to purchase all the issued and outstanding shares of
the Company's common stock, par value $0.01 per share, (the "Common Stock") and
the associated preferred share purchase rights (the "Rights") issued pursuant to
the Stockholder Rights Agreement, dated as of November 15, 1996, by and between
the Company and The First National Bank of Boston (the "Rights Agreement"), at a
purchase price of $34.00 per share (and associated Right) net to the seller in
cash, without interest thereon, (the "Offer Price") on the terms and subject to
the conditions set forth in the Offer to Purchase referred to herein and in the
related letter of transmittal;
WHEREAS, to complete such acquisition, the respective Boards of
Directors of Parent and Sub have approved and adopted this Agreement and the
plan of merger set forth herein whereby Sub will merge with and into the
Company, with the Company being the surviving corporation (the "Merger"), on the
terms and subject to the conditions of this Agreement;
WHEREAS, the Board of Directors of the Company has determined (i) that
the Offer is fair to, and in the best interests of, the holders of Common Stock,
(ii) to approve the Offer and (iii) to recommend the acceptance of the Offer by
the shareholders of the Company;
WHEREAS, on or prior to the date hereof, a Purchase Agreement, in the
form attached hereto as Exhibit A (the "Tax Credit LP Interest Purchase
Agreement"), has been executed and delivered by each of the parties thereto
pursuant to which the Company has agreed to sell, transfer and assign all of its
right, title and interest in and to the Partnership Interests (as defined
therein) pursuant to and in accordance with the terms and conditions thereof;
WHEREAS, concurrently herewith, a Purchase and Sale Agreement, in the
form attached hereto as Exhibit B (the "Purchase and Sale Agreement"), has been
executed and delivered by each of the parties thereto pursuant to which the
Company has agreed to sell, transfer and assign all of its right, title and
interest in and to the Assets (as defined therein) pursuant to and in accordance
with the terms and conditions thereof;
WHEREAS, concurrently herewith, a Subscription Agreement, in the form
attached hereto as Exhibit C (the "Subscription Agreement"), has been executed
and delivered by each of the parties thereto pursuant to which the Company has
agreed to convey, transfer and assign all of its right, title and interest in
and to the Assets (as defined therein) pursuant to and in accordance with the
terms and conditions thereof (it being understood and agreed that for purposes
of this Agreement (other than the immediately preceding paragraph and the
preceding provisions of this paragraph), (i) "Real Estate Assets" shall be
deemed to be a collective reference to the Assets (as defined in the Purchase
and Sale Agreement) and the Assets (as defined in the Subscription Agreement),
(ii) "Assets" shall be deemed to be a collective reference to the Real Estate
Assets and the Partnership Interests (as defined in the Tax Credit LP Interest
Purchase Agreement), so long as the transactions contemplated thereby have not
been consummated, (iii) "Real Estate Disposition Agreements" shall be deemed to
be a collective reference to the Purchase and Sale Agreement and the
Subscription Agreement and (iv) "Asset Disposition Agreements" shall be deemed
to be a collective reference to the Real Estate Disposition Agreements and the
Tax Credit LP Interest Purchase Agreement, so long as the transactions
contemplated thereby have not been consummated);
WHEREAS, concurrently herewith, an Escrow Agreement, in the form
attached hereto as Exhibit D (the "LandAmerica Escrow Agreement"), has been
executed and delivered by each of the parties thereto pursuant to which the
Company has agreed to deposit certain funds with the escrow agent thereunder
relating to the transaction expenses to be incurred in connection with the
transactions contemplated hereby; and
WHEREAS, concurrently herewith, an Escrow Agreement, in the form
attached hereto as Exhibit E (the "Rabobank Escrow Agreement" and, together with
the LandAmerica Escrow Agreement, the "Escrow Agreements"), has been executed
and delivered by each of the parties thereto pursuant to which the Company has
agreed to deposit certain funds with the escrow agent thereunder until such time
as when the transactions contemplated hereby shall have been consummated;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.01 The Offer. (a) Provided that this Agreement shall not have been
terminated in accordance with Article VI hereof and so long as none of the
events set forth in Annex A hereto (the "Tender Offer Conditions") shall have
occurred and be continuing, as promptly as practicable, but in no event later
than the fifth Business Day (as defined in Section 6.14 hereof) after the date
of this Agreement, Sub shall, and Parent shall cause Sub to, commence (within
the meaning of Rule 14d-2 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) the Offer. The obligations of Sub to, and of
Parent to cause Sub to, accept for payment and to pay for any shares of Common
Stock (and associated Rights) tendered shall be subject only to the Tender Offer
Conditions, any of which may be waived by Parent or Sub; provided, that the
Minimum Condition (as defined in Annex A hereto) may not be waived by Parent or
Sub without the prior written consent of the Company. Sub expressly reserves the
right to modify the terms of the Offer; provided, that, without the consent of
the Company, neither Parent nor Sub shall (i) reduce the number of shares of
Common Stock to be purchased in the Offer, (ii) reduce the Offer Price, (iii)
add to the Tender Offer Conditions, (iv) modify the Tender Offer Conditions or
any other term or condition of the Offer in a manner that is adverse to the
holders of Common Stock, (v) change the form of consideration payable in the
Offer or (vi) except as provided in the last two sentences of this subsection
(a), extend the Offer beyond any scheduled expiration date. Parent and Sub
covenant and agree that, on the terms and subject to the conditions of this
Agreement, including, but not limited to, the Tender Offer Conditions and the
last sentence of this Section 1.01(a), unless the Company otherwise consents in
writing, Sub will accept for payment and pay for the Common Stock (and
associated Rights) as soon as (but in any event within one Business Day after
the Offer terminates) it is permitted to do so under applicable law. Parent and
Sub agree that if Sub is unable to consummate the Offer on the initial scheduled
expiration date due to the failure of the Tender Offer Conditions set forth in
the first sentence of Annex A to be satisfied or waived, Sub shall, unless this
Agreement has been terminated in accordance with its terms, extend the Offer and
set a subsequent scheduled expiration date, and shall continue to so extend the
Offer and set subsequent scheduled expiration dates, until the termination of
this Agreement in accordance with its terms; provided, that any such extended
expiration date shall not be later than the earlier of (x) 20 Business Days
following the previously scheduled expiration date and (y) the date on which Sub
reasonably believes that all Tender Offer Conditions will be satisfied or
waived.
(b) As soon as reasonably practicable on the date that the Offer is
commenced, Parent and Sub shall file, and Parent shall cause Sub to file, with
the Securities and Exchange Commission (the "Commission") a Tender Offer
Statement on Schedule TO (together with all amendments and supplements thereto,
the "Schedule TO") with respect to the Offer. The Schedule TO shall contain
(included as an exhibit) or shall incorporate by reference an offer to purchase
(the "Offer to Purchase") and a form of the related letter of transmittal (the
"Letter of Transmittal"), as well as all other information and exhibits required
by law (which Schedule TO, Offer to Purchase, Letter of Transmittal and such
other information and exhibits, together with any supplements or amendments
thereto, are referred to herein collectively as the "Offer Documents"). The
Company and its counsel shall be given the opportunity to review and comment
upon the Schedule TO prior to its filing with the Commission. Parent and Sub
represent and warrant that the Offer Documents will comply in all material
respects with the provisions of applicable federal securities laws and, on the
date filed with the Commission and the date first published, sent or given to
the Company's shareholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading, except that no representation is made
by Parent or Sub with respect to any information supplied by the Company or its
officers, directors or affiliates in writing for inclusion in the Offer
Documents. If, at any time prior to the completion, expiration or termination of
the Offer, any event occurs which should be described in an amendment or
supplement to the Schedule TO or any amendment or supplement thereto, Parent and
Sub will, and Parent will cause Sub to, file and disseminate, as required, an
amendment or supplement which complies in all material respects with the
Exchange Act and the rules and regulations thereunder and any other applicable
laws. Prior to its filing with the Commission, the amendment or supplement shall
be delivered to the Company and its counsel and the Company and its counsel
shall be given the opportunity to comment thereon. The written information
supplied or to be supplied by Parent and Sub for inclusion in the Schedule 14D-9
(as defined in Section 1.02 hereof) of the Company will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made, in light of the circumstances under which
they are made, not misleading. Each of Parent and Sub agrees to provide the
Company and its counsel with copies of any written comments Parent and Sub or
their counsel may receive from the Commission or its staff with respect to the
Offer Documents promptly after the receipt of such comments and shall provide
the Company and its counsel an opportunity to participate, including by way of
discussions with the Commission or its staff, in the response of Parent and Sub
to such comments.
1.02 Company Actions. The Company hereby approves of and consents to
the Offer and represents that: (a) its Board of Directors (at a meeting duly
called and held) has (i) determined that the Offer is fair to, and in the best
interests of, the holders of Common Stock, (ii) approved the Offer and (iii)
determined to recommend the acceptance of the Offer by the shareholders of the
Company; provided, however, that such recommendation or other action may be
withdrawn, modified or amended at any time or from time to time in a manner
adverse to Parent and Sub so long as the Company has complied with Section 4.06
hereof; and (b) Donaldson, Lufkin & Jenrette Securities Corporation has
delivered to the Board of Directors of the Company its opinion that the
consideration to be received by the holders of Common Stock (other than Parent
and Sub) pursuant to the Offer and the Merger is fair to the holders of Common
Stock from a financial point of view, subject to the assumptions and
qualifications contained in such opinion. The Company shall file with the
Commission, as soon as practicable after the date of the commencement of the
Offer, a Solicitation/Recommendation Statement on Schedule 14D-9 (together with
all amendments and supplements thereto, the "Schedule 14D-9") containing the
recommendations referred to in clause (a) of the preceding sentence and shall
disseminate the Schedule 14D-9 as required by Rule 14d-9 under the Exchange Act;
provided, however, that such recommendation or other action may be withdrawn,
modified or amended at any time or from time to time in a manner adverse to
Parent and Sub so long as the Company has complied with Section 4.06 hereof.
Parent and Sub and their counsel shall be given the opportunity to review and
comment on the Schedule 14D-9 prior to its filing with the Commission. The
Company represents and warrants that the Schedule 14D-9 will comply in all
material respects with the provisions of applicable federal securities laws and,
on the date filed with the Commission and on the date first published, sent or
given to the Company's shareholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or Sub or their officers, directors or affiliates in writing for
inclusion in the Schedule 14D-9. If at any time prior to the completion,
expiration or termination of the Offer, any event occurs which should be
described in an amendment or supplement to the Schedule 14D-9 or any amendment
or supplement thereto, the Company will file and disseminate, as required, an
amendment or supplement which complies in all material respects with the
Exchange Act and the rules and regulations thereunder and any other applicable
laws. Prior to its filing with the Commission, the amendment or supplement shall
be delivered to Parent and its counsel and Parent and its counsel shall be given
the opportunity to comment thereon. The written information supplied or to be
supplied by the Company for inclusion in the Offer Documents will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made, in light of the circumstances
under which they are made, not misleading. The Company agrees to provide Parent
and its counsel with any comments the Company or its counsel may receive from
the Commission or its staff with respect to the Schedule 14D-9 promptly after
the receipt of such comments and shall provide Parent and its counsel an
opportunity to participate, including by way of discussions with the Commission
or its staff, in the response of the Company to such comments.
In connection with the Offer, the Company will promptly furnish Sub
with mailing labels, security position listings and any available listing or
computer list containing the names and addresses of the record holders of the
Common Stock as of the most recent practicable date and shall furnish Sub with
such additional information (including, but not limited to, updated lists of
holders of Common Stock and their addresses, mailing labels and lists of
security positions) and such other assistance as Sub or its agents may
reasonably request in communicating the Offer to the Company's shareholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent, Sub and their respective affiliates,
associates, agents, and advisors, shall keep confidential and use the
information contained in any such labels, listings and files only in connection
with the Offer and the Merger and, if this Agreement shall be terminated, will
deliver to the Company all copies of such information then in their possession.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.01 The Merger. (a) On the terms and subject to the conditions of
this Agreement and subject to, and in accordance with, the applicable provisions
of the Florida Business Corporation Act (the "FBCA"), at the Effective Time (as
defined in Section 2.02 hereof), Sub shall be merged with and into the Company
and the separate corporate existence of Sub shall cease, and the Company shall
continue as the surviving corporation under the laws of the State of Florida
under the name of "Echelon International Corporation" (together with its
successors, the "Surviving Corporation").
2.02 Effective Time. On the date of acceptance for payment and
immediately following payment to the paying agent designated in the Offer
Documents for not less than 80% of all the shares of Common Stock outstanding
(calculated on a fully diluted basis) in accordance with the Offer, Sub will
cause articles of merger (the "Articles of Merger") to be filed pursuant to the
LandAmerica Escrow Agreement with the office of the Department of State of the
State of Florida in the manner required by Section 607.1105 of the FBCA and
shall take such other and further actions as may be required by law to make the
Merger effective. The Merger shall become effective at the time when the
Articles of Merger have been duly filed with the Department of State of the
State of Florida. The time and the date as of which the Merger becomes effective
in accordance with applicable law is referred to as the "Effective Time" or the
"Effective Date", as applicable.
2.03 Effect of Merger. From and after the Effective Time, the Merger
shall have the effects set forth in Section 607.1106 of the FBCA.
2.04 Conversion of Stock. At the Effective Time:
(a) Each share of Common Stock then issued and outstanding (other than
(i) any shares of Common Stock which are held by any Subsidiary of the Company
or in the treasury of the Company, or which are held, directly or indirectly, by
Parent or any direct or indirect subsidiary of Parent (including Sub), all of
which shall be canceled and none of which shall receive any payment with respect
thereto and (ii) shares of Common Stock held by Dissenting Shareholders (as
defined in Section 2.05 hereof)) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into and represent the
right to receive an amount in cash, without interest, equal to the price paid
for each share of Common Stock (and associated Right) pursuant to the Offer (the
"Merger Consideration"), upon surrender, in the manner provided in Section 2.06
hereof, of the certificate that formerly evidenced such share of Common Stock;
and
(b) Each share of common stock, par value $0.01 per share, of Sub then
issued and outstanding shall, by virtue of the Merger and without any action on
the part of the holder thereof, become one fully paid and nonassessable share of
common stock, par value $0.01 per share, of the Surviving Corporation.
2.05 Dissenting Stock. Notwithstanding anything in this Agreement to
the contrary (including, without limitation, Section 2.04 hereof) but only to
the extent required by the FBCA, shares of Common Stock that are issued and
outstanding immediately prior to the Effective Time and are held by holders of
Common Stock who comply with all the provisions of the FBCA concerning the right
of holders of Common Stock to dissent from the Merger and require an appraisal
of their shares of Common Stock (the "Dissenting Shareholders") shall not be
converted into the right to receive the Merger Consideration but shall become
the right to receive such consideration as may be determined to be due such
Dissenting Shareholder pursuant to Section 607.1320 of the FBCA; provided, that
(i) if any Dissenting Shareholder shall subsequently deliver a written
withdrawal of his or her demand for appraisal (with the written approval of the
Surviving Corporation, to the extent permitted by the FBCA), or (ii) if any
Dissenting Shareholder fails to establish and perfect, or shall have effectively
withdrawn or lost, his or her entitlement to appraisal rights as provided by
applicable law or (iii) to the extent permitted by the FBCA, if within the time
period prescribed by the FBCA neither any Dissenting Shareholder nor the
Surviving Corporation has filed a petition demanding a determination of the
value of the shares of Common Stock outstanding at the Effective Time and held
by Dissenting Shareholders, in accordance with applicable law, then such
Dissenting Shareholder or Shareholders, as the case may be, shall forfeit the
right to appraisal of such shares and such shares shall thereupon be deemed to
have been converted into the right to receive, as of the Effective Time, the
Merger Consideration, without interest. The Company shall give Parent and Sub
(A) notice of any written demands for appraisal, withdrawals of demands for
appraisal and any other related instruments received by the Company and (B) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal. The Company will not voluntarily make any payment with respect to
any demands for appraisal and will not, except with the prior written consent of
Parent, settle or offer to settle any demand.
2.06 Surrender of Certificates. (a) Concurrently with or prior to the
Effective Time, Parent shall designate a bank or trust company located in the
United States and reasonably acceptable to the Company to act as paying agent
(the "Paying Agent") for purposes of making the cash payments contemplated
hereby. As soon as practicable after the Effective Time, Parent shall or shall
cause the Paying Agent to mail and/or make available to each holder of a
certificate theretofore evidencing shares of Common Stock (other than those
which are held by any Subsidiary of the Company or in the treasury of the
Company or which are held directly or indirectly by Parent or any direct or
indirect subsidiary of Parent (including Sub)) a notice and letter of
transmittal advising such holder of the effectiveness of the Merger and the
procedure for surrendering to the Paying Agent such certificate or certificates
which immediately prior to the Effective Time represented outstanding Common
Stock (the "Certificates") in exchange for the Merger Consideration deliverable
in respect thereof pursuant to this Article II. Upon the surrender for
cancellation to the Paying Agent of such Certificates, together with a letter of
transmittal, duly executed and completed in accordance with the instructions
thereon, and any other items specified by the letter of transmittal, the Paying
Agent shall promptly pay to the Person (as defined in Section 6.14 hereof)
entitled thereto the Merger Consideration deliverable in respect thereof. Until
so surrendered, each Certificate shall be deemed, for all corporate purposes, to
evidence only the right to receive upon such surrender the Merger Consideration
deliverable in respect thereof to which such Person is entitled pursuant to this
Article II. No interest shall be paid or accrued in respect of such cash
payments.
(b) If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the Certificates
surrendered in exchange therefor are registered, it shall be a condition to the
payment of the Merger Consideration that the Certificates so surrendered shall
be properly endorsed or accompanied by appropriate stock powers and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
Person requesting such transfer pay to the Paying Agent any transfer or other
taxes payable by reason of the foregoing or establish to the satisfaction of the
Paying Agent that such taxes have been paid or are not required to be paid.
(c) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with this Article II;
provided that, the Person to whom the Merger Consideration is paid shall, as a
condition precedent to the payment thereof, give the Surviving Corporation a
bond in such sum as it may direct or otherwise indemnify the Surviving
Corporation in a manner satisfactory to it against any claim that may be made
against the Surviving Corporation with respect to the Certificate claimed to
have been lost, stolen or destroyed.
2.07 Payment. Concurrently with or immediately prior to the Effective
Time, Parent or Sub shall deposit, or cause to be deposited, in trust with the
Paying Agent cash in United States dollars in an aggregate amount equal to the
product of (i) the number of shares of Common Stock outstanding immediately
prior to the Effective Time (other than shares of Common Stock which are held by
any Subsidiary of the Company or in the treasury of the Company or which are
held directly or indirectly by Parent or any direct or indirect subsidiary of
Parent (including Sub) or a Person known at the time of such deposit to be a
Dissenting Shareholder) and (ii) the Merger Consideration (such amount being
hereinafter referred to as the "Payment Fund"). The Payment Fund shall be
invested by the Paying Agent as directed by Parent in direct obligations of the
United States, obligations for which the full faith and credit of the United
States is pledged to provide for the payment of principal and interest,
commercial paper rated of the highest quality by Moody's Investors Services,
Inc. or Standard & Poor's Ratings Group or certificates of deposit, bank
repurchase agreements or bankers' acceptances of a commercial bank having at
least $1,000,000,000 in assets (collectively, "Permitted Investments") or in
money market funds which are invested in Permitted Investments, and any net
earnings with respect thereto shall be paid to Parent as and when requested by
Parent. The Paying Agent shall, pursuant to irrevocable instructions, make the
payments referred to in Section 2.04(a) hereof out of the Payment Fund. The
Payment Fund shall not be used for any other purpose except as otherwise agreed
to by Parent. Promptly following the date which is six months after the
Effective Time, the Paying Agent shall return to the Surviving Corporation all
cash, certificates and other instruments in its possession that constitute any
portion of the Payment Fund, and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar laws) receive in exchange therefor the Merger Consideration, without
interest, but shall have no greater rights against the Surviving Corporation or
Parent than may be accorded to general creditors of the Surviving Corporation or
Parent under applicable law. Notwithstanding the foregoing, neither the Paying
Agent nor any party hereto shall be liable to a holder of shares of Common Stock
for any Merger Consideration delivered to a public official pursuant to
applicable abandoned property, escheat and similar laws.
2.08 No Further Rights of Transfers. At and after the Effective Time,
each holder of a Certificate shall cease to have any rights as a shareholder of
the Company, except for, in the case of a holder of a Certificate (other than
shares to be canceled pursuant to Section 2.04(a) hereof and other than shares
held by Dissenting Shareholders), the right to surrender his or her Certificate
in exchange for payment of the Merger Consideration or, in the case of a
Dissenting Shareholder, to perfect his or her right to receive payment for his
or her shares pursuant to the FBCA if such holder has validly perfected and not
withdrawn his or her right to receive payment for his or her shares, and no
transfer of shares of Common Stock shall be made on the stock transfer books of
the Surviving Corporation. Certificates presented to the Surviving Corporation
after the Effective Time shall be canceled and exchanged for cash as provided in
this Article II. At the close of business on the day of the Effective Time the
stock ledger of the Company with respect to Common Stock shall be closed.
2.09 Stock Option and Other Plans. Prior to the Effective Time, the
Board of Directors of the Company (or, if appropriate, any committee thereof)
shall adopt appropriate resolutions and use its reasonable best efforts to take
all other actions necessary to provide for the cancellation, effective at the
Effective Time, of all the outstanding stock options to purchase Common Stock
(the "Options") heretofore granted under any stock option plan of the Company
(the "Stock Plans"). Immediately prior to the Effective Time, the Company shall
use its reasonable best efforts to ensure that (i) each Option, whether or not
then vested or exercisable, shall no longer be exercisable for the purchase of
shares of Common Stock but shall entitle each holder thereof, in cancellation
and settlement therefor, to payments by the Company in cash (subject to any
applicable withholding taxes, the "Cash Payment"), at the Effective Time, equal
to the product of (x) the total number of shares of Common Stock subject to such
Option as to which such Option could have been exercised as of the Effective
Date and (y) the excess of the Merger Consideration over the exercise price per
share of Common Stock subject to such Option, each such Cash Payment to be paid
to each holder of an outstanding Option at the Effective Time and (ii) each
share of Common Stock previously issued in the form of grants of restricted
stock or grants of contingent or bonus shares, and not vested prior to the
Effective Time, shall fully vest and be paid by the Company in cash at the
Effective Time in an amount equal to the Merger Consideration (subject to
applicable withholding taxes) and otherwise in accordance with their respective
terms. Prior to the Effective Time, the Board of Directors of the Company shall
adopt appropriate resolutions and use its reasonable best efforts to take all
other actions necessary to provide for the purchase prior to the Effective Time
of shares of Common Stock covered by subscriptions outstanding under the Echelon
International Corporation 1996 Employee Stock Purchase Plan. As provided herein,
the Company shall use its reasonable best efforts to ensure that the Stock Plans
shall terminate as of the Effective Time and the provisions of any Employee
Benefit Plan (as defined in Section 3.01(j) hereof) providing for the issuance
or grant of shares of the capital stock of the Company shall be deleted as of
the Effective Time. The Company will take all reasonable steps to ensure that
neither the Company nor any of its Subsidiaries is or will be bound by any
Options, other options, warrants, rights or agreements which would entitle any
Person, other than Parent or its affiliates, to own or purchase any capital
stock of the Surviving Corporation or any of its subsidiaries. The Company will
use its reasonable best efforts to obtain any necessary consents to ensure that
after the Effective Time, the only rights of the holders of Options, in respect
of such Options, will be to receive the Cash Payment in cancellation and
settlement thereof.
2.10 Articles of Incorporation of the Surviving Corporation; Use of
"Echelon" Name. The Amended and Restated Articles of Incorporation of the
Company, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation of the Surviving Corporation until thereafter duly
amended as provided by law and such Articles of Incorporation, provided, that
such Articles of Incorporation shall at all times be in accordance with the
provisions of Section 4.10 hereof. For a period of 180 days after the Effective
Time, the Surviving Corporation 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 parties to facilitate the sale
of the Real Estate Assets pursuant to the Real Estate Disposition Agreements and
in connection with the management of, and any sale to any third party purchaser
of, any asset subject to any lease in the Leveraged Lease Portfolio (as defined
in Section 3.01(g)(iii) hereof) 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.
2.11 By-Laws of the Surviving Corporation. The By-Laws of the Company,
as in effect immediately prior to the Effective Time, shall be the By-Laws of
the Surviving Corporation until thereafter duly amended as provided by law and
such By-Laws.
2.12 Directors and Officers of the Surviving Corporation. At the
Effective Time, the directors of Sub immediately prior to the Effective Time
shall be the directors of the Surviving Corporation, each of such directors to
hold office, subject to the applicable provisions of the Articles of
Incorporation and By-Laws of the Surviving Corporation, until the next annual
shareholders' meeting of the Surviving Corporation and until their respective
successors shall be duly elected or appointed and qualified. At the Effective
Time, the officers of the Company immediately prior to the Effective Time shall,
subject to the applicable provisions of the Articles of Incorporation and
By-Laws of the Surviving Corporation, be the officers of the Surviving
Corporation until their respective successors shall be duly elected or appointed
and qualified; provided, that prior to the Effective Date the officers of the
Company shall have tendered their respective resignations (which resignations
shall be expressly conditional upon the consummation of the Merger and the
consummation of the transactions contemplated by the Real Estate Disposition
Agreements and thereafter automatically shall take effect without any further
act of the Surviving Corporation; provided, further that such officers shall
nevertheless remain authorized as provided in, and subject to the terms and
conditions of, the LandAmerica Escrow Agreement to authorize disbursements from
the escrow established thereby and for no other purpose).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of the Company. In connection with
the transactions contemplated by this Agreement, the Company hereby represents
and warrants to Parent and Sub as follows:
(a) Due Organization, Good Standing and Power. Each of the Company and
its Subsidiaries 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 and to carry on its
business as now being conducted. Except as set forth in Section 3.01(a) of the
Company Disclosure Letter (as defined in Section 6.14 hereof), each of the
Company and its Subsidiaries 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, except where such failure to be so qualified or
licensed and in good standing would not have a material adverse effect on the
business, results of operations or financial condition (collectively, but after
giving effect to the immediately succeeding provisos, the "Condition") of the
Company and its Subsidiaries taken as a whole; provided that, for purposes of
this Agreement, in no event shall any events, facts or circumstances (including
any material adverse effect) with respect to the Assets (including Assets
acquired pursuant to the provisions of Section 4.03), individually or in the
aggregate, be deemed to have a material adverse effect on the business, results
of operations or financial condition of the Company and its Subsidiaries taken
as a whole, so long as each of the Asset Disposition Agreements shall at all
times be in full force and effect and the purchase price or transfer value, as
the case may be, thereunder shall not have been reduced; provided, further,
that, for purposes of this Agreement, "material" shall mean material with
respect to the Leveraged Lease Portfolio taken as a whole and not with respect
to the Company and its Subsidiaries taken as a whole.
(b) Authorization and Validity of Agreement. The Company has the
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and, subject only to compliance with Section 607.1104
of the FBCA, to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Company, and the consummation
by it of the transactions contemplated hereby, have been duly authorized by its
Board of Directors and no other corporate action on the part of the Company is
necessary to authorize the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated hereby
(other than (i) compliance with Section 607.1104 of the FBCA and (ii) the filing
and recordation of appropriate merger documents as required by the FBCA). This
Agreement has been duly executed and delivered by the Company and, assuming that
this Agreement constitutes a valid and binding obligation of Parent and Sub, is
a valid and binding obligation of the Company enforceable against the Company 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.
(c) Capitalization. (i) The authorized capital stock of the Company
consists of 25,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock of the Company ("Company Preferred Stock"), par value $0.01 per share (of
which 250,000 shares have been designated as Series A Junior Participating
Preferred Stock (the "Series A Junior Participating Preferred Stock")). As of
December 31, 1999, (1) 6,946,523 shares of Common Stock were issued, of which
6,719,938 were outstanding and 6,121 shares were canceled, (2) 514,340 shares of
Common Stock and no shares of Company Preferred Stock were reserved for issuance
pursuant to outstanding Options granted under the Stock Plans, (3) 220,464
shares of Common Stock and no shares of Company Preferred Stock were held in the
Company's treasury, (4) no shares of Company Preferred Stock were issued and
outstanding and (5) no shares of Common Stock and no shares of Company Preferred
Stock are held by any of the Company's Subsidiaries. All issued and outstanding
shares of Common Stock have been duly authorized, validly issued and are fully
paid and nonassessable and are not subject to, nor were they issued in violation
of, any preemptive rights. Except as set forth in this Section 3.01(c) or in
Section 3.01(c)(i) of the Company Disclosure Letter, (x) there are no shares of
capital stock of the Company authorized or, as of the date hereof, issued or
outstanding and (y) there are not as of the date hereof, and at the Effective
Time there will not be, any outstanding or authorized options, warrants, rights,
subscriptions, claims of any character, agreements, rights of redemption,
convertible or exchangeable securities, or other commitments, contingent or
otherwise, relating to Common Stock or any other shares of capital stock of the
Company, pursuant to which the Company is or may become obligated to issue
shares of Common Stock, any other shares of its capital stock or any securities
convertible into, exchangeable for, or evidencing the right to subscribe for,
any shares of the capital stock of the Company.
(ii) Section 3.01(c)(ii) of the Company Disclosure Letter lists
all of the Company's Subsidiaries. All of the outstanding shares of capital
stock or other equity interests of each of the Company's Subsidiaries have been
duly authorized and validly issued, are fully paid and nonassessable, are not
subject to, nor were they issued in violation of, any preemptive rights, and are
owned, of record and beneficially, by the Company or one of its direct or
indirect Subsidiaries, free and clear of all liens, encumbrances, options or
claims whatsoever except as set forth in Section 3.01(c)(ii) of the Company
Disclosure Letter. No shares of capital stock of any of the Company's
Subsidiaries are reserved for issuance and there are no outstanding or
authorized options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, rights of redemption, convertible or exchangeable
securities, or other commitments, contingent or otherwise, relating to the
capital stock of any Subsidiary of the Company, pursuant to which such
Subsidiary is or may become obligated to issue any shares of capital stock of
such Subsidiary or any securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of such Subsidiary. Except for
restrictions under applicable law or as set forth in Section 3.01(c)(ii) of the
Company Disclosure Letter, there are no restrictions of any kind which prevent
the payment of dividends by any of the Company's Subsidiaries. Except for the
Subsidiaries listed in Section 3.01(c)(ii) of the Company Disclosure Letter, the
Company does not own, directly or indirectly, any capital stock or other equity
interest in any Person or have any direct or indirect equity or ownership
interest in any Person and neither the Company nor any of its Subsidiaries is
subject to any obligation or requirement to provide funds for or to make any
investment (in the form of a loan or capital contribution) to or in any Person.
(d) Consents and Approvals; No Violations. Assuming (i) any filings
required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), are made and any applicable waiting period thereunder
has been terminated or has expired, (ii) the requirements of the Exchange Act
relating to the Offer are met, (iii) the filing of the Articles of Merger and
other appropriate merger documents, if any, as required by the FBCA are made and
(iv) any required approval by the Company's shareholders in connection with the
consummation of the Merger is received, the execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby will not: (1) violate any provision of the Amended and
Restated Articles of Incorporation or By-Laws of the Company or the comparable
governing documents of any of its Subsidiaries, in each case, as amended; (2)
violate any law, statute, ordinance, rule, regulation, order or decree of any
court or of any governmental or regulatory body, agency or authority applicable
to the Company or any of its Subsidiaries or by which any of their respective
properties or assets may be bound; (3) except as set forth in Section 3.01(d) of
the Company Disclosure Letter, 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 (4) except as set forth in Section 3.01(d) of the
Company Disclosure Letter, 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 or encumbrance (each, an "Encumbrance") upon any of the
properties or assets of the Company or any of its Subsidiaries 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 the Company or any of its Subsidiaries is a
party, or by which it or any of their respective properties or assets are bound
except, in the case of clauses (2), (3) and (4) above, for any such filing,
permit, consent, approval, notice, the failure to obtain or make which, and
except for any breach, violation or Encumbrance which, would not have a material
adverse effect on the Condition of the Company and its Subsidiaries taken as a
whole or would not prevent consummation of the transactions contemplated by this
Agreement.
(e) Company Reports and Financial Statements. (i) Since December 18,
1996 the Company has filed all forms, reports and documents with 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 the Company have complied in all material
respects with all applicable requirements of the federal securities laws and the
Commission rules and regulations promulgated thereunder. The Company has, prior
to the date of this Agreement, made available to Parent true and complete copies
of all forms, reports, registration statements and other filings filed by the
Company 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
the Company 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).
(ii) Section 3.01(e)(ii) of the Company Disclosure Letter sets forth
the trial balance of the assets, liabilities and shareholders' equity accounts
of the Company and its consolidated Subsidiaries as of September 30, 1999. Each
such account reflected on the trial balance has been included in or allocated
between (a) the Company's leveraged lease portfolio and (b) the Company's real
estate portfolio, as agreed to by the parties hereto. Since September 30, 1999,
the Company has consistently allocated all of its known liabilities consistent
with the trial balance set forth on Section 3.01(e)(ii) of the Company
Disclosure Letter and in accordance with GAAP.
(iii) Section 3.01(e)(iii) of the Company Disclosure Letter sets forth
the condensed consolidated financial statements of the Company 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 3.01(e)(ii) above.
(f) Absence of Certain Changes. Except as previously disclosed in the
Commission Filings, as set forth in Section 3.01(f) of the Company Disclosure
Letter or as otherwise contemplated by this Agreement, since September 30, 1999
(i) there has not been any material adverse change in the Condition of the
Company and its Subsidiaries taken as a whole, in each case other than any
change (x) arising in the ordinary course of business, (y) arising out of
changes in general economic, regulatory or political conditions or (z) arising
out of changes which affect the markets in which the Company operates, in
general and (ii) the businesses of the Company and each of its Subsidiaries
(including, without limitation, with respect to the Leveraged Lease Portfolio
have been conducted only in the ordinary course.
(g) Title to Properties; Encumbrances. (i) Except as set forth in
Section 3.01(g)(i) of the Company Disclosure Letter, the Company and each of its
Subsidiaries and each Relevant Entity (as defined in Section 3.01(g)(iii)
hereof) has good title to (A) all of its material tangible properties and assets
(real and personal), including, without limitation, all the properties and
assets reflected in the consolidated balance sheet as of September 30, 1999
except as indicated in the notes thereto and except for properties and assets
reflected in the consolidated balance sheet as of September 30, 1999 which have
been sold or otherwise disposed of in the ordinary course of business after such
date, and (B) all the material tangible properties and assets purchased by the
Company and any of its Subsidiaries and each Relevant Entity since September 30,
1999 except for such properties and assets which have been sold or otherwise
disposed of in the ordinary course of business; in each case subject to no
Encumbrance, except for (1) Encumbrances reflected in the consolidated balance
sheet as of September 30, 1999 (including the notes thereto), (2) Encumbrances
consisting of zoning or planning restrictions, easements, permits and other
restrictions or limitations on the use of real property or irregularities in
title thereto which do not materially detract from the value of, or materially
impair the use of, such property by the Company or any of its Subsidiaries in
the operation of its respective business, (3) statutory liens or liens of
landlords, carriers, warehousemen, mechanics, suppliers, materialmen or
repairmen arising in the ordinary course of business, (4) Encumbrances for
current taxes, assessments or governmental charges or levies on property not yet
due and delinquent and (5) such Encumbrances as would not have a material
adverse effect on the Condition of the Company and its Subsidiaries taken as a
whole.
(ii) Leases. Section 3.01(g)(ii) of the Company Disclosure Letter
contains a list of all leases of real property (with an annual base rental
amount (not including variable payments) in excess of $50,000) to which the
Company or any of its Subsidiaries is a party (collectively, "Real Property
Leases"). To the Company's knowledge, except as set forth in Section 3.01(g)(ii)
of the Company Disclosure Letter or as disclosed in the Commission Filings, (1)
each lease set forth in Section 3.01(g)(ii) of the Company Disclosure Letter is
in full force and effect, (2) all rents and additional rents due to date on each
such lease have been paid (other than for amounts not exceeding $25,000 in the
aggregate with respect to each such lease) and (3) neither the Company nor any
of its Subsidiaries has received written notice that it is in default
thereunder, except to the extent that the failure to be in full force and effect
or pay such rents or such default would not have a material adverse effect on
the Condition of the Company and its Subsidiaries taken as a whole.
(iii) Leveraged Lease Portfolio. Section 3.01(g)(iii) of the Company
Disclosure Letter including the detailed sections referred to therein contains a
list of all leveraged and operating leases of personal property other than
personal property included in or underlying the Real Property Leases and certain
real property (collectively, the "Leveraged Lease Portfolio"), including all
material amendments, extensions and waivers thereto to which the Company or any
of its Subsidiaries, or the trust of which the Company or the relevant
Subsidiary of the Company is the beneficiary (such entity, the "Relevant
Entity"), is a party. Except as set forth in Section 3.01(g)(iii) of the Company
Disclosure Letter or as disclosed in the Commission Filings, (1) each lease set
forth in Section 3.01(g)(iii) of the Company Disclosure Letter is in full force
and effect and constitutes the valid and enforceable right and obligation of the
Relevant Entity and, to the Company's knowledge, the other parties thereto and
there are no amendments, extensions, or waivers of any of the terms thereof, or
agreements among the parties thereto to which the Relevant Entity is also a
party relating to any of such matters (including, without limitation, residual
sharing, tax sharing, remarketing or similar agreements) that are not disclosed
in Section 3.01(g)(iii) of the Company Disclosure Letter, (2) there has not
occurred any event which constitutes a default or event of default by the
Relevant Entity or, to the Company's knowledge, by the lessee under any lease in
the Leveraged Lease Portfolio or other default with respect to the repair of, or
modifications or improvements to, the assets subject to any such lease
(including with respect to any airworthiness directives or manufacturer service
bulletin) that is presently continuing, or, to the Company's knowledge, any
event of loss, casualty or similar occurrence thereunder, (3) to the Company's
knowledge, all rents and additional rents, or amounts payable in lieu of or
supplemental to rent, due to date under each such lease have been paid, and
there are no prepayments or overpayments of such rents or amounts (other than
with respect to the unexpired portion of any rent payment period thereto paid in
advance), (4) the Relevant Entity has not received payment in respect of any
indemnity obligation of any lessee thereunder, including any tax indemnity,
other than reimbursement of out-of-pocket expenses related to the performance or
enforcement of any term or condition of any such lease, and no tax indemnity
claim has been made by the Relevant Entity party thereto under any such lease or
related agreement and, to the Company's knowledge, there is no basis for any
such claim against any lessee, and (5) none of the Company, any of its
Subsidiaries or, to the Company's knowledge, any Relevant Entity has received
written notice of (x) any default or event which, with or without the giving of
notice or the passage of time or both, or otherwise, would constitute a default
under any lease in the Leveraged Lease Portfolio or any loan agreement,
indenture or other financing instrument related thereto, except such as has been
cured within any applicable grace period thereunder, (y) the exercise by any
lessee of any purchase or renewal option provided by any such lease or (z) the
exercise by any lessee of any early termination option provided therein or the
assertion of any right or claim by any lessee to cancel, terminate or modify any
such lease. To the Company's knowledge, there are no duplicate or executed
original counterparts of any lease in the Leveraged Lease Portfolio other than
those marked "duplicate" or a counterpart number other than the counterpart
delivered to the holder of any non-recourse debt with respect thereto and there
exists no offset, counterclaim, right of recoupment or abatement or other
defenses to performance or the payment of rent or other sums due thereunder by
any lessee. All insurance required to be maintained by the Company or any of its
Subsidiaries or a Relevant Entity under any agreement, instrument or indenture
relating to the Leveraged Lease Portfolio (including the insurance specified in
Section 4.16 hereof) or, to the Company's knowledge, by any lessee with respect
to any of the property included in or underlying the Leveraged Lease Portfolio,
is in full force and effect and names the Company or the relevant Subsidiary of
the Company or the Relevant Entity as additional insureds and loss payees as
their respective interests appear.
(h) Compliance with Laws. Except as set forth in the Commission
Filings or as set forth in Section 3.01(h) of the Company Disclosure Letter, the
Company and its Subsidiaries are in compliance with all applicable laws,
regulations, orders, judgments and decrees (including, without limitation, the
Federal Aviation Act and all rules and regulations promulgated thereunder)
(other than with respect to taxes, Environmental Laws (as defined in Section
3.01(p) hereof), employee benefits and federal securities laws, which are the
subject of specific representations contained in this Agreement), except in each
case where the failure to so comply would not have a material adverse effect on
the Condition of the Company and its Subsidiaries taken as a whole or would not
prevent or materially delay consummation of the transactions contemplated by
this Agreement.
(i) Litigation. Except as disclosed in the Commission Filings or as
set forth in Section 3.01(i) of the Company Disclosure Letter, there is no
action, suit, proceeding at law or in equity, or any arbitration or any
administrative or other proceeding by or before (or to the knowledge of the
Company any investigation by) any governmental or other instrumentality or
agency, pending against the Company or any of its Subsidiaries, or by which any
of their properties or rights are subject, which, either individually or in the
aggregate, would have a material adverse effect on the Condition of the Company
and its Subsidiaries taken as a whole or would prevent or materially delay
consummation of the transactions contemplated by this Agreement. Except as
disclosed in the Commission Filings or as set forth in Section 3.01(i) of the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries (nor
any of their respective assets) is subject to any judgment, order or decree
entered in any lawsuit or proceeding which would have a material adverse effect
on the Condition of the Company and its Subsidiaries taken as a whole or would
prevent or materially delay consummation of the transactions contemplated by
this Agreement.
(j) Employee Benefit Plans. Each material employee benefit plan within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), maintained by the Company and/or any of its
Subsidiaries or to which the Company or any such Subsidiary contributes
(collectively, the "Employee Benefit Plans") is listed in Section 3.01(j) of the
Company Disclosure Letter. Except as set forth in Section 3.01(j) of the Company
Disclosure Letter or disclosed in the Commission Filings, or to the extent that
any breach of the representations set forth in this sentence would not have a
material adverse effect on the Condition of the Company and its Subsidiaries
taken as a whole: (i) each Employee Benefit Plan is in compliance with
applicable law and has been administered and operated in all 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 Internal Revenue Code
of 1986, as amended (the "Code"), has received a favorable determination letter
from the Internal Revenue Service and, to the knowledge of the Company, no event
has occurred and no condition exists which would result in the revocation of any
such determination; (iii) no Employee Benefit Plan is covered by Title IV of
ERISA or subject to Section 412 of the Code or Section 302 of ERISA; (iv)
neither the Company nor any of its Subsidiaries, nor, to the Company's
knowledge, 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 transactions in connection with any Employee Benefit Plan that
would result in the imposition of a penalty pursuant to Section 502(i) of ERISA
or a tax pursuant to Section 4975 of the Code; and (v) no claim, action or
litigation, has been made, commenced or, to the Company's knowledge, threatened
with respect to any Employee Benefit Plan (other than routine claims for
benefits payable in the ordinary course, and appeals of denials of such claims).
(k) Taxes. Except to the extent that the failure to do so would not
have a material adverse effect on the Condition of the Company and its
Subsidiaries taken as a whole, the Company has filed or caused to be filed, or
will file or cause to be filed on or prior to the Effective Date, all federal,
state, local and foreign tax returns and tax reports (including, without
limitation, with respect to the acquisition, ownership or lease of any of the
assets included in or underlying the Leveraged Lease Portfolio) which are
required to be filed by, or with respect to, the Company on or prior to the
Effective Date (taking into account any extension of time to file granted to or
on behalf of the Company) (collectively, the "Returns"). Except as set forth in
Section 3.01(k) of the Company Disclosure Letter or disclosed in the Commission
Filings, and except to the extent that the failure to do so would not have a
material adverse effect on the Condition of the Company and its Subsidiaries
taken as a whole, all federal, state, local and foreign taxes ("Taxes") due and
payable by the Company on or prior to the Effective Date, including all amounts
shown to be due on any Return, have been, or prior to the Effective Date will
be, paid or fully provided for on the books and records of the Company in
accordance with GAAP. Except as set forth in Section 3.01(k) of the Company
Disclosure Letter, (a) there are no written waivers in effect of the applicable
statutory period of limitation for Taxes of the Company for any taxable period
and (b) no deficiency assessment or proposed adjustment with respect to any tax
liability of the Company for any taxable period is pending or, to the knowledge
of the Company, threatened, except for such deficiency assessments or proposed
adjustments that would not have a material adverse effect on the Condition of
the Company and its Subsidiaries taken as a whole. Furthermore, there are no
outstanding requests by the Company or any of its Subsidiaries for any ruling of
the Internal Revenue Service including, without limitation, with respect to any
of the assets included in or underlying the Leveraged Lease Portfolio, and no
written notice has been received by the Company or any of its Subsidiaries of a
proposed reassessment of any Taxes.
(l) Liabilities. Neither the Company nor any of its Subsidiaries has
any 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 in Sections 3.01(e)(ii) and 3.01(e)(iii) of
the Company Disclosure Letter, (iii) for liabilities incurred subsequent to
September 30, 1999, in the ordinary course of business, (iv) as otherwise
disclosed in the Commission Filings or (v) such claims, liabilities or
indebtedness which would not have a material adverse effect on the Condition of
the Company and its Subsidiaries taken as a whole.
