exv10w1






Exhibit 10.1




 





CONTRIBUTION AGREEMENT




by and among




LIBERTY INTERNATIONAL HOLDINGS LIMITED,




CAPITAL SHOPPING CENTRES PLC,




and




EQUITY ONE, INC.




Dated as of May 23, 2010




 







 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 DEFINITIONS
	 	 	1	 
	1.1 Defined Terms
	 	 	1	 
	1.2 List of Other Defined Terms
	 	 	5	 
	1.3 Miscellaneous
	 	 	6	 
	 
	 	 	 	 
	ARTICLE 2
CONTRIBUTIONS; ISSUANCE OF EQY-CSC SHARES; CLOSING
	 	 	7	 
	2.1
Formation of EQY-CSC
	 	 	7	 
	2.2 Contribution of EQY Promissory Note
	 	 	7	 
	2.3 Contribution of Company Common Stock
	 	 	8	 
	2.4 Closing Date
	 	 	8	 
	2.5 Deliverables At Closing
	 	 	8	 
	2.6 Equityholders Agreement
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 3 CLOSING ADJUSTMENTS
	 	 	11	 
	3.1 Working Capital Adjustment
	 	 	11	 
	3.2 Survival
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 4 REPRESENTATIONS AND WARRANTIES
	 	 	15	 
	4.1 Representations and Warranties of LIH
	 	 	15	 
	4.2 Representations and Warranties of Equity One
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 5 CERTAIN COVENANTS
	 	 	39	 
	5.1 Management and Operation of Properties
	 	 	39	 
	5.2 Interim Operating Covenants of Equity One
	 	 	41	 
	5.3 Reserved
	 	 	41	 
	5.4 Insurance
	 	 	41	 
	5.5 Title
	 	 	42	 
	5.6 Estoppel Certificates
	 	 	42	 
	5.7 Casualty and Condemnation
	 	 	43	 
	5.8 Resignations
	 	 	44	 
	5.9 Employee Matters
	 	 	44	 
	5.10 Access to Information
	 	 	44	 
	5.11 Confidentiality; Publicity
	 	 	45	 
	5.12 Non-Solicit
	 	 	45	 
	5.13 Consent of Mortgage Lenders
	 	 	45	 
	5.14 Tax Matters
	 	 	46	 
	5.15 Expenses; Transfer and Stamp Taxes
	 	 	47	 
	5.16 Brokers or Finders
	 	 	47	 
	5.17 Supplemental Disclosure
	 	 	47	 
	5.18 Post-Closing Cooperation
	 	 	48	 
	5.19 Further Assurances
	 	 	48	 
	5.20 Name Change
	 	 	49	 
	5.21 Amendment of Organizational Documents
	 	 	49	 
	5.22 The Registration Statement
	 	 	49	 






(i) 









 






	 	 	 	 	 
	 	 	Page	 
	5.23 Cooperation Relating to Tax Opinions, EQY Promissory Note
“Bringdown,” and FIRPTA Relief Request
	 	 	49	 
	5.24 Intercompany Debt
	 	 	50	 
	5.25 Modification of EQY Promissory Note
	 	 	50	 
	5.26 FIRPTA Withholding
	 	 	50	 
	5.27 Modifications to Reflect United Kingdom Tax Requirements
	 	 	50	 
	 
	 	 	 	 
	ARTICLE 6 CONDITIONS TO CLOSING
	 	 	51	 
	6.1 Conditions to Each Party’s Obligations
	 	 	51	 
	6.2 Conditions to Equity One’s Obligations
	 	 	51	 
	6.3 Conditions to LIH’s Obligations
	 	 	52	 
	6.4 Mutual Obligation In Connection With the Delivery of Opinions.
	 	 	52	 
	 
	 	 	 	 
	ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER
	 	 	53	 
	7.1 Termination
	 	 	53	 
	7.2 Effect of Termination
	 	 	54	 
	7.3 Election of Remedies
	 	 	55	 
	7.4 FIRPTA Relief Request
	 	 	56	 
	7.5 No Shop
	 	 	58	 
	7.6 Amended EQY Charter
	 	 	58	 
	 
