EXECUTION COPY

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                          PURCHASE AND SALE AGREEMENT



                                  BY AND AMONG



                        ECHELON INTERNATIONAL CORPORATION

                                       AND

                          CERTAIN OF ITS SUBSIDIARIES,

                            COLLECTIVELY, AS SELLER,



                                       AND



                            ECHELON RESIDENTIAL LLC,

                                    AS BUYER





                                JANUARY 21, 2000







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<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