(m) Intellectual Properties. Except as would not have a material
adverse effect on the Condition of the Company and its Subsidiaries taken as a
whole, as set forth in Section 3.01(m) of the Company Disclosure Letter or as
disclosed in the Commission Filings, to the knowledge of the Company, the
Company and its Subsidiaries own or have valid, binding and enforceable rights
to use all patents, trademarks, trade names, service marks, service names,
copyrights, applications therefor and licenses or other rights in respect
thereof ("Intellectual Property") used or held for use in connection with the
business of the Company or its Subsidiaries, without any known conflict with the
rights of others. Neither the Company nor any of its Subsidiaries has received
any notice in writing from any other Person pertaining to or challenging the
right of the Company or any of its Subsidiaries to use any Intellectual Property
or any trade secrets, proprietary information, inventions, know-how, processes
and procedures owned or used or licensed to the Company or its Subsidiaries,
except (i) as set forth in Section 3.01(m) of the Company Disclosure Letter or
(ii) with respect to rights the loss of which, individually or in the aggregate,
would not have a material adverse effect on the Condition of the Company and its
Subsidiaries taken as a whole.
(n) Material Contracts. Except as set forth in Section 3.01(n) of the
Company Disclosure Letter and except for (i) the Asset Disposition Agreements,
(ii) the Contracts (as defined in each of the Real Estate Disposition
Agreements) and (iii) any agreements, contracts and commitments that are to be
fully performed by the Company or any Subsidiary of the Company prior to the
Effective Time, neither the Company nor any Subsidiary of the Company has or is
bound by any agreement, contract or commitment that involves base payments or
the performance of services by it of an amount or value (as measured by the
revenue derived therefrom during fiscal year 1998-1999) in excess of $12,000
annually. Except as otherwise set forth in Sections 3.01(d) and 3.01(n) of the
Company Disclosure Letter, each contract or agreement set forth in Section
3.01(n) of the Company Disclosure Letter is in force and effect and (A) there
exists no default or event of default or event, occurrence, condition or act
(including the consummation of the Offer or the Merger) on the part of the
Company or any of its Subsidiaries 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, except for such default or event of default
which would not have a material adverse effect on the Condition of the Company
and its Subsidiaries taken as a whole 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 full 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.
(o) Broker's or Finder's Fee. Except for Donaldson, Lufkin & Jenrette
Securities Corporation (whose fees and expenses will be paid by the Company at
or prior to the Effective Time in accordance with the Company's agreement with
such firm), no agent, broker, Person or firm acting on behalf of the Company is,
or will be, entitled to any fee, commission or broker's or finder's fees from
any of the parties hereto, or from any Person controlling, controlled by, or
under common control with any of the parties hereto, in connection with this
Agreement or any of the transactions contemplated hereby.
(p) Environmental Laws and Regulations. Except as set forth in this
Section 3.01(p), Section 3.01(p) of the Company Disclosure Letter or as
disclosed in the Commission Filings, or as would not have a material adverse
effect on the Condition of the Company and its Subsidiaries taken as a whole,
and to the knowledge of the Company:
(i) Hazardous Materials have not been generated, used,
treated or stored by the Company or its Subsidiaries on any Company
Property, except for quantities generated, used, treated or stored at
such Company Property in compliance with Environmental Laws and as
required in connection with the normal operations and maintenance of
such Company Property;
(ii) Hazardous Materials have not been Released or disposed
of by the Company or its Subsidiaries on any Company Property, except
for quantities Released or disposed of on such Company Property in
compliance with Environmental Laws and required in connection with the
normal operation and maintenance of such Company Property;
(iii) The Company and its Subsidiaries are in compliance
with Environmental Laws and the requirements of permits issued under
such Environmental Laws with respect to any Company Property;
(iv) There are no pending or threatened Environmental Claims
against the Company, any of its Subsidiaries or any Company Property;
(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 the Company or any of its Subsidiaries,
or, to the knowledge of the Company, against any Person whose
liability for any Environmental Claim the Company or any its
Subsidiaries has retained or assumed whether contractually or by
operation of law;
(vi) The Company and its Subsidiaries have delivered or
otherwise made available for inspection to Parent true, complete and
correct copies and results of any reports, studies, analyses, tests or
monitoring in the possession of the Company or its Subsidiaries
pertaining to Hazardous Materials in, on, beneath or adjacent to any
Company Property; and
(vii) There are no underground storage tanks located on any
Company Property.
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 testing may be obtained from the local
county public health unit.
As used in this Section 3.01(p), the following terms shall have the
meanings set forth below:
(1) "Company Property" means any real property and
improvements owned, leased (as lessee or lessor), operated or occupied
by the Company or any of its Subsidiaries at any time;
(2) "Hazardous Materials" means (a) any petroleum or
petroleum products, 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;
(3) "Environmental Law" means any federal, state or local
statute, law, rule, regulation, ordinance, code, policy or rule of
common law in effect and in each case as amended as of the Effective
Date, and any judicial or administrative interpretation thereof as of
the Effective 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. ss. 9601 et seq.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. ss. 6901 et seq.; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the
Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water
Act, 42 U.S.C. ss. 300f et seq.; the Oil Pollution Act of 1990, 33
U.S.C. ss. 2701 et seq.; and their state and local counterparts and
equivalents;
(4) "Environmental Claims" means administrative, regulatory
or judicial 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 (hereafter "Claims"), including (a)
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) 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; and
(5) "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.
(q) State Takeover Statutes. The Board of Directors of the Company has
approved the Offer and this Agreement and Sections 607.0901 and 607.0902 of the
FBCA are inapplicable to the Offer and this Agreement and the other transactions
contemplated by this Agreement.
(r) Rights Agreement. Prior to the date of acceptance for payment and
immediately following payment to the paying agent designated in the Offer
Documents for not less than 80% of all the shares of Common Stock outstanding
(calculated on a fully diluted basis) in accordance with the Offer, the Company
and the Board of Directors of the Company shall have taken and will maintain in
effect all necessary action to (i) render the Rights Agreement inapplicable with
respect to the Offer and (ii) ensure that (y) neither Parent nor Sub nor any of
their Affiliates (as defined in the Rights Agreement) or Associates (as defined
in the Rights Agreement) is considered to be an Acquiring Person (as defined in
the Rights Agreement) and (z) the provisions of the Rights Agreement, including
the occurrence of a Distribution Date (as defined in the Rights Agreement), are
not and shall not be triggered by reason of the announcement or consummation of
the Offer. The Company has made available to Parent a complete and correct copy
of the Rights Agreement as amended and supplemented to the date of this
Agreement.
(s) Year 2000. There is not reasonably expected to be a material
adverse effect on the Condition of the Company and its Subsidiaries taken as a
whole caused by the failure to be Year 2000 Compliant with respect to computer
systems, computer software or technology that are internal to the Company and
its Subsidiaries. There is not reasonably expected to be a material adverse
effect on the Condition of the Company and its Subsidiaries taken as a whole
caused by the failure to be Year 2000 Compliant of any products or services of
the Company or its Subsidiaries sold or licensed to customers of the Company and
its Subsidiaries. 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.
(t) Opinion of Financial Advisor. The Company has received the opinion
of Donaldson, Lufkin & Jenrette Securities Corporation to the effect that, as of
the date of this Agreement, the consideration to be received in the Offer and
the Merger by the Company's shareholders is fair to the Company's shareholders
from a financial point of view, and a complete and correct signed copy of such
opinion has been, or will be, delivered to Parent.
(u) Disclosure. The information contained in the Company Disclosure
Letter as it relates to the representations and warranties made by the Company
in this Section 3.01 does not contain any untrue statement of a material fact.
(v) Distribution Agreement. To the Company's knowledge, (i) there are
no outstanding claims against the Company or accrued obligations or accrued
liabilities of the Company of any nature whatsoever arising under the
Distribution Agreement, dated as of December 16, 1996 (the "Distribution
Agreement"), by and between Florida Progress Corporation, a Florida corporation,
and the Company, or under any Ancillary Agreement, in each case that have not
been satisfied in full and (ii) since December 16, 1996, there has been no claim
asserted by Florida Progress Corporation (or any Affiliate thereof) against the
Company (A) in respect of any Indemnifiable Losses of Florida Progress
Corporation (or any Affiliate thereof) or (B) in respect of any Third Party
Claim asserted against Florida Progress Corporation (or any Affiliate thereof).
Capitalized terms used in this Section 3.01(v) and not defined in this Agreement
shall have the respective meanings ascribed thereto in the Distribution
Agreement.
3.02 Representations and Warranties of Parent and Sub. Each of Parent
and Sub represents and warrants to the Company as follows:
(a) Due Organization; Good Standing and Corporate Power. Parent is a
limited liability company duly organized and validly existing and in good
standing under the laws of its jurisdiction of organization. Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida. EIN Corp., a Delaware corporation and a direct
wholly-owned subsidiary of Parent ("Delaware Sub"), is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each of Parent, Sub and Delaware Sub has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted except where the failure to have such power and
authority, individually or in the aggregate, would not prevent or materially
delay the consummation of the transactions contemplated by this Agreement.
(b) Authorization and Validity of Agreement. Each of Parent and Sub
has the power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by Parent and
Sub, and the consummation by each of them of the transactions contemplated
hereby, have been duly authorized by the member and manager of Parent and the
Board of Directors of Sub. No other limited liability company or corporate
action on the part of either of Parent or Sub is necessary to authorize the
execution, delivery and performance of this Agreement by each of Parent and Sub
and the consummation of the transactions contemplated hereby (other than, in the
case of Sub, the filing and recordation of appropriate merger documents as
required by the FBCA). This Agreement has been duly executed and delivered by
each of Parent and Sub and is a valid and binding obligation of each of Parent
and Sub, enforceable against each of Parent and Sub in accordance with its
terms, except that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws affecting creditors' rights generally, and general equitable principles.
(c) Consents and Approvals; No Violations. Assuming (i) any filings
required under the HSR Act are made and any applicable waiting period thereunder
has been terminated or has expired, (ii) the requirements of the Exchange Act
relating to the Offer are met, and (iii) the filing of the Articles of Merger
and other appropriate merger documents, if any, as required by the FBCA, the
execution and delivery of this Agreement by Parent and Sub and the consummation
by Parent and Sub of the transactions contemplated hereby will not: (1) violate
any provision of the Certificate of Formation or Operating Agreement of Parent
or the Articles of Incorporation or By-Laws of Sub; (2) violate any law,
statute, ordinance, rule, regulation (including, without limitation, Regulations
T, U and X of the Board of Governors of the Federal Reserve System) or any
applicable order, writ, injunction or decree of any court or of any governmental
or regulatory body, agency or authority applicable to Parent or Sub or by which
either of their respective properties or assets may be bound; (3) 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 (4) 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 or acceleration) under, or result in the creation of any
Encumbrance upon any of the properties or assets of Parent, Sub or any of their
subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, franchise, permit, agreement, lease or other
instrument or obligation to which Parent or Sub or any of their subsidiaries is
a party, or by which they or their respective properties or assets may be bound
except, in the cases of clauses (2), (3) and (4) above, for any such filing,
permit, consent, approval, the failure to obtain or make which, and except for
any breach, violation or Encumbrance which, would not prevent or materially
delay consummation of the transactions contemplated by this Agreement.
(d) Capitalization. (i) The authorized capital stock of Sub consists
of 1,000 shares of common stock, par value $.01 per share, of which 1,000 shares
are outstanding. All of the outstanding shares of common stock of Sub are
entitled to vote as a class and are owned of record by Parent.
(ii) The authorized capital stock of Delaware Sub consists of 1,000
shares of common stock, par value $.01 per share, of which 1,000 shares are
outstanding. All of the outstanding shares of common stock of Delaware Sub are
entitled to vote as a class and are owned of record by Parent.
(iii) Except as set forth above in this Section 3.02(d), Parent does
not own any shares of capital stock or other equity interests in any Person.
(e) Broker's or Finder's Fee. No agent, broker, Person or firm acting
on behalf of Parent or Sub is, or will be, entitled to any fee, commission or
broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by, or under common control with any of the parties
hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
(f) Financing. The Credit Agreement, dated as of January 21, 2000 (the
"Credit Agreement"), by and among Sub (as borrower), Utrecht-America Finance
Co., a Delaware corporation (as initial lender), and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New York branch (as
agent), which upon the terms and subject to the conditions thereof provides for
up to $300,000,000 senior secured single draw term loan facility, has been duly
authorized, executed and delivered by each of the parties thereto. A true,
complete and correct copy of the Credit Agreement has been furnished to the
Company prior to the date hereof. The Credit Agreement has not been amended,
modified or supplemented in any way and is in full force and effect.
(g) Parent Not an Affiliated Shareholder. As of the date hereof, (i)
neither Parent nor any of its Affiliates (as defined in Section 6.14 hereof) is,
with respect to the Company, an "interested shareholder" as such term is defined
in Section 607.0901 of the FBCA and (ii) Parent and its Affiliates collectively
do not hold directly or indirectly any outstanding voting shares of the Company.
(h) Size of Person. At all times prior to the Effective Time, none of
Parent, Sub, Delaware Sub or any "ultimate parent entity" (as such term is
defined in the regulations promulgated under the HSR Act), individually or
collectively, holds or owns assets, or has annual net sales, of $10,000,000 or
more (as calculated in accordance with the HSR Act (and the regulations
promulgated thereunder)).
(i) Capital Contributions; Cash On Hand; Special Purpose Entities. (i)
Parent has received at least $2,000,000 from new cash common equity
contributions by its sole member.
(ii) Parent has unrestricted and unutilized cash on hand in an amount
not less than $2,000,000.
(iii) Each of Parent, Sub and Delaware Sub was formed for the sole
purpose of effecting the transactions contemplated hereby and by the Omnibus
Agreement (as defined in Section 6.14 hereof) and, prior to the consummation
thereof, had no assets or liabilities except in connection with the transactions
contemplated hereby and thereby. Parent engages in no direct business
activities, other than (x) its ownership of the capital stock of Sub and
Delaware Sub and liabilities incident thereto and (y) its obligations with
respect to this Agreement and the Omnibus Agreement. Sub engages in no direct
business activities, other than its obligations with respect to this Agreement,
the Credit Agreement and the Omnibus Agreement. Delaware Sub engages in no
direct business activities, other than its obligations with respect to the
Credit Agreement and the Omnibus Agreement (upon giving effect to the provisions
of Section 4.19 hereof).
(j) Going Concern; Solvency. As of the Effective Time, both before and
after giving effect to the transactions contemplated hereby, as to each of
Parent, Sub, Delaware Sub and, to the best of Parent's knowledge with respect to
any liabilities or obligations (contingent or otherwise) of the Company and
otherwise without qualification, the Surviving Corporation, individually and
collectively, (i) all of such entity's known debts and obligations have been, or
will be, paid in full, (ii) the sum of such entity's debts is not greater than
such entity's assets at a fair valuation, (iii) such entity is generally paying
its debts as they become due and (iv) such entity has reasonably sufficient
capital to conduct its business, to engage in all contemplated transactions, and
to satisfy its debts, contingencies and obligations (including federal, state
and local income taxes) as they become due. None of Parent, Sub or Delaware Sub
actually intends, by consummating the transactions contemplated hereby, to
engage in a transaction void or voidable under Section 548(a)(1)(A) of Title 11
of the United States Code or the comparable provisions of any applicable state
statute (including, without limitation, Chapter 726 of the Florida Statutes).
ARTICLE IV
COVENANTS
4.01 Access to Information Concerning Properties and Records; Delivery
of Financial Information. (a) During the period commencing on the date hereof
and ending on the Effective Date, the Company shall, and shall cause each of its
Subsidiaries to, upon reasonable notice, afford Parent and Sub, and their
respective counsel, accountants, consultants and other authorized
representatives, reasonable access during normal business hours to the
employees, properties, books and records of the Company and its Subsidiaries in
order that they may have the opportunity to make such investigations as they
shall desire of the affairs of the Company and its Subsidiaries (other than
relating to those Assets with respect to which no liability shall be retained by
the Surviving Corporation after giving effect to the transactions contemplated
by the Asset Disposition Agreements). The Company shall furnish promptly to
Parent and Sub (i) a copy of each report, schedule, registration statement and
other document filed by it or its Subsidiaries during such period pursuant to
the requirements of Federal or state securities laws and (ii) all other
information concerning its or its Subsidiaries' business, properties and
personnel as Parent and Sub may reasonably request. The Company agrees to cause
its officers and employees to furnish such additional financial and operating
data and other information and respond to such inquiries as Parent and Sub shall
from time to time reasonably request.
(b) On or prior to February 15, 2000, the Company shall deliver to
Parent a copy of all written information prepared by the Company with respect to
its fiscal year ended December 31, 1999 of the type which the Company
customarily prepares to initially deliver to its independent auditors (prior to
responding to any inquiries from its independent auditors) in connection with
the preparation of the Company's financial statements in accordance with GAAP
for the end of a fiscal year of the Company.
(c) During the period commencing on the date hereof and ending on the
Effective Date, to the extent (and only to the extent) that the Company delivers
to its independent auditors any written information prepared by the Company
relating to the fiscal year ended December 31, 1999 or any prior period or
otherwise bearing upon the Condition of the Company and its Subsidiaries taken
as a whole, the Company shall, concurrently with such delivery of written
information to its independent auditors, deliver to Parent true and complete
copies of all such written information.
4.02 Confidentiality. Information obtained by Parent and Sub and their
respective counsel, accountants, consultants and other authorized
representatives pursuant to Section 4.01 hereof shall be subject to the
provisions of the Confidentiality Agreement, dated April 21, 1999, entered into
by and between Donaldson, Lufkin & Jenrette Securities Corporation, as agent for
the Company, and an agent for ETA Holding Corp., the manager of Parent.
4.03 Conduct of the Business of the Company Pending the Effective
Date. The Company agrees that, except as permitted, required or contemplated by,
or otherwise described in, this Agreement, the Company Disclosure Letter, the
Asset Disposition Agreements or otherwise consented to or approved by Parent
(which consent or approval shall not be unreasonably withheld, conditioned or
delayed), during the period commencing on the date hereof and ending on the
Effective Date:
(a) the Company and each of its Subsidiaries will conduct their
respective operations only according to their ordinary course of business
consistent with past practice and will use their reasonable best efforts to
preserve intact their respective business organization, keep available the
services of their officers and employees and maintain satisfactory relationships
with licensors, suppliers, distributors, clients, landlords, joint venture
partners, employees and others having business relationships with them;
(b) neither the Company nor any of its Subsidiaries shall: (i) make
any change in or amendment to its articles of incorporation or by-laws or
comparable governing documents; (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 Section 2.09 of this Agreement)); (iii)
sell or pledge or agree to sell or pledge any stock owned by it in any of its
Subsidiaries or any other entity in which it has an equity interest; (iv) enter
into any contract or commitment with respect to capital expenditures; (v)
acquire (by merger, consolidation, or acquisition of stock or assets or
otherwise) any corporation, partnership or other business or division thereof
(or any interest therein); provided, that any subsidiary of the Company may be
merged with and into the Company or any other Subsidiary of the Company; (vi)
cancel, amend or modify, in any material respect, any contract disclosed on
Section 3.01(n) of the Company Disclosure Letter or enter into any contract
that, if in effect on the date hereof, would be required to be set forth in the
Company Disclosure Letter; (vii) amend or modify any Real Estate Disposition
Agreement, or waive any term or condition thereunder, in each case in any manner
that (A) is adverse to Parent and Sub or (B) amends or modifies Schedule I to
either of the Real Estate Disposition Agreements; (viii) except as permitted by
the Asset Disposition Agreements, acquire any assets or securities; (ix) except
to the extent required under existing employee and director benefit plans,
agreements or arrangements 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 the Company or any of its Subsidiaries 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; (x) except
in the ordinary course of business with respect to the Assets (including Assets
acquired pursuant to the provisions of this Section 4.03) only, subject to the
terms and conditions of the Asset Disposition Agreements and otherwise without
exception, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose
of, encumber or subject to any lien, any material assets (including in any event
any asset subject to a lease in the Leveraged Lease Portfolio) or incur or
modify any indebtedness for borrowed money (other than for borrowings under
existing lines of credit and indebtedness for working capital in the ordinary
course of business); (xi) make any tax election or settle or compromise any tax
liability; (xii) except as required by applicable law or generally accepted
accounting principles, make any change in its method of accounting; (xiii) adopt
a plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any of
its Subsidiaries not constituting an inactive Subsidiary (other than in
connection with (A) the Merger or (B) any merger of a Subsidiary of the Company
with and into the Company or any other Subsidiary of the Company); (xiv) make
any loans, advances or capital contributions to, or investment in, any other
Person, other than to any direct or indirect Subsidiary of the Company; (xv)
declare, set aside or pay any dividends on, or make or cause to be made any
other distributions in respect of, any of its capital stock or other equity
securities or any interest in any Relevant Entity other than dividends and
distributions by a direct or indirect Subsidiary of the Company to its parent;
(xvi) 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; (xvii) 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 the Company; (xviii) purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any Subsidiary or any rights, warrants or
options to acquire any such shares or other securities; or (xix) agree, in
writing or otherwise, to take any of the foregoing actions; and
(c) the Company shall not, and shall not permit any of its
Subsidiaries to, (i) take any action, engage in any transaction or enter into
any agreement which would cause any of the representations or warranties set
forth in Section 3.01 hereof to be untrue as of the Effective Date or (ii)
purchase or acquire, or offer to purchase or acquire, any shares of capital
stock of the Company.
Notwithstanding anything to the contrary set forth in this Agreement,
the Company and its Subsidiaries shall be permitted to conduct their respective
real estate operations (so long as same (x) relates only to the Assets
(including Assets acquired pursuant to the provisions of this Section 4.03) and
(y) would not result in any reduction to the purchase price or transfer value,
as the case may be, under any of the Asset Disposition Agreements), including,
without limitation, (i) acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership, limited liability company or
other business or division thereof, (ii) enter into any contract or commitment
with respect to capital expenditures, (iii) cancel, amend or modify any
contract, (iv) acquire a material amount of assets or securities, (v) transfer,
lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or
subject to any lien, any material assets or incur or modify any indebtedness for
borrowed money, (vi) make any loans, advances or capital contributions to, or
investment in, any other Person and (vii) agree, in writing or otherwise, to
take any of the foregoing actions) as the Company or its Subsidiaries, as
applicable, shall deem necessary or desirable in its sole discretion.
4.04 Shareholder Approval. In the event that the Minimum Condition is
satisfied, Parent and Sub agree to take all necessary and appropriate action to
cause the Merger to become effective as soon as reasonably practicable after the
completion of the Offer, without a meeting of the Company's shareholders, in
accordance with Section 607.1104 of the FBCA.
4.05 Reasonable Best Efforts. (a) Subject to the terms and conditions
provided herein, each of the Company, Parent and Sub shall, and Parent shall
cause Sub and the Company shall cause each of its Subsidiaries to, 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
Effective Date, all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental authorities and parties to contracts
with the Company and its Subsidiaries as are necessary to fulfill the conditions
to the Offer.
(b) Subject to the terms and conditions provided herein, Parent (in
its capacity as holder of the capital stock of the Surviving Corporation) shall
take, or cause to be taken, all appropriate action necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by the Real Estate Disposition Agreements,
including, without limitation, executing and delivering any consents required
under applicable laws and regulations.
4.06 No Solicitation of Other Offers. (a) The Company and its
affiliates and each of their respective officers, directors, employees,
representatives, consultants, investment bankers, attorneys, accountants and
other agents shall immediately cease any existing discussions or negotiations
with any other parties that may be ongoing with respect to any Acquisition
Proposal (as defined below). Neither the Company nor any of its affiliates shall
take (and the Company and its affiliates shall not authorize or permit any of
its officers, directors, employees, representatives, consultants, investment
bankers, attorneys, accountants or other agents, to so take) any action (i) to
solicit, initiate or knowingly encourage the making of any Acquisition Proposal
or (ii) to have any discussions or negotiations with, or, furnish or disclose
any information to, any Person (other than Parent or Sub) in furtherance of, or
take any other action to facilitate any inquiries or the making of any proposal
that constitutes, or is reasonably expected to lead to, any Acquisition
Proposal; provided, that, to the extent that the failure to take such action
would reasonably be likely to breach the fiduciary obligations of the Board of
Directors of the Company, as determined in good faith by a majority of the
disinterested members thereof based on the advice of outside counsel, the
Company may, in response to an Acquisition Proposal that was not solicited by
the Company and that did not otherwise result from a breach of this Section
4.06(a), furnish information with respect to the Company and its Subsidiaries to
any Person pursuant to a customary confidentiality agreement and participate in
discussions or negotiations with respect to any Acquisition Proposal.
(b) Neither the Board of Directors of the Company nor any committee
thereof shall (i) withdraw or modify in a manner adverse to Parent or Sub, the
approval of this Agreement or the recommendation by the Board of Directors or
any such committee of the Offer, (ii) approve any letter of intent, agreement in
principle, acquisition agreement or similar agreement relating to any
Acquisition Proposal, (iii) approve or recommend any Acquisition Proposal or
(iv) enter into any agreement with respect to any Acquisition Proposal.
Notwithstanding the foregoing, if the Company receives a Superior Proposal (as
defined below) and a majority of the disinterested directors of the Company
determine in good faith, based on the advice of outside counsel, that failure to
take such action would reasonably be likely to breach their fiduciary
obligations, the Board of Directors of the Company may, no sooner than three
Business Days following delivery to Parent of notice of such Superior Proposal
in compliance with Section 4.06(c), withdraw or modify its approval of this
Agreement or recommendation of the Offer and may take any other action otherwise
prohibited by this Section 4.06(b).
"Acquisition Proposal" shall mean any inquiry, proposal or offer from
any Person or group relating to any direct or indirect acquisition or purchase
of a substantial amount of assets of the Company or any of its Subsidiaries or
of all or any portion of any class of equity securities of the Company or any of
its Subsidiaries, any tender offer or exchange offer that if consummated would
result in any Person beneficially owning all or any portion of any class of
equity securities of the Company or any of its Subsidiaries, any merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or any transaction having similar economic effect involving the Company or any
of its Subsidiaries, other than the transactions contemplated by this Agreement
and the Asset Disposition Agreements. "Superior Proposal" shall mean a bona fide
written proposal made by a third party to acquire all or substantially all of
the Company pursuant to a tender offer, exchange offer, a merger or other
business combination or a sale of all or substantially all of the assets of the
Company and its Subsidiaries on terms which a majority of the disinterested
members of the Board of Directors of the Company determines in their good faith
reasonable judgment (after consultation with its financial advisors and outside
counsel) (i) would, if consummated, be superior to the holders of Common Stock
from a financial point of view than the Merger taking into account all the terms
and conditions of such Acquisition Proposal and this Agreement and (ii) is
reasonably capable of being completed.
(c) The Company promptly shall advise Parent orally and in writing of
any Acquisition Proposal and the identity of the Person making any such
Acquisition Proposal including any change to the material terms of any such
Acquisition Proposal or inquiry. The Company shall (i) keep Parent fully
informed of the status including any change to the terms of any such Acquisition
Proposal or inquiry and (ii) provide to Parent, as soon as practicable after
receipt or delivery thereof, copies of all correspondence and other written
material sent or provided to the Company from any third party in connection with
any Acquisition Proposal or sent or provided by the Company to any third party
in connection with any Acquisition Proposal.
(d) Nothing in this Section 4.06 shall prevent the Company or its
Board of Directors from taking and disclosing to the Company's shareholders a
position contemplated by Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act with respect to any tender offer. Any actions permitted under, and
taken in compliance with, this Section 4.06 shall not be deemed a breach of any
other covenant or agreement of such party contained in this Agreement.
4.07 Notification of Certain Matters. The Company shall give prompt
notice to Parent, and Parent and Sub shall give prompt notice to the Company, of
the occurrence, or failure to occur, of any event, which occurrence or failure
to occur would likely cause any representation or warranty contained in the
Agreement to be untrue in any material respect at any time from the date of this
Agreement to the Effective Time. Each of the Company and Parent 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.
4.08 HSR Act. The Company and Parent shall, as soon as practicable and
in any event within ten Business Days from the date of this Agreement, file, if
required, Notification and Report Forms under the HSR Act with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the "Antitrust Division") and shall use their reasonable best efforts to
respond as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division, including, without limitation, a request for additional
information or documentary material.
4.09 Employment Agreements. Immediately following the consummation of
the Merger, the Company shall pay any and all amounts, to the extent then due
and payable (including as a result of the consummation of the Merger), under the
employment agreements between the Company and its employees (including, without
limitation, the senior officers) subject to no conditions other than the prior
or concurrent delivery by each such employee of a written statement to the
Company terminating his or her employment agreement with the Company effective
upon consummation of the Merger. It is understood and agreed that the employees
(including, without limitation, the senior officers) party to the employment
agreements with the Company shall be third party beneficiaries of this Section
4.09.
4.10 Directors' and Officers' Insurance; Indemnification. (a) The
Articles of Incorporation and the By-Laws of the Surviving Corporation shall
contain the provisions with respect to indemnification and exculpation from
liability set forth in the Company's Amended and Restated Articles of
Incorporation and By-Laws on the date of this Agreement, which provisions shall
not be amended, repealed or otherwise modified for a period of six years from
the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who on or prior to the Effective Time were directors,
officers, employees or agents of the Company, unless such modification is
required by law.
(b) For six years from the Effective Time, the Surviving Corporation
shall either (x) maintain in effect the Company's current directors' and
officers' liability insurance covering those persons who are currently covered
on the date of this Agreement by the Company's directors' and officers'
liability insurance policy (a copy of which has been heretofore delivered to
Parent) (the "Indemnified Parties"); provided that the Surviving Corporation may
substitute for such Company 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 Effective Time or (y) cause Parent's
directors' and officers' liability insurance then in effect to cover those
persons who are covered on the date of this Agreement by the Company's
directors' and officers' liability insurance policy with respect to those
matters covered by the Company's directors' and officers' liability policy;
provided that the coverage provided by Parent's insurance shall be no less
favorable to the Indemnified Parties and shall provide no fewer rights than the
Company's directors' and officers' liability insurance policy currently in
place; provided, further, that in no event shall the Surviving Corporation be
required to expend pursuant to this Section 4.10(b) more than an amount per year
equal to 200% of the current annual premiums paid by the Company for such
insurance; provided, further, that if the annual premiums exceed such amount,
the Surviving Corporation shall be required to obtain a policy with the greatest
coverage available for a cost not exceeding such amount.
(c) It is understood and agreed that the directors, officers,
employees and agents of the Company immediately prior to the consummation of the
Offer shall be third party beneficiaries of this Section 4.10.
4.11 Guaranty of Performance. Parent hereby guarantees the performance
of Sub of its obligations under this Agreement and the obligations of the
Surviving Corporation under Sections 4.09 and 4.10 hereof. It is understood and
agreed that the third party beneficiaries of Sections 4.09 and 4.10 hereof shall
also be third party beneficiaries of this Section 4.11.
4.12 Financing; Capital; Capitalization; Solvency; Going Concern. (a)
Parent and Sub shall, and shall cause their respective officers, directors,
employees, agents, affiliates, financial advisors and other representatives to,
use their reasonable best efforts to satisfy all conditions precedent set forth
in the Credit Agreement and, subject only to the simultaneous consummation of
the transactions contemplated hereby, to incur the financing provided thereby on
the terms set forth therein in order to finance the consummation of the
transactions contemplated hereby. Except to the extent the Company shall
otherwise consent in writing, Sub will not amend, modify or supplement in any
material respect the terms or conditions of, or cancel or waive any material
right under, the Credit Agreement.
(b) Parent shall maintain at all times through the Effective Date
unrestricted and unutilized cash on hand in an amount not less than $2,000,000.
Parent shall cause the representations and warranties set forth in Section
3.02(i) hereof to be true in all respects at all times through the Effective
Date.
(c) The Surviving Corporation will, and Parent will cause the
Surviving Corporation to, file all income Tax returns for the current fiscal
year and pay all Taxes shown to be due thereon.
(d) Parent shall cause Delaware Sub (i) to be a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware (including after giving effect to the provisions of Section 4.19
hereof), (ii) to establish and maintain an office in the State of Delaware and
(iii) to refrain from establishing or maintaining an office in any of the States
of Alabama, Florida and Georgia. The Surviving Corporation will, and Parent will
cause the Surviving Corporation to, maintain its existence until at least March
31, 2003.
4.13 Rights Agreement. Except to the extent permitted in accordance
with Section 4.06 hereof, the Company shall not (i) redeem the Rights, (ii)
amend (other than to delay the Distribution Date (as defined therein) or to
render the Rights inapplicable to the Offer and the Merger) or terminate the
Rights Agreement prior to the Effective Time without the consent of Parent,
unless required to do so by a court of competent jurisdiction or (iii) take any
action which would allow any Person (as such term is defined in the Rights
Agreement) other than Parent or Sub to be the Beneficial Owner (as such term is
defined in the Rights Agreement) of 15% or more of the Common Stock without
causing a Distribution Date (as such term is defined in the Rights Agreement) or
any event described in Section 11(a)(ii) or 13(a)(i)-(iv) of the Rights
Agreement to occur.
4.14 State Takeover Statutes. If any "fair price", "control share
acquisition", "moratorium", "interested shareholder" or other anti-takeover
statute, or similar statute or regulation, shall become applicable to this
Agreement, the Rights Agreement or any of the transactions contemplated hereby
or thereby (including, without limitation, the Offer), the Company and its Board
of Directors shall (subject always to applicable law and the fiduciary duties of
the Board of Directors) take all action necessary to ensure that the Offer and
the other transactions contemplated hereby and thereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise to
minimize the effect of such statute or regulation on the Offer and the other
transactions contemplated hereby and thereby.
4.15 No Other Representations or Warranties. Except for the
representations and warranties contained in Section 3.01 hereof, neither the
Company nor any other Person makes any other express or implied representation
or warranty on behalf of the Company or any of its affiliates. In particular,
the Company makes no representation or warranty to Parent or Sub with respect to
(a) the information set forth in the Confidential Information Memoranda and
related materials previously distributed by Donaldson, Lufkin and Jenrette
Securities Corporation in connection with the offering of the Company (except to
the extent specifically incorporated by reference in the Company Disclosure
Letter) or (b) any financial projection or forecast relating to the Company.
4.16 Insurance. Simultaneously with the execution and delivery hereof,
the Company shall procure or cause to be procured, and shall maintain in full
force and effect for a period expiring no earlier than thirty (30) days after
the expiration of the Offer, insurance covering all risks of loss with respect
to the assets subject to any lease included in the Leveraged Lease Portfolio,
such insurance coverage to be as described in, and in the amounts set forth in,
Schedule I hereto; provided that Parent shall have paid to the Company in
immediately available funds all costs (including, without limitation, all
premiums) and expenses of the Company (but only to the extent that such costs
and expenses exceed, in the aggregate, $10,000) in connection with procuring and
maintaining such insurance (it being expressly understood and agreed that in the
event of termination of this Agreement pursuant to Section 5.01 hereof, Parent
shall not be entitled to any refund or reimbursement of any amounts previously
paid by it to the Company as contemplated above).
4.17 Closing Certificate. On the Escrow Closing Date (as defined in
the Real Estate Disposition Agreements), the Company shall deliver to Parent a
certificate of the Chief Financial Officer of the Company in the form attached
hereto as Exhibit F (the "Closing Certificate"). The Company shall pay to, and
deposit with, the escrow agent under the LandAmerica Escrow Agreement for
disbursement in accordance with the terms and conditions thereof, a sum equal to
the aggregate transaction expenses listed on Schedule A to the Closing
Certificate, including the aggregate amount of all expenses itemized on such
Schedule A that are incurred (or to be incurred) by Persons other than the
Company (subject to the limitations set forth in Exhibit F hereto). Not later
than 48 hours prior to the Escrow Closing Date, the Company shall provide Parent
with an itemized list of the transaction expenses to be listed on Schedule A to
the Closing Certificate along with any and all substantiation of such
transaction expenses.
4.18 Preclearance of Articles of Merger. Parent shall, as soon as
reasonably practicable and in any event not later than five Business Days prior
to the initial expiration date of the Offer, (a) submit to the office of the
Department of State of the State of Florida draft Articles of Merger for the
purpose of preclearing such Articles of Merger for filing with the Florida
Department of State and shall use its reasonable best efforts to respond as
promptly as practicable to all inquiries or comments of the Florida Department
of State with respect thereto and shall make all such changes to the Articles of
Merger as shall be necessary to effect the filing thereof with the Florida
Department of State pursuant to Section 2.02 hereof and (b) submit to the office
of the Secretary of State of the State of Delaware a draft certificate of merger
relating to the merger of the Surviving Corporation with and into Delaware Sub
as contemplated by Section 4.19 hereof, for the purpose of preclearing such
certificate of merger for filing with the Delaware Secretary of State and shall
use its reasonable best efforts to respond as promptly as practicable to all
inquiries or comments of the Delaware Secretary of State with respect thereto
and shall make all such changes to the certificate of merger as shall be
necessary to effect the filing thereof with the Delaware Secretary of State
pursuant to Section 4.19 hereof.
4.19 Merger of Surviving Corporation with and into Delaware Sub.
Immediately following the earlier to occur of (i) the twelfth Business Day
following the completion of all transactions contemplated by the Asset
Disposition Agreements and (ii) the consummation of the purchase and sale
pursuant to the Omnibus Agreement of the beneficial interests in the trust
estates which own the aircraft bearing Federal Aviation Administration
Registration Numbers N14062, N79745 and N90070 (it being understood and agreed
that each of Parent and Sub has represented and warranted to the Company that
the Omnibus Agreement shall at all times contain provisions obligating each of
the parties thereto to use their respective best efforts to consummate such
purchase and sale of the beneficial interests in the trust estates as soon as
possible after the Effective Date, but in no event prior to the first Business
Day following the Effective Date; and each of Parent and Sub hereby covenants
(and shall cause each other party to the Omnibus Agreement to covenant in
writing for the benefit of the Company) that such provisions in the Omnibus
Agreement shall not be amended, modified or supplemented at any time prior to
the consummation of such purchase and sale of the beneficial interests in the
trust estates, in each case without the prior written consent of the Company),
Parent shall cause the Surviving Corporation to merge with and into Delaware Sub
and the separate corporate existence of the Surviving Corporation shall cease,
and Delaware Sub shall continue as the surviving corporation under the laws of
the State of Delaware under the name of "EIN Corp.", all in accordance with the
applicable provisions of the General Corporation Law of the State of Delaware
(the "DGCL"). Parent and the Surviving Corporation shall take, or cause to be
taken, all actions necessary, proper or advisable under applicable laws and
regulations (including, without limitation, the filing of this Agreement or a
certificate of merger or certificate of ownership and merger with the Secretary
of State of the State of Delaware, in such form as is required by, and executed
in accordance with, the relevant provisions of the DGCL) to make the merger
contemplated above in this Section 4.19 effective and the effect of such merger
shall be as provided in the applicable provisions of the DGCL. Upon consummation
of the merger contemplated above in this Section 4.19, (i) the Articles of
Incorporation of the Surviving Corporation, as in effect immediately prior to
the consummation of such merger, shall be the Certificate of Incorporation of
Delaware Sub until thereafter duly amended as provided by law and such
Certificate of Incorporation; provided, that such Certificate of Incorporation
shall at all times comply with the requirements set forth in Section 4.10
hereof; provided, further, that such Certificate of Incorporation may not at any
time be amended to include any reference to the word "Echelon" (or any similar
words based thereon or derived therefrom) in the name of Delaware Sub (it being
hereby expressly acknowledged and agreed by the parties hereto that neither
Delaware Sub nor any Affiliate thereof shall have any interest in, or right to
use, the word "Echelon" (or any similar words based thereon or derived
therefrom) except as expressly set forth in Section 2.10 hereof), (ii) the
By-Laws of the Surviving Corporation, as in effect immediately prior to the
consummation of such merger, shall be the By-Laws of Delaware Sub until
thereafter duly amended as provided by law and such By-Laws and (iii) all
references in this Agreement (other than this Section 4.19) to the Surviving
Corporation shall be deemed to be references to Delaware Sub. It is understood
and agreed that the directors, officers and shareholders of the Company
immediately prior to the consummation of the Offer shall be third party
beneficiaries of this Section 4.19.
ARTICLE V
TERMINATION AND ABANDONMENT
5.01 Termination. This Agreement may be terminated and the Offer and
the other transactions contemplated hereby may be abandoned, at any time prior
to the Effective Time:
(a) by mutual consent of the Company, on the one hand, and of Parent
and Sub, on the other hand;
(b) by either Parent, on the one hand, or the Company, on the other
hand, if any governmental or regulatory agency shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for, shares of
Common Stock pursuant to the Offer or the Merger and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by either Parent, on the one hand, or the Company, on the other
hand, if due to an occurrence or circumstance which would result in a failure to
satisfy any of the Tender Offer Conditions, Sub shall have failed to pay for
shares of Common Stock (and associated Rights) pursuant to the Offer within 90
days after commencement of the Offer (the "Outside Date"), unless such failure
to pay for shares of Common Stock (and associated Rights) shall have occurred
because 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 Parent, on the one hand, or the Company, on the other
hand, if the Offer is terminated or (subject to Section 1.01(a) hereof) expires
in accordance with its terms without Sub having purchased any Common Stock
thereunder due to an occurrence which would result in a failure to satisfy any
of the conditions set forth on Annex A hereto; provided, that (i) Parent may not
terminate this Agreement pursuant to this Section 5.01(d) if such failure shall
have been caused by or resulted from the failure of Parent or Sub to perform any
covenant or agreement of either of them contained in this Agreement or the
breach by Parent or Sub of any representation or warranty of either of them
contained in this Agreement and (ii) the Company may not terminate this
Agreement pursuant to this Section 5.01(d) if such failure shall have been
caused by or resulted from the failure of the Company to perform any covenant or
agreement contained in this Agreement or the breach by the Company of any
representation or warranty contained in this Agreement;
(e) by Parent, in the event of a breach by the Company of any
representation, warranty, covenant or agreement contained in this Agreement
which (A) would give rise to the occurrence of an event or condition set forth
in paragraph (d) or (f) of Annex A, (B) cannot or has not been cured prior to
the earlier of (i) 15 days after the giving of written notice of such breach to
the Company and (ii) two Business Days prior to the date on which the Offer
expires and (C) has not been waived by Parent pursuant to the provisions hereof
(it being expressly understood and agreed that no representation, warranty,
covenant (other than the covenant set forth in Section 4.17 hereof) or agreement
contained in this Agreement shall be deemed to be breached by the Company or any
of its Subsidiaries to the extent such representation, warranty, covenant or
agreement relates to the Assets (including Assets acquired pursuant to the
provisions of Section 4.03 hereof), so long as the Asset Disposition Agreements
shall at all times be in full force and effect and the purchase price or
transfer value, as the case may be, under each such agreement shall have not
been reduced in connection with any such breach of representation, warranty,
covenant or agreement contained in this Agreement);
(f) by the Company, if the Company receives a Superior Proposal and a
majority of the disinterested directors of the Company determine in good faith,
based on the advice of outside counsel, that a failure to terminate this
Agreement would be reasonably likely to breach their respective fiduciary
obligations; provided, that the Company shall have complied with its obligations
under Sections 4.06 and 5.02(b) hereof;
(g) by Parent, if the Company shall have received a Superior Proposal
and (i) the Board of Directors of the Company shall have withdrawn or modified
(including by amendment of the Schedule 14D-9) in a manner adverse to Parent or
Sub its approval or recommendation of the Offer, (ii) the Company or its Board
of Directors shall have approved, recommended or entered into an agreement with
respect to, or consummated the transactions contemplated by, any Acquisition
Proposal or (iii) the Board of Directors of the Company shall have resolved to
do any of the foregoing;
(h) by the Company, in the event of a breach by Parent or Sub of any
representation, warranty, covenant or agreement contained in this Agreement
which cannot or has not been cured within the earlier of (i) 15 days after the
giving of written notice of such breach to Parent and Sub and (ii) to the extent
applicable, two Business Days prior to the date on which the Offer expires,
except, in any case where such failures are not reasonably likely to affect
adversely Parent's or Sub's ability to complete the Offer;
(i) by the Company, if Parent or Sub shall have (i) failed to commence
the Offer within 5 days following the date of this Agreement, (ii) terminated
the Offer or (iii) failed to pay for shares of Common Stock pursuant to the
Offer on or prior to the earlier of (x) the fifth day after any shares of Common
Stock tendered in the Offer have been accepted for payment and (y) the Outside
Date, unless in the case of (i) or (ii) such failure shall have been caused by
the failure of the Company to satisfy the conditions set forth in paragraph (d)
or (f) of Annex A hereto;
(j) by the Parent, at any time prior to Sub having accepted for
payment shares of Common Stock (and associated Rights) pursuant to the Offer, if
any of the Asset Disposition Agreements shall have been terminated and be of no
further force and effect; or
(k) by the Parent, at any time prior to Sub having accepted for
payment shares of Common Stock (and associated Rights) pursuant to the Offer, if
any Person (other than Parent or Sub) shall have acquired beneficial ownership
(as defined in Rule 13d-3 promulgated under the Exchange Act) of more than 20%
of the outstanding voting securities of the Company or is granted an option or
right to acquire more than 20% of such voting securities of the Company (as used
in this clause (k), "Person" shall include any corporation, person, partnership,
trust, other entity or group as defined in the Exchange Act).
5.02 Effect of Termination. (a) In the event of the termination of
this Agreement pursuant to Section 5.01 hereof by Parent or Sub, on the one
hand, or the Company, on the other hand, written notice thereof shall forthwith
be given to the other party or parties specifying the provision hereof pursuant
to which such termination is made, and this Agreement shall become void and have
no effect, and there shall be no liability hereunder on the part of Parent, Sub
or the Company, except that Sections 4.02, 5.02, 6.01, 6.11 and 6.15 hereof
shall survive any termination of this Agreement. Nothing in this Section 5.02
shall relieve any party to this Agreement of liability for breach of this
Agreement. Any payment required to be made by Parent or Sub, on the one hand, or
the Company, on the other hand, pursuant to this Section 5.02 shall be made by
such party within three Business Days after receipt by it of notice from the
other party or parties, 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.
(b) (i) In the event of a termination of this Agreement pursuant to
Section 5.01(f), (g) or (k) hereof, the Company shall pay to Parent the sum of
$2,750,000 and the Company shall have no further liability to any other party
hereto and neither Parent nor Sub shall have any other remedy against the
Company hereunder except as provided in Section 5.02(b)(ii) below.
(ii) In the event of a termination of this Agreement pursuant to
Section 5.01(e), (f), (g), (j) or (k) hereof, in addition to the amounts payable
under Section 5.02(b)(i) above with respect to any termination of this Agreement
pursuant to Section 5.01(f), (g) or (k) hereof, the Company shall reimburse
Parent and Sub all of their reasonable out-of-pocket costs and expenses incurred
in connection with the Offer to Purchase, this Agreement and each of the
transactions contemplated hereby in the sum of up to $1,000,000 (subject to
providing reasonable documentation of such costs and expenses) and the Company
shall have no further liability to any other party hereto and neither Parent nor
Sub shall have any other remedy against the Company hereunder; provided, that,
notwithstanding the foregoing, in the event of a termination of this Agreement
pursuant to Section 5.01(j) hereof as a result of the termination of the
Subscription Agreement by the Company pursuant to Section 9.1(g) thereof, the
Company shall not be obligated to reimburse Parent or Sub any of their
out-of-pocket costs and expenses incurred in connection with the Offer to
Purchase, this Agreement or any of the transactions contemplated hereby.
(c) In the event of a termination of this Agreement by the Company
pursuant to Section 5.01(h) hereof, the Company's sole remedy shall be to
receive from Parent and/or Sub a sum equal to $2,750,000 as agreed and
liquidated damages, it being agreed that in such event the Company's actual
damages would be incapable of precise ascertainment and that the foregoing is a
reasonable estimate of such damages and neither Parent nor Sub shall have any
further liability to any other party hereto. The obligations of Parent and Sub
pursuant to this Section 5.02(c) shall be joint and several.
ARTICLE VI
MISCELLANEOUS
6.01 Fees and Expenses. All costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses.
6.02 Representations and Warranties. The respective representations
and warranties of the Company, on the one hand, and Parent and Sub, 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. Each and every such representation and warranty
shall expire with, and be terminated and extinguished by, the Effective Time and
thereafter none of the Company, Parent or Sub shall be under any liability
whatsoever with respect to any such representation or warranty. This Section
6.02 shall have no effect upon any other obligation of the parties hereto,
whether to be performed before or after the Effective Time.
6.03 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company, Parent or Sub, may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate or writing
delivered pursuant hereto by any other applicable party or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. 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.
6.04 Public Announcements. The Company, on the one hand, and Parent
and Sub, 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, 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 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 Parent or the Company is subject.
6.05 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
telex, telegram or telecopier, as follows:
(a) if to the Company, to it at:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Telecopier: (727) 803-8203
Attention: Darryl A. LeClair
with a copy to:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Telecopier: (727) 803-8203
Attention: Susan Glatthorn Johnson, Esq.
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Telecopier: (212) 354-8113
Attention: William F. Wynne, Jr., Esq.
(b) if to Parent, Sub or the Surviving Corporation, to it at:
950 Third Avenue
New York, New York 10022
Telecopier: (212) 688-7908
Attention: James Haber
with a copy to:
Brown Raysman Millstein Felder and Steiner LLP
120 West 45th Street
New York, New York 10036
Telecopier: (212) 840-2429
Attention: Robert M. Unger, Esq.
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.
6.06 Entire Agreement. This Agreement and the annex, 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.
6.07 Binding Effect; Benefit; Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and, with respect to
the provisions of Sections 4.09, 4.10, 4.11 and 4.19 hereof, shall inure to the
benefit of the Persons benefiting from the provisions thereof who are intended
to be third party beneficiaries thereof, and, in each such case, their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties.
Except as specified in the previous sentence, nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the parties
hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
6.08 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented in writing by the parties
hereto in any and all respects before the Effective Time (notwithstanding any
shareholder approval), by action taken by the respective Boards of Directors of
Parent, Sub and the Company or by the respective officers authorized by such
Boards of Directors; provided, however, that after any such shareholder
approval, no amendment shall be made which by law requires further approval by
such shareholders without such further approval.
6.09 Further Actions. Each of the parties hereto agrees that, subject
to its legal obligations, it will use its reasonable best efforts to fulfill all
conditions precedent specified herein, to the extent that such conditions are
within its control, and to do all things reasonably necessary to consummate the
transactions contemplated hereby.
6.10 Headings. The descriptive headings of the several Articles and
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.
6.11 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.
6.12 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.
6.13 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.
6.14 Certain Definitions. (a) The term "Affiliate" or "affiliate" of a
specified Person means a Person who directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with, such
specified Person. For purposes of this definition, "control" (including the
terms "controlled by" and "under common control with") means the possession,
directly or indirectly or as trustee or executor, of the power to direct or
cause the direction of the management and policies of a person, whether through
the ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise.
(b) The term "Business Day" or "business day" shall mean any day,
other than a Saturday, Sunday or a day on which banks located in New York, New
York shall be authorized or required by law to close.
(c) "Knowledge" or "known" Defined. When any representation or
warranty contained in this Agreement or in the Company Disclosure Letter is
expressly qualified by the knowledge of the Company, such knowledge shall mean
the actual knowledge of Darryl A. LeClair, W. Michael Doramus, Julio A. Maggi,
Larry J. Newsome, Susan G. Johnson, J. Mark Stroud, Thomas D. Wilson, Antonia P.
Williams, Timothy S. Tinsley or K. Brent Little; provided that, for avoidance of
doubt, the Company shall, for purposes of this Agreement, be deemed to have
knowledge of any factual matter of which Parent or Sub shall have notified the
Company in writing in accordance with the provisions of Section 6.05 hereof.
(d) The term "Person" or "person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a person, a trust, a
limited liability company, an unincorporated organization, a group and a
government or other department or agency thereof.
(e) The term "Subsidiary", with respect to the Company, shall mean and
include (x) any partnership of which the Company or any Subsidiary is a general
partner or (y) any other entity in which the Company or any of its Subsidiaries
owns or has the power to vote 50% or more of the equity interests in such entity
having general voting power to participate in the election of the governing body
of such entity.
(f) The term "Company Disclosure Letter" shall mean the Company's
disclosure letter delivered by the Company to Parent and Sub concurrently with
the delivery of this Agreement.
(g) The term "Omnibus Agreement" shall mean the Omnibus Agreement,
dated as of January 21, 2000, between Sub and Heller Financial, Inc., a Delaware
corporation (as same is in effect on the date of this Agreement and thereafter,
as amended, modified or supplemented from time to time with the prior written
consent of the Company).
6.15 Transfer Taxes. All stamp, transfer, documentary, sales, use,
registration and other such taxes and fees (including any penalties and
interest) incurred in connection with this Agreement and the Offer
(collectively, the "Transfer Taxes") shall be paid by Sub, and Sub shall, at its
own expense, procure any stock transfer stamps required by, and properly file on
a timely basis all necessary tax returns and other documentation with respect
to, any Transfer Tax and provide to the Company evidence of payment of all
Transfer Taxes.
6.16 Waiver of Jury Trial. 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.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, each of Parent, Sub and the Company have caused
this Agreement to be executed by their respective officers thereunto duly
authorized, all as of the date first above written.
ETA HOLDING LLC
By: ETA Holding Corp., its Manager
By: /s/ James Haber
-------------------------------
Name: James Haber
Title: President
EIN ACQUISITION CORP.
By: /s/ James Haber
-------------------------------
Name: James Haber
Title: President
ECHELON INTERNATIONAL CORPORATION
By: /s/ S.G. Johnson
-------------------------------
Name: S.G. Johnson
Title: Sr Vice President
<PAGE>
ANNEX A
The capitalized terms used in this Annex A shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex A is
appended and "Purchaser" shall be deemed to refer to Sub.
Notwithstanding any other provision of the Offer, Purchaser shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act,
pay for any shares of Common Stock tendered pursuant to the Offer, and may
postpone the acceptance of and, subject to the restrictions referred to above,
payment for, any shares of Common Stock tendered pursuant to the Offer, if (i)
any applicable waiting period under the HSR Act shall not have expired or been
terminated or (ii) there shall not have been validly tendered and not properly
withdrawn prior to the expiration of the Offer (which shall not be earlier than
thirty (30) days after the mailing of the Offer Documents to the shareholders of
the Company) shares of Common Stock representing at least 80% of all the shares
of Common Stock outstanding (calculated on a fully diluted basis) (the "Minimum
Condition"). Additionally and without limiting the foregoing, notwithstanding
any other provision of the Offer, Purchaser shall not be required to accept for
payment or, subject to the restrictions referred to above, pay for any shares of
Common Stock, and may terminate or amend the Offer and may postpone the
acceptance of, subject to the restrictions referred to above, payment for shares
of Common Stock, if at any time on or after the date of the Merger Agreement and
at or before the time of payment for any such shares of Common Stock (whether or
not any shares of Common Stock have theretofore been accepted for payment or
paid for pursuant to the Offer) any of the following (other than the matters set
forth in clauses (i), (j) and (k) below, which shall only be determined
immediately prior to the expiration of the Offer) shall occur:
(a) there shall be any action taken by, or any law, statute, rule,
regulation, legislation, interpretation, judgment, order or injunction enacted,
enforced, promulgated, amended or issued by, any legislative body, court,
government or governmental, administrative or regulatory authority or agency,
domestic or foreign, other than the routine application of the waiting period
provisions of the HSR Act to the Offer or to the Merger, which is in effect and
would (i) make illegal, impede, delay or otherwise directly or indirectly
restrain or prohibit the Offer or the Merger or seeking to obtain material
damages, (ii) prohibit or materially limit the ownership or operation by Parent
or Purchaser of all or any material portion of the business or assets of the
Company and its Subsidiaries taken as a whole or to compel Parent or Purchaser
to dispose of or hold separately all or any material portion of the business or
assets of Parent and its subsidiaries (including Purchaser), taken as a whole,
or the Company and its Subsidiaries, taken as a whole, or seeking to impose any
material limitation on the ability of Parent or Purchaser to conduct its
business or own such assets or to prohibit or materially limit the ability of
Purchaser to consummate the transactions contemplated by the Asset Disposition
Agreements or the Omnibus Agreement, (iii) impose material limitations on the
ability of Parent or Purchaser effectively to exercise rights of ownership of
the shares of Common Stock, including, without limitation, the right to vote any
shares of Common Stock acquired or owned by Purchaser or Parent on all matters
properly presented to the Company's shareholders, (iv) require divestiture by
Parent or Purchaser of any shares of Common Stock or (v) materially and
adversely affect the Condition of the Company and its Subsidiaries taken as a
whole;
(b) there shall have been issued any airworthiness directive by the
Federal Aviation Administration or any other governmental or regulatory body,
agency or authority having jurisdiction over the Company or the relevant asset,
or any manufacturer's service bulletin or similar document, in each case that
would result in an increase in the cost to the Company of maintaining, or
complying with any applicable rules, regulations or approved maintenance
programs with respect to, the assets subject to the leases in the Leveraged
Lease Portfolio, which increase in the cost to the Company would have a material
adverse effect on the Leveraged Lease Portfolio taken as a whole;
(c) any change (other than any change (x) arising in the ordinary
course of business, (y) arising out of changes in general economic, regulatory
or political conditions or (z) arising out of changes which affect the markets
in which the Company operates in general) shall have occurred that would have a
material adverse effect on the Leveraged Lease Portfolio taken as a whole;
(d) any of the representations or warranties made by the Company in
the Merger Agreement that are qualified by materiality shall be untrue or
incorrect, or any such representation and warranty that is not so qualified
shall be untrue or incorrect in any material respect, in each case as of the
date of the Merger Agreement and the expiration date of the Offer, except (i)
for changes specifically permitted by the Merger Agreement and (ii) that those
representations and warranties which address matters only as of a particular
date shall remain true and correct in all material respects, as of such date (it
being expressly understood and agreed that no representation or warranty made by
the Company in the Merger Agreement shall be deemed to be untrue or incorrect to
the extent such representation or warranty relates to the Assets (including
Assets acquired pursuant to the provisions of Section 4.03 of the Merger
Agreement), so long as each of the Asset Disposition Agreements shall at all
times be in full force and effect and the purchase price or transfer value, as
the case may be, under each such Asset Disposition Agreement shall have not been
reduced in connection with any such breach of representation, warranty, covenant
or agreement contained in the Merger Agreement);
(e) the Company's Board of Directors shall have withdrawn, modified or
amended in any respect adverse to Parent or Purchaser its recommendation of the
Offer and the Company shall have entered into an agreement providing for or
implementing an Acquisition Proposal, or shall have resolved to do any of the
foregoing;
(f) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the Merger
Agreement or under either of the Escrow Agreements (including the deposit of all
amounts to be deposited thereunder when and as required thereby);
(g) any Person (other than Parent or Sub) shall have acquired
beneficial ownership (as defined in Rule 13d-3 promulgated under the Exchange
Act) of more than 20% of the outstanding voting securities of the Company or is
granted an option or right to acquire more than 20% of such voting securities of
the Company (as used in this clause (g), "Person" shall include any corporation,
person, partnership, trust, other entity or group as defined in the Exchange
Act);
(h) any of the Merger Agreement or any Asset Disposition Agreement
shall have been terminated in accordance with their respective terms or
otherwise;
(i) either of the Escrow Agreements shall have been terminated by the
Company in accordance with their respective terms or otherwise;
(j) any condition precedent to the closing of the transactions
contemplated by the Purchase and Sale Agreement shall not have been satisfied or
waived or any closing document to be delivered on or prior to the closing of the
transactions contemplated thereby shall not have been irrevocably delivered,
together with the full amount of the purchase price in accordance with the terms
of the Purchase and Sale Agreement, to be held in escrow pending the
consummation of the Offer and the Merger;
(k) any condition precedent to the closing of the transactions
contemplated by the Subscription Agreement shall not have been satisfied or
waived or any closing document to be delivered on or prior to the closing of the
transactions contemplated thereby shall not have been irrevocably delivered,
together with the full amount of the transfer value in accordance with the terms
of the Subscription Agreement, to be held in escrow pending the consummation of
the Offer and the Merger; or
(l) there shall have occurred and be continuing one or more defaults
or events of default by the lessees party to the leases in the Leveraged Lease
Portfolio with respect to their respective obligations thereunder, which
defaults and events of default, individually or in the aggregate, would have a
material adverse effect on the Leveraged Lease Portfolio taken as a whole.
<PAGE>
EXHIBIT A
PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is made and entered into as of
January 13, 2000, by and between Echelon International Corporation, a Florida
corporation, and Echelon Affordable Housing, Inc., a Florida corporation, as
sellers (collectively, "Sellers"), and Heller Affordable Housing, Inc., a
Delaware corporation, as purchaser ("Purchaser").
WITNESSETH
WHEREAS, Sellers are the legal and beneficial owners of limited partner
interests (the "Partnership Interests") in five multi-investor tax credit funds
(the "Funds"), which Partnership Interests and Funds are more particularly
identified in Exhibit A hereto; and
WHEREAS, Purchaser desires to purchase from Sellers, and Sellers desire to
sell to Purchaser, all the Partnership Interests on the terms and conditions set
forth herein;
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Purchase of Partnership Interests
1.1 Basic Transaction. On and subject to the terms and conditions of
this Agreement, Purchaser shall purchase from Sellers, and Sellers shall
sell to Purchaser, the Partnership Interests.
1.2 Purchase Price. The aggregate purchase price (the "Purchase
Price") for the Partnership Interests shall equal the sum of $21,065,000
plus the Recapture Premium (as defined in Section 5.7), and shall be
payable as follows:
(a) $21,065,000 shall be paid by Purchaser to Sellers at the
closing of the transactions contemplated by this Agreement (the
"Closing") by wire transfer of immediately available U.S. funds to an
account designated by Sellers; and
(b) the Recapture Premium shall be paid in accordance with
Section 5 hereof.
1.3 The Closing. The Closing shall be held at the offices of White &
Case LLP, 1155 Avenue of the Americas, New York, New York 10036, commencing
at 10:00 a.m. (New York time) on January 14, 2000, or at such other place
and earlier time and date as shall be agreed upon by the parties hereto
(the actual date of the Closing is hereinafter referred to as the "Closing
Date").
1.4 Deliveries at Closing. At the Closing, Sellers will deliver to
Purchaser the various certificates, instruments and documents referred to
in Section 6.1 hereof, and Purchaser will deliver to Sellers the cash
portion of the Purchase Price described in Section 1.2(a) and the various
certificates, instruments and documents referred to in Section 6.2 hereof.
2. Representations and Warranties of Sellers
Sellers represent and warrant to Purchaser that the statements contained in
this Section 2 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date. The representations and
warranties set forth in this Section 2 shall not survive the Closing Date
(except for those set forth in Sections 2.5 and 2.12, which shall survive the
Closing Date; provided, however, that the representations and warranties set
forth in Section 2.5 shall terminate upon the merger of EIN Acquisition Corp.
with and into Echelon International Corporation (the "Merger")).
2.1 Organization. Each Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida.
2.2 Authorization. Each Seller has full power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each Seller and, assuming that this
Agreement constitutes a valid and binding obligation of Purchaser, is a
valid and binding obligation of each Seller enforceable against each 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.
2.3 Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (a) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which either Seller is subject
or any provision of its charter or bylaws, or (b) conflict with, result in
a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or cancel,
or require any notice or consent under any agreement, contract, lease,
license, instrument or other arrangement to which either Seller is a party
or by which it is bound or to which any of its assets are subject, except
for such notices and consents which must be given or obtained pursuant to
the partnership agreements for the various Funds (the "Fund Agreements").
2.4 Description of Partnership Interests. With respect to each
Partnership Interest, the following information is set forth on Exhibit A
hereto:
(a) the name, state of organization, taxpayer identification
number and tax shelter registration number of the relevant Fund; and
(b) the number of units comprising such Partnership Interest and
whether such Partnership Interest is represented by a separate
certificate.
2.5 Ownership of Partnership Interests. Sellers are the sole legal and
beneficial owners of the Partnership Interests. Sellers have not granted
any security interests, liens, claims or encumbrances with respect to the
Partnership Interests which will remain outstanding as of the Closing Date.
At the Closing, Sellers will transfer the Partnership Interests to
Purchaser free and clear of any liens, claims or encumbrances of any kind
whatsoever of which Sellers have knowledge.
2.6 Consents. Except for the consent of the general partner of each
Fund (a "General Partner") and except as set forth in the Fund Agreements,
no consent, authorization or approval of any person, or of any court or
governmental authority, is required in connection with the consummation by
Sellers of the transactions contemplated by this Agreement.
2.7 Capital Contributions. Sellers have made all scheduled capital
contributions required to be made by them to any Fund under the existing
Fund Agreements as a result of the ownership of the Partnership Interests.
2.8 Fund Agreements. Sellers have provided to Purchaser true and
correct copies of each Fund Agreement (and all amendments thereto) and all
other agreements, instruments or writings of any kind in the possession of
Sellers which set forth or govern the rights and obligations of either
Seller in its capacity as the owner of the Partnership Interests, in each
case to which either Seller is a party or of which either Seller has
knowledge.
2.9 Defaults. Sellers are not in default with respect to any of their
material obligations under any Fund Agreement and, to Sellers' knowledge,
no General Partner is in default with respect to any of its material
obligations under the applicable Fund Agreement.
2.10 Audits. To Sellers' knowledge, except as set forth in Schedule
2.10, no income tax audit has ever been commenced by the Internal Revenue
Service with respect to any Fund or any lower-tier limited partnership or
limited liability company (a "Project Partnership") in which any Fund has
invested.
2.11 Litigation. To Sellers' knowledge, except as set forth in
Schedule 2.11, no litigation, arbitration or similar proceeding has been
commenced, or is threatened, against any Fund or Project Partnership which,
if determined adversely to any such party, would materially and adversely
affect such Fund or Project Partnership.
2.12 Brokers. Sellers have no liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement and no such person or entity
claims any of the foregoing with respect to the transactions contemplated
by this Agreement.
3. Representations and Warranties of Purchaser
Purchaser represents and warrants to Sellers that the statements contained
in this Section 3 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date. The representations and
warranties set forth in this Section 3 shall not survive the Closing Date
(except for (x) those set forth in Sections 3.4, 3.5 and 3.6, which shall
survive for a period of one year after the Closing Date, and (y) those set forth
in Section 3.7, which shall survive the Closing Date).
3.1 Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
3.2 Authorization. Purchaser has full power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Purchaser and, assuming that this Agreement
constitutes a valid and binding obligation of Sellers, is a valid and
binding obligation of Purchaser enforceable against Purchaser 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 Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (a) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which Purchaser is subject or
any provision of its charter or bylaws, or (b) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or cancel,
or require any notice or consent under any agreement, contract, lease,
license, instrument or other arrangement to which Purchaser is a party or
by which it is bound or to which any of its assets are subject.
3.4 Due Diligence. Purchaser has conducted all due diligence that
Purchaser deems necessary or desirable with respect to the Partnership
Interests, 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 Sellers
specifically set forth in Section 2 hereof, Purchaser will rely solely upon
such due diligence in purchasing the Partnership Interests. Notwithstanding
anything in this Agreement, it is expressly understood and agreed that
Purchaser is acquiring the Partnership Interests "AS IS", "WHERE IS", and
that Sellers have not made and do not and will not make any representations
or warranties, express or implied, which might be pertinent in considering
whether to purchase the Partnership Interests or to make and enter into
this Agreement, except, in each case, to the extent of the limited
representations set forth in Section 2 hereof. Sellers are not liable or
bound in any manner by any warranties, either express or implied,
guarantees, or any promises, statements, representations or information
pertaining to the Partnership Interests or to the value thereof made or
furnished by any broker or any agent, employee, servant or other person
representing or purporting to represent Sellers.
3.5 Purchase for Investment. Purchaser will acquire the Partnership
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 Purchaser at all times to sell or otherwise dispose of all or any part
of the Partnership Interests under the Securities Act of 1933, as amended
(the "Securities Act"), or under an exemption from such registration
available under the Securities Act. Purchaser is an "accredited investor"
as defined under Regulation D of the Securities Act and has substantial
experience in purchasing investments similar to the Partnership Interests.
Purchaser has evaluated the merits and risks inherent in purchasing the
Partnership Interests and is a able to bear the financial risks of such
investment.
3.6 Tax Status. Purchaser is neither a "foreign person" within the
meaning of Sections 897 and 1445 of the Internal Revenue Code of 1986, as
amended (the "Code"), nor a "tax-exempt entity" within the meaning of
Section 168(h)(2) of the Code.
3.7 Brokers. Purchaser has no liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the
transactions contemplated by the Agreement and no such person or entity
claims any of the foregoing with respect to the transactions contemplated
by this Agreement.
4. Covenants
4.1 Consents. Purchaser will use reasonable efforts to obtain, prior
to January 14, 2000, all consents required for the admission of Purchaser
as a substitute limited partner in each Fund (the "Consents"); provided
that Sellers shall have cooperated with Purchaser in obtaining such
Consents and in complying with the applicable requirements of the Fund
Agreements prior to such time. Purchaser shall pay all costs incurred by it
in connection with obtaining the Consents and effecting the admission of
Purchaser as a substitute limited partner in each Fund, including any
amounts payable to any General Partner pursuant to a Fund Agreement.
4.2 Delivery of Documents. Prior to Closing, Sellers shall deliver to
Purchaser all documents, or copies thereof, in its possession which relate
to any of the Funds and which do not contain any proprietary or
confidential information. Sellers may retain copies of any or all of such
documents.
4.3 Transfer Taxes. Purchaser shall pay when due all transfer taxes,
if any, imposed by any governmental authority with respect to the transfer
of the Partnership Interests to Purchaser, and shall indemnify and hold
Sellers harmless from and against any loss, liability or claim against or
incurred by Sellers as a result of Purchaser's failure to pay such transfer
taxes.
4.4 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Partnership Interests in accordance with the schedule
attached hereto as Exhibit B. Each Seller and Purchaser shall utilize such
allocation in the preparation of all tax returns and financial statements
reflecting its sale or purchase, as the case may be, of the Partnership
Interests and shall not take any positions which are inconsistent
therewith.
5. Recapture Bonds
5.1 Procedures. Promptly after Closing, Purchaser and Sellers shall
take the following actions in order to obtain any recapture bonds (the
"Bonds") required to be delivered to the Internal Revenue Service (the
"IRS") in order for Sellers to avoid any recapture of federal income tax
credits claimed by Sellers pursuant to Section 42 of the Code with respect
to their ownership of the Partnership Interests.
(a) Sellers shall request from the IRS a 30-day extension of the
due date for providing the Bonds (such due date, as it may be extended
from time to time, is hereinafter referred to as the "Bonding Date");
(b) Purchaser shall use its best efforts to obtain a written
commitment from a surety selected by Purchaser and reasonably
acceptable to Sellers (the "Surety") which contains the following
provisions:
(i) if the Merger occurs prior to the Bonding Date and
Purchaser guarantees the obligations of Sellers to the Surety
with respect to the Bonds, the Surety will issue the Bonds on or
prior to the Bonding Date for a premium based on Purchaser's
credit rating;
(ii) if the Merger does not occur prior to the Bonding Date
and Purchaser does not guarantee the obligations of Sellers to
the Surety with respect to the Bonds, the Surety will issue the
Bonds on or prior to the Bonding Date for a premium based on
Sellers' credit rating; and
(iii) if the Merger occurs after the Bonding Date and the
Surety has already issued the Bonds for a premium based on
Sellers' credit rating and Purchaser then delivers to the Surety
a guarantee of the obligations of Sellers to the Surety with
respect to the Bonds, then the surety will pay to the Purchaser,
in exchange for such guarantee, an amount equal to the excess of
(x) the premium charged for the Bonds based on Sellers' credit
rating over (y) the premium that would have been charged for the
Bonds based on Purchaser's credit rating.
(c) Purchaser and Sellers shall cooperate with each other and
prepare, execute and deliver such documents and forms as may be
necessary to obtain the Bonds prior to the Bonding Date.
5.2 Merger Occurs Prior to Bonding Date. If the Merger occurs prior to
the Bonding Date, whether or not the commitment described in Section 5.1(b)
is obtained, Purchaser will (a) provide such guarantee or other form of
credit enhancement as may be required in order to cause a surety to issue
the Bonds on behalf of Sellers on or prior to the Bonding Date and (b) pay
directly to such surety the full amount of all premiums payable as
consideration for the issuance of the Bonds.
5.3 Bonding Date Occurs Prior to Merger. If the Bonding Date occurs
prior to the Merger, whether or not the commitment described in Section
5.1(b) is obtained, Sellers will (a) cause a surety to issue the Bonds on
behalf of Sellers on or prior to the Bonding Date and (b) pay directly to
such surety any premium then due as consideration for the issuance of the
Bonds. Within two business days after the later of (x) the consummation of
the Merger and (y) the delivery by Sellers to Purchaser of a receipt and/or
invoice for any premium paid and/or payable as consideration for the
issuance of the Bonds, Purchaser will pay to Sellers an amount equal to
such premium. If, after the Merger, Purchaser guarantees the obligations of
Sellers to a surety with respect to the Bonds, then Purchaser shall be
entitled to retain any rebate or other payment made by such surety in
exchange for Purchaser's guarantee.
5.4 Merger Does Not Occur. If any agreement with respect to the merger
is not executed prior to January 31, 2000, or following execution such
agreement is terminated for any reason, Purchaser shall pay $435,000 to
Sellers within two business days after the applicable date and, upon such
payment, shall be relieved of any further obligations under this Section 5.
5.5 Merger Occurs but Bonds Not Obtained. If, for any reason other
than the willful failure by Sellers to comply with the provisions of this
Section 5, the Sellers are unable to obtain the Bonds and the Merger is
consummated despite the absence of the Bonds, Purchaser shall pay, and
hereby agrees to pay, to Sellers an amount equal to fifty percent (50%) of
any "credit recapture amount" (as defined in Section 42(j)(2) of the Code)
of Sellers resulting from the transfer of the Partnership Interests
pursuant hereto.
5.6 Payments. Any amounts payable to Sellers pursuant to Section 5.3,
Section 5.4 or Section 5.5 shall be paid by wire transfer of immediately
available U.S. funds to an account designated by Sellers. Any amount
payable by Purchaser pursuant to Section 5.3 shall be paid in such manner
as shall be agreed upon by Purchaser and the surety.
5.7 Recapture Premium. For purposes of this Agreement, the term
"Recapture Premium" shall mean the amount payable by Purchaser pursuant to
Section 5.2, Section 5.3 (less any rebate or other payment received by
Purchaser from a surety), Section 5.4 or Section 5.5, as the case may be.
5.8 Purchaser to Include Affiliates. For purposes of the foregoing
provisions of this Section 5, the term "Purchaser" also includes any
affiliate of Purchaser that performs any of the obligations of Purchaser
under this Section 5.
6. Closing Conditions
6.1 Conditions to Obligations of Purchaser. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver of the following conditions:
(a) the representations and warranties set forth in Section 2
shall be true and correct in all material respects as of the Closing
Date;
(b) Sellers shall have performed and complied with all their
covenants hereunder in all material respects through the Closing Date;
(c) there shall not be any injunction, judgment, order, decree or
ruling in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(d) Sellers shall have delivered to Purchaser a Closing
Certificate in the form attached hereto as Exhibit C;
(e) to the extent that Sellers have previously granted security
interests to the Funds with respect to the Partnership Interests,
Sellers shall have delivered to Purchaser, with respect to each such
Partnership Interest, a copy of a termination statement evidencing the
termination of the applicable Fund's security interest in such
Partnership Interest or such other documentation reasonably
satisfactory to Purchaser which evidences that the security interest
has been terminated;
(f) each of the required Consents shall have been obtained and
appropriate documentation, in each case in the form specified by the
respective Fund Agreement and otherwise in form and substance
reasonably satisfactory to Purchaser, shall have been executed by all
relevant parties to effect the transfer of the Partnership Interests
to Purchaser and the admission of Purchaser as a substitute limited
partner in each Fund; and
(g) Sellers shall have delivered to Purchaser a Certificate of
Non-Foreign Status in the form attached hereto as Exhibit D.
6.2 Conditions to Obligations of Seller. The obligation of Sellers to
consummate the transactions contemplated by this Agreement is subject to
the satisfaction or waiver of the following conditions:
(a) the representations and warranties set forth in Section 3
shall be true and correct in all material respects as of the Closing
Date;
(b) Purchaser shall have performed and complied with all its
covenants hereunder in all material respects through the Closing Date;
(c) there shall not be any injunction, judgment, order, decree or
ruling in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(d) Purchaser shall have delivered to Sellers a Closing
Certificate in the form attached hereto as Exhibit E; and
(e) each of the required Consents shall have been obtained and
appropriate documentation, in each case in the form specified by the
respective Fund Agreement and otherwise in form and substance
reasonably satisfactory to Sellers, shall have been executed by all
relevant parties to effect the transfer of the Partnership Interests
to Purchaser and the admission of Purchaser as a substitute limited
partner in each Fund, and Purchaser shall have cooperated with Sellers
in complying with the applicable requirements set forth in the Fund
Agreements relating to the transfer of the Partnership Interests to
Purchaser and the admission of Purchaser as a substitute limited
partner.
7. Miscellaneous
7.1 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their
respective successors and permitted assigns.
7.2 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign either this Agreement
or any of its rights, interests, or obligations hereunder without the prior
written approval of the other party.
7.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
7.4 Headings. The section headings contained in the Agreement are
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
7.5 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given two
business days after it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient
as set forth below:
If to Sellers prior to the Merger:
Echelon International Corporation
and Echelon Affordable Housing, Inc.
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Attn: Susan Glatthorn Johnson, Esq.
Telecopy No: (727) 803-8203
with a copy, which shall not constitute notice, prior to the
Merger, to:
White & Case LLP
1155 Avenue of the Americas
New York, New York, 10036-2787
Attn: William F. Wynne, Jr., Esq.
Telecopy No: (212) 354-8113
If to Sellers after the Merger:
950 Third Avenue
New York, New York 10022
Attn: James Haber
Telecopy No: (212) 688-7908
with a copy, which shall not constitute notice, after the
Merger, to:
Brown Raysman Millstein Felder and Steiner LLP
120 West 45th Street
New York, New York 10036
Attn: Robert M. Unger, Esq.
Telecopy No: (212) 840-2429
If to Purchaser: Heller Affordable Housing, Inc
500 West Monroe
30th Floor
Chicago, Illinois 60661
Attn: Larry Mandel
Telecopy No: (312) 441-7560
with a copy, which shall not constitute notice, to:
Paul, Hastings, Janofsky & Walker LLP
600 Peachtree St., NE, Suite 2400
Atlanta, Georgia 30308
Attn: Philip J. Marzetti, Esq.
Telecopy No. (404) 815-2424
Any party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim or other communication
shall be deemed to have been duly given unless and until it actually is
received by the intended recipient. Any party may change the address to
which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other party notice in the
manner herein set forth.
7.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of New York without
giving effect to any choice or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New
York.
7.8 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
Purchaser and Sellers. No waiver by any party of any default,
misrepresentation, or beach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or beach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent
such occurrence.
7.9 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.
7.10 Expenses. Except as otherwise specifically provided herein, each
party hereto will bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
7.11 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including
without limitation.
7.12 Knowledge. When any representation or warranty contained in this
Agreement is expressly qualified by the knowledge of Sellers, such
knowledge shall mean the actual knowledge of Larry J. Newsome, James R.
Hobbs, Jr. and Dan R. Johnson.
7.13 Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
7.14 Entire Agreement. This Agreement constitutes the entire agreement
among the parties and supersedes any prior understandings, agreements, or
representations by or among the parties, written or oral, to the extent
they have related in any way to the subject matter hereof.
7.15 Termination. This Agreement shall terminate automatically if the
Closing does not occur on or before January 14, 2000, unless the Closing
Date is extended by mutual agreement of all the parties hereto.
[Signature pages follow]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PURCHASER: HELLER AFFORDABLE HOUSING, INC.
By:
___________________________________
Name:
Title:
SELLERS: ECHELON INTERNATIONAL CORPORATION
By:
___________________________________
Name:
Title:
ECHELON AFFORDABLE HOUSING, INC.
By:
___________________________________
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
DESCRIPTION OF PARTNERSHIP INTERESTS
<S> <C> <C> <C> <C> <C>
================================= ================== =================== ====================== ================= ================
State of Taxpayer Tax Shelter Number of Units Holding in
Name of Fund Organization Identification Registration Number Held Certificate
Number of Fund Form?
================================= ================== =================== ====================== ================= ================
American Tax Credit Corporate Delaware 31-1455367 96058000264 4 No
Fund III, L.P.
- --------------------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
KeyCorp Investment Limited Ohio 34-1811098 6 No
Partnership II
- --------------------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
Lehman Housing Tax Credit Fund New York 13-3928458 95276000023 6.738544 Yes
L.P.
- --------------------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
Lehman Housing Tax Credit Fund Delaware 13-3932050 97241000369 8.673 Yes
VI L.P.
- --------------------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
National Corporate Tax Credit California 95-4593894 97139000133 5 No
Fund VII
- --------------------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
</TABLE>
<PAGE>
EXHIBIT B
ALLOCATION OF PURCHASE PRICE
The cash portion of the Purchase Price payable pursuant to Section
1.2(a) of the Agreement shall be allocated among the Partnership Interests as
follows:
Partnership Interest Price
Lehman Housing Tax Credit Fund L.P. $ 4,452,826
Lehman Housing Tax Credit Fund VI L.P. 5,720,099
KeyCorp Investment Limited Partnership II 4,989,556
National Corporate Tax Credit Fund VII 3,092,815
American Tax Credit Corporate Fund III, L.P. 2,809,704
TOTAL $21,065,000
The Recapture Premium payable pursuant to Sections 1.2(b) and 5 of the
Agreement shall be allocated among the Partnership Interests in the same ratios
as the foregoing cash portion of the Purchase Price is allocated among such
Partnership Interests.
<PAGE>
EXHIBIT C
CLOSING CERTIFICATE
Pursuant to Section 6.1(d) of the Purchase Agreement between Echelon
International Corporation and Echelon Affordable Housing, Inc. ("Sellers") and
Heller Affordable Housing, Inc. ("Purchaser") made and entered into as of
January 13, 2000 (the "Purchase Agreement"), the undersigned hereby certify on
behalf of Sellers as follows:
(1) The representations and warranties of Sellers set forth in Section
2 of the Purchase Agreement are true and correct in all material respects
as of the date hereof;
(2) Sellers have performed and complied with all its covenants under
the Purchase Agreement in all material respects through the date hereof;
and
(3) No injunction, judgment, order, decree or ruling is in effect with
respect to Seller which would prevent the consummation of the transactions
contemplated by the Purchase Agreement.
This ____ day of January, 2000.
ECHELON INTERNATIONAL CORPORATION
By:____________________________________
Name: ______________________________
Title: _____________________________
ECHELON AFFORDABLE HOUSING, INC.
By:____________________________________
Name: ______________________________
Title: _____________________________
<PAGE>
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
In order to comply with Sections 897 and 1445 of the Internal Revenue Code
(the "Code"), the undersigned hereby certify on behalf of Echelon International
Corporation and Echelon Affordable Housing, Inc. (the "Sellers") as follows:
(1) Neither Seller is a "foreign person" within the meaning of Section
7701 of the Code;
(2) The employer identification number of Echelon International
Corporation is 59-2554218, and the employer identification number of
Echelon Affordable Housing, Inc. is 59-3420655;
(3) The address of each Seller is 450 Carillon Parkway, Suite 200, St.
Petersburg, Florida 33716; and
(4) Each Seller understands that this certification may be disclosed
to the Internal Revenue Service and that any false statement contained
herein 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, and they further declare that they have the authority to
sign this certification on behalf of the Sellers.
This _____ day of January, 2000.
ECHELON INTERNATIONAL CORPORATION
By:____________________________________
Name: ______________________________
Title: _____________________________
ECHELON AFFORDABLE HOUSING, INC.
By:____________________________________
Name: ______________________________
Title: _____________________________
<PAGE>
EXHIBIT E
CLOSING CERTIFICATE
Pursuant to Section 6.2(d) of the Purchase Agreement between Echelon
International Corporation and Echelon Affordable Housing, Inc. ("Sellers") and
Heller Affordable Housing, Inc. ("Purchaser") made and entered into as of
January 13, 2000 (the "Purchase Agreement"), the undersigned hereby certifies on
behalf of Purchaser as follows:
(1) The representations and warranties of Purchaser set forth in
Section 3 of the Purchase Agreement are true and correct in all material
respects as of the date hereof;
(2) Purchaser has performed and complied with all its covenants under
the Purchase Agreement in all material respects through the date hereof;
and
(3) No injunction, judgment, order, decree or ruling is in effect with
respect to Purchaser which would prevent the consummation of the
transactions contemplated by the Purchase Agreement.
This ____ day of January, 2000.
HELLER AFFORDABLE HOUSING, INC.
By:______________________________
Name: ________________________
Title:________________________
<PAGE>
EXHIBIT B
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
===============================================================================
<PAGE>
Page
TABLE OF CONTENTS
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
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
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
<PAGE>
SCHEDULES
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 Agreements
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
<PAGE>
EXHIBITS
Exhibit A - Form of Special Warranty Deed
Exhibit B - Form of Bill 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
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the
21st day of January, 2000, by and among ECHELON INTERNATIONAL CORPORATION, a
Florida corporation ("Echelon"), and various of its subsidiaries signatory
hereto (each, a "Subsidiary", and collectively, the "Subsidiaries") (Echelon and
the Subsidiaries are collectively referred to herein as "Seller"), and ECHELON
RESIDENTIAL LLC, a Delaware limited liability company ("Buyer"). All capitalized
terms used herein shall have the meanings set forth in Section 1 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
(collectively, the "Assets"); and
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.
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
hereof.
"Agreement Date" means the date upon which this Agreement has been
executed and delivered by Seller, Buyer and Escrow Agent.
"Asset Sales Proceeds" has the meaning set forth in Section 5.3
hereof.
"Assets" has the meaning set forth in the first recital hereof, as
more particularly described on Schedule I (other than Part V thereof), and
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
Schedule I) and (v) any and all refunds or any reduction of, or credit against,
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.
"Bringdown Certificate" has the meaning set forth in Section 5.9
hereof.
"Broker" has the meaning set forth in Section 8 hereof.
"Business Day" means any day, other than a Saturday, Sunday or a day
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
hereof.
"Claim" has the meaning set forth in Section 10.3 hereof.
"Claim Notice" has the meaning set forth in Section 10.3 hereof.
"Closing" means the consummation of the transfer, assignment and sale
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.
"Closing Date" has the meaning specified in Section 7.1 hereof.
"COBRA" has the meaning set forth in Section 11.2(a)(1) hereof.
"Code" has the meaning set forth in Section 3.13 hereof.
"Combining Trial Balance" means the trial balance set forth in Part I
of Schedule XXI annexed hereto and made a part hereof.
"Commercial Property" means the real property, including the
improvements thereon, described in Part I of Schedule I; provided, that in no
event shall "Commercial Property" include any or all of the Other Assets.
"Commercial Property Security Deposit Amount" means the aggregate
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.
"Commission Filings" has the meaning set forth in Section 3.17(a)
hereof.
"Contracts" means, collectively, (i) the contracts, agreements and
commitments described on Schedule XI annexed hereto and made a part hereof, (ii)
any contract, agreement or commitment 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) 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 event shall "Contracts"
include any or all of the Other Contracts.
"County" means a political subdivision of the State within which a
Real Estate Asset is situated.
"Deposit" has the meaning set forth in Section 2.2(a) hereof.
"Distribution Agreement" means the Distribution Agreement, dated as of
December 16, 1996, by and between Florida Progress and Echelon.
"Echelon" has the meaning set forth in the introductory paragraph
hereof.
"Employee Benefit Plans" has the meaning set forth in Section 3.13
hereof.
"Employee Loans" means the loans described in Part IX of Schedule I.
"Encumbrance" has the meaning set forth in Section 3.3 hereof.
"Environmental Claims" means administrative, regulatory or judicial
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,
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. ss.
9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
ss. 6901 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.;
the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et
seq.; and their state and local counterparts and equivalents.
"ERISA" has the meaning set forth in Section 3.13 hereof.
"Escrow Agent" means LandAmerica Financial Group, a Virginia
corporation.
"Escrow Closing" means the delivery on the Escrow Closing Date to
Escrow Agent by each of Buyer and Seller of the agreements, documents and
instruments specified in Sections 7.4 and 7.5 hereof, respectively.
"Escrow Closing Date" means the date specified as such in the initial
Escrow Date Notification Certificate delivered by Seller to Buyer; provided,
that if Seller shall deliver one or more subsequent Escrow Date Notification
Certificates in accordance with Section 7.3 hereof, the Escrow Closing Date
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
Section 7.3 hereof.
"Escrowed Items" has the meaning set forth in Section 7.7 hereof.
"Excepted Leases" has the meaning provided in Schedule I.
"Excess Cash Amount" means the aggregate amount of cash and cash
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
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.
"Excluded Liabilities" means any liabilities or obligations of Seller
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
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
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 Subsidiaries
(including the employment agreements described on Schedule XIII 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
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. Michael Doramus, Larry J. Newsome, Susan G. Johnson and Julio A.
Maggi.
"Existing Debt" means the indebtedness described in Schedule II
annexed hereto and made a part hereof; provided, that, in no event shall
"Existing Debt" include any or all of the Other Existing Debt.
"Financial Statements" has the meaning set forth in Section 3.17(a)
hereof.
"Florida Progress" means Florida Progress Corporation, a Florida
corporation.
"GAAP" has the meaning set forth in Section 3.17(a) hereof.
"Hazardous Materials" means (a) any petroleum or petroleum products,
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.
"Heller Lease" means the Lease Agreement, dated as of January 21,
2000, between Heller 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
sentence, paragraph or section in which used.
"HSR Act" has the meaning set forth in Section 3.3 hereof.
"Improvements" means all buildings, structures and other improvements
existing upon the Land.
"including", "include" or "includes" mean including as an example,
without limiting the generality of the description.
"Indemnitee" has the meaning set forth in Section 10.3 hereof.
"Indemnitor" has the meaning set forth in Section 10.3 hereof.
"Intangible Personal Property" means the Intellectual Property and
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
subsidiaries in all assignable credit records, security codes, assignable
telephone numbers, warranties and guarantees; provided, that in no event shall
"Intangible Personal Property" include any or all of the Other Intangible
Personal Property.
"Intellectual Property" means all trademarks, trade names, service
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;
provided, that in no event shall "Intellectual Property" include any or all of
the Other Intellectual Property.
"Joint Venture Interests" means Seller's equity interests in the joint
ventures described in Part VI of Schedule I.
"Land" means, singularly or collectively, the various real properties
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
of the Commercial Property which are more particularly described on Schedule III
annexed hereto and made a part hereof; provided, that in no event shall "Leases"
include any or all of the Other Leases.
"Litigation" has the meaning set forth in Section 3.9 hereof.
"Losses" has the meaning set forth in Section 10.3 hereof.
"Material Adverse Effect" means a material adverse effect on the
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
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.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
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).
"Minimum Cash Amount" means $21,275,000.
"NationsBank Tower" means the 26-story Class A office tower located at
One Progress Plaza, St. Petersburg, Florida.
"Net Sale Proceeds" means, for any Pending Transaction, the gross cash
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.
"Other Assets" means the "Assets" as defined in the Subscription
Agreement.
"Other Assumed Liabilities" means the "Assumed Liabilities" as defined
in the Subscription Agreement.
"Other Buyer" means "Company" as defined in the Subscription
Agreement.
"Other Contracts" means the "Contracts" as defined in the Subscription
Agreement.
"Other Existing Debt" means the "Assumed Debt" as defined in the
Subscription Agreement.
"Other Intangible Personal Property" means the "Intangible Personal
Property" as defined in the Subscription Agreement.
"Other Intellectual Property" means the "Intellectual Property" as
defined in the Subscription Agreement.
"Other Leases" means the "Leases" as defined in the Subscription
Agreement.
"Other Permits" means the "Permits" as defined in the Subscription
Agreement.
"Other Personalty" means the "Personalty" as defined in the
Subscription Agreement.
"Other Real Estate Assets" means the "Real Estate Assets" as defined
in the Subscription Agreement.
"Other Tangible Personal Property" means the "Tangible Personal
Property" as defined in the Subscription Agreement.
"Pending Transactions" has the meaning set forth in Section 5.3
hereof.
"Permits" means the licenses or permits required to be maintained by
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
hereof; provided, that in no event shall "Permits" include any or all of the
Other Permits.
"Person" means and includes an individual, a partnership, a joint
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
Personal Property; provided, that in no event shall "Personalty" include any or
all of the Other Personalty.
"Pre-Approved Expenditures" means the aggregate amount of (i) all
expenditures of Seller described in Part III of Schedule XV annexed hereto and
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
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
Expenditures (as of the Escrow Closing Date specified in the initial Escrow Date
Notification Certificate delivered by Seller pursuant to Section 7.3 hereof)
exceed $7,750,000.
"Purchase Price" has the meaning set forth in Section 2.1 hereof.
"Radon" has the meaning set forth in Section 12.17 hereof.
"Real Estate Assets" means, collectively, the Residential Property
(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
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.
"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 4701 Broadway Avenue, Tampa, Florida.
"Subscription Agreement" means the Subscription Agreement, dated as of
January 21, 2000, by and among Heller 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.
"Tax Credit LP Interest Purchase Agreement" means the Purchase
Agreement, dated as of January 13, 2000, by and between Heller 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
1980 Saturn Street, Monterey Park, California.
"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.
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, 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 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 Hart-Scott-Rodino 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 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 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.
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.
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.
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.
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 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.
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 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
Heller 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, 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 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
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:
(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 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 "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
trade name, 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
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, 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).
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 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 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 Heller 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:
(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 Heller 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.
Section 7. Closing.
7.1 Time and Place. The Closing will take place at the offices of
White & Case LLP, 1155 Avenue of the Americas, New York, New York 10036 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 450 Carillon Parkway, Suite 200, St. Petersburg,
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 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 bill 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; 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);
(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.
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 Donaldson, Lufkin & Jenrette 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, 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 Heller 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.
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 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 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 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.
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 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.
ss. 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 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.
(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 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
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Facsimile: (727) 803-8203
Attention: Darryl A. LeClair
with a copy to:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Facsimile: (727) 803-8203
Attention: Susan Glatthorn Johnson, Esq.
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 354-8113
Attention: William F. Wynne, Jr., Esq.
and a copy to:
EIN Acquisition Corp.
950 Third Avenue
New York, New York 10022
Facsimile: (212) 688-7908
Attention: James Haber
with a copy to:
Brown Raysman Millstein Felder and Steiner LLP
120 West 45th Street
New York, New York 10036
Facsimile: (212) 840-2429
Attention: Robert M. Unger, Esq.
(b) if to Buyer, to it at:
c/o Equis Financial Group
One Canterbury Green, 8th Floor
Stamford, Connecticut 06901
Facsimile: (203) 363-0861
Attention: Gary D. Engle
with a copy to:
Steel Hector & Davis LLP
200 South Biscayne Boulevard
Miami, Florida 33131
Facsimile: (305) 577-7001
Attention: Thomas V. Eagan, P.A.
(c) if to Escrow Agent, to it at:
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Facsimile: (813) 740-0595
Attention: Juanita M. Shuster
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.
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.
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 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 Darryl A. LeClair, W. Michael Doramus,
Julio A. Maggi, Larry J. Newsome, Susan G. Johnson, J. Mark Stroud, Thomas D.
Wilson, Antonia P. Williams, Timothy S. Tinsley or K. Brent Little.
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]
<PAGE>
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:___________________________
Name:_____________ Date: January ____, 2000
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:___________________________
Name:______________ Date: January ____, 2000
<PAGE>
WITNESSED BY: ECHELON AT TWENTY MILE VILLAGE, INC.,
a Florida corporation
___________________
Name:______________ By:______________________________
Name:____________________________
___________________ Title:___________________________
Name:______________ Date: January ____, 2000
WITNESSED BY: NEW FOURTH RESIDENTIAL LIMITED
PARTNERSHIP, a Texas Limited
Partnership
By: Echelon General Partner, Inc., a
Florida Corporation,
its general partner
___________________
Name:______________ By:______________________________
Name:____________________________
Title:___________________________
Date: January ____, 2000
WITNESSED BY: WATTERS CREEK LIMITED PARTNERSHIP,
a Texas Limited Partnership
By: Echelon General Partner II, Inc.,
a Florida Corporation,
its general partner
___________________
Name:______________ By:______________________________
Name:____________________________
___________________ Title:___________________________
Name:______________ Date: January ____, 2000
<PAGE>
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:___________________________
Name:______________ Date: January ____, 2000
WITNESSED BY: GALLOWAY-TRIPP SF LIMITED PARTNERSHIP, a
Texas Limited Partnership
By: Echelon General Partner II, Inc., a
Florida Corporation,
its general partner
___________________
Name:______________ By:______________________________
Name:____________________________
___________________ Title:___________________________
Name:______________ Date: January ____, 2000
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:___________________________
Name:______________ Date: January ____, 2000
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
<PAGE>
BUYER:
WITNESSED BY: ECHELON RESIDENTIAL LLC,
a Delaware limited liability company
By: Equis Corporation, a Massachusetts
corporation, its managing member
___________________
Name:______________ By:_____________________________
Name:___________________________
___________________ Title:__________________________
Name:______________ Date: January ____, 200
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
<PAGE>
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
<PAGE>
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
<PAGE>
ECHELON CARILLON THREE, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
ECHELON AT MCNULTY, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
HIGHPOINT CENTER HEALTH CLUB, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
ECHELON GENERAL PARTNER AFFORDABLE
HOUSING, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
<PAGE>
ECHELON AT BAY ISLE KEY, 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
<PAGE>
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 ____, 2000
KNOX STREET CAPITAL, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
<PAGE>
BAYBRIDGE APARTMENTS, LTD.
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
200 CARILLON, L.L.C.
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
SOUTH GARNETT RESIDENTIAL LIMITED
PARTNERSHIP
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
RESIDENTIAL 98TH MEMORIAL CREEK TURNPIKE
LIMITED PARTNERSHIP
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
<PAGE>
MISSION RANCH LIMITED PARTNERSHIP
By:__________________________________
Name:________________________________
Title:_______________________________
Date: January ____, 2000
<PAGE>
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:
______________________________
______________________________
______________________________
______________________________
<PAGE>
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:
<PAGE>
EXHIBIT B
FORM OF
BILL 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 Bill 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.
IN WITNESS WHEREOF, this Bill 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:________________________
<PAGE>
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:________________________
<PAGE>
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:_________________________
<PAGE>
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
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: __________________
<PAGE>
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:
<PAGE>
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:
<PAGE>
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
<PAGE>
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.
<PAGE>
EXHIBIT H
INTENTIONALLY OMITTED
<PAGE>
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:
<PAGE>
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: ________________________
<PAGE>
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.
<PAGE>
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 Susan Glatthorn Johnson, Esq.
General Counsel & Senior Vice President
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
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:____________________________
<PAGE>
EXHIBIT L
JOINT DIRECTION LETTER
[February] __, 2000
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Attention: Juanita M. Shuster
Dear Ms. Shuster:
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 Heller 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 Heller 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:
HELLER 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:_____________________
<PAGE>
EXHIBIT M
JOINT INSTRUCTION LETTER
[February] __, 2000
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Attention: Juanita M. Shuster
Dear Ms. Shuster:
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 Heller 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 Heller Lease) as follows: [Heller 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.
<PAGE>
IN WITNESS WHEREOF, this irrevocable Joint Instruction Letter has been
signed this __ day of [February], 2000.
ECHELON RESIDENTIAL LLC, as Buyer
By:
------------------------------
Name:
Title:
HELLER 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:
<PAGE>
EXHIBIT C
================================================================================
SUBSCRIPTION AGREEMENT
BY AND AMONG
ECHELON INTERNATIONAL CORPORATION
AND
CERTAIN OF ITS SUBSIDIARIES,
COLLECTIVELY, AS TRANSFEROR,
AND
HELLER AFFORDABLE HOUSING OF FLORIDA, INC.,
AS COMPANY
JANUARY 21, 2000
================================================================================
<PAGE>
Table of Contents
Section 1. Definitions and References..........................................1
Section 2. Transfer of Assets; Assumption of Liabilities.......................8
2.1 Transfer Value...................................................8
2.2 Assumption of Liabilities.........................................9
2.3 Pending Transactions..............................................9
Section 3. Transferor's Representations and Warranties........................10
3.1 Due Organization and Good Standing of Transferor.................10
3.2 Authorization and Validity of Agreement..........................10
3.3 Consents and Approvals; No Violations...........................11
3.4 Title to Assets; Encumbrances.................................11
3.5 Ownership of Mortgage Loans......................................12
3.6 Environmental Laws and Regulations...............................12
3.7 Leases...........................................................13
3.8 Litigation.......................................................13
3.9 Land Use.........................................................13
3.10 Contracts........................................................14
3.11 Permits..........................................................14
3.12 Assumed Debt.....................................................14
3.13 Intellectual Property............................................15
3.14 Insurance........................................................16
3.15 Assets...........................................................16
3.16 Compliance with Laws.............................................16
3.17 Year 2000........................................................16
3.18 Investment Intention.............................................16
3.19 No Other Representations or Warranties...........................16
Section 4. Company's Representations and Warranties...........................17
4.1 Due Organization and Good Standing of Company....................17
4.2 Authorization and Validity of Agreement..........................17
4.3 Capitalization...................................................17
4.4 Consents and Approvals; No Violations............................17
4.5 Condition of the Assets..........................................18
4.6 Liens............................................................18
4.7 Sufficient Funds.................................................19
4.8 Title and Survey.................................................19
4.9 Inspection.......................................................19
4.10 Company Liquidity................................................19
4.11 No Other Representations or Warranties...........................19
Section 5. Covenants..........................................................19
5.1 Compliance.......................................................19
5.2 Notices of Violations............................................20
5.3 Ownership of Assets..............................................20
5.4 Operation of Assets Subsequent to the Agreement Date.............20
5.5 Status of Agreements.............................................21
5.6 Further Assurances..............................................22
5.7 Consents.........................................................23
5.8 Bringdown of Transferor's Representations........................23
5.9 Cooperation Regarding Taxes......................................24
5.10 Insurance........................................................25
5.11 Reasonable Best Efforts..........................................25
5.12 Access to Information Concerning Assets..........................25
5.13 Notification of Certain Matters..................................25
5.14 HSR Act..........................................................26
5.15 Retention of Records.............................................26
5.16 Transfer of Preferred Stock......................................26
5.17 Maintenance of Liquidity.........................................26
Section 6. Conditions Precedent to Closing....................................26
6.1 Company Conditions...............................................26
6.2 Transferor Conditions............................................27
Section 7. Closing............................................................29
7.1 Time and Place...................................................29
7.2 Closing Expenses.................................................29
7.3 Notification of Escrow Closing Date..............................29
7.4 Documents and/or Deliveries......................................29
7.5 Company Documents and/or Deliveries..............................32
7.6 Execution and Delivery of Closing Statements.....................33
7.7 Joint Instructions to Escrow Agent...............................32
7.8 Further Deliveries...............................................33
Section 8. Brokers............................................................34
Section 9. Termination and Abandonment........................................34
9.1 Termination......................................................34
9.2 Effect of Termination............................................35
Section 10. Risk of Loss; Indemnity...........................................36
10.1 Casualty.........................................................36
10.2 Condemnation.....................................................36
10.3 Indemnity........................................................37
Section 11. Special Environmental Indemnity...................................38
11.1 Environmental Liabilities........................................38
11.2 Proceedings in Respect of Claims.................................39
11.3 Assignment of Indemnity..........................................41
Section 12. Miscellaneous.....................................................41
12.1 Litigation......................................................41
12.2 Escrow Obligations of Escrow Agent.............................41
12.3 Notices.........................................................43
12.4 Entire Agreement................................................45
12.5 Successors and Assigns..........................................46
12.6 Headings........................................................46
12.7 Applicable Law..................................................46
12.8 Severability....................................................46
12.9 Counterparts....................................................46
12.10 No Waiver of Default............................................46
12.11 Confidentiality.................................................47
12.12 Recourse Limited................................................47
12.13 Business Day....................................................47
12.14 Recordation.....................................................47
12.15 Jury Waiver.....................................................48
12.16 Public Announcements............................................48
12.17 Radon Gas.......................................................48
12.18 Bulk Sales Law Waiver...........................................48
12.19 Knowledge.......................................................49
12.20 Amendments, Modifications and Supplements.......................49
12.21 Representations and Warranties..................................49
12.22 Performance and Discharge.......................................49
12.23 Section 351 of the Code.........................................49
<PAGE>
SCHEDULES
Schedule I - List of Assets
Schedule II - List of Assumed Debt
Schedule III - Leases
Schedule IV - Consents
Schedule V - Liens on Real Estate Assets
Schedule VI - Liens on Mortgage Loans
Schedule VII - Hazardous Materials
Schedule VIII - Real Estate Contracts
Schedule IX - Intellectual Property
Schedule X - Pending Transactions
Schedule XI - Land Use
Schedule XII - Litigation
Schedule XIII - List of Subsidiary Non-Qualification Information
Schedule XIV - Violations
Schedule XV - Insurance
Schedule XVI - Title Insurance Commitments or Other Reports
Schedule XVII - Surveys
Schedule XVIII - List of Entities Acquiring Preferred Stock
Schedule XIX - Terms of Required Consents
<PAGE>
EXHIBITS
Exhibit A - Form of Special Warranty Deed
Exhibit B - Form of Bill 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 Title Affidavit
Exhibit G - Form of Gap Indemnity
Exhibit H - Form of FIRPTA Affidavit
Exhibit 7.7 Form of Escrow Agent Joint Direction Letter
Exhibit 7.8 Form of Escrow Agent Joint Instruction Letter
<PAGE>
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is made as of the 21st
day of January, 2000, by and among ECHELON INTERNATIONAL CORPORATION, a Florida
corporation ("Echelon"), and various of its subsidiaries signatory hereto (each,
a "Subsidiary", and collectively, the "Subsidiaries") (Echelon and the
Subsidiaries are collectively referred to herein as "Transferor"), and HELLER
AFFORDABLE HOUSING OF FLORIDA, INC., a Florida corporation ("Company"). All
capitalized terms used herein shall have the meanings set forth in Section 1
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 annexed hereto and made a part hereof (collectively, the "Assets");
WHEREAS, Transferor desires to transfer all of Transferor's right,
title and interest in and to the Assets as an investment in Company pursuant to
and in accordance with the terms and provisions of this Agreement in exchange
for 2,000 shares of Preferred Stock of the Company (the "Shares") and
$51,300,000 in cash (subject to the adjustments set forth in Section 2.1 hereof)
("Cash Consideration"); and
WHEREAS, the transfer pursuant to this Agreement is intended, in
connection with a common plan for the capitalization of Company, together with a
contribution of property to Company by Heller Financial, Inc. in exchange for
shares of common stock of Company, to be a contribution to the capital of
Company pursuant to Section 351 of the Code;
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, Transferor agrees to
contribute, assign and transfer to Company, and Company agrees to acquire and
assume from Transferor, in exchange for the Shares and the Cash Consideration
and on the terms and subject to the conditions herein set forth, all of
Transferor's right, title and interest in and to the Assets and the Assumed
Liabilities.
Section 1. Definitions and References.
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
hereof.
"Agreement Date" means the date upon which this Agreement has been
executed and delivered by Transferor, Company and Escrow Agent.
"Asset Sales Proceeds" has the meaning set forth in Section 5.3
hereof.
"Assets" has the meaning set forth in the first recital hereof.
"Assumed Debt" means the indebtedness (as of the Closing Date)
described in Schedule II annexed hereto and made a part hereof.
"Assumed Liabilities" has the meaning set forth in Section 2.2 hereof.
"Bringdown Certificate" has the meaning set forth in Section 5.8
hereof.
"Broker" has the meaning set forth in Section 8 hereof.
"Business Day" means any day, other than a Saturday, Sunday or a day
on which banks located in the State of New York shall be authorized or required
by law to close.
"Claim" has the meaning set forth in Section 10.3 hereof.
"Claim Notice" has the meaning set forth in Section 10.3 hereof.
"Closing" means the consummation of the transfer of the Assets by or
on behalf of Transferor to Company and issuance of the Preferred Stock, the
payment of the Cash Consideration, and assumption of the Assumed Liabilities by
Company, pursuant to Section 7 hereof.
"Closing Date" has the meaning specified in Section 7.1 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission Filings" means all forms, reports, registration statements
filed by Transferor with the Securities and Exchange Commission since December
18, 1996.
"Common Stock and Subordinated Debt Subscription Agreement" means the
Common Stock and Subordinated Debt Subscription Agreement, dated as of January
21, 2000, by and between Company and Heller Financial Inc., a Delaware
corporation.
"Company" has the meaning set forth in the introductory paragraph
hereof.
"Contracts" means, collectively, (i) the contracts, agreements and
commitments described on Schedule VIII annexed hereto and made a part hereof,
(ii) any contract, agreement or commitment by which Transferor is bound
primarily affecting or relating to any of the Assets (excluding Leases,
Encumbrances on title and any documents and instruments related to the Assumed
Debt) which involves base payments or the performance of services by Transferor
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
Transferor on not more than 90 days notice without penalty and (iii) any and all
contracts, agreements and commitments by which Transferor is bound primarily
affecting or relating to any of the Assets (excluding Leases, Encumbrances on
title and any documents and instruments related to the Assumed Debt) and which
are entered into after the Agreement Date in compliance with the provisions of
this Agreement.
"County" means a political subdivision of the State within which a
Real Estate Asset is situated.
"Echelon" has the meaning set forth in the introductory paragraph
hereof.
"Encumbrance" has the meaning set forth in Section 3.3 hereof.
"Environmental Claims" has the meaning set forth in Section 11.1
hereof.
"Environmental Law" means any federal, state or local statute, law,
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. ss.
9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
ss. 6901 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.;
the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et
seq.; and their state and local counterparts and equivalents.
"Escrow Agent" means LandAmerica Financial Group, a Virginia
Corporation.
"Escrow Closing" means the delivery on the Escrow Closing Date to
Escrow Agent by each of Company and Transferor of the agreements, documents and
instruments specified in Sections 7.4 and 7.5 hereof, respectively.
"Escrow Closing Date" means the date specified as such in the initial
Escrow Date Notification Certificate delivered by Transferor to Company;
provided, that if Transferor shall deliver one or more subsequent Escrow Date
Notification Certificates in accordance with Section 7.3 hereof, the Escrow
Closing Date shall mean the date specified as such in the last Escrow Date
Notification Certificate theretofore delivered by Transferor to Company.
"Escrow Date Notification Certificate" has the meaning set forth in
Section 7.3 hereof.
"Escrowed Items" has the meaning set forth in Section 7.7 hereof.
"Excepted Leases" has the meaning provided in Schedule I of the
Purchase and Sale Agreement.
"Excess Amount" has the meaning set forth in Section 2.3(a) hereof.
"Excluded Liabilities" means any liabilities or obligations of
Transferor or its affiliates or predecessors other than the Assumed Liabilities.
"GAAP" means generally accepted accounting principles (as in effect
from time to time).
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Hazardous Materials" means (a) any petroleum or petroleum products,
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 Materials",
"hazardous wastes", "hazardous materials", "extremely Hazardous Materials",
"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.
"Heller Lease" means the Lease Agreement, dated as of January 21,
2000, between Company 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
sentence, paragraph or section in which used.
"HSR Act" has the meaning set forth in Section 3.3 hereof.
"Improvements" means all buildings, structures and other improvements
existing upon the Land.
"including", "include" or "includes" mean including as an example,
without limiting the generality of the description.
"Indemnitee" has the meaning set forth in Section 10.3 hereof.
"Indemnitor" has the meaning set forth in Section 10.3 hereof.
"Intangible Personal Property" means the Intellectual Property and
other intangible personal property used primarily in connection with the 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 Subsidiaries
in all assignable credit records, security codes, assignable telephone numbers,
warranties and guarantees; provided, that in no event shall "Intangible Personal
Property" include any intellectual property or other intangible personal
property used primarily in connection with the Other Assets.
"Intellectual Property" means all trademarks, trade names, service
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 Assets, as more
particularly described in Schedule IX annexed hereto and made a part hereof;
provided, that in no event shall "Intellectual Property" include any
intellectual property used in connection with the Other Assets and in any event
Company shall not obtain any use of the name "Echelon" except to the extent the
use of such name is licensed pursuant to the Lease.
"Land" means, singularly or collectively, the various real properties
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
of the Real Estate Assets which are more particularly described on Schedule III
annexed hereto and made a part hereof.
"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, easement, servitude or charge of any kind, including, without
limitation, any irrevocable license, conditional sale or other title retention
agreement, any lease in the nature thereof, or any other right of or arrangement
with any creditor to have its claim satisfied out of any specified property or
asset with the proceeds therefrom prior to the satisfaction of the claims of the
general creditors of the owner thereof, whether or not filed or recorded, or the
filing of, or agreement to execute as "debtor", any financing or continuation
statement under the Uniform Commercial Code of any jurisdiction or any federal,
state or local lien imposed pursuant to any Environmental Laws.
"Losses" has the meaning set forth in Section 10.3 hereof.
"Material Adverse Effect" means a material adverse effect on the
business, results of operations or financial condition of the Assets taken as a
whole.
"Merger" means the merger of EIN Acquisition Corp., a Florida
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.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
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).
"Mortgage Loans" means the real estate mortgage loans described in
Part IV of Schedule I.
"Net Proceeds" means, for a Pending Transaction, the gross cash
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 Assumed Debt which is secured by or directly related to the respective
assets which were sold, transferred or otherwise disposed or 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.
"Omnibus Agreement" means the Omnibus Agreement, dated as of January
21, 2000, between EIN Acquisition Corp., as seller and Heller Financial, Inc.,
as purchaser.
"Other Assets" means the "Assets" as defined in the Purchase and Sale
Agreement.
"Other Assumed Liabilities" means the "Assumed Liabilities" as defined
in the Purchase and Sale Agreement.
"Other Buyer" means the "Buyer" as defined in the Purchase and Sale
Agreement.
"Other Real Estate Assets" means the "Real Estate Assets" as defined
in the Purchase and Sale Agreement.
"Pending Transactions" has the meaning set forth in Section 5.3
hereof.
"Permits" means any certificates, licenses, authorizations,
registrations or permits required to be maintained by Transferor for the
development, use or occupancy of any portion of any of the Real Estate Assets;
provided, that in no event shall "Permits" include any licenses or permits
required to be maintained for the development, use or occupancy of any portion
of any of the Other Real Estate Assets.
"Person" means and includes an individual, a partnership, a joint
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
Personal Property.
"Preferred Stock" means the shares of Series A Cumulative Redeemable
Preferred Stock, par value $1,000 per share, of Company.
"Purchase and Sale Agreement" means the Purchase and Sale Agreement,
dated as of January 21, 2000, by and among Echelon and its subsidiaries
signatory thereto Echelon Residential LLC, a Delaware limited liability company,
and Escrow Agent.
"Radon" has the meaning set forth in Section 12.17 hereof.
"Real Estate Assets" means, collectively, the real property, together
with the Personalty, Contracts, Leases, and Permits relating thereto, as more
particularly described in Schedule I.
"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 XIX annexed hereto and made a part hereof consenting to the
transactions contemplated by this Agreement and containing terms and provisions
no more onerous to Company than those set forth in Schedule XIX and otherwise in
form and substance reasonably satisfactory to Company.
"Residential Property Restricted Cash Bank Accounts" means the bank
accounts set forth in Part VI of Schedule I annexed hereto and made a part
hereof.
"Securities Act" has the meaning set forth in Section 3.18 hereof.
"Security Deposit Amount" means the aggregate 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 (as defined in the Purchase and Sale Agreement).
"Subsidiary" means each of the entities signatory hereto other than
Echelon, Company and Escrow Agent.
"Surveys" means the surveys with respect to the Real Estate Assets
described on Schedule XVII annexed hereto and made a part hereof.
"Surviving Corporation" has the meaning specified in the Merger
Agreement.
"Tangible Personal Property" means the personal property used
primarily in connection with the Assets (including, without limitation, the
tangible personal property described in Schedule I) other than the Intangible
Personal Property; provided, that in no event shall "Tangible Personal Property"
include any personal property used primarily in connection with the Other
Assets.
"Tax Credit LP Interest Purchase Agreement" means the Purchase
Agreement, dated as of January 13, 2000, by and between Company, Echelon
Affordable Housing, Inc., a Florida corporation, and Echelon.
"Tax Credit LP Interests" means the equity interests of Echelon and
its subsidiaries 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 XVI annexed hereto
and made a part hereof.
"Transfer Value" has the meaning set forth in Section 2.1 hereof.
"Transferor" has the meaning set forth in the introductory paragraph
hereof.
Section 2. Transfer of Assets; Assumption of Liabilities.
2.1 Transfer Value. The aggregate consideration to be paid by Company
in exchange for the Assets (the "Transfer Value") shall be (A) an aggregate
amount equal to (x) $51,300,000, minus (y) the Security Deposit Amount, minus
(z) the aggregate amount set forth under the column "Reduction in Transfer
Value" on Schedule X with respect to the Pending Transactions if consummated on
or prior to the Escrow Closing Date and (B) 2,000 shares of Preferred Stock. The
Transfer Value shall be calculated in accordance with the immediately preceding
sentence by making reference to the notice to be delivered pursuant to Section
7.4(f) hereof. The Transfer Value before reduction by the aggregate amount of
"Reduction in Transfer Value" amounts shall be allocated among the Assets in
accordance with Schedule XVIII herein.
2.2 Assumption of Liabilities. On the terms and subject to the
conditions of this Agreement, on the Closing Date, Company shall assume and pay,
perform and discharge when due, without duplication, (i) the Assumed Debt (as in
effect on the Closing Date), including any prepayment obligations and (ii) the
executory obligations of Transferor arising on or after the Closing Date out of
the Permits, Contracts and Leases (collectively, the "Assumed Liabilities").
Except for the Assumed Liabilities and the executory obligations of Transferor
under the Contracts, Company and Transferor agree that Company shall have no
responsibility, obligation, or duty with respect to any other liability of
Transferor, including, without limitation, the Other Assumed Liabilities, all of
which shall be assumed by the Other Buyer.
2.3 Pending Transactions.
(a) In the event that a Pending Transaction set forth on Schedule
X which is a sale of any of the Assets is consummated after the Agreement Date
and prior to the Closing Date, (i) Company will not acquire any of the Assets
that are the subject of such Pending Transaction, (ii) Transferor shall promptly
deliver to Escrow Agent (in accordance with Section 5.3 hereof) the Net Proceeds
from such Pending Transaction, (iii) Company and Transferor shall instruct the
Escrow Agent not later than the Escrow Closing Date (in accordance with Section
7.7 hereof) to distribute such Net Proceeds as follows: (A) an amount equal to
the Reduction in Transfer Value (as set forth on Schedule X hereto) shall be
delivered to or at the direction of Transferor, (B) an amount equal to fifteen
(15) percent of the Excess Amount (as defined below) shall be delivered to the
Lessee (as defined in the Heller Lease) and (C) eighty-five (85) percent of the
Excess Amount shall be delivered to Company to be held in the Cash Collateral
Account pursuant to the Heller Lease and (iv) Company will not assume or
undertake to discharge any liability or perform any contract or agreement with
respect to such Pending Transaction. For purposes hereof, "Excess Amount" means
an amount equal to the difference between (A) the aggregate Net Proceeds
received by Transferor in connection with such Pending Transaction and (B) the
Reduction in Transfer Value (as set forth on Schedule X hereto) with respect to
the Assets that are the subject of such Pending Transaction; provided, that in
no event shall the Excess Amount be less than $0. The Excess Amount shall be
calculated in accordance with the immediately preceding sentence by making
reference to the notice to be delivered pursuant to Section 7.4(f) hereof.
(b) In the event that a Pending Transaction set forth on Schedule
X which is a refinancing of any of the Assets is consummated after the Agreement
Date and prior to the Closing Date, (i) the New Debt (as described on Schedule
X) shall be included in Assumed Debt, (ii) Transferor shall promptly deliver to
Escrow Agent (in accordance with Section 5.3 hereof) the Net Proceeds from such
Pending Transaction, (iii) Company and Transferor shall instruct the Escrow
Agent not later than the Escrow Closing Date (in accordance with Section 7.7
hereof) to distribute (A) fifteen (15) percent of the Net Proceeds to the Lessee
and (B) eighty-five (85) percent of the Net Proceeds to Company to be held in
the Cash Collateral Account pursuant to the Heller Lease and (iv) Company will
not assume or undertake to discharge any liability with respect to the
Refinanced Debt (as described on Schedule X hereto).
Section 3. Transferor's Representations and Warranties.
Transferor makes the following representations and warranties to
Company, which representations and warranties shall not survive the Escrow
Closing Date, except for the representation and warranty set forth in Section
3.18 hereof which shall survive for a period of one year after the 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
Transferor of any of the following representations and warranties, Company'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 Company's sole remedies in
connection therewith shall be those expressly set forth in Section 9.2 hereof)
and Transferor 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 Transferor.
(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 Company. Except as set forth on Schedule
XIII 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 Company. Except as set
forth on Schedule XIII, 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.
3.2 Authorization and Validity of Agreement. Transferor 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 IV, to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by Transferor, 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 IV). This Agreement has been duly executed and delivered
by Transferor and, assuming that this Agreement constitutes a valid and binding
obligation of Company, is a valid and binding obligation of Transferor
enforceable against Transferor 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 Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), applicable to the sale of Assets to Company 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 IV, 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 IV, 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
Mortgage Loans, with respect to which no representation or warranty is being
made pursuant to this Section 3.4), subject to no Encumbrance or other
restriction of any kind or character, except for (a) liens reflected on Schedule
V 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.
3.5 Ownership of Mortgage Loans. Transferor or its relevant
Subsidiary, as applicable, is the owner and holder of the Mortgage Loans, free
and clear of all Encumbrances and claims of every kind other than those
described in Schedule VI annexed hereto and made a part hereof. True and
complete copies of the documents evidencing and securing the Mortgage Loans, and
any participation agreements relating thereto, have been made available for
review to Company. Except as set forth on Schedule VI, the documents evidencing
and securing the Mortgage Loans are in full force and effect and no defaults on
the part of the borrower or, to Transferor's knowledge, the lender thereunder
have occurred and are continuing. Except as set forth on Schedule VI, all
payments of principal and interest in respect of the Mortgage Loans are current.
Schedule VI sets forth the outstanding principal balance of each of the Mortgage
Loans as of the date indicated therein. To Transferor's knowledge, the Mortgage
Loans and each of the borrower's obligations thereunder are not subject to any
valid right of rescission, set-off, abatement, diminution, counterclaim or
defense which would prevent Company (or any of its assigns) from enforcing the
payment provisions of the documents evidencing and securing the Mortgage Loans,
including, without limitation, any payment guaranty or from foreclosing on the
assets that are security for such Mortgage Loans and Transferor has received no
notice of any such claims having been asserted. Transferor has not satisfied,
canceled or subordinated any of the promissory notes evidencing the Mortgage
Loans in whole or in part.
3.6 Environmental Laws and Regulations. Except as set forth on
Schedule VII annexed hereto and made a part hereof, and subject to Section 12.17
hereof, to the knowledge of Transferor:
(i) Hazardous Materials have not been generated, used,
treated or stored by Transferor on the Real Estate Assets, except for
quantities generated, used, treated or stored in compliance with
Environmental Laws and as required in connection with the normal
operations and maintenance of such Real Estate Assets;
(ii) Hazardous Materials have not been Released or disposed
of by Transferor on the 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;
(iii) Transferor is in compliance with Environmental Laws
and the requirements of permits issued under such Environmental Laws
with respect to the Real Estate Assets;
(iv) There are no pending or threatened Environmental Claims
against Transferor with respect to the 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 Transferor, or against any Person whose
liability for any Environmental Claim Transferor has retained or
assumed whether contractually or by operation of law, in each case to
the extent same relates to the Real Estate Assets;
(vi) Transferor has delivered to or otherwise made available
for inspection by Company true, complete and correct copies and
results of any reports, studies, analyses, tests or monitoring in the
possession of Transferor pertaining to Hazardous Materials in, on,
beneath or adjacent to any Real Estate Assets; and
(vii) There are no underground storage tanks located on the
Real Estate Assets.
3.7 Leases. Schedule III sets forth all Leases affecting any portions
of any of the Real Estate Assets and the Other Real Estate Assets 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 have been made available for review to
Company. 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 Transferor has neither sent nor received any notice of a material default
under any Lease which remains outstanding. The Real Estate Assets are not
subject to any ground leases.
3.8 Litigation. Schedule XII annexed hereto and made a part hereof
contains a current list of all actions, suits, arbitrations and proceedings
pending, or to Transferor's knowledge threatened, against or concerning the
Assets or the Other Assets. To Transferor's knowledge, there are no judgments,
orders or decrees entered in any lawsuit or proceeding against or concerning the
Assets or the Other Assets, other than as set forth on Schedule XII. Transferor
has received no written notice of any pending or threatened condemnation, taking
or similar proceeding affecting the Assets, or any pending public improvements
which would result in, nor has Transferor received written notice of, special
assessments affecting the Assets.
3.9 Land Use. With respect to the Real Estate Assets, Transferor has
not received any written notice from any governmental authority, and Transferor
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 XI
annexed hereto and made a part hereof, Transferor 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 or the Other Real Estate Assets for the purposes permitted by
the regulations governing the applicable zoning district.
3.10 Contracts. Except for the Leases, Encumbrances on title and the
documents and instruments relating to the Assumed Debt, Schedule VIII sets forth
all agreements, contracts and commitments by which Transferor is bound primarily
affecting or relating to the Assets or the Other Assets other than such
contracts, agreements or commitments that involve base payments or the
performance of services by Transferor 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 Transferor on not more than 90 days notice without
penalty relating to or affecting the Assets. True and complete copies of all of
the agreements, contracts and commitments referred to in Schedule VIII have been
made available for review to Company. Except as otherwise set forth on Schedule
IV and VIII, each agreement, contract and commitment referred to in Schedule
VIII 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 Transferor
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.
3.11 Permits. Transferor has obtained all material Permits necessary
for the development, use and occupancy of the Real Estate Assets (except for
those Permits relating to the development of the Real Estate Assets which are
not yet required to be issued), all of such Permits are in full force and
effect, and none of such Permits is the subject of any revocation proceeding,
suspension, forfeiture or the like.
3.12 Assumed Debt. Echelon or its relevant Subsidiary, as applicable,
is the borrower under the Assumed 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 Assumed 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 Assumed Debt and except for debt
incurred in connection with a Pending Transaction, 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 Assumed Debt are
current. True and complete copies of all agreements evidencing and securing the
Assumed Debt have been made available for review to Company.
3.13 Intellectual Property.
(a) Schedule IX sets forth a true and complete list of all
Intellectual Property, specifying, if applicable, the registration or
application numbers for each such item of Intellectual Property, owned by or
licensed to Echelon and/or its subsidiaries. Other than as set forth on Schedule
IX, neither Echelon nor any of its subsidiaries owns or uses any other item of
intellectual property which is material to the Assets or the Other Assets.
(b) Except as set forth on Schedule IX, 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 IX, 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 Transferor's knowledge, use of the Intellectual Property in connection with
the 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 IX, 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 IX.
(f) To the knowledge of Transferor, 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.
3.14 Insurance. Schedule XV annexed hereto and made a part hereof sets
forth a true and complete listing of all insurance policies maintained by
Transferor 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.
3.15 Assets. The Assets are all of the assets necessary for the Assets
to function and operate in substantially the same manner as the Assets have
recently functioned and been operated by Transferor.
3.16 Compliance with Laws. Except as set forth in the Commission
Filings or as set forth on Schedule XIV, Transferor is in compliance with all
applicable laws, regulations, orders, judgments and decrees (other than with
respect to environmental matters and federal securities laws, which are the
subject of specific representations contained in this Agreement).
3.17 Year 2000. There has not been nor is there 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 Transferor. There has not been nor is there reasonably expected to
be a Material Adverse Effect caused by the failure to be Year 2000 Compliant of
any products or services of Transferor sold or licensed to customers of
Transferor.
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.
3.18 Investment Intention. Transferor is acquiring the Preferred Stock
for its own account, for investment purposes only and not with a view to, or any
present intention of, the distribution thereof, except as a result of the
consummation of the transactions contemplated by the Merger Agreement.
Transferor will not, directly or indirectly, offer, transfer, sell, assign,
pledge, hypothecate or otherwise dispose of any of the Preferred Stock (or
solicit any offers to buy, purchase, or otherwise acquire any of the Preferred
Stock), except in compliance with the Securities Act of 1933, as amended (the
"Securities Act"). Transferor acknowledges that the Preferred Stock has not been
registered under the Securities Act or the securities laws of any state or other
jurisdiction and cannot be disposed of unless it is subsequently registered
under the Securities Act and any applicable state laws or exemption from such
registration is available.
3.19 No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 3 and in Section 8
hereof, neither Transferor nor any other Person makes any other express or
implied representation or warranty on behalf of Transferor or any of its
affiliates.
Section 4. Company's Representations and Warranties.
Company makes the following representations and warranties to
Transferor, which representations and warranties shall not survive the Escrow
Closing Date, except for (x) those representations and warranties set forth in
Sections 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 Company. Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida. Company has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted. Company is duly qualified or licensed to do business in Florida
and will, on or prior to the Closing Date, qualify to do business in each
jurisdiction where the Assets are located.
4.2 Authorization and Validity of Agreement. Company has the power and
authority to execute and deliver this Agreement and the Common Stock and
Subordinated Debt Subscription Agreement, to perform its obligations hereunder
and thereunder and consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance of this Agreement and the Common Stock
and Subordinated Debt Subscription Agreement by Company, and the consummation by
it of the transactions contemplated hereby and thereby, have been duly
authorized and no other corporate, partnership or limited liability company
action on the part of Company is necessary to authorize the execution, delivery
and performance of this Agreement and the Common Stock and Subordinated Debt
Subscription Agreement by Company and the consummation of the transactions
contemplated hereby and thereby. This Agreement and the Common Stock and
Subordinated Debt Subscription Agreement have each been duly executed and
delivered by Company and each is a valid and binding obligation of Company
enforceable against Company 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 Capitalization. Immediately after the Closing Date, the authorized
capital stock of Company will consist of (i) 4,000 shares of common stock, par
value $1.00 per share, of which 1,200 shares will be issued and outstanding and
(ii) 2,000 shares of Preferred Stock, of which 2,000 shares will be issued and
outstanding. Immediately after the Closing Date, all issued and outstanding
shares of capital stock of Company will have been duly authorized and be validly
issued and outstanding, fully paid and nonassessable.
4.4 Consents and Approvals; No Violations. Assuming any filings
required under the HSR Act applicable to the transfer of the Assets to Company
are made and any applicable waiting period thereunder has been terminated or has
expired, the execution and delivery of this Agreement by Company and the
consummation by Company of the transactions contemplated hereby will not: (a)
violate any provision of the Certificate of Incorporation or By-Laws of Company,
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 Company 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
Company 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 Company 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.
4.5 Condition of the Assets. Company has conducted all due diligence
that Company deems necessary or desirable with respect to the Assets, the
Assumed Debt, 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 Transferor specifically set
forth in Section 3 hereof, Company will rely solely upon such due diligence in
acquiring the Assets and in assuming the Assumed Liabilities. Without limiting
the generality of the foregoing, Company acknowledges that Transferor makes and
will make no representation or warranty concerning environmental conditions
heretofore, now or hereafter existing on properties adjoining or proximate to
the Assets. Notwithstanding anything in this Agreement, it is expressly
understood and agreed that Company is acquiring the Assets "AS IS", "WHERE IS"
and "WITH ALL FAULTS", and that Transferor has not made and does not and will
not make any representations or warranties, express or implied, including any
with respect to the quality, physical condition, expenses, legal status, zoning,
value, utility or development or operating potential of the Assets, or the
absence of any Hazardous Materials on, in, under or near the Assets, or any
other matter or thing affecting or relating to the Assets, the 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.
Transferor 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 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 Transferor. As of the Agreement
Date, Company is not aware of any events, facts or circumstances which,
individually or in the aggregate, have or would have a Material Adverse Effect.
4.6 Liens. Company acknowledges that it is acquiring the Assets
subject to the matters described in Schedules V and VI and the Assumed Debt
described in Schedule II, and such other matters as are permitted pursuant to
the terms of this Agreement.
4.7 Sufficient Funds. Company has sufficient funds available to it to
acquire the Assets pursuant to this Agreement and will not, prior to Closing,
incur third party debt to finance any portion of the Transfer Value.
4.8 Title and Survey. Prior to the Agreement Date, Company has
reviewed (i) the Title Commitments or other reports with respect to the Real
Estate Assets described on Schedule XVI and (ii) the Surveys with respect to the
Real Estate Assets described on Schedule XVII. Company hereby acknowledges its
approval as of the Agreement Date of the condition of title to the Real Estate
Assets, subject to Transferor'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, Company has inspected the
Assets and any operating files maintained by Transferor or its property managers
in connection with the ownership, leasing, maintenance and/or management of the
Assets, including, without limitation, the Leases, lease files, operating
agreements, insurance policies, bills, invoices, receipts and other general
records relating to the Assets, correspondence, surveys, plans and
specifications, warranties for services and materials provided, environmental
assessments and similar materials, in each case, as Company has deemed necessary
in connection with making its determination to execute and deliver this
Agreement. Company hereby indemnifies Transferor and holds Transferor 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 Assets by Company or its agents other than injury or damages
resulting from Transferor's gross negligence or willful misconduct, and such
indemnity shall survive Closing or any termination of this Agreement.
4.10 Company Liquidity. Company has and through the Closing Date will
have assets which would be classified as cash and cash equivalents on a balance
sheet prepared in accordance with GAAP of not less than $15,000,000.
4.11 No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 4 and in Section 8
hereof, neither Company nor any other Person makes any other express or implied
representation or warranty on behalf of Company 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, Transferor 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 a Pending
Transaction 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 Transferor
receives any notice from any County, or any other 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, Transferor promptly will deliver a copy of
such notice to Company; and Company will have the option (but will not be
required) either to (a) participate with Transferor 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 Company's interests in and with respect
to any of the Real Estate Assets.
5.3 Ownership of Assets. During the period commencing on the Agreement
Date and ending on the Closing Date, Transferor shall not without the prior
consent of Company (which consent shall not be unreasonably withheld,
conditioned or delayed) directly or indirectly sell, transfer, encumber or
otherwise dispose of any of the Assets or any portion thereof to any Person,
other than sales, transfers, encumbrances 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 the transaction described in
Schedule X (the "Pending Transactions"); provided, that the Net Proceeds from
any sale, transfer, encumbrance or disposition of Assets, in whole or in part,
pursuant to the Pending Transactions consummated after the Agreement Date and
prior to the Closing Date (collectively, the "Asset Sales Proceeds") shall be
promptly delivered by Transferor 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 Transferor and Company, 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. Transferor
agrees that except for the Pending Transactions (including all transactions
incident thereto as set forth on Schedule X, 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 Purchase and Sale
Agreement, the Tax Credit LP Interest Purchase Agreement or the Merger Agreement
or otherwise consented to or approved by Company (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) Insofar as any such action relates to the Assets, 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; (ii) enter into any contract or commitment with respect to capital
expenditures; (iii) acquire (by merger, consolidation, or acquisition of stock
or assets or 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;
(iv) acquire a material amount of assets or securities; (v) 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;
(vi) 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; (vii) except as required by applicable law or GAAP, make any material
change in its methods of accounting for financial accounting or income tax
return filing purposes; (viii) 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); (ix) 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 Assumed Debt; or (x) agree, in writing or otherwise, to
take any of the foregoing actions;
(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 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 the
Pending Transactions, the Required Consents or as set forth on Schedule IV or
otherwise consented to or approved by Company (which consent or approval shall
not be unreasonably withheld, conditioned or delayed), Transferor will not do
any of the following:
(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 Assumed 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 Transferor 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 Transferor 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 Assumed 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 Assumed Debt.
(b) During the period commencing on the Agreement Date and ending
on the Closing Date, Echelon will not, without the prior consent or approval of
Company (which consent or approval shall not 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 Company under this
Agreement (it being expressly understood and agreed that in no event shall
Section 4.07 or 5.01 of the Merger Agreement be amended, modified or
supplemented (and in no event shall Transferor grant any consent or waiver with
respect to any such Section) without the prior consent of Company (not to be
unreasonably withheld, conditioned or delayed)). The parties hereto acknowledge
that Company is a third party beneficiary of the agreements made by Echelon
pursuant to Section 4.07 of the Merger Agreement and that Transferor shall be
required to provide Company 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 Transferor and Company 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 Company or
Transferor from time to time for the more effective transfer, assignment and
conveyance to Company of any of the Assets or the Assumed Liabilities, including
without limitation, obtaining the consent of third parties (without obligating
Company or Transferor or their respective affiliates to spend money or assume
obligations in connection therewith), as, in the reasonable opinion of Company
or Transferor, as the case may be, or their respective counsel, are necessary to
transfer, assign and convey the Assets to Company, the assumption by Company 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 Company (irrespective of whether such actions were at the request
of Transferor or Company). In addition to and not in limitation of the foregoing
provisions of this Section 5.6, Company 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 Transferor 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 Company 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 delivered by tenants pursuant to the Leases. The provisions of this
Section 5.6 shall survive Closing for a period of one year from the Closing
Date, except for the provisions of the preceding sentence, which shall survive
the Closing indefinitely.
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, Transferor agrees that it
will use its commercially reasonable efforts (without obligating Transferor 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,
Transferor will use commercially reasonable efforts (without obligating
Transferor or its affiliates to spend money or assume obligations in connection
therewith) to cooperate with Company in any lawful arrangement designed to
provide Company the benefits under any such documents.
5.8 Bringdown of Transferor's Representations. On the Escrow Closing
Date, Transferor shall deliver to Company 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 Transferor
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. Transferor'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
Transferor of any of Transferor's representations and warranties, Company'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 Company's sole remedies in
connection therewith shall be those expressly set forth in Section 9.2 hereof)
and Transferor 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 Transferor's representations and warranties). If, and only if, all of
the changes in Transferor's representations and warranties set forth in such
Bringdown Certificate (other than any changes related to a Pending Transaction),
taken in the aggregate, would have a Material Adverse Effect, then Company shall
have the right by written notice to Transferor actually received by Transferor
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
Transferor 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, Transferor shall, on each such new Escrow Closing Date, deliver to Company
a new Bringdown Certificate certifying as to the matters set forth above in this
Section 5.8 as of such new Escrow Closing Date.
5.9 Cooperation Regarding Taxes. After the Closing Date, Company and
Transferor 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 Company, Transferor 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,
returns, schedules, documents, work papers or other relevant materials. Company
and Transferor shall also make available to each other, as reasonably requested
and on a mutually convenient basis, personnel (including officers, directors,
employees and agents of Company or Transferor 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 5.9 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. Company and Transferor 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). Company and Transferor
agree to retain all records relevant to the tax basis of the Assets and tax
treatment of this Agreement for a period of seven years after the Closing Date.
The provisions of this Section 5.9 shall survive Closing for a period of seven
years after the Closing Date.
5.10 Insurance. During the period commencing on the Agreement Date and
ending on the Closing Date, Transferor will maintain the insurance policies
relating to the Real Estate Assets set forth on Schedule XV; provided, that
Transferor 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 Transferor, unless, in each
case, Company shall have requested in writing that Transferor not discontinue or
reduce, as the case may be, such insurance and shall have paid to Transferor in
immediately available funds all costs (including, without limitation, all
premiums) and expenses of Transferor 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, Company shall not be entitled to any refund or reimbursement of any
amounts previously paid by it to Transferor as contemplated above).
5.11 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 Company and Transferor 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 Transferor
as are necessary for consummation of the transactions contemplated by this
Agreement.
5.12 Access to Information Concerning Assets. During the period
commencing on the Agreement Date and ending on the Closing Date, Transferor
shall, upon reasonable notice, afford Company and its counsel, accountants,
consultants and other authorized representatives, reasonable access (subject to
the rights of tenants under the Leases) during normal business hours to the
employees, properties, books and records of Transferor in order that Company may
have the opportunity to make such investigations as it shall desire of the
Assets. Transferor shall furnish promptly to Company (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 Transferor's possession concerning the Assets as
Company may reasonably request. Transferor 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 Company shall from
time to time reasonably request in relation to the Assets.
5.13 Notification of Certain Matters. During the period commencing on
the Agreement Date and ending on the Closing Date, Transferor shall give prompt
notice to Company, and Company shall give prompt notice to Transferor, 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 Transferor and Company 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.
5.14 HSR Act. Company and Transferor 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.
5.15 Retention of Records. Except as otherwise agreed between Company
and Transferor in writing, Company shall, and shall cause its subsidiaries to,
retain all information relating directly and primarily to the Assets that is
delivered to or obtained by Company 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 Company 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) Company shall provide no less than 30 days' prior written
notice to Transferor specifying the information proposed to be destroyed or
disposed of and (2) if, prior to the scheduled date for such destruction or
disposal, Transferor requests in writing that any of the information proposed to
be destroyed or disposed of be delivered to Transferor, Company promptly shall
deliver the requested information to a location specified by Transferor, at
Transferor's sole cost and expense.
5.16 Transfer of Preferred Stock. Following the consummation of the
Merger and the Closing, Echelon shall distribute (as defined in Code Section
351(c)) the shares of Preferred Stock received by Echelon as set forth on
Schedule XVIII to Parent (as defined in the Merger Agreement).
5.17 Maintenance of Liquidity. At all times through and including the
thirtieth day after the Closing Date, Company shall have assets which would be
classified as cash and cash equivalents on a balance sheet prepared in
accordance with GAAP of not less than $15,000,000.
Section 6. Conditions Precedent to Closing.
6.1 Company Conditions. The obligation of Company 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 Company:
(a) Officer's Certificate. Echelon shall have delivered to
Company 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, Transferor has performed in all
material respects each of its obligations and complied in all material respects
with each agreement and covenant of Transferor to be performed or complied with
by it under this Agreement on or prior to such date, including the delivery of
the certificate required under Section 5.8 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) Purchase and Sale of Other Assets. The purchase and sale of
the Other Assets as contemplated by the Purchase and Sale Agreement 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 Assets. The leasing of the Assets as
contemplated by the Heller 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 Company 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, however, 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 Transferor Conditions. The obligation of Transferor 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 Transferor:
(a) Officer's Certificate. Company shall have delivered to
Transferor a certificate of the President or any Vice President of Company
certifying that, as of the Escrow Closing Date, Company has performed in all
material respects each of its obligations and complied in all material respects
with each agreement and covenant of Company 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 or
issuance of the Transfer Value) 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) Purchase and Sale of Other Assets. The purchase and sale of
the Other Assets as contemplated by the Purchase and Sale Agreement 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 Assets. The leasing of the Assets as
contemplated by the Heller 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 Company 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, however, 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.
Section 7. Closing.
7.1 Time and Place. The Closing will take place at the office of White
& Case LLP, 1155 Avenue of the Americas, New York, New York 10036 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
transfer 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 Transferor), 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 Transferor. Each of Company and Transferor shall be
responsible for its due diligence costs and expenses (including, without
limitation, the payment of the fees and disbursements of its attorneys) and
Transferor shall make any required payments to the Broker in accordance with
Section 8 hereof.
7.3 Notification of Escrow Closing Date. Transferor shall deliver to
Company 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 Transferor
to Company 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 Company, return the Escrowed Items to the party which had
previously deposited same with Escrow Agent, whereupon Transferor shall have the
right to deliver a new Escrow Date Notification Certificate to Company upon the
terms set forth above specifying a new Escrow Closing Date. Transferor 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 Transferor to the extent applicable
(other than those agreements, documents and instruments described in Sections
7.4(b)(vii), (b)(ix), (b)(x), (c)(i) (except that the allonge referred to
therein shall be delivered to Escrow Agent), (c)(ii), (c)(iii), (c)(iv) and
(d)(i) hereof, all of which shall have been made available to Company during
normal business hours at one or more locations previously identified to Company
(which location shall, in the case of the agreements, documents and instruments
described in Section 7.4(b)(vii) and (d)(i) hereof, be 450 Carillon Parkway,
Suite 200, St. Petersburg, 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 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 bill 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 Company in relation to the Real Estate Assets,
substantially in the form annexed hereto as Exhibit C; (iv) an assignment and
assumption agreement with respect to each of the Residential Property Restricted
Cash Bank Accounts, in the form specified by the Bank (or other financial
institution) where the respective Residential Property Restricted Cash Bank
Account is established or, if none, in a form satisfactory to Company; (v)
third-party consents sought in connection with the consummation of the transfer
of the Real Estate Assets but only to the extent actually obtained by Transferor
(it being expressly understood and agreed, for avoidance of doubt, that so long
as Transferor 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); (vi) 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 Real Estate Assets (which tenant estoppel
statements shall in any event include tenant estoppel statements from each of
Andersen Consulting, Florida Power Corporation, Florida Progress, NationsBank,
N.A. and Raymond James & Associates) 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 Transferor does not warrant or guarantee any of the information
contained in tenant estoppel certificates); (vii) 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
Transferor's possession or in the possession of the current property manager for
any of the Real Estate Assets; provided, however, that Company will make all
originals available to Transferor after Closing to the extent required by
Transferor in connection with accounting, taxation, litigation or other
proceedings involving Transferor's prior ownership of the any of the Real Estate
Assets; (viii) notices to the tenants renting space at the Real Estate Assets
confirming that such Real Estate Assets have been acquired by Company, in such
form as Transferor and Company shall agree; (ix) 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 Transferor or Transferor's current property manager; (x) 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 Transferor's possession; (xi)
a Title Affidavit in the form annexed hereto as Exhibit F; (xii) a Gap Indemnity
in the form annexed hereto as Exhibit G if required by the title insurance
company; (xiii) a FIRPTA Affidavit in the form annexed hereto as Exhibit H;
(xiv) such documents or other evidence as may be required to satisfy all
requirements raised in the Title Commitments; provided, however, Transferor
shall not be required to satisfy requirements raised in the Title Commitments
relating to Real Estate Taxes, Assumed Debt (other than the delivery of the
Required Consents relating to any Assumed Debt in accordance with the terms of
this Agreement), Other Assumed 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 Transferor is taking pursuant to the terms
of this Agreement; and (xv) 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 Mortgage Loans: (i) the mortgage note
relating to each such Mortgage Loan, duly endorsed, or attaching an allonge
executed by Transferor in favor of Company, in either case without recourse to
Transferor; (ii) the original executed mortgage or deed of trust securing such
mortgage note, stamped by the appropriate recorders' office as having being duly
filed of record (or a copy thereof certified by the relevant county or
municipality); (iii) the mortgagee title insurance policy relating to the
Mortgage Loan, endorsed to show the assignment of the lender's interest to
Company, (iv) original, executed counterparts of all other documents and
instruments relating to such Mortgage Loan; (v) an assignment and assumption
agreement substantially in the form annexed hereto as Exhibit E, effectively
assigning to Company all of Transferor's right, title and interest in and to,
and obligations with respect to, such Mortgage Loan, together with all relevant
UCC-3 assignment statements; and (vi) any consents sought from pledgees of such
Mortgage Loans, if applicable, as more particularly identified on Schedule IV
(it being expressly understood and agreed, for avoidance of doubt, that so long
as Transferor 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 Assumed Debt: (i) originals (or copies if
originals are unavailable) of all documents and instruments evidencing and
securing the Assumed Debt and (ii) all documents and instruments required to
effect the assignment and assumption of the borrower's interest in the Assumed
Debt from Transferor to Company, including without limitation, if applicable,
consents sought from the holders of the Assumed Debt, as more particularly
identified on Schedule IV (it being expressly understood and agreed, for
avoidance of doubt, that so long as Transferor 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) originals of all Required Consents (but only to the extent
theretofore obtained by Transferor);
(f) 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 Security Deposit Amount and (ii) the Net Proceeds
received by Transferor in connection with a Pending Transaction, if consummated
prior to the Escrow Closing Date; and
(g) 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) Transferor 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) Transferor shall not be
required to provide any representations or warranties which survive the Escrow
Closing Date and (iii) so long as Transferor 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 Company Documents and/or Deliveries. On or prior to the Escrow
Closing Date, Company will deliver (subject only to receipt by Company of the
relevant Bringdown Certificate and Escrow Date Notification Certificate) the
following to Escrow Agent, which shall have been executed by Company to the
extent applicable:
(a) the Transfer Value, by (i) bank wire transfer of U.S. dollars
in immediately available funds and (ii) delivery of stock certificates,
representing a total of 2,000 shares of Preferred Stock, registered in the names
and in the amounts set forth on Schedule XVIII;
(b) certified copies of resolutions of Company 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)(v), and (d)(ii) 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) Transferor 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) Transferor shall not be
required to provide any representations or warranties which survive the Escrow
Closing Date, and (iii) so long as Transferor 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 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.
(f) a release, executed by a duly authorized officer of Company,
releasing Transferor from any and all liabilities or obligations of Transferor
arising under Section 11 of this Agreement, which such liabilities and
obligations shall be assumed by Other Buyer under the Purchase and Sale
Agreement.
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, Transferor and Company 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, Company and Transferor shall execute and deliver to Escrow Agent a
joint direction letter in the form attached hereto as Exhibit 7.7, which shall
be irrevocable, (a) listing with specificity all items delivered by Company
and/or Transferor pursuant to Sections 7.4 and 7.5 hereof (including the
Transfer Value, all such items collectively referred to herein as the "Escrowed
Items") and (b) setting forth irrevocable instructions from Company and
Transferor 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
the Transfer Value shall be delivered to Surviving Corporation or to such
account as Surviving Corporation may designate) 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 the
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
directions set forth in Section 7.7 of this Agreement, Company shall execute and
deliver (a) to Escrow Agent, together with Other Buyer, a joint instruction
letter in the form attached hereto as Exhibit 7.8 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 set forth in Sections 4.1, 4.2
and 4.4(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
Transferor has engaged Donaldson, Lufkin & Jenrette Securities Corporation (the
"Broker") to whom a commission is or could be due in connection with the sale of
the Assets by Transferor to Company, or any other matter associated with this
Agreement. Transferor 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, 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 Company and Transferor at any time prior
to the Tender Offer Expiration Date;
(b) by either Company or Transferor 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 Company or Transferor, 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 Company or Transferor 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 Company or Transferor at any time prior to the
Tender Offer Expiration Date, if any of the Purchase and Sale Agreement, the
Heller Lease or the Tax Credit LP Interest Purchase Agreement shall have been
terminated and be of no further force and effect;
(f) by Company on or at any time prior to the Escrow Closing, in
the event (i) that Company exercises its right of termination as provided in
Section 5.8 or (ii) in the event of (A) a breach by Transferor of its
representations and warranties set forth herein (other than arising out of or
related to a Pending Transaction) which, taken in the aggregate, would have a
Material Adverse Effect or (B) a breach by Transferor 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 Transferor and (y) two Business Days prior to the Tender Offer
Expiration Date and (2) has not been waived by Company; or
(g) by Transferor on or at any time prior to Escrow Closing, in
the event of a breach by Company 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 Company and (ii) two Business Days prior to the Tender Offer
Expiration Date and (B) has not been waived by Transferor, except, in any case
where such failures are not reasonably likely to affect adversely Company's
ability to consummate the transactions contemplated by this Agreement.
9.2 Effect of Termination. (a) In the event of the termination of this
Agreement pursuant to Section 9.1 hereof by Company or Transferor, 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 (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 Sections 5.01(e), (f), (g), (j) (except if the Merger Agreement
has been terminated as a result of the non-performance by Company or any
affiliate of Company under any of the Asset Disposition Agreements (as defined
in the Merger Agreement)) or (k) of the Merger Agreement or (y) Section 9.1(f)
above, Company and its affiliates shall be entitled to receive from Transferor
reimbursement for its reasonable out-of-pocket costs and expenses incurred in
connection with the transactions contemplated by this Agreement, the Omnibus
Agreement and the Tax Credit LP Interest Purchase Agreement in an amount of up
to $1,000,000 (subject to providing reasonable documentation of such costs and
expenses).
(ii) In the event of a termination of this Agreement pursuant to
Section 9.1(g) above, Transferor's sole remedy shall be to receive a sum equal
to $2,750,000 as agreed and liquidated damages, it being agreed that in such
event Transferor's actual damages would be incapable of precise ascertainment
and that the foregoing is a reasonable estimate of such damages.
(iii) Except as expressly set forth above in this Section 9.2,
neither Company nor Transferor 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 Transferor or Company, 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), Company
may by written notice to Transferor actually received by Transferor 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 Company's receipt of written
notice of such damage or destruction (such receipt of written notice by
Transferor to be promptly thereafter acknowledged), terminate this Agreement,
whereupon 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, Company shall proceed to Closing with no
reduction in the Transfer Value notwithstanding any damage or destruction
occurring with respect to the Real Estate Assets, and Transferor will deliver
and/or assign to Company on the Closing Date any insurance proceeds with respect
to such damage or destruction to the extent Transferor is entitled to same;
provided that Company shall be afforded reasonable opportunity by Transferor to
participate in any discussions with third parties relating to such insurance
proceeds and such insurance proceeds shall not be settled or otherwise
compromised by Transferor without the approval of Company (not to be
unreasonably withheld, conditioned or delayed). Transferor shall notify Company
of any damage to or destruction of the Real Estate Assets promptly after
Transferor 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), Company may by written notice to
Transferor actually received by Transferor 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 Company's receipt of written notice of such damage
or destruction (such receipt of written notice by Transferor to be promptly
thereafter acknowledged), terminate this Agreement, whereupon 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, Company shall proceed to Closing with no reduction in the Transfer
Value notwithstanding any taking or condemnation occurring with respect to the
Real Estate Assets, and Transferor will deliver and/or assign to Company on the
Closing Date any award with respect to such taking or condemnation to the extent
Transferor is entitled to same; provided that Company shall be afforded
reasonable opportunity by Transferor 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 Transferor without the
approval of Company (not to be unreasonably withheld, conditioned or delayed).
Transferor shall notify Company of any eminent domain or condemnation proceeding
in respect of the Real Estate Assets promptly after Transferor learns of the
same.
10.3 Indemnity. Each of Company and Transferor (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 Transferor (a "Claim"),
made, or arising out of (x) in the case of Company (as Indemnitor), the Assumed
Liabilities or any failure by Company for any reason to pay, perform and
discharge any Assumed Liabilities, or (y) in the case of Transferor (as
Indemnitor) the Excluded Liabilities or any failure by Transferor 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 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.
Section 11. Special Environmental Indemnity.
11.1 Environmental Liabilities. Upon completion of the Merger and
notwithstanding any other provision of this Agreement to the contrary, the
Surviving Corporation hereby agrees to indemnify, hold harmless and defend
Company from and against any and all claims (including without limitation third
party claims for personal injury or real or personal property damage), losses,
damages, liabilities, fines, penalties, charges, administrative and judicial
proceedings (including informal proceedings) and orders, judgments, remedial
action, requirements, enforcement actions of any kind, and all reasonable and
documented costs and expenses incurred in connection therewith (including but
not limited to reasonable and documented attorneys' and/or paralegals' fees and
expenses), including, but not limited to, all costs incurred in connection with
any investigation or monitoring of site conditions or any clean-up, remedial,
removal or restoration work by any federal, state or local government agency,
arising in whole or in part, out of:
(a) the presence on or under any of the Real Estate Assets of any
Hazardous Materials, or any releases or discharges of any Hazardous Materials
on, under, from or onto any of the Real Estate Assets,
(b) any activity, including, without limitation, construction,
carried on or undertaken on or of any of the Real Estate Assets, and whether by
the Surviving Corporation or any predecessor in title or any employees, agents,
contractors or subcontractors of the Surviving Corporation or any predecessor in
title, or any other Persons, in connection with the handling, treatment,
removal, storage, decontamination, clean-up, transport or disposal of any
Hazardous Materials that at any time are located or present on or under or that
at any time migrate, flow, percolate, diffuse or in any way move onto or under
any of the Real Estate Assets,
(c) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs, remediation and
removal costs, cost of corrective action, costs of financial assurance, fines
and penalties and natural resource damages), or death or injury to any Person,
and all expenses associated with the protection of wildlife, aquatic species,
vegetation, flora and fauna, and any mitigative action required by or under any
Environmental Law,
(d) any claim concerning lack of compliance with any
Environmental Law, or any act or omission causing an environmental condition
that requires remediation or would allow any Governmental Authority to record a
Lien on the land records, or
(e) any residual contamination on or under any of the Real Estate
Assets, or affecting any natural resources, and to any contamination of any
property or natural resources arising in connection with the generation, use,
handling, storage, transport or disposal of any such Hazardous Materials, and
irrespective of whether any of such activities were or will be undertaken in
accordance with applicable laws, regulations, codes and ordinances (any claim
arising out of the events set forth in subsections (a) through (e) of this
Section 11.1 being an "Environmental Claim").
It is expressly understood and agreed that the indemnity provided for herein
shall survive the expiration or termination of and shall be separate and
independent from any remedy under this Agreement.
11.2 Proceedings in Respect of Claims. (a) With respect to any
amount that the Surviving Corporation is requested by Company to pay by reason
of Section 11.1, Company shall, if so requested by the Surviving Corporation and
prior to any payment, submit such additional information to the Surviving
Corporation as the Surviving Corporation may reasonably request and which is in
the possession of Company to substantiate the requested payment.
(b) In case any action, suit or proceeding shall be brought against
Company, Company shall promptly notify the Surviving Corporation of the
commencement thereof, and the Surviving Corporation shall be entitled, at its
expense, to participate in, and, to the extent that the Surviving Corporation
desires to, assume and control the defense thereof, but only to that the
Surviving Corporation shall have acknowledged in writing its obligation to fully
indemnify Company in respect of such action, suit or proceeding. The Surviving
Corporation shall keep Company fully apprised of the status of such action suit
or proceeding and shall provide Company with all information with respect to
such action suit or proceeding as Company shall reasonably request. The
Surviving Corporation shall not be entitled to assume and control the defense of
any such action, suit or proceeding if and to the extent that, (A) in the
reasonable opinion of Company, (x) such action, suit or proceeding involves any
risk of imposition of criminal liability or any risk of imposition of material
civil liability on Company or will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien on any Real Estate Assets or
any part thereof unless, in the case of civil liability, the Surviving
Corporation shall have posted a bond or other security satisfactory to Company
in respect to such risk or (y) the control of such action, suit or proceeding
would involve an actual or potential conflict of interest, or (B) such
proceeding involves claims not fully indemnified by the Surviving Corporation
which the Surviving Corporation and Company have been unable to sever from the
indemnified claim(s). Company may participate in a reasonable manner at its own
expense and with its own counsel in any proceeding conducted by the Surviving
Corporation in accordance with the foregoing. The Surviving Corporation shall
not enter into any settlement or other compromise with respect to any
Environmental Claim which is entitled to be indemnified under Sections 11.1 or
11.2 without the prior written consent of Company which consent shall not be
unreasonably withheld in the case of a money settlement not involving an
admission of liability of Company; provided, however, that in the event that
Company withholds consent to any settlement or other compromise, the Surviving
Corporation shall not be required to indemnify Company under Sections 11.1 or
11.2 to the extent that the applicable Environmental Claim (x) is for legal fees
and expenses incurred after the date of the proposed settlement or (y) results
in a judgment in excess of such offered money settlement.
Company shall at the expense of the Surviving Corporation supply the
Surviving Corporation with such information and documents reasonably requested
by the Surviving Corporation as are necessary or advisable for the Surviving
Corporation to participate in any action, suit or proceeding to the extent
permitted by Sections 11.1 or 11.2. Company shall not enter into any settlement
or other compromise with respect to any Environmental Claim which is entitled to
be indemnified under Sections 11.1 or 11.2 without the prior written consent of
the Surviving Corporation, which consent shall not be unreasonably withheld,
unless Company waives its right to be indemnified under Sections 11.1 or 11.2
with respect to such Environmental Claim.
Upon payment in full of any Environmental Claim by the Surviving
Corporation pursuant to Sections 11.1 or 11.2 to or on behalf of Company, the
Surviving Corporation, without any further action, shall be subrogated to any
and all claims that Company may have relating thereto (other than claims in
respect of insurance policies maintained by Company at its own expense), and
Company shall execute such instruments of assignment and conveyance, evidence of
claims and payment and such other documents, instruments and agreements as may
be necessary to preserve any such claims and otherwise cooperate with the
Surviving Corporation and give such further assurances as are necessary or
advisable to enable the Surviving Corporation vigorously to pursue such claims.
(c) Any amount payable to Company pursuant to Sections 11.1 or 11.2
shall be paid to Company promptly upon receipt of a written demand therefor from
Company, accompanied by a written statement describing in reasonable detail the
basis for such indemnity and the computation of the amount so payable and, if
requested by the Surviving Corporation, such determination shall be verified by
a nationally recognized independent accounting firm mutually acceptable to the
Surviving Corporation and Company at the expense of the Surviving Corporation;
provided, however, that if the Surviving Corporation has assumed the defense of
the related Environmental Claim or is paying the costs of Company's defense of
the related claim on an ongoing basis, the Surviving Corporation shall not be
required to pay such amount to Company until such time as a judgment is entered
with respect to such Environmental Claim, the enforcement of which is not stayed
or which judgment is not bonded over, or the Environmental Claim is otherwise
settled or lost. To the extent the Surviving Corporation suffers any losses or
damages as a result of Company's failure to provide the Surviving Corporation
with prompt notice of the commencement of any action, suit or proceeding against
Company in accordance with the first sentence of the second paragraph of this
Section 11.2, the amounts of such losses or damages may be offset against the
Surviving Corporation's indemnification obligation to Company.
11.3 Assignment of Indemnity. The obligations of the Surviving
Corporation under this Section 11 may be assigned to the Buyer (as such term is
defined in the Purchase and Sale Agreement). Upon such assignment by the
Surviving Corporation and the express assumption of this Special Environmental
Indemnity by Buyer (each on terms satisfactory to Company), Company will release
the Surviving Corporation from any obligations under this Section 11 by
execution of a release in form and substance reasonably satisfactory to the
Surviving Corporation.
Section 12. Miscellaneous.
12.1 Litigation. In the event of any litigation between Transferor and
Company 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. Transferor and Company
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 Transfer Value 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) Transferor and Company 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 Transferor and Company, the responsibility for
indemnifying Escrow Agent for such expenses will belong solely to the
non-prevailing party.
(c) Escrow Agent will not make any disbursement of the Transfer Value
(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 Transfer Value except as set
forth in succeeding subsection (d), Escrow Agent will not disburse the
Transfer Value and will file an action in interpleader to resolve such
disagreement or inconsistency, as the case may be. Escrow Agent will be
indemnified (by Transferor or Company, 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 Transferor or Company
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 Transferor and
Company 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 the Transfer Value to Transferor or to such
account as Transferor may designate) as set forth in the joint direction
letter described in Section 7.7 hereof, (iii) immediately following receipt
of written notice from Transferor or Company 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 Company 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 delivered 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 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 Transferor
and Company, and if a successor title agent is not appointed 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 Transferor, to it at:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Facsimile: (727) 803-8203
Attention: Darryl A. LeClair
with a copy to:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Facsimile: (727) 803-8203
Attention: Susan Glatthorn Johnson, Esq.
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 354-8113
Attention: William F. Wynne, Jr., Esq.
and a copy to:
EIN Acquisition Corp.
950 Third Avenue
New York, New York 10022
Facsimile: (212) 688-7908
Attention: James Haber
with a copy to:
Brown Raysman Millstein Felder and Steiner LLP
120 West 45th Street
New York, New York 10036
Facsimile: (212) 840-2429
Attention: Robert M. Unger, Esq.
(b) if to Company, to it at:
Heller Affordable Housing of Florida, Inc.
500 West Monroe Street
Chicago, Illinois 60661
Facsimile: (312) 441-7119
Attention: John Petrovksi
and a copy to:
Heller Financial
111 West 50th Street
New York, New York 10020
Facsimile: (212) 586-3017
Attention: Mark Hirschhorn
with a copy to:
Winston & Strawn
200 Park Avenue
New York, New York 10166
Facsimile: (212) 294-4700
Attention: Robert W. Ericson, Esq.
with a copy to:
Equis Financial Group
1 Canterbury Green, 8th Floor
Stamford, Connecticut 06901
Facsimile: (203) 363-0861
Attention: James A. Coyne
and a copy to:
Steel Hector & Davis LLP
200 South Biscayne Blvd.
Miami, Florida 33131
Facsimile: (305) 577-7001
Attention: Thomas V. Eagan, P.A.
(c) if to Escrow Agent, to it at:
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Facsimile: (813) 740-0595
Attention: Juanita M. Shuster
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. Company 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 Company 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, in each case so long as (x)
such transfer, assignment or assumption does not impose any incremental burden
on Transferor under this Agreement or delay (or otherwise impede) the
consummation of the transactions contemplated by this Agreement and (y) Company
remains liable to Transferor for all of its obligations hereunder with respect
to the 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.
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) Transferor 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 Company and/or the Assets and
(y) Company 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 Transferor pursuant to or in connection with this
Agreement or any confidentiality agreement executed by Company 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 Mortgage Loans and the Assumed Debt). Each
of Transferor and Company 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 Transferor and Company 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 Transferor
and Company may disclose any such non-public information as may be required by
law. If the transfer of the Assets contemplated by this Agreement is not
completed for any reason, Company will, upon request of Transferor, promptly
return to Transferor all instruments and materials or copies of instruments and
materials delivered pursuant hereto and obtained by Company. 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.
12.13 Business Day. If any date herein set forth for the performance
of any obligations by Transferor 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. Company and Transferor 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,
Transferor, on the one hand, and Company, 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 14D-1, 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 Transferor's obligations under the Merger Agreement, Transferor will
give Company and its counsel the opportunity to review and comment upon the
Schedule 14D-1, 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
Company 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 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 Transferor set forth in Section 3.6 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 Transferor or Echelon, such
knowledge means the actual knowledge of Darryl A. LeClair, W. Michael Doramus,
Julio A. Maggi, Larry J. Newsome, Susan G. Johnson, J. Mark Stroud, Thomas D.
Wilson, Antonia P. Williams, Timothy S. Tinsley or K. Brent Little.
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 Transferor, on the one hand, and Company, 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 Company, Sections 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 Transferor nor
Company 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 Transferor of any of its representations and
warranties, Company'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 Company's
sole remedies in connection therewith shall be those expressly set forth in
Section 9.2 hereof) and Transferor 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 Company of the
agreements, instruments and other documents contemplated in this Agreement
conveying title to, or assigning Transferor'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 Transferor 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.
12.23 Section 351 of the Code. Each party hereto agrees that this
Agreement and the transactions contemplated thereby shall be taxed in accordance
with Section 351 of the Code and that such party will file applicable Tax
Returns to reflect such treatment.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Subscription
Agreement to be executed on the date(s) hereinafter set forth.
ECHELON INTERNATIONAL CORPORATION,
a Florida corporation
By:_______________________________________________
Name:
Title:
Date: January __, 2000
ECHELON DEVELOPMENT CORPORATION,
a Florida corporation
By:_______________________________________________
Name:
Title:
Date: January __, 2000
SOUTH CORE COMMERCIAL, INC.,
a Florida corporation
By:_______________________________________________
Name:
Title:
Date: January __, 2000
SOUTH CORE PARKING, INC.,
a Florida corporation
By:_______________________________________________
Name:
Title:
Date: January __, 2000
ECHELON AT CARILLON ONE, INC.,
a Florida corporation
By:_______________________________________________
Name:
Title:
Date: January __, 2000
ECHELON AT NORTHLAKE, INC.,
a Florida corporation
By:_______________________________________________
Name:
Title:
Date: January __, 2000
ECHELON AT THE RESERVE, INC.,
a Florida corporation
By:_______________________________________________
Name:
Title:
Date: January __, 2000
WITNESSED BY: ECHELON AFFORDABLE HOUSING, INC.,
a Florida corporation
________________________
Name: By:_______________________________________________
Name:
________________________ Title:
Name: Date: January __, 2000
<PAGE>
WITNESSED BY: BAYBRIDGE APARTMENTS, LTD., a Florida Limited
Partnership
________________________
Name: By: Echelon General Partner Affordable Housing,
Inc., a Florida Corporation, its general
partner
________________________ By:_______________________________________________
Name: Name:
Title:
Date: January __, 2000
WITNESSED BY: 200 CARILLON, L.L.C., a Delawrare Limited
Liability Company
________________________ By: Echelon at Carillon Two, Inc., a Florida
Name: Corporation, its managing member
________________________ By:_______________________________________________
Name: Name:
Title:
Date: January __, 2000
<PAGE>
SOUTH GARNETT RESIDENTIAL LIMITED PARTNERSHIP, a
Texas Limited Parntership
By: Echelon General Partner, Inc., a Florida
Corporation, its general partner
By:_______________________________________________
Name:
Title:
Date: January __, 2000
RESIDENTIAL 98TH MEMORIAL CREEK TURNPIKE LIMITED
PARTNERSHIP, a Texas Limited Partnership
By: Echelon General Partner, Inc., a Florida
Corporation, its general partner
By:_______________________________________________
Name:
Title:
Date: January __, 2000
WITNESSED BY: MISSION RANCH LIMITED PARTNERSHIP, a Texas Limited
Partnership
________________________ By: Echelon General Partner, Inc., a Florida
Name: J. Jordan Urstadt Corporation, its general partner
________________________
Name: Abe Abraham By:_______________________________________________
Name:
Title:
Date: January __, 2000
<PAGE>
COMPANY:
WITNESSED BY: Heller Affordable Housing of Florida, Inc.
________________________
Name: By:_______________________________________________
Name:
________________________ Title:
Name: Date: January __, 2000
<PAGE>
$$$$$$$$
Escrow Agent hereby agrees to hold and disburse the Transfer Value and
the other Escrowed Items in accordance with and subject to the provisions of the
foregoing Subscription Agreement.
LANDAMERICA FINANCIAL GROUP
By:_______________________________________________
Name:
Title:
Date: January __, 2000
<PAGE>
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:
____________________________
____________________________
____________________________
<PAGE>
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 B
FORM OF
BILL OF SALE
Made and entered into this ____ day of __________, 2000, by and between
_____________, a _____________ ("Transferor"), and __________________, a
____________ ("Company").
W I T N E S S E T H:
WHEREAS, Transferor and Company entered into that certain Subscription
Agreement (the "Agreement"), dated as of January 21, 2000, for, inter alia, the
transfer 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, Transferor desires
to assign, transfer, set over and deliver to Company all of Transferor's right,
title and interest in, and Company desires to assume all duties and obligations
of Transferor 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. Transferor does hereby grant, bargain, transfer, set over and deliver
unto Company all of Transferor's right, title and interest in and to the
Personalty.
2. Company hereby acknowledges and agrees that it is purchasing the
Personalty in its "as is" condition. Transferor 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 Bill 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.
Transferor hereby warrants title to the Property against the lawful claims
of all persons claiming by, through or under Transferor, but none others.
<PAGE>
IN WITNESS WHEREOF, this Bill of Sale has been signed, sealed and
delivered by the parties as of the date first above written.
WITNESSED BY: TRANSFEROR:
______________________________ By:_______________________
Name:_________________________
By:____________________
______________________________ Name:
Title:
Name:_________________________
WITNESSED BY: COMPANY:
______________________________ By:_______________________
Name:_________________________
By:____________________
______________________________ Name:
Title:
Name:_________________________
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 Subscription
Agreement (the "Agreement"), dated as of January 21, 2000, for, inter alia, the
transfer to Assignee 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 (as such terms
are defined in the Agreement) relating to the Property;
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:_________________________
<PAGE>
EXHIBIT D
FORM OF
TENANT ESTOPPEL STATEMENT
DATE: ______________, 2000
TO: ________________________, a ________________________ ("Company")
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 Company, which is about to purchase the Leased Premises, and
Company'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 Company, its successors and
assigns, the Company's lender, if any, and all parties claiming through or
under such persons.
TENANT:
____________________________
By: ______________________
Name:_____________________
Title:____________________
<PAGE>
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 Subscription
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:_________________________
<PAGE>
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:
<PAGE>
EXHIBIT F
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.
<PAGE>
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:
<PAGE>
EXHIBIT G
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:________________________
<PAGE>
SCHEDULE A TO EXHIBIT G
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.
<PAGE>
EXHIBIT H
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:
4. The undersigned are not nonresident aliens for purposes of U.S. Income
taxation;
5. The undersigned's U.S. taxpayer identifying numbers are identified on
Schedule A; and
6. The undersigned's address is:
c/o Susan Glatthorn Johnson, Esq.
General Counsel & Senior Vice President
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
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
SUBSCRIPTION AGREEMENT]
By:_____________________________
Name:___________________________
Title:__________________________
<PAGE>
EXHIBIT 7.7
JOINT DIRECTION LETTER
[February] __, 2000
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Attention: Juanita M. Shuster
Dear Ms. Shuster:
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 Heller 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 Heller 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:
HELLER 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:
<PAGE>
EXHIBIT 7.8
JOINT INSTRUCTION LETTER
[February] __, 2000
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Attention: Juanita M. Shuster
Dear Ms. Shuster:
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 Heller 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 Heller Lease)
as follows: [Heller 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.
<PAGE>
IN WITNESS WHEREOF, this irrevocable Joint Instruction Letter has been
signed this __ day of [February], 2000.
ECHELON RESIDENTIAL LLC, as Buyer
By:_____________________________
Name:
Title:
HELLER 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:______________________
<PAGE>
EXHIBIT D
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of January 21, 2000 (this "Agreement"), by
and among ETA HOLDING LLC, a Delaware limited liability company ("Parent"), EIN
ACQUISITION CORP., a Florida corporation and a direct wholly-owned subsidiary of
Parent ("Sub"), ECHELON INTERNATIONAL CORPORATION, a Florida corporation (the
"Company"), and LANDAMERICA FINANCIAL GROUP, a Virginia corporation ("Escrow
Agent").
W I T N E S S E T H:
WHEREAS, Parent, Sub and the Company have entered into an Agreement
and Plan of Merger, dated as of January 21, 2000 (the "Merger Agreement"), and
in connection with the transactions contemplated thereby, certain costs and
expenses, as described in the certificate of the Chief Financial Officer of the
Company to be delivered pursuant to Section 4.17 thereof (the "Closing
Certificate"), are expected to be incurred;
WHEREAS, it is a condition to the transactions contemplated by the
Merger Agreement that each of Parent, Sub and the Company shall have executed
and delivered this Agreement; and
WHEREAS, Parent, Sub and the Company desire to execute this Agreement
in order to satisfy the condition described in the preceding paragraph and, in
connection therewith, desire to appoint LandAmerica Financial Group as the
escrow agent hereunder, and LandAmerica Financial Group is willing to act as the
escrow agent hereunder in accordance with the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
Section 1. Definitions. Unless otherwise defined herein, terms which
are defined in the Merger Agreement, as in effect on the date hereof, and used
herein are so used as so defined.
Section 2. Filing of Articles of Merger. (a) Promptly upon completion
of the preclearing process contemplated in Section 4.18 of the Merger Agreement
with respect to the Articles of Merger, and in any event prior to the date of
acceptance for payment of the tendered shares of Common Stock (and associated
Rights) in accordance with the Offer, Parent shall cause Sub to deliver the
precleared Articles of Merger to Escrow Agent.
(b) On the date of acceptance for payment and immediately following
payment to the paying agent designated in the Offer Documents for not less than
80% of all the shares of Common Stock outstanding (calculated on a fully diluted
basis) in accordance with the Offer, Sub shall instruct Escrow Agent to file the
precleared Articles of Merger previously delivered to Escrow Agent with the
office of the Department of State of the State of Florida in the manner required
by Section 607.1105 of the Florida Business Corporation Act and Escrow Agent
agrees to effectuate such filing of the precleared Articles of Merger
immediately upon receipt by it of such instructions from Sub.
Section 3. Establishment of Escrow Account. On the Escrow Closing Date
(as defined in the Real Estate Disposition Agreements), the Company shall
deliver to Escrow Agent cash in an amount not less than the aggregate amount of
all transaction expenses (both paid and accrued) set forth in the Closing
Certificate (whether invoiced or estimated), including the aggregate amount of
all expenses itemized on Schedule A to the Closing Certificate that are incurred
(or to be incurred) by any Person other than the Company (subject to the
limitations set forth in Exhibit F to the Merger Agreement) (the "Escrow
Amount") and such cash shall be accepted by Escrow Agent and placed into a
separate interest-bearing escrow account (the "Escrow Account") with an
institution the deposits in which are insured by an agency of the United States;
provided that, interest accruing thereon shall constitute part of the Escrow
Amount. The Escrow Amount shall be held and administered in accordance with the
terms and conditions of this Agreement. A form W-9 will be provided by the
Company.
Section 4. Disbursements of the Escrow Amount. (a) Simultaneously with
the consummation of the Merger, the Company shall cause written instructions in
the form attached as Exhibit A hereto to be delivered to Escrow Agent with
respect to all transaction expenses (other than those for which no invoices have
been provided). Within one Business Day after receipt of written instructions in
the form attached as Exhibit A hereto signed by any person identified on Exhibit
B hereto (collectively, the "Authorized Persons"), Escrow Agent shall make a
disbursement from the Escrow Account to the Persons, and in such amounts, as
specified in Schedule A to the Closing Certificate; provided that in no event
shall Escrow Agent make any disbursement from the Escrow Account in an amount
greater than the aggregate Escrow Amount. It is expressly understood and agreed
that (i) in no event shall the direction, instruction, consent or approval of
Parent, Sub or the Company be required in order to authorize or make any
disbursement from the Escrow Account in accordance with the terms of this
Section 4(a) and (ii) in no event shall the provisions of this Agreement
(including Exhibit B hereto) be amended, modified or supplemented in any manner
(A) to limit the authority of any of the Authorized Persons to give disbursement
instructions to Escrow Agent in accordance with the terms of this Section 4(a)
or (B) to grant any person (other than the Authorized Persons as in effect on
the date of this Agreement) any authority to give disbursement instructions to
Escrow Agent, in each case without the prior written consent of (i) any of the
Authorized Persons and (ii) any of the officers of Parent whose signature
appears on Exhibit B. Each of the Authorized Persons shall be a third party
beneficiary of this Section 4(a) solely for the purpose of enforcing the terms
of this Section 4(a) subsequent to the Merger.
(b) In the event of a dispute between the parties hereto or between
the parties hereto and the Authorized Officers, Escrow Agent shall, in its
discretion, be entitled to transfer to a court of competent jurisdiction all
amounts then held in the Escrow Account and, upon such transfer and upon the
commencement of appropriate proceedings therein in the nature of interpleader,
the Escrow Account shall be deemed dissolved and this Agreement shall terminate.
Section 5. Termination of Escrow Account and Escrow Agreement. Within
one Business Day after the Closing Date (as defined in the Real Estate
Disposition Agreements), unless this Agreement shall have been previously
terminated pursuant to Section 4(b) hereof, Escrow Agent shall deliver to Sub
(or its successor) any and all amounts remaining in the Escrow Account and, upon
such delivery, the Escrow Account shall be deemed dissolved and this Agreement
shall terminate.
Section 6. Rights, Duties and Immunities of Escrow Agent. Acceptance
by Escrow Agent of its duties under this Agreement is subject to the following
terms and conditions, which all parties to this Agreement hereby agree shall
govern and control the rights, duties and immunities of Escrow Agent:
(a) The duties and obligations of Escrow Agent shall be determined
solely by the express provisions of this Agreement and Escrow Agent shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement.
(b) Escrow Agent shall not be responsible in any manner for the
validity or sufficiency of any property delivered hereunder, or for the value or
collectability of any note, check or other instrument so delivered, or for any
representations made or obligations assumed by any party other than Escrow
Agent. Nothing herein contained shall be deemed to obligate Escrow Agent to
deliver any cash, instruments, documents or any other property referred to
herein, unless the same shall have first been received by Escrow Agent pursuant
to this Agreement.
(c) Each of Parent, Sub and the Company, jointly and severally, will
indemnify Escrow Agent for, and hold it harmless against any loss, liability or
expense, including but not limited to counsel fees, incurred without bad faith,
gross negligence, fraud or intentional misconduct on the part of Escrow Agent
arising out of or in conjunction with its acceptance of, or the performance of
its duties and obligations under this Agreement as well as the costs and
expenses of defending against any claim or liability arising out of or relating
to this Agreement.
(d) Escrow Agent shall be fully protected in acting on and relying
upon any written notice, direction, request, waiver, consent, receipt or other
paper or documents which Escrow Agent in good faith believes to have been signed
and presented by the proper party or parties.
(e) Escrow Agent shall not be liable for any error of judgment, or for
any act done or step taken or omitted by it in good faith or for any mistake in
act or law, or for anything which it may do or refrain from doing in connection
herewith, except its own bad faith, gross negligence, fraud or intentional
misconduct.
(f) Escrow Agent may seek the advice of legal counsel in the event of
any dispute or question as to the construction of any of the provisions of this
Agreement or its duties hereunder, and it shall incur no liability and shall be
fully protected in respect of any action taken, omitted or suffered by it in
good faith in accordance with the opinion of such counsel.
The parties hereto agree that should any dispute arise with respect to
the payment, ownership or right of possession of the Escrow Account, Escrow
Agent is authorized and directed to proceed in accordance with Section 4(b) or
retain in its possession, without liability to anyone, except for its bad faith,
willful misconduct or gross negligence, all or any part of the Escrow Account
until such dispute shall have been settled either by mutual agreement by the
parties concerned or by the final order, decree or judgment of a court or other
tribunal of competent jurisdiction in the United States, and a notice executed
by the parties to the dispute or their authorized representatives shall have
been delivered to Escrow Agent setting forth the resolution of the dispute.
Escrow Agent shall be under no duty whatsoever to institute, defend or partake
in such proceedings.
(g) The agreements set forth in Section 4(b) and this Section 6 shall
survive the termination of this Agreement and the payment of all amounts
hereunder.
Section 7. Resignation of Escrow Agent. Escrow Agent shall have the
right to resign upon 30 days written notice to Parent, the Company and the
Authorized Persons. In the event of such resignation, with the consent of the
Parent and the Authorized Persons, which consent shall not unreasonably be
withheld, the Parent and the Authorized Persons shall appoint a successor escrow
agent hereunder by delivering to Escrow Agent a written notice of such
appointment. Upon receipt of such notice, Escrow Agent shall deliver to the
designated successor escrow agent all money and other property held hereunder
and shall thereupon be released and discharged from any and all further
responsibilities whatsoever under this Agreement. It is understood and agreed
that the Authorized Persons shall be third party beneficiaries of this Section 7
solely for the purpose of enforcing the terms of this Section 7 subsequent to
the Merger.
Section 8. Notices. All claims, notices and other communications
hereunder to be effective shall be in writing and shall be deemed to have been
duly given when delivered by hand, or 5 days after being deposited in the mail
or sent by registered or certified first class mail postage prepaid, or, in the
case of facsimile transmission, when received and telephonically confirmed, in
each case addressed to the parties at the addresses set forth below (or to such
other person or address as the parties shall have notified each other and Escrow
Agent in writing; provided that notices of a change of address shall be
effective only upon receipt thereof):
(a) if to the Company or any of the Authorized Persons, to it or such
person at:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Telecopier: (727) 803-8203
Attention: Darryl A. LeClair
with a copy to:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Telecopier: (727) 803-8203
Attention: Susan Glatthorn Johnson, Esq.
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Telecopier: (212) 354-8113
Attention: William F. Wynne, Jr., Esq.
(b) if to Parent or Sub (or its successor), to it at:
950 Third Avenue
New York, New York 10022
Telecopier: (212) 688-7908
Attention: James Haber
with a copy to:
Brown Raysman Millstein Felder and Steiner LLP
120 West 45th Street
New York, New York 10036
Telecopier: (212) 840-2429
Attention: Robert M. Unger, Esq.
(c) if to Escrow Agent, to it at:
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Telecopier: (813) 740-0595
Attention: Juanita M. Shuster
Section 9. Binding Effect. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, with respect to the provisions of
Sections 4(a) and 7 hereof, shall inure to the benefit of the Authorized Persons
who are intended to be third party beneficiaries thereof, and, in each such
case, their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties.
Section 10. Amendments. This Agreement may be amended, modified or
supplemented at any time or from time to time in writing executed by the parties
to this Agreement.
Section 11. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to contracts to be performed entirely within the State of New York,
without reference to or application of rules or principles of conflicts of law.
Section 12. Interpretation. The headings of the sections contained in
this Agreement are solely for convenience or reference and shall not affect the
meaning or interpretation of this Agreement.
Section 13. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 14. Consent to Jurisdiction. Each of the parties hereto hereby
irrevocably agrees that any action, suit or proceedings against any of them by
any of the other aforementioned parties with respect to this Agreement shall be
brought before the exclusive jurisdiction of the federal or state courts located
in the Borough of Manhattan in the State of New York, unless all the parties
hereto agree in writing to any other jurisdiction. Each of the parties hereto
hereby submits to such exclusive jurisdiction.
Section 15. Severability. If any provisions of this Agreement shall be
declared by any court of competent jurisdiction illegal, void or unenforceable,
the other provisions shall not be affected, but shall remain in full force and
effect.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and the year first above written.
ETA HOLDING LLC
By: ETA Holding Corp., its Manager
By:
-------------------------------------
Name:
Title:
EIN ACQUISITION CORP.
By:
-------------------------------------
Name:
Title:
ECHELON INTERNATIONAL CORPORATION
By:
-------------------------------------
Name:
Title:
LANDAMERICA FINANCIAL GROUP
By:
-------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF WRITTEN INSTRUCTIONS
[Date]
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Attention: Juanita M. Shuster
Re: Escrow Agreement, dated as of January 21, 2000 (the "Escrow Agreement"), by
and among ETA Holding LLC, EIN Acquisition Corp., Echelon International
Corporation and LandAmerica Financial Group, as Escrow Agent
The undersigned is an Authorized Person under the Escrow Agreement and is
authorized to give the disbursement instructions set forth below. Please make
the following disbursement via wire transfer from the Escrow Account to the
account listed below within one Business Day after your receipt of these
instructions:
Amount: $_______________
Wiring Instructions: _______________
To: _______________
Account No.: _______________
Credit to: _______________
The foregoing disbursement is in [complete] [partial] satisfaction of the
Transaction Expense identified as Item ____ on Schedule I to the Escrow
Agreement. The balance in the Escrow Account after giving effect to all
disbursements previously made from the Escrow Account and after giving effect to
the foregoing disbursement is $______________.1
We appreciate your cooperation.
Very truly yours,
- ---------------------
Authorized Person
cc: James Haber (agent for ETA Holding LLC)
Robert M. Unger (Brown Raysman Millstein Felder and Steiner LLP)
_______________
1 Must be greater than $0.
<PAGE>
EXHIBIT B
PERSONS AUTHORIZED TO GIVE DISBURSEMENT INSTRUCTIONS
Name and Title Signature
Darryl A. LeClair,
Chairman, President and CEO ______________________
W. Michael Doramus,
Executive Vice President ______________________
Susan Glatthorn Johnson,
Senior Vice President ______________________
PERSONS AUTHORIZED TO CONSENT TO MODIFICATIONS ON BEHALF OF PARENT
Name and Title Signature
James Haber,
President ______________________
ETA Holding Corp.,
Manager of ETA Holding LLC
Irwin Rosen,
Vice President ______________________
ETA Holding Corp.,
Manager of ETA Holding LLC
<PAGE>
EXHIBIT E
ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of January __, 2000 (this
"Agreement"), among EIN ACQUISITION CORP., a Florida corporation (together with
any successor by merger, the "Sub"), ECHELON INTERNATIONAL CORP., a Florida
corporation (the "Company"), and COOPERATIEVE CENTRALE RAFFEISEN-BOERENLEENBANK
B.A., NEW YORK BRANCH, in its capacity as escrow agent, (the "Escrow Agent").
RECITALS
A. The Company and Sub have entered into Agreement and Plan of Merger,
dated January __, 2000 (the "Merger Agreement"). Unless otherwise defined
herein, capitalized terms used shall have the meanings specified in the Merger
Agreement.
B. In order to facilitate the transaction contemplated by the Merger
Agreement, the Company has agreed to deposit into escrow cash in the amount of
$________ (the "Escrow Fund"), to be held and distributed by the Escrow Agent in
accordance with this Agreement.
C. The Escrow Agent will hold the Escrow Fund in escrow for the
benefit of the Sub and the Company.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein and in the Merger Agreement, and intending to be
legally bound hereby, the parties hereby agree as follows:
1. Appointment and Agreement of Escrow Agent. The Company and the Sub
hereby appoint the Escrow Agent to serve as, and the Escrow Agent hereby agrees
to act as, escrow agent upon the terms and conditions of this Agreement. Sub
shall pay all fees and expenses of the Escrow Agent for services to be rendered
by Escrow Agent hereunder.
2. Establishment of the Escrow Fund.
(a) In accordance with terms of the Merger Agreement, simultaneously
with the consummation of the Merger, the Company shall deliver or cause to be
delivered to the Escrow Agent, the Escrow Fund. The Escrow Agent shall hold the
Escrow Fund in escrow pursuant to this Agreement.
(b) Each of Sub and the Company confirms to the Escrow Agent and to
each other that all amounts in the Escrow Fund are free and clear of all
Encumbrances (as defined below), except as may be created by this Agreement.
"Encumbrances" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential arrangement or restriction of any kind
including, without limitation, any restriction on the use, voting, transfer,
receipt of income or other exercise of any attributes of ownership.
3. Release from Escrow. Notwithstanding anything else to the contrary
contained herein, in the Merger Agreement or in any other related document,
immediately following the receipt of notice of the filing of the Articles of
Merger, the Escrow Agent shall transfer entire balance of the Escrow Fund to the
Sub's account with the Escrow Agent.
4. Assignment of Rights to the Escrow Fund: Assignment of Obligations;
Successors. This Agreement may not be assigned by operation of law or otherwise
without the express written consent of the other parties hereto (which consent
may be granted or withheld in the sole discretion of such other parties);
provided, however, that it is expressly understood and agreed that (i) EIN
Acquisition Corp. shall, upon the terms and subject to the conditions of the
Merger Agreement, be merged with and into Echelon International Corporation, a
Florida corporation, which, in turn, shall be merged with and into EIN Corp., a
Delaware corporation, each of which shall be bound by and become a party hereto
as and from the date of such respective mergers in accordance with applicable
law and (ii) the Sub may assign its rights under this Agreement to
Utrecht-America Finance Co. ("UAFC") and the other Lenders (as defined in the
Credit Agreement dated as of January __, 2000 among Sub, UAFC and Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New York Branch,
as agent)(UAFC and the other Lenders, collectively referred to as the "Lender").
This Agreement shall be binding upon and inure solely to the benefit of the
parties hereto and their permitted assigns.
5. Liquidation of the Escrow Fund. Whenever the Escrow Agent shall be
required to make payment of the Escrow Fund, the Escrow Agent shall pay such
amounts by liquidating the investments of the Escrow Fund, as the case may be,
to the extent necessary to pay such amounts in full and in cash.
6. Maintenance of the Escrow Fund; Termination of the Escrow Fund. The
Escrow Agent shall continue to maintain the Escrow Fund, as the case may be,
until the earlier of (i) the time at which there shall be no funds in such
Escrow Fund or (ii) the termination of this Agreement.
7. Investment of Escrow Fund. The Escrow Agent shall invest and
reinvest moneys on deposit in the Escrow Fund, in any combination of the
following: (a) readily marketable direct obligations of the Government of the
United States or any agency or instrumentality thereof or readily marketable
obligations unconditionally guaranteed by the full faith and credit of the
Government of the United States, (b) insured certificates of deposit of, or time
deposits with, any commercial bank that is a member of the Federal Reserve
System and which issues (or the parent of which issues) commercial paper rated
as described in clause (c), is organized under the laws of the United States or
any State thereof and has combined capital and surplus of at least $1 billion or
(c) commercial paper in an aggregate amount of no more than $1,000,000 per
issuer outstanding at any time, issued by any corporation organized under the
laws of any State of the United States, rated at least "Prime 1 " (or the then
equivalent grade) by Moody's Investors Services, Inc. or "A 1 " (or the then
equivalent grade) by Standard & Poors, Inc. It is agreed for federal income tax
purposes that the parties herein shall treat the Escrow Fund as a grantor trust
established by Sub. The Interest shall be included on Sub's tax return as it is
earned by the Escrow Fund in accordance with Sub's method of tax accounting.
8. Escrow Agent.
(a) Except as expressly contemplated by this Agreement or by written
instructions from the Company, the Sub and their permitted assigns, the Escrow
Agent shall not deliver any funds constituting the Escrow Fund, except pursuant
to an order of a court of competent jurisdiction.
(b) The duties and obligations of the Escrow Agent shall be determined
solely by this Agreement, and the Escrow Agent shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Agreement.
(c) In the performance of its duties hereunder, the Escrow Agent shall
be entitled to rely upon any document, instrument or signature believed by it in
good faith to be genuine and signed by any party hereto or an authorized officer
or agent thereof, and shall not be required to investigate the truth or accuracy
of any statement contained in any such document or instrument. The Escrow Agent
may assume that any Person purporting to give any notice in accordance with the
provisions of this Agreement has been duly authorized to do so.
(d) The Escrow Agent shall not be liable for any error of judgment, or
any action taken, suffered or omitted to be taken, hereunder except in the case
of its negligence, bad faith or willful misconduct. The Escrow Agent may consult
with counsel of its own choice (including in-house counsel) and shall 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.
(e) The Sub and the Company shall reimburse and indemnify the Escrow
Agent for, and hold it harmless against, any loss, liability or expense,
including, without limitation, reasonable attorneys' fees, incurred without
negligence, bad faith or willful misconduct on the part of the Escrow Agent
arising out of, or in connection with the acceptance of, or the performance of,
its duties and obligations under this Agreement.
(f) The Escrow Agent may at any time resign by giving twenty business
days' prior written notice of resignation to the Sub and the Company. The Sub
and the Company may, with the consent of their permitted assigns, at any time
jointly remove the Escrow Agent by giving ten business days' written notice
signed by each of them to the Escrow Agent. If the Escrow Agent shall resign or
be removed, a successor Escrow Agent, which shall be a bank or trust company
having its principal executive offices in New York and assets in excess of $1.5
billion, and which shall be reasonably acceptable to the Sub and their permitted
assigns, shall be appointed by the Company by written instrument executed by the
Company and delivered to the Escrow Agent and to such successor Escrow Agent
and, thereupon, the resignation or removal of the predecessor Escrow Agent shall
become effective and such successor Escrow Agent, without any further act, deed
or conveyance, shall become vested with all right, title and interest to all
cash and property held hereunder of such predecessor Escrow Agent. If no
successor Escrow Agent shall have been appointed within twenty business days of
a notice of resignation by the Escrow Agent, the Escrow Agent's sole
responsibility shall thereafter be to hold the Escrow Fund until the earliest of
(i) its receipt of designation of a successor Escrow Agent, (ii) its receipt of
a written instruction by the Sub, the Company and their permitted assigns or
(iii) termination of this Agreement in accordance with its terms.
9. Termination. This Agreement shall terminate on the earlier date (i)
on which all funds in the Escrow Fund have been delivered pursuant to the terms
hereof or (ii) the Sub, the Company, their permitted assigns and the Escrow
Agent agree in writing to terminate this Agreement.
10. Notices. All notices, requests, claims, demands and other
communications delivered hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by cable, by telecopy, by telegram or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
7):
(a) if to the Sub, at its address set forth in the Merger Agreement.
(b) if to the Company, at its address set forth in the Merger
Agreement.
(c) if to the Escrow Agent:
245 Park Avenue
New York, NY 10167-0062
Fax: (212) 808-2585
Attention: Chris Kortlandt
11. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
executed and to be performed entirely within that State without giving effect to
principles thereof relating to conflicts of law rules that would direct the
application of the laws of another jurisdiction.
12. Amendments. This Agreement may not be amended or modified except
(a) by an instrument in writing signed by, or on behalf of, the Sub, the
Company, their permitted assign and the Escrow Agent or (b) by a waiver in
accordance with Section 10 of this Agreement.
13. Waiver. Any party hereto may (i) extend the time for the
performance of any obligation or other act of any other party hereto or (ii)
waive compliance with any agreement or condition contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.
14. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic and legal substance of
the transactions contemplated by this Agreement is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement be consummated as
originally contemplated to the fullest extent possible.
15. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and undertakings, both written and oral, among the Sub, the
Company and the Escrow Agent with respect to the subject matter hereof.
16. No Third Party Beneficiaries. Except with respect to permitted
assigns, this Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other person or entity any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
17. Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
18. Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties hereto in separate counterparts, each of
which when duly executed shall be deemed to be an original but all of which when
taken together shall constitute one and the same agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
EIN ACQUISITION CORP.
By:______________________________
Name: _______________________
Title: _______________________
ECHELON INTERNATIONAL CORP.
By:_____________________________
Name:
Title:
COOPERATIEVE CENTRALE
RAFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT F
FORM OF CLOSING CERTIFICATE
ECHELON INTERNATIONAL CORPORATION
CLOSING CERTIFICATE
I, the undersigned, Chief Financial Officer of Echelon International
Corporation, do hereby certify, solely in my capacity as an officer of the
Company and not in my individual capacity, on behalf of the Company, to the best
of my knowledge, that the following is true and complete, as of the Effective
Date:
1. Unrestricted Cash in Company: $ ____________1
2. Proceeds from Purchase and Sale Agreement: $ ____________2
3. Proceeds from Subscription Agreement: $ ____________3
4. Assumed Proceeds: $ ____________4
5. Total Cash Available: $ ____________
Less:
1. Transaction Expenses Paid: $ (____________)
(See attached schedule)
2. Transaction Expenses Accrued: $ (____________)
(See attached schedule)
3. Total Transaction Expenses: $ (____________)5
Equal:
1. Net Cash (including Tender Consideration): $ ____________6
<PAGE>
Endnotes:
1 This amount shall, in any event, include (i) the aggregate amount of
funds to be deposited in escrow under the LandAmerica Escrow Agreement
and (ii) the aggregate amount of funds to be deposited in escrow under
the Rabobank Escrow Agreement.
2 Assume consummation of the transactions set forth in the Purchase and
Sale Agreement as of the date of this certificate, including the
application of a credit against the purchase price under the Purchase
and Sale Agreement in an amount equal to the Excess Cash Amount (as
defined in the Purchase and Sale Agreement).
3 Assume consummation of the transactions set forth in the
Subscription Agreement as of the date of this certificate.
4 Parent has represented to the Company that, for purposes of this
certificate, the amount of the Assumed Proceeds shall be $130,258,531
(which amount is a fixed amount and not subject to any downward
adjustment for any reason whatsoever) and the Company (including the
officer of the Company executing this certificate) shall be entitled to
rely, and shall be fully protected (and shall have no liability to any
Person) in relying, upon such representation of Parent.
5 It is agreed among the parties to the Merger Agreement that, for
purposes of calculating Transaction Expenses (both paid and accrued),
(i) the aggregate amount of any and all Transaction Expenses incurred
(or to be incurred) by any party other than the Company as set forth on
Schedule A to this certificate shall be capped at $1,200,000, (ii) if
certain Transaction Expenses have not yet been incurred as of the date
of this certificate, good-faith estimates of such Transaction Expenses
shall be used and (iii) Transaction Expenses shall include, but not be
limited to, all expenses of the type itemized on Schedule A to this
certificate (including, without limitation, payment of the Cash Payment
required by Section 2.09 of the Merger Agreement, payment of the fees
and expenses of Donaldson, Lufkin & Jenrette Securities Corporation
pursuant to Section 3.01(o) of the Merger Agreement and payment of any
amounts required to be paid pursuant to Section 4.09 of the Merger
Agreement).
6 This amount shall be equal to the sum of (i) $233,528,672 plus (ii) the
aggregate amount of rent payments, whether in arrears or in advance,
actually received by the Company with respect to the Leveraged Lease
Portfolio during the period from February 1, 2000 through the Effective
Date.
<PAGE>
SCHEDULE A TO CLOSING CERTIFICATE
LIST OF TRANSACTION EXPENSES
List of Costs incurred (or to be incurred) by the Company
Fee to Donaldson, Lufkin & Jenrette
Reimbursement of Out-of-Pocket Expenses to Donaldson, Lufkin & Jenrette
Assumption and Assignment fees to Company's Lenders
Reimburse Company's Lenders for Out of Pocket Legal Costs
Company Legal Costs
Directors and Officers Insurance Policy
SEC & Hart-Scott-Rodino Filing Fees
Documentary Stamps and Recording Fees
Title Insurance
Company Accounting & Tax Fees
Company Administrative Costs
Company Payroll through Date of Closing
Change in Control Payments to Company Contract Employees (netted for
Executive Loan Repayments)
Excise and Other Tax Gross-Up Payments
Cash Payment in Lieu of Stock for Executive LTIP Shares
Cash Payment for All Outstanding Options in Lieu of Shares
List of Costs incurred (or to be incurred) by Parties
Other than the Company
Transfer Agent Fees
Tender Offer Printing Costs
Tender Offer Solicitation and Distribution Costs
PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is made and entered into as
of January 13, 2000, by and between Echelon International Corporation, a Florida
corporation, and Echelon Affordable Housing, Inc., a Florida corporation, as
sellers (collectively, "Sellers"), and Heller Affordable Housing, Inc., a
Delaware corporation, as purchaser ("Purchaser").
WITNESSETH
WHEREAS, Sellers are the legal and beneficial owners of limited
partner interests (the "Partnership Interests") in five multi-investor tax
credit funds (the "Funds"), which Partnership Interests and Funds are more
particularly identified in Exhibit A hereto; and
WHEREAS, Purchaser desires to purchase from Sellers, and Sellers
desire to sell to Purchaser, all the Partnership Interests on the terms and
conditions set forth herein;
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Purchase of Partnership Interests
1.1 Basic Transaction. On and subject to the terms and conditions
of this Agreement, Purchaser shall purchase from Sellers, and Sellers
shall sell to Purchaser, the Partnership Interests.
1.2 Purchase Price. The aggregate purchase price (the "Purchase
Price") for the Partnership Interests shall equal the sum of
$21,065,000 plus the Recapture Premium (as defined in Section 5.7),
and shall be payable as follows:
(a) $21,065,000 shall be paid by Purchaser to Sellers at the
closing of the transactions contemplated by this Agreement (the
"Closing") by wire transfer of immediately available U.S. funds
to an account designated by Sellers; and
(b) the Recapture Premium shall be paid in accordance with
Section 5 hereof.
1.3 The Closing. The Closing shall be held at the offices of
White & Case LLP, 1155 Avenue of the Americas, New York, New York
10036, commencing at 10:00 a.m. (New York time) on January 14, 2000,
or at such other place and earlier time and date as shall be agreed
upon by the parties hereto (the actual date of the Closing is
hereinafter referred to as the "Closing Date").
1.4 Deliveries at Closing. At the Closing, Sellers will deliver
to Purchaser the various certificates, instruments and documents
referred to in Section 6.1 hereof, and Purchaser will deliver to
Sellers the cash portion of the Purchase Price described in Section
1.2(a) and the various certificates, instruments and documents
referred to in Section 6.2 hereof.
2. Representations and Warranties of Sellers
Sellers represent and warrant to Purchaser that the statements
contained in this Section 2 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date. The
representations and warranties set forth in this Section 2 shall not survive the
Closing Date (except for those set forth in Sections 2.5 and 2.12, which shall
survive the Closing Date; provided, however, that the representations and
warranties set forth in Section 2.5 shall terminate upon the merger of EIN
Acquisition Corp. with and into Echelon International Corporation (the
"Merger")).
2.1 Organization. Each Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Florida.
2.2 Authorization. Each Seller has full power and authority to
execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by each Seller and,
assuming that this Agreement constitutes a valid and binding
obligation of Purchaser, is a valid and binding obligation of each
Seller enforceable against each 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.
2.3 Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (a) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge or other
restriction of any government, governmental agency or court to which
either Seller is subject or any provision of its charter or bylaws, or
(b) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice or
consent under any agreement, contract, lease, license, instrument or
other arrangement to which either Seller is a party or by which it is
bound or to which any of its assets are subject, except for such
notices and consents which must be given or obtained pursuant to the
partnership agreements for the various Funds (the "Fund Agreements").
2.4 Description of Partnership Interests. With respect to each
Partnership Interest, the following information is set forth on
Exhibit A hereto:
(a) the name, state of organization, taxpayer identification
number and tax shelter registration number of the relevant Fund;
and
(b) the number of units comprising such Partnership Interest
and whether such Partnership Interest is represented by a
separate certificate.
2.5 Ownership of Partnership Interests. Sellers are the sole
legal and beneficial owners of the Partnership Interests. Sellers
have not granted any security interests, liens, claims or
encumbrances with respect to the Partnership Interests which will
remain outstanding as of the Closing Date. At the Closing,
Sellers will transfer the Partnership Interests to Purchaser free
and clear of any liens, claims or encumbrances of any kind
whatsoever of which Sellers have knowledge.
2.6 Consents. Except for the consent of the general partner
of each Fund (a "General Partner") and except as set forth in the
Fund Agreements, no consent, authorization or approval of any
person, or of any court or governmental authority, is required in
connection with the consummation by Sellers of the transactions
contemplated by this Agreement.
2.7 Capital Contributions. Sellers have made all scheduled
capital contributions required to be made by them to any Fund
under the existing Fund Agreements as a result of the ownership
of the Partnership Interests.
2.8 Fund Agreements. Sellers have provided to Purchaser true
and correct copies of each Fund Agreement (and all amendments
thereto) and all other agreements, instruments or writings of any
kind in the possession of Sellers which set forth or govern the
rights and obligations of either Seller in its capacity as the
owner of the Partnership Interests, in each case to which either
Seller is a party or of which either Seller has knowledge.
2.9 Defaults. Sellers are not in default with respect to any
of their material obligations under any Fund Agreement and, to
Sellers' knowledge, no General Partner is in default with respect
to any of its material obligations under the applicable Fund
Agreement.
2.10 Audits. To Sellers' knowledge, except as set forth in
Schedule 2.10, no income tax audit has ever been commenced by the
Internal Revenue Service with respect to any Fund or any
lower-tier limited partnership or limited liability company (a
"Project Partnership") in which any Fund has invested.
2.11 Litigation. To Sellers' knowledge, except as set forth
in Schedule 2.11, no litigation, arbitration or similar
proceeding has been commenced, or is threatened, against any Fund
or Project Partnership which, if determined adversely to any such
party, would materially and adversely affect such Fund or Project
Partnership.
2.12 Brokers. Sellers have no liability or obligation to pay
any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement and no
such person or entity claims any of the foregoing with respect to
the transactions contemplated by this Agreement.
3. Representations and Warranties of Purchaser
Purchaser represents and warrants to Sellers that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date. The
representations and warranties set forth in this Section 3 shall not survive the
Closing Date (except for (x) those set forth in Sections 3.4, 3.5 and 3.6, which
shall survive for a period of one year after the Closing Date, and (y) those set
forth in Section 3.7, which shall survive the Closing Date).
3.1 Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
3.2 Authorization. Purchaser has full power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Purchaser and, assuming that this Agreement
constitutes a valid and binding obligation of Sellers, is a valid and
binding obligation of Purchaser enforceable against Purchaser 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 Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (a) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any
government, governmental agency or court to which Purchaser is subject or
any provision of its charter or bylaws, or (b) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or cancel,
or require any notice or consent under any agreement, contract, lease,
license, instrument or other arrangement to which Purchaser is a party or
by which it is bound or to which any of its assets are subject.
3.4 Due Diligence. Purchaser has conducted all due diligence that
Purchaser deems necessary or desirable with respect to the Partnership
Interests, 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 Sellers
specifically set forth in Section 2 hereof, Purchaser will rely solely upon
such due diligence in purchasing the Partnership Interests. Notwithstanding
anything in this Agreement, it is expressly understood and agreed that
Purchaser is acquiring the Partnership Interests "AS IS", "WHERE IS", and
that Sellers have not made and do not and will not make any representations
or warranties, express or implied, which might be pertinent in considering
whether to purchase the Partnership Interests or to make and enter into
this Agreement, except, in each case, to the extent of the limited
representations set forth in Section 2 hereof. Sellers are not liable or
bound in any manner by any warranties, either express or implied,
guarantees, or any promises, statements, representations or information
pertaining to the Partnership Interests or to the value thereof made or
furnished by any broker or any agent, employee, servant or other person
representing or purporting to represent Sellers.
3.5 Purchase for Investment. Purchaser will acquire the Partnership
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 Purchaser at all times to sell or otherwise dispose of all or any part
of the Partnership Interests under the Securities Act of 1933, as amended
(the "Securities Act"), or under an exemption from such registration
available under the Securities Act. Purchaser is an "accredited investor"
as defined under Regulation D of the Securities Act and has substantial
experience in purchasing investments similar to the Partnership Interests.
Purchaser has evaluated the merits and risks inherent in purchasing the
Partnership Interests and is a able to bear the financial risks of such
investment.
3.6 Tax Status. Purchaser is neither a "foreign person" within the
meaning of Sections 897 and 1445 of the Internal Revenue Code of 1986, as
amended (the "Code"), nor a "tax-exempt entity" within the meaning of
Section 168(h)(2) of the Code.
3.7 Brokers. Purchaser has no liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the
transactions contemplated by the Agreement and no such person or entity
claims any of the foregoing with respect to the transactions contemplated
by this Agreement.
<PAGE>
4. Covenants
4.1 Consents. Purchaser will use reasonable efforts to obtain, prior
to January 14, 2000, all consents required for the admission of Purchaser
as a substitute limited partner in each Fund (the "Consents"); provided
that Sellers shall have cooperated with Purchaser in obtaining such
Consents and in complying with the applicable requirements of the Fund
Agreements prior to such time. Purchaser shall pay all costs incurred by it
in connection with obtaining the Consents and effecting the admission of
Purchaser as a substitute limited partner in each Fund, including any
amounts payable to any General Partner pursuant to a Fund Agreement.
4.2 Delivery of Documents. Prior to Closing, Sellers shall deliver to
Purchaser all documents, or copies thereof, in its possession which relate
to any of the Funds and which do not contain any proprietary or
confidential information. Sellers may retain copies of any or all of such
documents.
4.3 Transfer Taxes. Purchaser shall pay when due all transfer taxes,
if any, imposed by any governmental authority with respect to the transfer
of the Partnership Interests to Purchaser, and shall indemnify and hold
Sellers harmless from and against any loss, liability or claim against or
incurred by Sellers as a result of Purchaser's failure to pay such transfer
taxes.
4.4 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Partnership Interests in accordance with the schedule
attached hereto as Exhibit B. Each Seller and Purchaser shall utilize such
allocation in the preparation of all tax returns and financial statements
reflecting its sale or purchase, as the case may be, of the Partnership
Interests and shall not take any positions which are inconsistent
therewith.
5. Recapture Bonds
5.1 Procedures. Promptly after Closing, Purchaser and Sellers shall
take the following actions in order to obtain any recapture bonds (the
"Bonds") required to be delivered to the Internal Revenue Service (the
"IRS") in order for Sellers to avoid any recapture of federal income tax
credits claimed by Sellers pursuant to Section 42 of the Code with respect
to their ownership of the Partnership Interests.
(a) Sellers shall request from the IRS a 30-day extension of the
due date for providing the Bonds (such due date, as it may be extended
from time to time, is hereinafter referred to as the "Bonding Date");
(b) Purchaser shall use its best efforts to obtain a written
commitment from a surety selected by Purchaser and reasonably
acceptable to Sellers (the "Surety") which contains the following
provisions:
(i) if the Merger occurs prior to the Bonding Date and
Purchaser guarantees the obligations of Sellers to the Surety
with respect to the Bonds, the Surety will issue the Bonds on or
prior to the Bonding Date for a premium based on Purchaser's
credit rating;
(ii) if the Merger does not occur prior to the Bonding Date
and Purchaser does not guarantee the obligations of Sellers to
the Surety with respect to the Bonds, the Surety will issue the
Bonds on or prior to the Bonding Date for a premium based on
Sellers' credit rating; and
(iii) if the Merger occurs after the Bonding Date and the
Surety has already issued the Bonds for a premium based on
Sellers' credit rating and Purchaser then delivers to the Surety
a guarantee of the obligations of Sellers to the Surety with
respect to the Bonds, then the surety will pay to the Purchaser,
in exchange for such guarantee, an amount equal to the excess of
(x) the premium charged for the Bonds based on Sellers' credit
rating over (y) the premium that would have been charged for the
Bonds based on Purchaser's credit rating.
(c) Purchaser and Sellers shall cooperate with each other and
prepare, execute and deliver such documents and forms as may be
necessary to obtain the Bonds prior to the Bonding Date.
5.2 Merger Occurs Prior to Bonding Date. If the Merger occurs prior to
the Bonding Date, whether or not the commitment described in Section 5.1(b)
is obtained, Purchaser will (a) provide such guarantee or other form of
credit enhancement as may be required in order to cause a surety to issue
the Bonds on behalf of Sellers on or prior to the Bonding Date and (b) pay
directly to such surety the full amount of all premiums payable as
consideration for the issuance of the Bonds.
5.3 Bonding Date Occurs Prior to Merger. If the Bonding Date occurs
prior to the Merger, whether or not the commitment described in Section
5.1(b) is obtained, Sellers will (a) cause a surety to issue the Bonds on
behalf of Sellers on or prior to the Bonding Date and (b) pay directly to
such surety any premium then due as consideration for the issuance of the
Bonds. Within two business days after the later of (x) the consummation of
the Merger and (y) the delivery by Sellers to Purchaser of a receipt and/or
invoice for any premium paid and/or payable as consideration for the
issuance of the Bonds, Purchaser will pay to Sellers an amount equal to
such premium. If, after the Merger, Purchaser guarantees the obligations of
Sellers to a surety with respect to the Bonds, then Purchaser shall be
entitled to retain any rebate or other payment made by such surety in
exchange for Purchaser's guarantee.
5.4 Merger Does Not Occur. If any agreement with respect to the merger
is not executed prior to January 31, 2000, or following execution such
agreement is terminated for any reason, Purchaser shall pay $435,000 to
Sellers within two business days after the applicable date and, upon such
payment, shall be relieved of any further obligations under this Section 5.
5.5 Merger Occurs but Bonds Not Obtained. If, for any reason other
than the willful failure by Sellers to comply with the provisions of this
Section 5, the Sellers are unable to obtain the Bonds and the Merger is
consummated despite the absence of the Bonds, Purchaser shall pay, and
hereby agrees to pay, to Sellers an amount equal to fifty percent (50%) of
any "credit recapture amount" (as defined in Section 42(j)(2) of the Code)
of Sellers resulting from the transfer of the Partnership Interests
pursuant hereto.
5.6 Payments. Any amounts payable to Sellers pursuant to Section 5.3,
Section 5.4 or Section 5.5 shall be paid by wire transfer of immediately
available U.S. funds to an account designated by Sellers. Any amount
payable by Purchaser pursuant to Section 5.3 shall be paid in such manner
as shall be agreed upon by Purchaser and the surety.
5.7 Recapture Premium. For purposes of this Agreement, the term
"Recapture Premium" shall mean the amount payable by Purchaser pursuant to
Section 5.2, Section 5.3 (less any rebate or other payment received by
Purchaser from a surety), Section 5.4 or Section 5.5, as the case may be.
5.8 Purchaser to Include Affiliates. For purposes of the foregoing
provisions of this Section 5, the term "Purchaser" also includes any
affiliate of Purchaser that performs any of the obligations of Purchaser
under this Section 5.
6. Closing Conditions
6.1 Conditions to Obligations of Purchaser. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver of the following conditions:
(a) the representations and warranties set forth in Section 2
shall be true and correct in all material respects as of the Closing
Date;
(b) Sellers shall have performed and complied with all their
covenants hereunder in all material respects through the Closing Date;
(c) there shall not be any injunction, judgment, order, decree or
ruling in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(d) Sellers shall have delivered to Purchaser a Closing
Certificate in the form attached hereto as Exhibit C;
(e) to the extent that Sellers have previously granted security
interests to the Funds with respect to the Partnership Interests,
Sellers shall have delivered to Purchaser, with respect to each such
Partnership Interest, a copy of a termination statement evidencing the
termination of the applicable Fund's security interest in such
Partnership Interest or such other documentation reasonably
satisfactory to Purchaser which evidences that the security interest
has been terminated;
(f) each of the required Consents shall have been obtained and
appropriate documentation, in each case in the form specified by the
respective Fund Agreement and otherwise in form and substance
reasonably satisfactory to Purchaser, shall have been executed by all
relevant parties to effect the transfer of the Partnership Interests
to Purchaser and the admission of Purchaser as a substitute limited
partner in each Fund; and
(g) Sellers shall have delivered to Purchaser a Certificate of
Non-Foreign Status in the form attached hereto as Exhibit D.
6.2 Conditions to Obligations of Seller. The obligation of Sellers to
consummate the transactions contemplated by this Agreement is subject to
the satisfaction or waiver of the following conditions:
(a) the representations and warranties set forth in Section 3
shall be true and correct in all material respects as of the Closing
Date;
(b) Purchaser shall have performed and complied with all its
covenants hereunder in all material respects through the Closing Date;
(c) there shall not be any injunction, judgment, order, decree or
ruling in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(d) Purchaser shall have delivered to Sellers a Closing
Certificate in the form attached hereto as Exhibit E; and
(e) each of the required Consents shall have been obtained and
appropriate documentation, in each case in the form specified by the
respective Fund Agreement and otherwise in form and substance
reasonably satisfactory to Sellers, shall have been executed by all
relevant parties to effect the transfer of the Partnership Interests
to Purchaser and the admission of Purchaser as a substitute limited
partner in each Fund, and Purchaser shall have cooperated with Sellers
in complying with the applicable requirements set forth in the Fund
Agreements relating to the transfer of the Partnership Interests to
Purchaser and the admission of Purchaser as a substitute limited
partner.
7. Miscellaneous
7.1 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their
respective successors and permitted assigns.
7.2 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign either this Agreement
or any of its rights, interests, or obligations hereunder without the prior
written approval of the other party.
7.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
7.4 Headings. The section headings contained in the Agreement are
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
7.5 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given two
business days after it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient
as set forth below:
If to Sellers prior to the Merger:
Echelon International Corporation
and Echelon Affordable Housing, Inc.
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Attn: Susan Glatthorn Johnson, Esq.
Telecopy No: (727) 803-8203
with a copy, which shall not constitute notice, prior to the
Merger, to:
White & Case LLP
1155 Avenue of the Americas
New York, New York, 10036-2787
Attn: William F. Wynne, Jr., Esq.
Telecopy No: (212) 354-8113
If to Sellers after the Merger:
950 Third Avenue
New York, New York 10022
Attn: James Haber
Telecopy No: (212) 688-7908
with a copy, which shall not constitute notice, after the Merger,
to:
Brown Raysman Millstein Felder and Steiner LLP
120 West 45th Street
New York, New York 10036
Attn: Robert M. Unger, Esq.
Telecopy No: (212) 840-2429
If to Purchaser:
Heller Affordable Housing, Inc
500 West Monroe
30th Floor
Chicago, Illinois 60661
Attn: Larry Mandel
Telecopy No: (312) 441-7560
with a copy, which shall not constitute notice, to:
Paul, Hastings, Janofsky & Walker LLP
600 Peachtree St., NE, Suite 2400
Atlanta, Georgia 30308
Attn: Philip J. Marzetti, Esq.
Telecopy No. (404) 815-2424
Any party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim or other communication
shall be deemed to have been duly given unless and until it actually is
received by the intended recipient. Any party may change the address to
which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other party notice in the
manner herein set forth.
7.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of New York without
giving effect to any choice or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New
York.
7.8 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
Purchaser and Sellers. No waiver by any party of any default,
misrepresentation, or beach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent
such occurrence.
7.9 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.
7.10 Expenses. Except as otherwise specifically provided herein, each
party hereto will bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
7.11 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including
without limitation.
7.12 Knowledge. When any representation or warranty contained in this
Agreement is expressly qualified by the knowledge of Sellers, such
knowledge shall mean the actual knowledge of Larry J. Newsome, James R.
Hobbs, Jr. and Dan R. Johnson.
7.13 Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
7.14 Entire Agreement. This Agreement constitutes the entire agreement
among the parties and supersedes any prior understandings, agreements, or
representations by or among the parties, written or oral, to the extent
they have related in any way to the subject matter hereof.
7.15 Termination. This Agreement shall terminate automatically if the
Closing does not occur on or before January 14, 2000, unless the Closing
Date is extended by mutual agreement of all the parties hereto.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PURCHASER: HELLER AFFORDABLE HOUSING, INC.
By /s/Lawrence S. Mandel
---------------------------------------
Name: Lawrence S. Mandel
Title: Vice President
SELLERS: ECHELON INTERNATIONAL CORPORATION
By: /s/ S.G. Johnson
---------------------------------------
Name: S.G. Johnson
Title: Senior Vice President
ECHELON AFFORDABLE HOUSING, INC.
By: /s/ S.G. Johnson
---------------------------------------
Name: S.G. Johnson
Title: Senior Vice President
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
DESCRIPTION OF PARTNERSHIP INTERESTS
<S> <C> <C> <C> <C> <C>
======================= ================== =================== ====================== ================= ================
State of Taxpayer Tax Shelter Number of Units Holding in
Name of Fund Organization Identification Registration Number Held Certificate
Number of Fund Form?
======================= ================== =================== ====================== ================= ================
American Tax Credit Delaware 31-1455367 96058000264 4 No
Corporate Fund III,
L.P.
- ----------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
KeyCorp Investment Ohio 34-1811098 6 No
Limited Partnership II
- ----------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
Lehman Housing Tax New York 13-3928458 95276000023 6.738544 Yes
Credit Fund L.P.
- ----------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
Lehman Housing Tax Delaware 13-3932050 97241000369 8.673 Yes
Credit Fund VI L.P.
- ----------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
National Corporate California 95-4593894 97139000133 5 No
Tax Credit Fund VII
- ----------------------- ------------------ ------------------- ---------------------- ----------------- ----------------
</TABLE>
<PAGE>
EXHIBIT B
ALLOCATION OF PURCHASE PRICE
The cash portion of the Purchase Price payable pursuant to Section
1.2(a) of the Agreement shall be allocated among the Partnership Interests as
follows:
Partnership Interest Price
Lehman Housing Tax Credit Fund L.P. $ 4,452,826
Lehman Housing Tax Credit Fund VI L.P. 5,720,099
KeyCorp Investment Limited Partnership II 4,989,556
National Corporate Tax Credit Fund VII 3,092,815
American Tax Credit Corporate Fund III, L.P. 2,809,704
TOTAL $21,065,000
The Recapture Premium payable pursuant to Sections 1.2(b) and 5 of the
Agreement shall be allocated among the Partnership Interests in the same ratios
as the foregoing cash portion of the Purchase Price is allocated among such
Partnership Interests.
<PAGE>
EXHIBIT C
CLOSING CERTIFICATE
Pursuant to Section 6.1(d) of the Purchase Agreement between Echelon
International Corporation and Echelon Affordable Housing, Inc. ("Sellers") and
Heller Affordable Housing, Inc. ("Purchaser") made and entered into as of
January 13, 2000 (the "Purchase Agreement"), the undersigned hereby certify on
behalf of Sellers as follows:
(1) The representations and warranties of Sellers set forth in Section
2 of the Purchase Agreement are true and correct in all material respects
as of the date hereof;
(2) Sellers have performed and complied with all its covenants under
the Purchase Agreement in all material respects through the date hereof;
and
(3) No injunction, judgment, order, decree or ruling is in effect with
respect to Seller which would prevent the consummation of the transactions
contemplated by the Purchase Agreement.
This ____ day of January, 2000.
ECHELON INTERNATIONAL CORPORATION
By:
Name: ______________________________
Title: ______________________________
ECHELON AFFORDABLE HOUSING, INC.
By:
Name: ______________________________
Title: ______________________________
<PAGE>
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
In order to comply with Sections 897 and 1445 of the Internal Revenue
Code (the "Code"), the undersigned hereby certify on behalf of Echelon
International Corporation and Echelon Affordable Housing, Inc. (the "Sellers")
as follows:
(1) Neither Seller is a "foreign person" within the meaning of Section
7701 of the Code;
(2) The employer identification number of Echelon International
Corporation is 59-2554218, and the employer identification number of
Echelon Affordable Housing, Inc. is 59-3420655;
(3) The address of each Seller is 450 Carillon Parkway, Suite 200, St.
Petersburg, Florida 33716; and
(4) Each Seller understands that this certification may be disclosed
to the Internal Revenue Service and that any false statement contained
herein 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, and they further declare that they have the
authority to sign this certification on behalf of the Sellers.
This _____ day of January, 2000.
ECHELON INTERNATIONAL CORPORATION
By:
Name: ______________________________
Title: ______________________________
ECHELON AFFORDABLE HOUSING, INC.
By:
Name: ______________________________
Title: ______________________________
<PAGE>
EXHIBIT E
CLOSING CERTIFICATE
Pursuant to Section 6.2(d) of the Purchase Agreement between Echelon
International Corporation and Echelon Affordable Housing, Inc. ("Sellers") and
Heller Affordable Housing, Inc. ("Purchaser") made and entered into as of
January 13, 2000 (the "Purchase Agreement"), the undersigned hereby certifies on
behalf of Purchaser as follows:
(1) The representations and warranties of Purchaser set forth in
Section 3 of the Purchase Agreement are true and correct in all material
respects as of the date hereof;
(2) Purchaser has performed and complied with all its covenants under
the Purchase Agreement in all material respects through the date hereof;
and
(3) No injunction, judgment, order, decree or ruling is in effect with
respect to Purchaser which would prevent the consummation of the
transactions contemplated by the Purchase Agreement.
This ____ day of January, 2000.
HELLER AFFORDABLE HOUSING, INC.
By:
Name: ______________________________
Title: ______________________________
EXECUTION COPY
================================================================================
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
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
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. Sellers 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. Buyers 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
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 Sellers 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
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
<PAGE>
SCHEDULES
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 Agreements
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
<PAGE>
EXHIBITS
Exhibit A - Form of Special Warranty Deed
Exhibit B - Form of Bill 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
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the
21st day of January, 2000, by and among ECHELON INTERNATIONAL CORPORATION, a
Florida corporation ("Echelon"), and various of its subsidiaries signatory
hereto (each, a "Subsidiary", and collectively, the "Subsidiaries") (Echelon and
the Subsidiaries are collectively referred to herein as "Seller"), and ECHELON
RESIDENTIAL LLC, a Delaware limited liability company ("Buyer"). All capitalized
terms used herein shall have the meanings set forth in Section 1 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
(collectively, the "Assets"); and
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.
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
hereof.
"Agreement Date" means the date upon which this Agreement has been
executed and delivered by Seller, Buyer and Escrow Agent.
"Asset Sales Proceeds" has the meaning set forth in Section 5.3
hereof.
"Assets" has the meaning set forth in the first recital hereof, as
more particularly described on Schedule I (other than Part V thereof), and
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
Schedule I) and (v) any and all refunds or any reduction of, or credit against,
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.
"Bringdown Certificate" has the meaning set forth in Section 5.9
hereof.
"Broker" has the meaning set forth in Section 8 hereof.
"Business Day" means any day, other than a Saturday, Sunday or a day
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
hereof.
"Claim" has the meaning set forth in Section 10.3 hereof.
"Claim Notice" has the meaning set forth in Section 10.3 hereof.
"Closing" means the consummation of the transfer, assignment and sale
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.
"Closing Date" has the meaning specified in Section 7.1 hereof.
"COBRA" has the meaning set forth in Section 11.2(a)(1) hereof.
"Code" has the meaning set forth in Section 3.13 hereof.
"Combining Trial Balance" means the trial balance set forth in Part I
of Schedule XXI annexed hereto and made a part hereof.
"Commercial Property" means the real property, including the
improvements thereon, described in Part I of Schedule I; provided, that in no
event shall "Commercial Property" include any or all of the Other Assets.
"Commercial Property Security Deposit Amount" means the aggregate
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.
"Commission Filings" has the meaning set forth in Section 3.17(a)
hereof.
"Contracts" means, collectively, (i) the contracts, agreements and
commitments described on Schedule XI annexed hereto and made a part hereof, (ii)
any contract, agreement or commitment 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) 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 event shall "Contracts"
include any or all of the Other Contracts.
"County" means a political subdivision of the State within which a
Real Estate Asset is situated.
"Deposit" has the meaning set forth in Section 2.2(a) hereof.
"Distribution Agreement" means the Distribution Agreement, dated as of
December 16, 1996, by and between Florida Progress and Echelon.
"Echelon" has the meaning set forth in the introductory paragraph
hereof.
"Employee Benefit Plans" has the meaning set forth in Section 3.13
hereof.
"Employee Loans" means the loans described in Part IX of Schedule I.
"Encumbrance" has the meaning set forth in Section 3.3 hereof.
"Environmental Claims" means administrative, regulatory or judicial
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,
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. ss.
9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
ss. 6901 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.;
the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et
seq.; and their state and local counterparts and equivalents.
"ERISA" has the meaning set forth in Section 3.13 hereof.
"Escrow Agent" means LandAmerica Financial Group, a Virginia
corporation.
"Escrow Closing" means the delivery on the Escrow Closing Date to
Escrow Agent by each of Buyer and Seller of the agreements, documents and
instruments specified in Sections 7.4 and 7.5 hereof, respectively.
"Escrow Closing Date" means the date specified as such in the initial
Escrow Date Notification Certificate delivered by Seller to Buyer; provided,
that if Seller shall deliver one or more subsequent Escrow Date Notification
Certificates in accordance with Section 7.3 hereof, the Escrow Closing Date
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
Section 7.3 hereof.
"Escrowed Items" has the meaning set forth in Section 7.7 hereof.
"Excepted Leases" has the meaning provided in Schedule I.
"Excess Cash Amount" means the aggregate amount of cash and cash
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
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.
"Excluded Liabilities" means any liabilities or obligations of Seller
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
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
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 Subsidiaries
(including the employment agreements described on Schedule XIII 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
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. Michael Doramus, Larry J. Newsome, Susan G. Johnson and Julio A.
Maggi.
"Existing Debt" means the indebtedness described in Schedule II
annexed hereto and made a part hereof; provided, that, in no event shall
"Existing Debt" include any or all of the Other Existing Debt.
"Financial Statements" has the meaning set forth in Section 3.17(a)
hereof.
"Florida Progress" means Florida Progress Corporation, a Florida
corporation.
"GAAP" has the meaning set forth in Section 3.17(a) hereof.
"Hazardous Materials" means (a) any petroleum or petroleum products,
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.
"Heller Lease" means the Lease Agreement, dated as of January 21,
2000, between Heller 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
sentence, paragraph or section in which used.
"HSR Act" has the meaning set forth in Section 3.3 hereof.
"Improvements" means all buildings, structures and other improvements
existing upon the Land.
"including", "include" or "includes" mean including as an example,
without limiting the generality of the description.
"Indemnitee" has the meaning set forth in Section 10.3 hereof.
"Indemnitor" has the meaning set forth in Section 10.3 hereof.
"Intangible Personal Property" means the Intellectual Property and
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
subsidiaries in all assignable credit records, security codes, assignable
telephone numbers, warranties and guarantees; provided, that in no event shall
"Intangible Personal Property" include any or all of the Other Intangible
Personal Property.
"Intellectual Property" means all trademarks, trade names, service
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;
provided, that in no event shall "Intellectual Property" include any or all of
the Other Intellectual Property.
"Joint Venture Interests" means Seller's equity interests in the joint
ventures described in Part VI of Schedule I.
"Land" means, singularly or collectively, the various real properties
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
of the Commercial Property which are more particularly described on Schedule III
annexed hereto and made a part hereof; provided, that in no event shall "Leases"
include any or all of the Other Leases.
"Litigation" has the meaning set forth in Section 3.9 hereof.
"Losses" has the meaning set forth in Section 10.3 hereof.
"Material Adverse Effect" means a material adverse effect on the
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
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.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
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).
"Minimum Cash Amount" means $21,275,000.
"NationsBank Tower" means the 26-story Class A office tower located at
One Progress Plaza, St. Petersburg, Florida.
"Net Sale Proceeds" means, for any Pending Transaction, the gross cash
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.
"Other Assets" means the "Assets" as defined in the Subscription
Agreement.
"Other Assumed Liabilities" means the "Assumed Liabilities" as defined
in the Subscription Agreement.
"Other Buyer" means "Company" as defined in the Subscription
Agreement.
"Other Contracts" means the "Contracts" as defined in the Subscription
Agreement.
"Other Existing Debt" means the "Assumed Debt" as defined in the
Subscription Agreement.
"Other Intangible Personal Property" means the "Intangible Personal
Property" as defined in the Subscription Agreement.
"Other Intellectual Property" means the "Intellectual Property" as
defined in the Subscription Agreement.
"Other Leases" means the "Leases" as defined in the Subscription
Agreement.
"Other Permits" means the "Permits" as defined in the Subscription
Agreement.
"Other Personalty" means the "Personalty" as defined in the
Subscription Agreement.
"Other Real Estate Assets" means the "Real Estate Assets" as defined
in the Subscription Agreement.
"Other Tangible Personal Property" means the "Tangible Personal
Property" as defined in the Subscription Agreement.
"Pending Transactions" has the meaning set forth in Section 5.3
hereof.
"Permits" means the licenses or permits required to be maintained by
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
hereof; provided, that in no event shall "Permits" include any or all of the
Other Permits.
"Person" means and includes an individual, a partnership, a joint
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
Personal Property; provided, that in no event shall "Personalty" include any or
all of the Other Personalty.
"Pre-Approved Expenditures" means the aggregate amount of (i) all
expenditures of Seller described in Part III of Schedule XV annexed hereto and
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
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
Expenditures (as of the Escrow Closing Date specified in the initial Escrow Date
Notification Certificate delivered by Seller pursuant to Section 7.3 hereof)
exceed $7,750,000.
"Purchase Price" has the meaning set forth in Section 2.1 hereof.
"Radon" has the meaning set forth in Section 12.17 hereof.
"Real Estate Assets" means, collectively, the Residential Property
(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
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.
"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 4701 Broadway Avenue, Tampa, Florida.
"Subscription Agreement" means the Subscription Agreement, dated as of
January 21, 2000, by and among Heller 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.
"Tax Credit LP Interest Purchase Agreement" means the Purchase
Agreement, dated as of January 13, 2000, by and between Heller 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
1980 Saturn Street, Monterey Park, California.
"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.
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, 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 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 Hart-Scott-Rodino 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 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
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.
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.
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.
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.
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 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.
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 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
Heller 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, 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 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)(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)(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
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:
(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 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 "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
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, 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).
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 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 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 Heller 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:
(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 Heller 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.
Section 7. Closing.
7.1 Time and Place. The Closing will take place at the offices of
White & Case LLP, 1155 Avenue of the Americas, New York, New York 10036 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 450 Carillon Parkway, Suite 200, St. Petersburg,
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 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 bill 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; 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);
(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.
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 Donaldson, Lufkin & Jenrette 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, 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 Heller 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.
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 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 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 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.
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 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.
ss. 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 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.
(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 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
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Facsimile: (727) 803-8203
Attention: Darryl A. LeClair
with a copy to:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Facsimile: (727) 803-8203
Attention: Susan Glatthorn Johnson, Esq.
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 354-8113
Attention: William F. Wynne, Jr., Esq.
and a copy to:
EIN Acquisition Corp.
950 Third Avenue
New York, New York 10022
Facsimile: (212) 688-7908
Attention: James Haber
with a copy to:
Brown Raysman Millstein Felder and Steiner LLP
120 West 45th Street
New York, New York 10036
Facsimile: (212) 840-2429
Attention: Robert M. Unger, Esq.
(b) if to Buyer, to it at:
c/o Equis Financial Group
One Canterbury Green, 8th Floor
Stamford, Connecticut 06901
Facsimile: (203) 363-0861
Attention: Gary D. Engle
with a copy to:
Steel Hector & Davis LLP
200 South Biscayne Boulevard
Miami, Florida 33131
Facsimile: (305) 577-7001
Attention: Thomas V. Eagan, P.A.
(c) if to Escrow Agent, to it at:
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Facsimile: (813) 740-0595
Attention: Juanita M. Shuster
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.
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.
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 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 Darryl A. LeClair, W. Michael Doramus,
Julio A. Maggi, Larry J. Newsome, Susan G. Johnson, J. Mark Stroud, Thomas D.
Wilson, Antonia P. Williams, Timothy S. Tinsley or K. Brent Little.
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]
<PAGE>
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
By: /s/ Larry J. Newsome
/s/ Christine Vitiello Name: Larry J. Newsome
Name: Christine Vitiello Title: Senior Vice President & Chief
Financial Officer
/s/ Abe Abraham Date: January 21, 2000
Name: Abe Abraham
ECHELON DOWNTOWN I, INC., a Florida
corporation
By: s/s James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
ECHELON RESIDENTIAL INVESTMENTS,
INC., a Florida corporation
By: s/s James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
ECHELON RESIDENTIAL SERVICES, INC.,
a Florida corporation
By: s/s James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
<PAGE>
ECHELON GENERAL PARTNER, INC.,
a Florida corporation
By: s/s James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
WITNESSED BY: ECHELON AT BRIARGATE, INC.,
a Florida corporation
s/s Christine Vitiello By: s/s James R. Hobbs, Jr.
Name: Christine Vitiello Name: James R. Hobbs, Jr.
Title: Senior Vice President
s/s Abe Abraham & Treasurer
Name: Abe Abraham Date: January 21, 2000
<PAGE>
WITNESSED BY: ECHELON AT TWENTY MILE VILLAGE, INC.,
a Florida corporation
/ss Christine Vitiello
Name: Christine Vitiello By: s/s James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
/s/ Abe Abraham Title: Senior Vice President
Name: Abe Abraham & Treasurer
Date: January 21, 2000
WITNESSED BY: NEW FOURTH RESIDENTIAL LIMITED
PARTNERSHIP, a Texas Limited
/s/ Christine Vitiello
Name: Christine Vitiello By: Echelon General Partner, Inc.,
/s/ Abe Abraham a Florida Corporation, its
Name: Abe Abraham general partner
By: s/s James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
WATTERS CREEK LIMITED PARTNERSHIP, a
WITNESSED BY: Texas Limited Partnership
/s/ Christine Vitiello By:Echelon General Partner II, Inc.,
Name: Christine Vitiello Inc., a Florida Corporation,
its general partner
/s/ Abe Abraham
Name: Abe Abraham By: s/s James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
WITNESSED BY: RIVER PARK ESTATES, LLC, a Delaware
Limited Liability Company
/s/ Christine Vitiello
Name: Christine Vitiello By: Echelon Residential Incorporated,
a Florida Corporation, its
/s/ Abe Abraham managing member
Name: Abe Abraham
By: s/s James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
<PAGE>
WITNESSED BY: KELLER-COUNTRY BROOK LIMITED
PARTNERSHIP, a Texas Limited
/s/ Christine Vitiello Partnership
Name: Christine Vitiello
/s/ Abe Abraham By: Echelon General Partner II,
Name: Abe Abraham Inc., a Florida Corporation,
its general partner
By: s/s James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
GALLOWAY-TRIPP SF LIMITED
WITNESSED BY: PARTNERSHIP, a Texas Limited
Partnership
/s/ Christine Vitiello
Name: Christine Vitiello
By: Echelon General Partner II, Inc.,
/s/ Abe Abraham a Florida Corporation, its
Name: Abe Abraham general partner
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
WITNESSED BY: MID-TOWN RESIDENTIAL LIMITED
PARTNERSHIP, a Texas Limited
/s/ Christine Vitiello Partnership
Name: Christine Vitiello By: Echelon General Partner II, Inc.,
a Florida Corportion, its
/s/ Abe Abraham general partner
Name: Abe Abraham
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
& Treasurer
Date: January 21, 2000
<PAGE>
WITNESSED BY: BUYER:
ECHELON RESIDENTIAL LLC, a
Delaware limited liability company
/s/ Wayne Wallace
Name: Wayne Wallace By: Equis Corporation, a
Massachusetts corporation,
/s/ J. Jordon Urstadt
Name: J.Jordan Urstadt By: /s/ James A. Coone
Name:James A. Coone
Title: Executive Vice President
Date: January 21, 2000
<PAGE>
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:/s/John S. Elzeer
Name: John S. Elzeer
Title: Counsel
Date: January 21, 2000
<PAGE>
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: /s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
ECHELON REAL ESTATE SERVICES, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
PCC DEL, INC.
By:/s/James R. Hobbs, Jr.
Name:James R. Hobbs, Jr.
Title:President
Date: January 21, 2000
ECHELON RESIDENTIAL INCORPORATED
By: /s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title:Senior Vice President &
Treasurer
Date: January 21, 2000
<PAGE>
ECHELON GENERAL PARTNER, INC.
By: /s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
SOUTH CORE COMMERCIAL, INC.
By: /s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title:Senior Vice President &
Treasurer
Date: January 21, 2000
<PAGE>
SOUTH CORE PARKING, INC.
By: /s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
ECHELON AFFORDABLE DEVELOPMENT, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title:Senior Vice President &
Treasurer
Date: January 21, 2000
ECHELON CARILLON ONE, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
ECHELON AT CARILLON TWO, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
<PAGE>
ECHELON CARILLON THREE, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title:Senior Vice President &
Treasurer
Date: January 21, 2000
ECHELON AT MCNULTY, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
HIGHPOINT CENTER HEALTH CLUB, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date:January 21, 2000
ECHELON GENERAL PARTNER AFFORDABLE
HOUSING, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
<PAGE>
ECHELON AT BAY ISLE KEY, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date:January 21, 2000
ECHELON AT NORTHLAKE, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
ECHELON AT THE RESERVE I, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
ECHELON AT THE RESERVE II, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title:Senior Vice President &
Treasurer
Date: January 21, 2000
<PAGE>
ECHELON AT WOODLAND PARK, INC.
n/k/a ECHELON GATEWAY, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
ECHELON AT THE HARBORAGE, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
ECHELON RESIDENTIAL INVESTMENTS II,
INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
KNOX STREET CAPITAL, INC.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
<PAGE>
BAYBRIDGE APARTMENTS, LTD.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
200 CARILLON, L.L.C.
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
SOUTH GARNETT RESIDENTIAL LIMITED
PARTNERSHIP
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title:Senior Vice President &
Treasurer
Date: January 21, 2000
RESIDENTIAL 98TH MEMORIAL CREEK
TURNPIKE LIMITED PARTNERSHIP
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title:Senior Vice President &
Treasurer
Date: January 21, 2000
<PAGE>
MISSION RANCH LIMITED PARTNERSHIP
By:/s/James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President &
Treasurer
Date: January 21, 2000
EXECUTION COPY
================================================================================
SUBSCRIPTION AGREEMENT
BY AND AMONG
ECHELON INTERNATIONAL CORPORATION
AND
CERTAIN OF ITS SUBSIDIARIES,
COLLECTIVELY, AS TRANSFEROR,
AND
HELLER AFFORDABLE HOUSING OF FLORIDA, INC.,
AS COMPANY
JANUARY 21, 2000
================================================================================
<PAGE>
Table of Contents
Section 1. Definitions and References..........................................1
Section 2. Transfer of Assets; Assumption of Liabilities.......................8
2.1 Transfer Value...................................................8
2.2 Assumption of Liabilities.........................................9
2.3 Pending Transactions..............................................9
Section 3. Transferor's Representations and Warranties........................10
3.1 Due Organization and Good Standing of Transferor.................10
3.2 Authorization and Validity of Agreement..........................10
3.3 Consents and Approvals; No Violations...........................11
3.4 Title to Assets; Encumbrances.................................11
3.5 Ownership of Mortgage Loans......................................12
3.6 Environmental Laws and Regulations...............................12
3.7 Leases...........................................................13
3.8 Litigation.......................................................13
3.9 Land Use.........................................................13
3.10 Contracts........................................................14
3.11 Permits..........................................................14
3.12 Assumed Debt.....................................................14
3.13 Intellectual Property............................................15
3.14 Insurance........................................................16
3.15 Assets...........................................................16
3.16 Compliance with Laws.............................................16
3.17 Year 2000........................................................16
3.18 Investment Intention.............................................16
3.19 No Other Representations or Warranties...........................16
Section 4. Company's Representations and Warranties...........................17
4.1 Due Organization and Good Standing of Company....................17
4.2 Authorization and Validity of Agreement..........................17
4.3 Capitalization...................................................17
4.4 Consents and Approvals; No Violations............................17
4.5 Condition of the Assets..........................................18
4.6 Liens............................................................18
4.7 Sufficient Funds.................................................19
4.8 Title and Survey.................................................19
4.9 Inspection.......................................................19
4.10 Company Liquidity................................................19
4.11 No Other Representations or Warranties...........................19
Section 5. Covenants..........................................................19
5.1 Compliance.......................................................19
5.2 Notices of Violations............................................20
5.3 Ownership of Assets..............................................20
5.4 Operation of Assets Subsequent to the Agreement Date.............20
5.5 Status of Agreements.............................................21
5.6 Further Assurances..............................................22
5.7 Consents.........................................................23
5.8 Bringdown of Transferor's Representations........................23
5.9 Cooperation Regarding Taxes......................................24
5.10 Insurance........................................................25
5.11 Reasonable Best Efforts..........................................25
5.12 Access to Information Concerning Assets..........................25
5.13 Notification of Certain Matters..................................25
5.14 HSR Act..........................................................26
5.15 Retention of Records.............................................26
5.16 Transfer of Preferred Stock......................................26
5.17 Maintenance of Liquidity.........................................26
Section 6. Conditions Precedent to Closing....................................26
6.1 Company Conditions...............................................26
6.2 Transferor Conditions............................................27
Section 7. Closing............................................................29
7.1 Time and Place...................................................29
7.2 Closing Expenses.................................................29
7.3 Notification of Escrow Closing Date..............................29
7.4 Documents and/or Deliveries......................................29
7.5 Company Documents and/or Deliveries..............................32
7.6 Execution and Delivery of Closing Statements.....................33
7.7 Joint Instructions to Escrow Agent...............................32
7.8 Further Deliveries...............................................33
Section 8. Brokers............................................................34
Section 9. Termination and Abandonment........................................34
9.1 Termination......................................................34
9.2 Effect of Termination............................................35
Section 10. Risk of Loss; Indemnity...........................................36
10.1 Casualty.........................................................36
10.2 Condemnation.....................................................36
10.3 Indemnity........................................................37
Section 11. Special Environmental Indemnity...................................38
11.1 Environmental Liabilities........................................38
11.2 Proceedings in Respect of Claims.................................39
11.3 Assignment of Indemnity..........................................41
Section 12. Miscellaneous.....................................................41
12.1 Litigation......................................................41
12.2 Escrow Obligations of Escrow Agent.............................41
12.3 Notices.........................................................43
12.4 Entire Agreement................................................45
12.5 Successors and Assigns..........................................46
12.6 Headings........................................................46
12.7 Applicable Law..................................................46
12.8 Severability....................................................46
12.9 Counterparts....................................................46
12.10 No Waiver of Default............................................46
12.11 Confidentiality.................................................47
12.12 Recourse Limited................................................47
12.13 Business Day....................................................47
12.14 Recordation.....................................................47
12.15 Jury Waiver.....................................................48
12.16 Public Announcements............................................48
12.17 Radon Gas.......................................................48
12.18 Bulk Sales Law Waiver...........................................48
12.19 Knowledge.......................................................49
12.20 Amendments, Modifications and Supplements.......................49
12.21 Representations and Warranties..................................49
12.22 Performance and Discharge.......................................49
12.23 Section 351 of the Code.........................................49
<PAGE>
SCHEDULES
Schedule I - List of Assets
Schedule II - List of Assumed Debt
Schedule III - Leases
Schedule IV - Consents
Schedule V - Liens on Real Estate Assets
Schedule VI - Liens on Mortgage Loans
Schedule VII - Hazardous Materials
Schedule VIII - Real Estate Contracts
Schedule IX - Intellectual Property
Schedule X - Pending Transactions
Schedule XI - Land Use
Schedule XII - Litigation
Schedule XIII - List of Subsidiary Non-Qualification Information
Schedule XIV - Violations
Schedule XV - Insurance
Schedule XVI - Title Insurance Commitments or Other Reports
Schedule XVII - Surveys
Schedule XVIII - List of Entities Acquiring Preferred Stock
Schedule XIX - Terms of Required Consents
<PAGE>
EXHIBITS
Exhibit A - Form of Special Warranty Deed
Exhibit B - Form of Bill 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 Title Affidavit
Exhibit G - Form of Gap Indemnity
Exhibit H - Form of FIRPTA Affidavit
Exhibit 7.7 Form of Escrow Agent Joint Direction Letter
Exhibit 7.8 Form of Escrow Agent Joint Instruction Letter
<PAGE>
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is made as of the 21st
day of January, 2000, by and among ECHELON INTERNATIONAL CORPORATION, a Florida
corporation ("Echelon"), and various of its subsidiaries signatory hereto (each,
a "Subsidiary", and collectively, the "Subsidiaries") (Echelon and the
Subsidiaries are collectively referred to herein as "Transferor"), and HELLER
AFFORDABLE HOUSING OF FLORIDA, INC., a Florida corporation ("Company"). All
capitalized terms used herein shall have the meanings set forth in Section 1
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 annexed hereto and made a part hereof (collectively, the "Assets");
WHEREAS, Transferor desires to transfer all of Transferor's right,
title and interest in and to the Assets as an investment in Company pursuant to
and in accordance with the terms and provisions of this Agreement in exchange
for 2,000 shares of Preferred Stock of the Company (the "Shares") and
$51,300,000 in cash (subject to the adjustments set forth in Section 2.1 hereof)
("Cash Consideration"); and
WHEREAS, the transfer pursuant to this Agreement is intended, in
connection with a common plan for the capitalization of Company, together with a
contribution of property to Company by Heller Financial, Inc. in exchange for
shares of common stock of Company, to be a contribution to the capital of
Company pursuant to Section 351 of the Code;
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, Transferor agrees to
contribute, assign and transfer to Company, and Company agrees to acquire and
assume from Transferor, in exchange for the Shares and the Cash Consideration
and on the terms and subject to the conditions herein set forth, all of
Transferor's right, title and interest in and to the Assets and the Assumed
Liabilities.
Section 1. Definitions and References.
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
hereof.
"Agreement Date" means the date upon which this Agreement has been
executed and delivered by Transferor, Company and Escrow Agent.
"Asset Sales Proceeds" has the meaning set forth in Section 5.3
hereof.
"Assets" has the meaning set forth in the first recital hereof.
"Assumed Debt" means the indebtedness (as of the Closing Date)
described in Schedule II annexed hereto and made a part hereof.
"Assumed Liabilities" has the meaning set forth in Section 2.2 hereof.
"Bringdown Certificate" has the meaning set forth in Section 5.8
hereof.
"Broker" has the meaning set forth in Section 8 hereof.
"Business Day" means any day, other than a Saturday, Sunday or a day
on which banks located in the State of New York shall be authorized or required
by law to close.
"Claim" has the meaning set forth in Section 10.3 hereof.
"Claim Notice" has the meaning set forth in Section 10.3 hereof.
"Closing" means the consummation of the transfer of the Assets by or
on behalf of Transferor to Company and issuance of the Preferred Stock, the
payment of the Cash Consideration, and assumption of the Assumed Liabilities by
Company, pursuant to Section 7 hereof.
"Closing Date" has the meaning specified in Section 7.1 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission Filings" means all forms, reports, registration statements
filed by Transferor with the Securities and Exchange Commission since December
18, 1996.
"Common Stock and Subordinated Debt Subscription Agreement" means the
Common Stock and Subordinated Debt Subscription Agreement, dated as of January
21, 2000, by and between Company and Heller Financial Inc., a Delaware
corporation.
"Company" has the meaning set forth in the introductory paragraph
hereof.
"Contracts" means, collectively, (i) the contracts, agreements and
commitments described on Schedule VIII annexed hereto and made a part hereof,
(ii) any contract, agreement or commitment by which Transferor is bound
primarily affecting or relating to any of the Assets (excluding Leases,
Encumbrances on title and any documents and instruments related to the Assumed
Debt) which involves base payments or the performance of services by Transferor
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
Transferor on not more than 90 days notice without penalty and (iii) any and all
contracts, agreements and commitments by which Transferor is bound primarily
affecting or relating to any of the Assets (excluding Leases, Encumbrances on
title and any documents and instruments related to the Assumed Debt) and which
are entered into after the Agreement Date in compliance with the provisions of
this Agreement.
"County" means a political subdivision of the State within which a
Real Estate Asset is situated.
"Echelon" has the meaning set forth in the introductory paragraph
hereof.
"Encumbrance" has the meaning set forth in Section 3.3 hereof.
"Environmental Claims" has the meaning set forth in Section 11.1
hereof.
"Environmental Law" means any federal, state or local statute, law,
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. ss.
9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
ss. 6901 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.;
the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et
seq.; and their state and local counterparts and equivalents.
"Escrow Agent" means LandAmerica Financial Group, a Virginia
Corporation.
"Escrow Closing" means the delivery on the Escrow Closing Date to
Escrow Agent by each of Company and Transferor of the agreements, documents and
instruments specified in Sections 7.4 and 7.5 hereof, respectively.
"Escrow Closing Date" means the date specified as such in the initial
Escrow Date Notification Certificate delivered by Transferor to Company;
provided, that if Transferor shall deliver one or more subsequent Escrow Date
Notification Certificates in accordance with Section 7.3 hereof, the Escrow
Closing Date shall mean the date specified as such in the last Escrow Date
Notification Certificate theretofore delivered by Transferor to Company.
"Escrow Date Notification Certificate" has the meaning set forth in
Section 7.3 hereof.
"Escrowed Items" has the meaning set forth in Section 7.7 hereof.
"Excepted Leases" has the meaning provided in Schedule I of the
Purchase and Sale Agreement.
"Excess Amount" has the meaning set forth in Section 2.3(a) hereof.
"Excluded Liabilities" means any liabilities or obligations of
Transferor or its affiliates or predecessors other than the Assumed Liabilities.
"GAAP" means generally accepted accounting principles (as in effect
from time to time).
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Hazardous Materials" means (a) any petroleum or petroleum products,
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 Materials",
"hazardous wastes", "hazardous materials", "extremely Hazardous Materials",
"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.
"Heller Lease" means the Lease Agreement, dated as of January 21,
2000, between Company 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
sentence, paragraph or section in which used.
"HSR Act" has the meaning set forth in Section 3.3 hereof.
"Improvements" means all buildings, structures and other improvements
existing upon the Land.
"including", "include" or "includes" mean including as an example,
without limiting the generality of the description.
"Indemnitee" has the meaning set forth in Section 10.3 hereof.
"Indemnitor" has the meaning set forth in Section 10.3 hereof.
"Intangible Personal Property" means the Intellectual Property and
other intangible personal property used primarily in connection with the 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 Subsidiaries
in all assignable credit records, security codes, assignable telephone numbers,
warranties and guarantees; provided, that in no event shall "Intangible Personal
Property" include any intellectual property or other intangible personal
property used primarily in connection with the Other Assets.
"Intellectual Property" means all trademarks, trade names, service
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 Assets, as more
particularly described in Schedule IX annexed hereto and made a part hereof;
provided, that in no event shall "Intellectual Property" include any
intellectual property used in connection with the Other Assets and in any event
Company shall not obtain any use of the name "Echelon" except to the extent the
use of such name is licensed pursuant to the Lease.
"Land" means, singularly or collectively, the various real properties
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
of the Real Estate Assets which are more particularly described on Schedule III
annexed hereto and made a part hereof.
"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, easement, servitude or charge of any kind, including, without
limitation, any irrevocable license, conditional sale or other title retention
agreement, any lease in the nature thereof, or any other right of or arrangement
with any creditor to have its claim satisfied out of any specified property or
asset with the proceeds therefrom prior to the satisfaction of the claims of the
general creditors of the owner thereof, whether or not filed or recorded, or the
filing of, or agreement to execute as "debtor", any financing or continuation
statement under the Uniform Commercial Code of any jurisdiction or any federal,
state or local lien imposed pursuant to any Environmental Laws.
"Losses" has the meaning set forth in Section 10.3 hereof.
"Material Adverse Effect" means a material adverse effect on the
business, results of operations or financial condition of the Assets taken as a
whole.
"Merger" means the merger of EIN Acquisition Corp., a Florida
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.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
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).
"Mortgage Loans" means the real estate mortgage loans described in
Part IV of Schedule I.
"Net Proceeds" means, for a Pending Transaction, the gross cash
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 Assumed Debt which is secured by or directly related to the respective
assets which were sold, transferred or otherwise disposed or 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.
"Omnibus Agreement" means the Omnibus Agreement, dated as of January
21, 2000, between EIN Acquisition Corp., as seller and Heller Financial, Inc.,
as purchaser.
"Other Assets" means the "Assets" as defined in the Purchase and Sale
Agreement.
"Other Assumed Liabilities" means the "Assumed Liabilities" as defined
in the Purchase and Sale Agreement.
"Other Buyer" means the "Buyer" as defined in the Purchase and Sale
Agreement.
"Other Real Estate Assets" means the "Real Estate Assets" as defined
in the Purchase and Sale Agreement.
"Pending Transactions" has the meaning set forth in Section 5.3
hereof.
"Permits" means any certificates, licenses, authorizations,
registrations or permits required to be maintained by Transferor for the
development, use or occupancy of any portion of any of the Real Estate Assets;
provided, that in no event shall "Permits" include any licenses or permits
required to be maintained for the development, use or occupancy of any portion
of any of the Other Real Estate Assets.
"Person" means and includes an individual, a partnership, a joint
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
Personal Property.
"Preferred Stock" means the shares of Series A Cumulative Redeemable
Preferred Stock, par value $1,000 per share, of Company.
"Purchase and Sale Agreement" means the Purchase and Sale Agreement,
dated as of January 21, 2000, by and among Echelon and its subsidiaries
signatory thereto Echelon Residential LLC, a Delaware limited liability company,
and Escrow Agent.
"Radon" has the meaning set forth in Section 12.17 hereof.
"Real Estate Assets" means, collectively, the real property, together
with the Personalty, Contracts, Leases, and Permits relating thereto, as more
particularly described in Schedule I.
"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 XIX annexed hereto and made a part hereof consenting to the
transactions contemplated by this Agreement and containing terms and provisions
no more onerous to Company than those set forth in Schedule XIX and otherwise in
form and substance reasonably satisfactory to Company.
"Residential Property Restricted Cash Bank Accounts" means the bank
accounts set forth in Part VI of Schedule I annexed hereto and made a part
hereof.
"Securities Act" has the meaning set forth in Section 3.18 hereof.
"Security Deposit Amount" means the aggregate 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 (as defined in the Purchase and Sale Agreement).
"Subsidiary" means each of the entities signatory hereto other than
Echelon, Company and Escrow Agent.
"Surveys" means the surveys with respect to the Real Estate Assets
described on Schedule XVII annexed hereto and made a part hereof.
"Surviving Corporation" has the meaning specified in the Merger
Agreement.
"Tangible Personal Property" means the personal property used
primarily in connection with the Assets (including, without limitation, the
tangible personal property described in Schedule I) other than the Intangible
Personal Property; provided, that in no event shall "Tangible Personal Property"
include any personal property used primarily in connection with the Other
Assets.
"Tax Credit LP Interest Purchase Agreement" means the Purchase
Agreement, dated as of January 13, 2000, by and between Company, Echelon
Affordable Housing, Inc., a Florida corporation, and Echelon.
"Tax Credit LP Interests" means the equity interests of Echelon and
its subsidiaries 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 XVI annexed hereto
and made a part hereof.
"Transfer Value" has the meaning set forth in Section 2.1 hereof.
"Transferor" has the meaning set forth in the introductory paragraph
hereof.
Section 2. Transfer of Assets; Assumption of Liabilities.
2.1 Transfer Value. The aggregate consideration to be paid by Company
in exchange for the Assets (the "Transfer Value") shall be (A) an aggregate
amount equal to (x) $51,300,000, minus (y) the Security Deposit Amount, minus
(z) the aggregate amount set forth under the column "Reduction in Transfer
Value" on Schedule X with respect to the Pending Transactions if consummated on
or prior to the Escrow Closing Date and (B) 2,000 shares of Preferred Stock. The
Transfer Value shall be calculated in accordance with the immediately preceding
sentence by making reference to the notice to be delivered pursuant to Section
7.4(f) hereof. The Transfer Value before reduction by the aggregate amount of
"Reduction in Transfer Value" amounts shall be allocated among the Assets in
accordance with Schedule XVIII herein.
2.2 Assumption of Liabilities. On the terms and subject to the
conditions of this Agreement, on the Closing Date, Company shall assume and pay,
perform and discharge when due, without duplication, (i) the Assumed Debt (as in
effect on the Closing Date), including any prepayment obligations and (ii) the
executory obligations of Transferor arising on or after the Closing Date out of
the Permits, Contracts and Leases (collectively, the "Assumed Liabilities").
Except for the Assumed Liabilities and the executory obligations of Transferor
under the Contracts, Company and Transferor agree that Company shall have no
responsibility, obligation, or duty with respect to any other liability of
Transferor, including, without limitation, the Other Assumed Liabilities, all of
which shall be assumed by the Other Buyer.
2.3 Pending Transactions.
(a) In the event that a Pending Transaction set forth on Schedule
X which is a sale of any of the Assets is consummated after the Agreement Date
and prior to the Closing Date, (i) Company will not acquire any of the Assets
that are the subject of such Pending Transaction, (ii) Transferor shall promptly
deliver to Escrow Agent (in accordance with Section 5.3 hereof) the Net Proceeds
from such Pending Transaction, (iii) Company and Transferor shall instruct the
Escrow Agent not later than the Escrow Closing Date (in accordance with Section
7.7 hereof) to distribute such Net Proceeds as follows: (A) an amount equal to
the Reduction in Transfer Value (as set forth on Schedule X hereto) shall be
delivered to or at the direction of Transferor, (B) an amount equal to fifteen
(15) percent of the Excess Amount (as defined below) shall be delivered to the
Lessee (as defined in the Heller Lease) and (C) eighty-five (85) percent of the
Excess Amount shall be delivered to Company to be held in the Cash Collateral
Account pursuant to the Heller Lease and (iv) Company will not assume or
undertake to discharge any liability or perform any contract or agreement with
respect to such Pending Transaction. For purposes hereof, "Excess Amount" means
an amount equal to the difference between (A) the aggregate Net Proceeds
received by Transferor in connection with such Pending Transaction and (B) the
Reduction in Transfer Value (as set forth on Schedule X hereto) with respect to
the Assets that are the subject of such Pending Transaction; provided, that in
no event shall the Excess Amount be less than $0. The Excess Amount shall be
calculated in accordance with the immediately preceding sentence by making
reference to the notice to be delivered pursuant to Section 7.4(f) hereof.
(b) In the event that a Pending Transaction set forth on Schedule
X which is a refinancing of any of the Assets is consummated after the Agreement
Date and prior to the Closing Date, (i) the New Debt (as described on Schedule
X) shall be included in Assumed Debt, (ii) Transferor shall promptly deliver to
Escrow Agent (in accordance with Section 5.3 hereof) the Net Proceeds from such
Pending Transaction, (iii) Company and Transferor shall instruct the Escrow
Agent not later than the Escrow Closing Date (in accordance with Section 7.7
hereof) to distribute (A) fifteen (15) percent of the Net Proceeds to the Lessee
and (B) eighty-five (85) percent of the Net Proceeds to Company to be held in
the Cash Collateral Account pursuant to the Heller Lease and (iv) Company will
not assume or undertake to discharge any liability with respect to the
Refinanced Debt (as described on Schedule X hereto).
Section 3. Transferor's Representations and Warranties.
Transferor makes the following representations and warranties to
Company, which representations and warranties shall not survive the Escrow
Closing Date, except for the representation and warranty set forth in Section
3.18 hereof which shall survive for a period of one year after the 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
Transferor of any of the following representations and warranties, Company'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 Company's sole remedies in
connection therewith shall be those expressly set forth in Section 9.2 hereof)
and Transferor 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 Transferor.
(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 Company. Except as set forth on Schedule
XIII 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 Company. Except as set
forth on Schedule XIII, 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.
3.2 Authorization and Validity of Agreement. Transferor 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 IV, to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by Transferor, 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 IV). This Agreement has been duly executed and delivered
by Transferor and, assuming that this Agreement constitutes a valid and binding
obligation of Company, is a valid and binding obligation of Transferor
enforceable against Transferor 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 Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), applicable to the sale of Assets to Company 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 IV, 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 IV, 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
Mortgage Loans, with respect to which no representation or warranty is being
made pursuant to this Section 3.4), subject to no Encumbrance or other
restriction of any kind or character, except for (a) liens reflected on Schedule
V 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.
3.5 Ownership of Mortgage Loans. Transferor or its relevant
Subsidiary, as applicable, is the owner and holder of the Mortgage Loans, free
and clear of all Encumbrances and claims of every kind other than those
described in Schedule VI annexed hereto and made a part hereof. True and
complete copies of the documents evidencing and securing the Mortgage Loans, and
any participation agreements relating thereto, have been made available for
review to Company. Except as set forth on Schedule VI, the documents evidencing
and securing the Mortgage Loans are in full force and effect and no defaults on
the part of the borrower or, to Transferor's knowledge, the lender thereunder
have occurred and are continuing. Except as set forth on Schedule VI, all
payments of principal and interest in respect of the Mortgage Loans are current.
Schedule VI sets forth the outstanding principal balance of each of the Mortgage
Loans as of the date indicated therein. To Transferor's knowledge, the Mortgage
Loans and each of the borrower's obligations thereunder are not subject to any
valid right of rescission, set-off, abatement, diminution, counterclaim or
defense which would prevent Company (or any of its assigns) from enforcing the
payment provisions of the documents evidencing and securing the Mortgage Loans,
including, without limitation, any payment guaranty or from foreclosing on the
assets that are security for such Mortgage Loans and Transferor has received no
notice of any such claims having been asserted. Transferor has not satisfied,
canceled or subordinated any of the promissory notes evidencing the Mortgage
Loans in whole or in part.
3.6 Environmental Laws and Regulations. Except as set forth on
Schedule VII annexed hereto and made a part hereof, and subject to Section 12.17
hereof, to the knowledge of Transferor:
(i) Hazardous Materials have not been generated, used,
treated or stored by Transferor on the Real Estate Assets, except for
quantities generated, used, treated or stored in compliance with
Environmental Laws and as required in connection with the normal
operations and maintenance of such Real Estate Assets;
(ii) Hazardous Materials have not been Released or disposed
of by Transferor on the 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;
(iii) Transferor is in compliance with Environmental Laws
and the requirements of permits issued under such Environmental Laws
with respect to the Real Estate Assets;
(iv) There are no pending or threatened Environmental Claims
against Transferor with respect to the 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 Transferor, or against any Person whose
liability for any Environmental Claim Transferor has retained or
assumed whether contractually or by operation of law, in each case to
the extent same relates to the Real Estate Assets;
(vi) Transferor has delivered to or otherwise made available
for inspection by Company true, complete and correct copies and
results of any reports, studies, analyses, tests or monitoring in the
possession of Transferor pertaining to Hazardous Materials in, on,
beneath or adjacent to any Real Estate Assets; and
(vii) There are no underground storage tanks located on the
Real Estate Assets.
3.7 Leases. Schedule III sets forth all Leases affecting any portions
of any of the Real Estate Assets and the Other Real Estate Assets 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 have been made available for review to
Company. 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 Transferor has neither sent nor received any notice of a material default
under any Lease which remains outstanding. The Real Estate Assets are not
subject to any ground leases.
3.8 Litigation. Schedule XII annexed hereto and made a part hereof
contains a current list of all actions, suits, arbitrations and proceedings
pending, or to Transferor's knowledge threatened, against or concerning the
Assets or the Other Assets. To Transferor's knowledge, there are no judgments,
orders or decrees entered in any lawsuit or proceeding against or concerning the
Assets or the Other Assets, other than as set forth on Schedule XII. Transferor
has received no written notice of any pending or threatened condemnation, taking
or similar proceeding affecting the Assets, or any pending public improvements
which would result in, nor has Transferor received written notice of, special
assessments affecting the Assets.
3.9 Land Use. With respect to the Real Estate Assets, Transferor has
not received any written notice from any governmental authority, and Transferor
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 XI
annexed hereto and made a part hereof, Transferor 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 or the Other Real Estate Assets for the purposes permitted by
the regulations governing the applicable zoning district.
3.10 Contracts. Except for the Leases, Encumbrances on title and the
documents and instruments relating to the Assumed Debt, Schedule VIII sets forth
all agreements, contracts and commitments by which Transferor is bound primarily
affecting or relating to the Assets or the Other Assets other than such
contracts, agreements or commitments that involve base payments or the
performance of services by Transferor 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 Transferor on not more than 90 days notice without
penalty relating to or affecting the Assets. True and complete copies of all of
the agreements, contracts and commitments referred to in Schedule VIII have been
made available for review to Company. Except as otherwise set forth on Schedule
IV and VIII, each agreement, contract and commitment referred to in Schedule
VIII 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 Transferor
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.
3.11 Permits. Transferor has obtained all material Permits necessary
for the development, use and occupancy of the Real Estate Assets (except for
those Permits relating to the development of the Real Estate Assets which are
not yet required to be issued), all of such Permits are in full force and
effect, and none of such Permits is the subject of any revocation proceeding,
suspension, forfeiture or the like.
3.12 Assumed Debt. Echelon or its relevant Subsidiary, as applicable,
is the borrower under the Assumed 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 Assumed 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 Assumed Debt and except for debt
incurred in connection with a Pending Transaction, 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 Assumed Debt are
current. True and complete copies of all agreements evidencing and securing the
Assumed Debt have been made available for review to Company.
3.13 Intellectual Property.
(a) Schedule IX sets forth a true and complete list of all
Intellectual Property, specifying, if applicable, the registration or
application numbers for each such item of Intellectual Property, owned by or
licensed to Echelon and/or its subsidiaries. Other than as set forth on Schedule
IX, neither Echelon nor any of its subsidiaries owns or uses any other item of
intellectual property which is material to the Assets or the Other Assets.
(b) Except as set forth on Schedule IX, 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 IX, 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 Transferor's knowledge, use of the Intellectual Property in connection with
the 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 IX, 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 IX.
(f) To the knowledge of Transferor, 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.
3.14 Insurance. Schedule XV annexed hereto and made a part hereof sets
forth a true and complete listing of all insurance policies maintained by
Transferor 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.
3.15 Assets. The Assets are all of the assets necessary for the Assets
to function and operate in substantially the same manner as the Assets have
recently functioned and been operated by Transferor.
3.16 Compliance with Laws. Except as set forth in the Commission
Filings or as set forth on Schedule XIV, Transferor is in compliance with all
applicable laws, regulations, orders, judgments and decrees (other than with
respect to environmental matters and federal securities laws, which are the
subject of specific representations contained in this Agreement).
3.17 Year 2000. There has not been nor is there 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 Transferor. There has not been nor is there reasonably expected to
be a Material Adverse Effect caused by the failure to be Year 2000 Compliant of
any products or services of Transferor sold or licensed to customers of
Transferor.
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.
3.18 Investment Intention. Transferor is acquiring the Preferred Stock
for its own account, for investment purposes only and not with a view to, or any
present intention of, the distribution thereof, except as a result of the
consummation of the transactions contemplated by the Merger Agreement.
Transferor will not, directly or indirectly, offer, transfer, sell, assign,
pledge, hypothecate or otherwise dispose of any of the Preferred Stock (or
solicit any offers to buy, purchase, or otherwise acquire any of the Preferred
Stock), except in compliance with the Securities Act of 1933, as amended (the
"Securities Act"). Transferor acknowledges that the Preferred Stock has not been
registered under the Securities Act or the securities laws of any state or other
jurisdiction and cannot be disposed of unless it is subsequently registered
under the Securities Act and any applicable state laws or exemption from such
registration is available.
3.19 No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 3 and in Section 8
hereof, neither Transferor nor any other Person makes any other express or
implied representation or warranty on behalf of Transferor or any of its
affiliates.
Section 4. Company's Representations and Warranties.
Company makes the following representations and warranties to
Transferor, which representations and warranties shall not survive the Escrow
Closing Date, except for (x) those representations and warranties set forth in
Sections 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 Company. Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida. Company has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted. Company is duly qualified or licensed to do business in Florida
and will, on or prior to the Closing Date, qualify to do business in each
jurisdiction where the Assets are located.
4.2 Authorization and Validity of Agreement. Company has the power and
authority to execute and deliver this Agreement and the Common Stock and
Subordinated Debt Subscription Agreement, to perform its obligations hereunder
and thereunder and consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance of this Agreement and the Common Stock
and Subordinated Debt Subscription Agreement by Company, and the consummation by
it of the transactions contemplated hereby and thereby, have been duly
authorized and no other corporate, partnership or limited liability company
action on the part of Company is necessary to authorize the execution, delivery
and performance of this Agreement and the Common Stock and Subordinated Debt
Subscription Agreement by Company and the consummation of the transactions
contemplated hereby and thereby. This Agreement and the Common Stock and
Subordinated Debt Subscription Agreement have each been duly executed and
delivered by Company and each is a valid and binding obligation of Company
enforceable against Company 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 Capitalization. Immediately after the Closing Date, the authorized
capital stock of Company will consist of (i) 4,000 shares of common stock, par
value $1.00 per share, of which 1,200 shares will be issued and outstanding and
(ii) 2,000 shares of Preferred Stock, of which 2,000 shares will be issued and
outstanding. Immediately after the Closing Date, all issued and outstanding
shares of capital stock of Company will have been duly authorized and be validly
issued and outstanding, fully paid and nonassessable.
4.4 Consents and Approvals; No Violations. Assuming any filings
required under the HSR Act applicable to the transfer of the Assets to Company
are made and any applicable waiting period thereunder has been terminated or has
expired, the execution and delivery of this Agreement by Company and the
consummation by Company of the transactions contemplated hereby will not: (a)
violate any provision of the Certificate of Incorporation or By-Laws of Company,
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 Company 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
Company 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 Company 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.
4.5 Condition of the Assets. Company has conducted all due diligence
that Company deems necessary or desirable with respect to the Assets, the
Assumed Debt, 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 Transferor specifically set
forth in Section 3 hereof, Company will rely solely upon such due diligence in
acquiring the Assets and in assuming the Assumed Liabilities. Without limiting
the generality of the foregoing, Company acknowledges that Transferor makes and
will make no representation or warranty concerning environmental conditions
heretofore, now or hereafter existing on properties adjoining or proximate to
the Assets. Notwithstanding anything in this Agreement, it is expressly
understood and agreed that Company is acquiring the Assets "AS IS", "WHERE IS"
and "WITH ALL FAULTS", and that Transferor has not made and does not and will
not make any representations or warranties, express or implied, including any
with respect to the quality, physical condition, expenses, legal status, zoning,
value, utility or development or operating potential of the Assets, or the
absence of any Hazardous Materials on, in, under or near the Assets, or any
other matter or thing affecting or relating to the Assets, the 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.
Transferor 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 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 Transferor. As of the Agreement
Date, Company is not aware of any events, facts or circumstances which,
individually or in the aggregate, have or would have a Material Adverse Effect.
4.6 Liens. Company acknowledges that it is acquiring the Assets
subject to the matters described in Schedules V and VI and the Assumed Debt
described in Schedule II, and such other matters as are permitted pursuant to
the terms of this Agreement.
4.7 Sufficient Funds. Company has sufficient funds available to it to
acquire the Assets pursuant to this Agreement and will not, prior to Closing,
incur third party debt to finance any portion of the Transfer Value.
4.8 Title and Survey. Prior to the Agreement Date, Company has
reviewed (i) the Title Commitments or other reports with respect to the Real
Estate Assets described on Schedule XVI and (ii) the Surveys with respect to the
Real Estate Assets described on Schedule XVII. Company hereby acknowledges its
approval as of the Agreement Date of the condition of title to the Real Estate
Assets, subject to Transferor'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, Company has inspected the
Assets and any operating files maintained by Transferor or its property managers
in connection with the ownership, leasing, maintenance and/or management of the
Assets, including, without limitation, the Leases, lease files, operating
agreements, insurance policies, bills, invoices, receipts and other general
records relating to the Assets, correspondence, surveys, plans and
specifications, warranties for services and materials provided, environmental
assessments and similar materials, in each case, as Company has deemed necessary
in connection with making its determination to execute and deliver this
Agreement. Company hereby indemnifies Transferor and holds Transferor 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 Assets by Company or its agents other than injury or damages
resulting from Transferor's gross negligence or willful misconduct, and such
indemnity shall survive Closing or any termination of this Agreement.
4.10 Company Liquidity. Company has and through the Closing Date will
have assets which would be classified as cash and cash equivalents on a balance
sheet prepared in accordance with GAAP of not less than $15,000,000.
4.11 No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 4 and in Section 8
hereof, neither Company nor any other Person makes any other express or implied
representation or warranty on behalf of Company 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, Transferor 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 a Pending
Transaction 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 Transferor
receives any notice from any County, or any other 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, Transferor promptly will deliver a copy of
such notice to Company; and Company will have the option (but will not be
required) either to (a) participate with Transferor 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 Company's interests in and with respect
to any of the Real Estate Assets.
5.3 Ownership of Assets. During the period commencing on the Agreement
Date and ending on the Closing Date, Transferor shall not without the prior
consent of Company (which consent shall not be unreasonably withheld,
conditioned or delayed) directly or indirectly sell, transfer, encumber or
otherwise dispose of any of the Assets or any portion thereof to any Person,
other than sales, transfers, encumbrances 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 the transaction described in
Schedule X (the "Pending Transactions"); provided, that the Net Proceeds from
any sale, transfer, encumbrance or disposition of Assets, in whole or in part,
pursuant to the Pending Transactions consummated after the Agreement Date and
prior to the Closing Date (collectively, the "Asset Sales Proceeds") shall be
promptly delivered by Transferor 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 Transferor and Company, 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. Transferor
agrees that except for the Pending Transactions (including all transactions
incident thereto as set forth on Schedule X, 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 Purchase and Sale
Agreement, the Tax Credit LP Interest Purchase Agreement or the Merger Agreement
or otherwise consented to or approved by Company (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) Insofar as any such action relates to the Assets, 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; (ii) enter into any contract or commitment with respect to capital
expenditures; (iii) acquire (by merger, consolidation, or acquisition of stock
or assets or 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;
(iv) acquire a material amount of assets or securities; (v) 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;
(vi) 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; (vii) except as required by applicable law or GAAP, make any material
change in its methods of accounting for financial accounting or income tax
return filing purposes; (viii) 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); (ix) 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 Assumed Debt; or (x) agree, in writing or otherwise, to
take any of the foregoing actions;
(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 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 the
Pending Transactions, the Required Consents or as set forth on Schedule IV or
otherwise consented to or approved by Company (which consent or approval shall
not be unreasonably withheld, conditioned or delayed), Transferor will not do
any of the following:
(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 Assumed 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 Transferor 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 Transferor 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 Assumed 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 Assumed Debt.
(b) During the period commencing on the Agreement Date and ending
on the Closing Date, Echelon will not, without the prior consent or approval of
Company (which consent or approval shall not 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 Company under this
Agreement (it being expressly understood and agreed that in no event shall
Section 4.07 or 5.01 of the Merger Agreement be amended, modified or
supplemented (and in no event shall Transferor grant any consent or waiver with
respect to any such Section) without the prior consent of Company (not to be
unreasonably withheld, conditioned or delayed)). The parties hereto acknowledge
that Company is a third party beneficiary of the agreements made by Echelon
pursuant to Section 4.07 of the Merger Agreement and that Transferor shall be
required to provide Company 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 Transferor and Company 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 Company or
Transferor from time to time for the more effective transfer, assignment and
conveyance to Company of any of the Assets or the Assumed Liabilities, including
without limitation, obtaining the consent of third parties (without obligating
Company or Transferor or their respective affiliates to spend money or assume
obligations in connection therewith), as, in the reasonable opinion of Company
or Transferor, as the case may be, or their respective counsel, are necessary to
transfer, assign and convey the Assets to Company, the assumption by Company 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 Company (irrespective of whether such actions were at the request
of Transferor or Company). In addition to and not in limitation of the foregoing
provisions of this Section 5.6, Company 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 Transferor 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 Company 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 delivered by tenants pursuant to the Leases. The provisions of this
Section 5.6 shall survive Closing for a period of one year from the Closing
Date, except for the provisions of the preceding sentence, which shall survive
the Closing indefinitely.
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, Transferor agrees that it
will use its commercially reasonable efforts (without obligating Transferor 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,
Transferor will use commercially reasonable efforts (without obligating
Transferor or its affiliates to spend money or assume obligations in connection
therewith) to cooperate with Company in any lawful arrangement designed to
provide Company the benefits under any such documents.
5.8 Bringdown of Transferor's Representations. On the Escrow Closing
Date, Transferor shall deliver to Company 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 Transferor
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. Transferor'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
Transferor of any of Transferor's representations and warranties, Company'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 Company's sole remedies in
connection therewith shall be those expressly set forth in Section 9.2 hereof)
and Transferor 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 Transferor's representations and warranties). If, and only if, all of
the changes in Transferor's representations and warranties set forth in such
Bringdown Certificate (other than any changes related to a Pending Transaction),
taken in the aggregate, would have a Material Adverse Effect, then Company shall
have the right by written notice to Transferor actually received by Transferor
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
Transferor 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, Transferor shall, on each such new Escrow Closing Date, deliver to Company
a new Bringdown Certificate certifying as to the matters set forth above in this
Section 5.8 as of such new Escrow Closing Date.
5.9 Cooperation Regarding Taxes. After the Closing Date, Company and
Transferor 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 Company, Transferor 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,
returns, schedules, documents, work papers or other relevant materials. Company
and Transferor shall also make available to each other, as reasonably requested
and on a mutually convenient basis, personnel (including officers, directors,
employees and agents of Company or Transferor 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 5.9 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. Company and Transferor 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). Company and Transferor
agree to retain all records relevant to the tax basis of the Assets and tax
treatment of this Agreement for a period of seven years after the Closing Date.
The provisions of this Section 5.9 shall survive Closing for a period of seven
years after the Closing Date.
5.10 Insurance. During the period commencing on the Agreement Date and
ending on the Closing Date, Transferor will maintain the insurance policies
relating to the Real Estate Assets set forth on Schedule XV; provided, that
Transferor 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 Transferor, unless, in each
case, Company shall have requested in writing that Transferor not discontinue or
reduce, as the case may be, such insurance and shall have paid to Transferor in
immediately available funds all costs (including, without limitation, all
premiums) and expenses of Transferor 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, Company shall not be entitled to any refund or reimbursement of any
amounts previously paid by it to Transferor as contemplated above).
5.11 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 Company and Transferor 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 Transferor
as are necessary for consummation of the transactions contemplated by this
Agreement.
5.12 Access to Information Concerning Assets. During the period
commencing on the Agreement Date and ending on the Closing Date, Transferor
shall, upon reasonable notice, afford Company and its counsel, accountants,
consultants and other authorized representatives, reasonable access (subject to
the rights of tenants under the Leases) during normal business hours to the
employees, properties, books and records of Transferor in order that Company may
have the opportunity to make such investigations as it shall desire of the
Assets. Transferor shall furnish promptly to Company (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 Transferor's possession concerning the Assets as
Company may reasonably request. Transferor 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 Company shall from
time to time reasonably request in relation to the Assets.
5.13 Notification of Certain Matters. During the period commencing on
the Agreement Date and ending on the Closing Date, Transferor shall give prompt
notice to Company, and Company shall give prompt notice to Transferor, 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 Transferor and Company 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.
5.14 HSR Act. Company and Transferor 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.
5.15 Retention of Records. Except as otherwise agreed between Company
and Transferor in writing, Company shall, and shall cause its subsidiaries to,
retain all information relating directly and primarily to the Assets that is
delivered to or obtained by Company 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 Company 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) Company shall provide no less than 30 days' prior written
notice to Transferor specifying the information proposed to be destroyed or
disposed of and (2) if, prior to the scheduled date for such destruction or
disposal, Transferor requests in writing that any of the information proposed to
be destroyed or disposed of be delivered to Transferor, Company promptly shall
deliver the requested information to a location specified by Transferor, at
Transferor's sole cost and expense.
5.16 Transfer of Preferred Stock. Following the consummation of the
Merger and the Closing, Echelon shall distribute (as defined in Code Section
351(c)) the shares of Preferred Stock received by Echelon as set forth on
Schedule XVIII to Parent (as defined in the Merger Agreement).
5.17 Maintenance of Liquidity. At all times through and including the
thirtieth day after the Closing Date, Company shall have assets which would be
classified as cash and cash equivalents on a balance sheet prepared in
accordance with GAAP of not less than $15,000,000.
Section 6. Conditions Precedent to Closing.
6.1 Company Conditions. The obligation of Company 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 Company:
(a) Officer's Certificate. Echelon shall have delivered to
Company 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, Transferor has performed in all
material respects each of its obligations and complied in all material respects
with each agreement and covenant of Transferor to be performed or complied with
by it under this Agreement on or prior to such date, including the delivery of
the certificate required under Section 5.8 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) Purchase and Sale of Other Assets. The purchase and sale of
the Other Assets as contemplated by the Purchase and Sale Agreement 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 Assets. The leasing of the Assets as
contemplated by the Heller 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 Company 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, however, 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 Transferor Conditions. The obligation of Transferor 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 Transferor:
(a) Officer's Certificate. Company shall have delivered to
Transferor a certificate of the President or any Vice President of Company
certifying that, as of the Escrow Closing Date, Company has performed in all
material respects each of its obligations and complied in all material respects
with each agreement and covenant of Company 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 or
issuance of the Transfer Value) 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) Purchase and Sale of Other Assets. The purchase and sale of
the Other Assets as contemplated by the Purchase and Sale Agreement 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 Assets. The leasing of the Assets as
contemplated by the Heller 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 Company 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, however, 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.
Section 7. Closing.
7.1 Time and Place. The Closing will take place at the office of White
& Case LLP, 1155 Avenue of the Americas, New York, New York 10036 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
transfer 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 Transferor), 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 Transferor. Each of Company and Transferor shall be
responsible for its due diligence costs and expenses (including, without
limitation, the payment of the fees and disbursements of its attorneys) and
Transferor shall make any required payments to the Broker in accordance with
Section 8 hereof.
7.3 Notification of Escrow Closing Date. Transferor shall deliver to
Company 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 Transferor
to Company 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 Company, return the Escrowed Items to the party which had
previously deposited same with Escrow Agent, whereupon Transferor shall have the
right to deliver a new Escrow Date Notification Certificate to Company upon the
terms set forth above specifying a new Escrow Closing Date. Transferor 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 Transferor to the extent applicable
(other than those agreements, documents and instruments described in Sections
7.4(b)(vii), (b)(ix), (b)(x), (c)(i) (except that the allonge referred to
therein shall be delivered to Escrow Agent), (c)(ii), (c)(iii), (c)(iv) and
(d)(i) hereof, all of which shall have been made available to Company during
normal business hours at one or more locations previously identified to Company
(which location shall, in the case of the agreements, documents and instruments
described in Section 7.4(b)(vii) and (d)(i) hereof, be 450 Carillon Parkway,
Suite 200, St. Petersburg, 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 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 bill 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 Company in relation to the Real Estate Assets,
substantially in the form annexed hereto as Exhibit C; (iv) an assignment and
assumption agreement with respect to each of the Residential Property Restricted
Cash Bank Accounts, in the form specified by the Bank (or other financial
institution) where the respective Residential Property Restricted Cash Bank
Account is established or, if none, in a form satisfactory to Company; (v)
third-party consents sought in connection with the consummation of the transfer
of the Real Estate Assets but only to the extent actually obtained by Transferor
(it being expressly understood and agreed, for avoidance of doubt, that so long
as Transferor 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); (vi) 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 Real Estate Assets (which tenant estoppel
statements shall in any event include tenant estoppel statements from each of
Andersen Consulting, Florida Power Corporation, Florida Progress, NationsBank,
N.A. and Raymond James & Associates) 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 Transferor does not warrant or guarantee any of the information
contained in tenant estoppel certificates); (vii) 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
Transferor's possession or in the possession of the current property manager for
any of the Real Estate Assets; provided, however, that Company will make all
originals available to Transferor after Closing to the extent required by
Transferor in connection with accounting, taxation, litigation or other
proceedings involving Transferor's prior ownership of the any of the Real Estate
Assets; (viii) notices to the tenants renting space at the Real Estate Assets
confirming that such Real Estate Assets have been acquired by Company, in such
form as Transferor and Company shall agree; (ix) 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 Transferor or Transferor's current property manager; (x) 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 Transferor's possession; (xi)
a Title Affidavit in the form annexed hereto as Exhibit F; (xii) a Gap Indemnity
in the form annexed hereto as Exhibit G if required by the title insurance
company; (xiii) a FIRPTA Affidavit in the form annexed hereto as Exhibit H;
(xiv) such documents or other evidence as may be required to satisfy all
requirements raised in the Title Commitments; provided, however, Transferor
shall not be required to satisfy requirements raised in the Title Commitments
relating to Real Estate Taxes, Assumed Debt (other than the delivery of the
Required Consents relating to any Assumed Debt in accordance with the terms of
this Agreement), Other Assumed 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 Transferor is taking pursuant to the terms
of this Agreement; and (xv) 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 Mortgage Loans: (i) the mortgage note
relating to each such Mortgage Loan, duly endorsed, or attaching an allonge
executed by Transferor in favor of Company, in either case without recourse to
Transferor; (ii) the original executed mortgage or deed of trust securing such
mortgage note, stamped by the appropriate recorders' office as having being duly
filed of record (or a copy thereof certified by the relevant county or
municipality); (iii) the mortgagee title insurance policy relating to the
Mortgage Loan, endorsed to show the assignment of the lender's interest to
Company, (iv) original, executed counterparts of all other documents and
instruments relating to such Mortgage Loan; (v) an assignment and assumption
agreement substantially in the form annexed hereto as Exhibit E, effectively
assigning to Company all of Transferor's right, title and interest in and to,
and obligations with respect to, such Mortgage Loan, together with all relevant
UCC-3 assignment statements; and (vi) any consents sought from pledgees of such
Mortgage Loans, if applicable, as more particularly identified on Schedule IV
(it being expressly understood and agreed, for avoidance of doubt, that so long
as Transferor 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 Assumed Debt: (i) originals (or copies if
originals are unavailable) of all documents and instruments evidencing and
securing the Assumed Debt and (ii) all documents and instruments required to
effect the assignment and assumption of the borrower's interest in the Assumed
Debt from Transferor to Company, including without limitation, if applicable,
consents sought from the holders of the Assumed Debt, as more particularly
identified on Schedule IV (it being expressly understood and agreed, for
avoidance of doubt, that so long as Transferor 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) originals of all Required Consents (but only to the extent
theretofore obtained by Transferor);
(f) 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 Security Deposit Amount and (ii) the Net Proceeds
received by Transferor in connection with a Pending Transaction, if consummated
prior to the Escrow Closing Date; and
(g) 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) Transferor 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) Transferor shall not be
required to provide any representations or warranties which survive the Escrow
Closing Date and (iii) so long as Transferor 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 Company Documents and/or Deliveries. On or prior to the Escrow
Closing Date, Company will deliver (subject only to receipt by Company of the
relevant Bringdown Certificate and Escrow Date Notification Certificate) the
following to Escrow Agent, which shall have been executed by Company to the
extent applicable:
(a) the Transfer Value, by (i) bank wire transfer of U.S. dollars
in immediately available funds and (ii) delivery of stock certificates,
representing a total of 2,000 shares of Preferred Stock, registered in the names
and in the amounts set forth on Schedule XVIII;
(b) certified copies of resolutions of Company 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)(v), and (d)(ii) 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) Transferor 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) Transferor shall not be
required to provide any representations or warranties which survive the Escrow
Closing Date, and (iii) so long as Transferor 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 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.
(f) a release, executed by a duly authorized officer of Company,
releasing Transferor from any and all liabilities or obligations of Transferor
arising under Section 11 of this Agreement, which such liabilities and
obligations shall be assumed by Other Buyer under the Purchase and Sale
Agreement.
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, Transferor and Company 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, Company and Transferor shall execute and deliver to Escrow Agent a
joint direction letter in the form attached hereto as Exhibit 7.7, which shall
be irrevocable, (a) listing with specificity all items delivered by Company
and/or Transferor pursuant to Sections 7.4 and 7.5 hereof (including the
Transfer Value, all such items collectively referred to herein as the "Escrowed
Items") and (b) setting forth irrevocable instructions from Company and
Transferor 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
the Transfer Value shall be delivered to Surviving Corporation or to such
account as Surviving Corporation may designate) 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 the
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
directions set forth in Section 7.7 of this Agreement, Company shall execute and
deliver (a) to Escrow Agent, together with Other Buyer, a joint instruction
letter in the form attached hereto as Exhibit 7.8 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 set forth in Sections 4.1, 4.2
and 4.4(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
Transferor has engaged Donaldson, Lufkin & Jenrette Securities Corporation (the
"Broker") to whom a commission is or could be due in connection with the sale of
the Assets by Transferor to Company, or any other matter associated with this
Agreement. Transferor 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, 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 Company and Transferor at any time prior
to the Tender Offer Expiration Date;
(b) by either Company or Transferor 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 Company or Transferor, 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 Company or Transferor 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 Company or Transferor at any time prior to the
Tender Offer Expiration Date, if any of the Purchase and Sale Agreement, the
Heller Lease or the Tax Credit LP Interest Purchase Agreement shall have been
terminated and be of no further force and effect;
(f) by Company on or at any time prior to the Escrow Closing, in
the event (i) that Company exercises its right of termination as provided in
Section 5.8 or (ii) in the event of (A) a breach by Transferor of its
representations and warranties set forth herein (other than arising out of or
related to a Pending Transaction) which, taken in the aggregate, would have a
Material Adverse Effect or (B) a breach by Transferor 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 Transferor and (y) two Business Days prior to the Tender Offer
Expiration Date and (2) has not been waived by Company; or
(g) by Transferor on or at any time prior to Escrow Closing, in
the event of a breach by Company 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 Company and (ii) two Business Days prior to the Tender Offer
Expiration Date and (B) has not been waived by Transferor, except, in any case
where such failures are not reasonably likely to affect adversely Company's
ability to consummate the transactions contemplated by this Agreement.
9.2 Effect of Termination. (a) In the event of the termination of this
Agreement pursuant to Section 9.1 hereof by Company or Transferor, 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 (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 Sections 5.01(e), (f), (g), (j) (except if the Merger Agreement
has been terminated as a result of the non-performance by Company or any
affiliate of Company under any of the Asset Disposition Agreements (as defined
in the Merger Agreement)) or (k) of the Merger Agreement or (y) Section 9.1(f)
above, Company and its affiliates shall be entitled to receive from Transferor
reimbursement for its reasonable out-of-pocket costs and expenses incurred in
connection with the transactions contemplated by this Agreement, the Omnibus
Agreement and the Tax Credit LP Interest Purchase Agreement in an amount of up
to $1,000,000 (subject to providing reasonable documentation of such costs and
expenses).
(ii) In the event of a termination of this Agreement pursuant to
Section 9.1(g) above, Transferor's sole remedy shall be to receive a sum equal
to $2,750,000 as agreed and liquidated damages, it being agreed that in such
event Transferor's actual damages would be incapable of precise ascertainment
and that the foregoing is a reasonable estimate of such damages.
(iii) Except as expressly set forth above in this Section 9.2,
neither Company nor Transferor 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 Transferor or Company, 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), Company
may by written notice to Transferor actually received by Transferor 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 Company's receipt of written
notice of such damage or destruction (such receipt of written notice by
Transferor to be promptly thereafter acknowledged), terminate this Agreement,
whereupon 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, Company shall proceed to Closing with no
reduction in the Transfer Value notwithstanding any damage or destruction
occurring with respect to the Real Estate Assets, and Transferor will deliver
and/or assign to Company on the Closing Date any insurance proceeds with respect
to such damage or destruction to the extent Transferor is entitled to same;
provided that Company shall be afforded reasonable opportunity by Transferor to
participate in any discussions with third parties relating to such insurance
proceeds and such insurance proceeds shall not be settled or otherwise
compromised by Transferor without the approval of Company (not to be
unreasonably withheld, conditioned or delayed). Transferor shall notify Company
of any damage to or destruction of the Real Estate Assets promptly after
Transferor 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), Company may by written notice to
Transferor actually received by Transferor 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 Company's receipt of written notice of such damage
or destruction (such receipt of written notice by Transferor to be promptly
thereafter acknowledged), terminate this Agreement, whereupon 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, Company shall proceed to Closing with no reduction in the Transfer
Value notwithstanding any taking or condemnation occurring with respect to the
Real Estate Assets, and Transferor will deliver and/or assign to Company on the
Closing Date any award with respect to such taking or condemnation to the extent
Transferor is entitled to same; provided that Company shall be afforded
reasonable opportunity by Transferor 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 Transferor without the
approval of Company (not to be unreasonably withheld, conditioned or delayed).
Transferor shall notify Company of any eminent domain or condemnation proceeding
in respect of the Real Estate Assets promptly after Transferor learns of the
same.
10.3 Indemnity. Each of Company and Transferor (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 Transferor (a "Claim"),
made, or arising out of (x) in the case of Company (as Indemnitor), the Assumed
Liabilities or any failure by Company for any reason to pay, perform and
discharge any Assumed Liabilities, or (y) in the case of Transferor (as
Indemnitor) the Excluded Liabilities or any failure by Transferor 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 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.
Section 11. Special Environmental Indemnity.
11.1 Environmental Liabilities. Upon completion of the Merger and
notwithstanding any other provision of this Agreement to the contrary, the
Surviving Corporation hereby agrees to indemnify, hold harmless and defend
Company from and against any and all claims (including without limitation third
party claims for personal injury or real or personal property damage), losses,
damages, liabilities, fines, penalties, charges, administrative and judicial
proceedings (including informal proceedings) and orders, judgments, remedial
action, requirements, enforcement actions of any kind, and all reasonable and
documented costs and expenses incurred in connection therewith (including but
not limited to reasonable and documented attorneys' and/or paralegals' fees and
expenses), including, but not limited to, all costs incurred in connection with
any investigation or monitoring of site conditions or any clean-up, remedial,
removal or restoration work by any federal, state or local government agency,
arising in whole or in part, out of:
(a) the presence on or under any of the Real Estate Assets of any
Hazardous Materials, or any releases or discharges of any Hazardous Materials
on, under, from or onto any of the Real Estate Assets,
(b) any activity, including, without limitation, construction,
carried on or undertaken on or of any of the Real Estate Assets, and whether by
the Surviving Corporation or any predecessor in title or any employees, agents,
contractors or subcontractors of the Surviving Corporation or any predecessor in
title, or any other Persons, in connection with the handling, treatment,
removal, storage, decontamination, clean-up, transport or disposal of any
Hazardous Materials that at any time are located or present on or under or that
at any time migrate, flow, percolate, diffuse or in any way move onto or under
any of the Real Estate Assets,
(c) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs, remediation and
removal costs, cost of corrective action, costs of financial assurance, fines
and penalties and natural resource damages), or death or injury to any Person,
and all expenses associated with the protection of wildlife, aquatic species,
vegetation, flora and fauna, and any mitigative action required by or under any
Environmental Law,
(d) any claim concerning lack of compliance with any
Environmental Law, or any act or omission causing an environmental condition
that requires remediation or would allow any Governmental Authority to record a
Lien on the land records, or
(e) any residual contamination on or under any of the Real Estate
Assets, or affecting any natural resources, and to any contamination of any
property or natural resources arising in connection with the generation, use,
handling, storage, transport or disposal of any such Hazardous Materials, and
irrespective of whether any of such activities were or will be undertaken in
accordance with applicable laws, regulations, codes and ordinances (any claim
arising out of the events set forth in subsections (a) through (e) of this
Section 11.1 being an "Environmental Claim").
It is expressly understood and agreed that the indemnity provided for herein
shall survive the expiration or termination of and shall be separate and
independent from any remedy under this Agreement.
11.2 Proceedings in Respect of Claims. (a) With respect to any
amount that the Surviving Corporation is requested by Company to pay by reason
of Section 11.1, Company shall, if so requested by the Surviving Corporation and
prior to any payment, submit such additional information to the Surviving
Corporation as the Surviving Corporation may reasonably request and which is in
the possession of Company to substantiate the requested payment.
(b) In case any action, suit or proceeding shall be brought against
Company, Company shall promptly notify the Surviving Corporation of the
commencement thereof, and the Surviving Corporation shall be entitled, at its
expense, to participate in, and, to the extent that the Surviving Corporation
desires to, assume and control the defense thereof, but only to that the
Surviving Corporation shall have acknowledged in writing its obligation to fully
indemnify Company in respect of such action, suit or proceeding. The Surviving
Corporation shall keep Company fully apprised of the status of such action suit
or proceeding and shall provide Company with all information with respect to
such action suit or proceeding as Company shall reasonably request. The
Surviving Corporation shall not be entitled to assume and control the defense of
any such action, suit or proceeding if and to the extent that, (A) in the
reasonable opinion of Company, (x) such action, suit or proceeding involves any
risk of imposition of criminal liability or any risk of imposition of material
civil liability on Company or will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien on any Real Estate Assets or
any part thereof unless, in the case of civil liability, the Surviving
Corporation shall have posted a bond or other security satisfactory to Company
in respect to such risk or (y) the control of such action, suit or proceeding
would involve an actual or potential conflict of interest, or (B) such
proceeding involves claims not fully indemnified by the Surviving Corporation
which the Surviving Corporation and Company have been unable to sever from the
indemnified claim(s). Company may participate in a reasonable manner at its own
expense and with its own counsel in any proceeding conducted by the Surviving
Corporation in accordance with the foregoing. The Surviving Corporation shall
not enter into any settlement or other compromise with respect to any
Environmental Claim which is entitled to be indemnified under Sections 11.1 or
11.2 without the prior written consent of Company which consent shall not be
unreasonably withheld in the case of a money settlement not involving an
admission of liability of Company; provided, however, that in the event that
Company withholds consent to any settlement or other compromise, the Surviving
Corporation shall not be required to indemnify Company under Sections 11.1 or
11.2 to the extent that the applicable Environmental Claim (x) is for legal fees
and expenses incurred after the date of the proposed settlement or (y) results
in a judgment in excess of such offered money settlement.
Company shall at the expense of the Surviving Corporation supply the
Surviving Corporation with such information and documents reasonably requested
by the Surviving Corporation as are necessary or advisable for the Surviving
Corporation to participate in any action, suit or proceeding to the extent
permitted by Sections 11.1 or 11.2. Company shall not enter into any settlement
or other compromise with respect to any Environmental Claim which is entitled to
be indemnified under Sections 11.1 or 11.2 without the prior written consent of
the Surviving Corporation, which consent shall not be unreasonably withheld,
unless Company waives its right to be indemnified under Sections 11.1 or 11.2
with respect to such Environmental Claim.
Upon payment in full of any Environmental Claim by the Surviving
Corporation pursuant to Sections 11.1 or 11.2 to or on behalf of Company, the
Surviving Corporation, without any further action, shall be subrogated to any
and all claims that Company may have relating thereto (other than claims in
respect of insurance policies maintained by Company at its own expense), and
Company shall execute such instruments of assignment and conveyance, evidence of
claims and payment and such other documents, instruments and agreements as may
be necessary to preserve any such claims and otherwise cooperate with the
Surviving Corporation and give such further assurances as are necessary or
advisable to enable the Surviving Corporation vigorously to pursue such claims.
(c) Any amount payable to Company pursuant to Sections 11.1 or 11.2
shall be paid to Company promptly upon receipt of a written demand therefor from
Company, accompanied by a written statement describing in reasonable detail the
basis for such indemnity and the computation of the amount so payable and, if
requested by the Surviving Corporation, such determination shall be verified by
a nationally recognized independent accounting firm mutually acceptable to the
Surviving Corporation and Company at the expense of the Surviving Corporation;
provided, however, that if the Surviving Corporation has assumed the defense of
the related Environmental Claim or is paying the costs of Company's defense of
the related claim on an ongoing basis, the Surviving Corporation shall not be
required to pay such amount to Company until such time as a judgment is entered
with respect to such Environmental Claim, the enforcement of which is not stayed
or which judgment is not bonded over, or the Environmental Claim is otherwise
settled or lost. To the extent the Surviving Corporation suffers any losses or
damages as a result of Company's failure to provide the Surviving Corporation
with prompt notice of the commencement of any action, suit or proceeding against
Company in accordance with the first sentence of the second paragraph of this
Section 11.2, the amounts of such losses or damages may be offset against the
Surviving Corporation's indemnification obligation to Company.
11.3 Assignment of Indemnity. The obligations of the Surviving
Corporation under this Section 11 may be assigned to the Buyer (as such term is
defined in the Purchase and Sale Agreement). Upon such assignment by the
Surviving Corporation and the express assumption of this Special Environmental
Indemnity by Buyer (each on terms satisfactory to Company), Company will release
the Surviving Corporation from any obligations under this Section 11 by
execution of a release in form and substance reasonably satisfactory to the
Surviving Corporation.
Section 12. Miscellaneous.
12.1 Litigation. In the event of any litigation between Transferor and
Company 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. Transferor and Company
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 Transfer Value 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) Transferor and Company 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 Transferor and Company, the responsibility for
indemnifying Escrow Agent for such expenses will belong solely to the
non-prevailing party.
(c) Escrow Agent will not make any disbursement of the Transfer Value
(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 Transfer Value except as set
forth in succeeding subsection (d), Escrow Agent will not disburse the
Transfer Value and will file an action in interpleader to resolve such
disagreement or inconsistency, as the case may be. Escrow Agent will be
indemnified (by Transferor or Company, 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 Transferor or Company
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 Transferor and
Company 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 the Transfer Value to Transferor or to such
account as Transferor may designate) as set forth in the joint direction
letter described in Section 7.7 hereof, (iii) immediately following receipt
of written notice from Transferor or Company 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 Company 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 delivered 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 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 Transferor
and Company, and if a successor title agent is not appointed 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 Transferor, to it at:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Facsimile: (727) 803-8203
Attention: Darryl A. LeClair
with a copy to:
Echelon International Corporation
450 Carillon Parkway, Suite 200
St. Petersburg, Florida 33716
Facsimile: (727) 803-8203
Attention: Susan Glatthorn Johnson, Esq.
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Facsimile: (212) 354-8113
Attention: William F. Wynne, Jr., Esq.
and a copy to:
EIN Acquisition Corp.
950 Third Avenue
New York, New York 10022
Facsimile: (212) 688-7908
Attention: James Haber
with a copy to:
Brown Raysman Millstein Felder and Steiner LLP
120 West 45th Street
New York, New York 10036
Facsimile: (212) 840-2429
Attention: Robert M. Unger, Esq.
(b) if to Company, to it at:
Heller Affordable Housing of Florida, Inc.
500 West Monroe Street
Chicago, Illinois 60661
Facsimile: (312) 441-7119
Attention: John Petrovksi
and a copy to:
Heller Financial
111 West 50th Street
New York, New York 10020
Facsimile: (212) 586-3017
Attention: Mark Hirschhorn
with a copy to:
Winston & Strawn
200 Park Avenue
New York, New York 10166
Facsimile: (212) 294-4700
Attention: Robert W. Ericson, Esq.
with a copy to:
Equis Financial Group
1 Canterbury Green, 8th Floor
Stamford, Connecticut 06901
Facsimile: (203) 363-0861
Attention: James A. Coyne
and a copy to:
Steel Hector & Davis LLP
200 South Biscayne Blvd.
Miami, Florida 33131
Facsimile: (305) 577-7001
Attention: Thomas V. Eagan, P.A.
(c) if to Escrow Agent, to it at:
LandAmerica Financial Group
3922 Coconut Palm Drive, Suite 102
Tampa, Florida 33619
Facsimile: (813) 740-0595
Attention: Juanita M. Shuster
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. Company 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 Company 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, in each case so long as (x)
such transfer, assignment or assumption does not impose any incremental burden
on Transferor under this Agreement or delay (or otherwise impede) the
consummation of the transactions contemplated by this Agreement and (y) Company
remains liable to Transferor for all of its obligations hereunder with respect
to the 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.
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) Transferor 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 Company and/or the Assets and
(y) Company 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 Transferor pursuant to or in connection with this
Agreement or any confidentiality agreement executed by Company 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 Mortgage Loans and the Assumed Debt). Each
of Transferor and Company 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 Transferor and Company 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 Transferor
and Company may disclose any such non-public information as may be required by
law. If the transfer of the Assets contemplated by this Agreement is not
completed for any reason, Company will, upon request of Transferor, promptly
return to Transferor all instruments and materials or copies of instruments and
materials delivered pursuant hereto and obtained by Company. 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.
12.13 Business Day. If any date herein set forth for the performance
of any obligations by Transferor 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. Company and Transferor 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,
Transferor, on the one hand, and Company, 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 14D-1, 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 Transferor's obligations under the Merger Agreement, Transferor will
give Company and its counsel the opportunity to review and comment upon the
Schedule 14D-1, 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
Company 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 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 Transferor set forth in Section 3.6 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 Transferor or Echelon, such
knowledge means the actual knowledge of Darryl A. LeClair, W. Michael Doramus,
Julio A. Maggi, Larry J. Newsome, Susan G. Johnson, J. Mark Stroud, Thomas D.
Wilson, Antonia P. Williams, Timothy S. Tinsley or K. Brent Little.
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 Transferor, on the one hand, and Company, 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 Company, Sections 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 Transferor nor
Company 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 Transferor of any of its representations and
warranties, Company'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 Company's
sole remedies in connection therewith shall be those expressly set forth in
Section 9.2 hereof) and Transferor 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 Company of the
agreements, instruments and other documents contemplated in this Agreement
conveying title to, or assigning Transferor'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 Transferor 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.
12.23 Section 351 of the Code. Each party hereto agrees that this
Agreement and the transactions contemplated thereby shall be taxed in accordance
with Section 351 of the Code and that such party will file applicable Tax
Returns to reflect such treatment.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Subscription
Agreement to be executed on the date(s) hereinafter set forth.
ECHELON INTERNATIONAL CORPORATION,
a Florida corporation
By: /s/ Larry J. Newsome
Name: Larry J. Newsome
Title: Senior Vice President and Chief Financial
Officer
Date: January 21, 2000
ECHELON DEVELOPMENT CORPORATION,
a Florida corporation
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
SOUTH CORE COMMERCIAL, INC.,
a Florida corporation
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
SOUTH CORE PARKING, INC.,
a Florida corporation
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President
Date: January 21, 2000
ECHELON AT CARILLON ONE, INC.,
a Florida corporation
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
ECHELON AT NORTHLAKE, INC.,
a Florida corporation
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
ECHELON AT THE RESERVE, INC.,
a Florida corporation
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
WITNESSED BY: ECHELON AFFORDABLE HOUSING, INC.,
a Florida corporation
/s/ J. Jordan Urstadt
Name: J. Jordan Urstadt By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
/s/ Abe Abraham Title: Senior Vice President and Treasurer
Name: Abe Abraham Date: January 21, 2000
<PAGE>
WITNESSED BY: BAYBRIDGE APARTMENTS, LTD., a Florida Limited
Partnership
/s/ J. Jordan Urstadt
Name: J. Jordan Urstadt By: Echelon General Partner Affordable Housing,
Inc., a Florida Corporation, its general
partner
/s/ Abe Abraham By: /s/ James R. Hobbs, Jr.
Name: Abe Abraham Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
WITNESSED BY: 200 CARILLON, L.L.C., a Delawrare Limited
Liability Company
/s/ J. Jordan Urstadt By: Echelon at Carillon Two, Inc., a Florida
Name: J. Jordan Urstadt Corporation, its managing member
/s/ Abe Abraham By: /s/ James R. Hobbs, Jr.
Name: Abe Abraham Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
<PAGE>
SOUTH GARNETT RESIDENTIAL LIMITED PARTNERSHIP, a
Texas Limited Parntership
By: Echelon General Partner, Inc., a Florida
Corporation, its general partner
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
RESIDENTIAL 98TH MEMORIAL CREEK TURNPIKE LIMITED
PARTNERSHIP, a Texas Limited Partnership
By: Echelon General Partner, Inc., a Florida
Corporation, its general partner
By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
WITNESSED BY: MISSION RANCH LIMITED PARTNERSHIP, a Texas Limited
Partnership
/s/ J. Jordan Urstadt By: Echelon General Partner, Inc., a Florida
Name: J. Jordan Urstadt Corporation, its general partner
/s/ Abe Abraham
Name: Abe Abraham By: /s/ James R. Hobbs, Jr.
Name: James R. Hobbs, Jr.
Title: Senior Vice President and Treasurer
Date: January 21, 2000
<PAGE>
COMPANY:
WITNESSED BY: Heller Affordable Housing of Florida, Inc.
/s/ J. Jordan Urstadt
Name: J. Jordan Urstadt By: /s/ Michael H. Jahrmarkt
Name: Michael J. Jahrmarkt
/s/ Abe Abraham Title: Executive Vice President
Name: Abe Abraham Date: January 21, 2000
<PAGE>
Escrow Agent hereby agrees to hold and disburse the Transfer Value and
the other Escrowed Items in accordance with and subject to the provisions of the
foregoing Subscription Agreement.
LANDAMERICA FINANCIAL GROUP
By: /s/ John S. Elzeer
Name: John S. Elzeer
Title: Counsel
Date: January 21, 2000
FOR IMMEDIATE RELEASE
TENDER OFFER ANNOUNCED FOR
ECHELON INTERNATIONAL CORPORATION
ST. PETERSBURG, FL, January 22, 2000 - Echelon International Corporation
("Echelon") (NYSE: EIN), a real estate company which develops, owns and manages
multi-family residential and commercial real estate, announced today that it has
entered into a definitive agreement pursuant to which EIN Acquisition Corp. will
initiate a tender offer for all the outstanding shares of Echelon for a cash
price of $34.00 per share. The offer is fully financed and is subject to, among
other things, the escrow closing of the real estate transactions described
below.
Under the terms of the agreement, which was approved by the Board of Directors
of Echelon and the Board of Directors of EIN Acquisition Corp., EIN Acquisition
Corp. will commence an all-cash tender offer for all outstanding shares of
Echelon within five (5) business days of signing. The offer will be made only
pursuant to definitive offering documents being filed with the Securities and
Exchange Commission. The offer is conditioned upon, among other things, there
having been validly tendered, and not withdrawn prior to the expiration of the
tender offer, eighty percent (80%) of Echelon's shares. The transaction is
expected to be completed in late February or early March 2000. Donaldson, Lufkin
& Jenrette Securities Corporation acted as the financial advisor to Echelon.
Affiliates of Equis Financial Group ("Equis") and Heller Financial, Inc.
("Heller") have also entered into definitive agreements with Echelon in
connection with the acquisition and financing of Echelon's real estate assets.
These transactions will close as soon as practicable after the completion of the
tender offer and subsequent merger of EIN Acquisition Corp. into Echelon. Equis
will acquire the name "Echelon" and will operate its real estate business
throughout the southeast and southwest United States. Separately, another Heller
affiliate acquired all of Echelon's low income housing tax credit partnership
interests.
Darryl A. LeClair, Echelon's chairman, president and chief executive officer,
commented,
"Since Echelon's spin-off from Florida Progress Corporation (NYSE: FPC),
the Board and management have worked diligently to unlock the value of the
Company for the shareholders. We believe this transaction unlocks value,
providing a premium to shareholders of 42% over the market price of the
stock as of January 20, 2000."
# # #
Note: Certain statements contained in this press release regarding other than
historical facts are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 and are intended to be covered
by the safe harbor created thereby. Such statements, including those concerning
Echelon's expected sources and uses of funds and capital expenditures and its
business strategy including its plans to gradually withdraw from the aircraft
and real estate lending business and focus on its core real estate operations,
involve risks and uncertainties.
Where the Company expresses an expectation or belief as to future events, such
expectation or belief is expressed in good faith and is believed to have a
reasonable basis. However, such forward-looking statements are subject to risks,
uncertainties and other factors, which could cause actual results to differ
materially from future results expressed or implied by such forward-looking
statements. Important factors that could cause actual strategies and the timing
and expected results thereof to differ materially from such forward-looking
statements ("cautionary statements") include, but are not limited to those
factors identified under "CAUTIONARY STATEMENT REGARDING FORWARD LOOKING
STATEMENTS" in the Company's 1998 Annual Report. Given these uncertainties,
readers are cautioned not to place undue reliance on such forward-looking
statements.
All subsequent written and oral forward-looking statements attributable to the
Company or to persons acting on its behalf are expressly qualified in their
entirety by the cautionary statements. The Company disclaims any intent or
obligation to update publicly any forward-looking statements set forth in this
press release, whether as a result of new information, future events or
otherwise.