	 	 	 	 
	ARTICLE 8 INDEMNIFICATION
	 	 	58	 
	8.1 Indemnification by LIH
	 	 	58	 
	8.2 Indemnification by Equity One
	 	 	59	 
	8.3 Indemnification Procedure
	 	 	59	 
	8.4 Survival
	 	 	60	 
	8.5 Insurance
	 	 	61	 
	8.6 Exclusivity
	 	 	62	 
	 
	 	 	 	 
	ARTICLE 9 MISCELLANEOUS
	 	 	62	 
	9.1 Entire Agreement; No Amendment
	 	 	62	 
	9.2 Notices
	 	 	62	 
	9.3 No Assignment
	 	 	63	 
	9.4 Multiple Counterparts
	 	 	63	 
	9.5 Invalid Provisions
	 	 	63	 
	9.6 Prior Agreements
	 	 	63	 
	9.7 Jurisdiction
	 	 	64	 
	9.8 Waiver of Jury Trial
	 	 	64	 
	9.9 Governing Law
	 	 	64	 
	9.10 Waiver.
	 	 	64	 
	9.11 No Third Party Beneficiary
	 	 	65	 
	9.12 CSC Guarantee
	 	 	65	 






(ii) 









 





EXHIBITS AND SCHEDULES




	 	 	 

	Exhibit A

	 	Reserved
	Exhibit B

	 	EQY Promissory Note
	Exhibit C

	 	Equityholders Agreement
	Exhibit D

	 	Operating Agreement of EQY-CSC LLC
	Exhibit E

	 	Registration and Liquidity Rights Agreement
	Exhibit F

	 	Notice of Nonrecognition
	Exhibit F-1

	 	Notice of Nonrecognition Cover Letter
	Exhibit G

	 	Subscription Agreement
	Exhibit H

	 	Tax Matters Agreement
	Exhibit I

	 	Opinion of Greenberg Traurig LLP
	Exhibit J

	 	Opinion of Financial Advisor
	Exhibit K-1

	 	Opinion of KPMG LLP
	Exhibit K-2

	 	Opinion of Potter Anderson & Corroon LLP
	Exhibit L

	 	Estoppel Certificates
	 
	 	 
	Schedule 1

	 	The Properties
	Schedule 2

	 	Share Allocation Schedule
	Schedule 3

	 	Knowledge of the Parties
	Schedule 3.1

	 	Working Capital
	Schedule 4.2(h)(b)

	 	Excepted Holders
	Schedule 5.1

	 	Interim Operating Covenants Exceptions
	Schedule 5.5(a)

	 	Title; Specified Liens
	Schedule 5.6

	 	Required Estoppels
	Schedule 5.10(b)

	 	Tenant Interviews
	Schedule 5.13(a)

	 	Lenders Providing Mortgage Consents
	Schedule 5.16

	 	Brokers and Finders
	Schedule 7.5

	 	No Shop Properties






LIH DISCLOSURE SCHEDULE




	 	 	 

	Section 1.3(e)

	 	Index of Company Data Site
	Section 4.1(c)

	 	Company Subsidiaries
	Section 4.1(f)

	 	Violations or Defaults
	Section 4.1(g)

	 	Conflicts
	Section 4.1(h)

	 	Consents
	Section 4.1(i)

	 	Company Common Stock
	Section 4.1(j)

	 	Financial Information
	Section 4.1(k)

	 	Dividends and Distributions
	Section 4.1(l)

	 	Proceedings
	Section 4.1(o)(ii)

	 	Current Title Policies
	Section 4.1(o)(iii)

	 	Surveys
	Section 4.1(o)(iv)

	 	Leases
	Section 4.1(o)(vi)

	 	Commissions, Costs, Concessions
	Section 4.1(o)(vii)

	 	Tenant Right of First Offer, First Refusal or
Option to Purchase of Tenants






(iii) 









 






	 	 	 

	Section 4.1(o)(viii)

	 	Tenant Bankruptcies
	Section 4.1(p)

	 	Acquisitions; Dispositions
	Section 4.1(q)

	 	Existing Debt
	Section 4.1(r)

	 	Material Contracts
	Section 4.1(s)(i)

	 	Tax Due
	Section 4.1(s)(iii)

	 	Tax Audits
	Section 4.1(s)(iv)

	 	Tax Extensions
	Section 4.1(s)(v)

	 	Tax Withholding
	Section 4.1(s)(vi)

	 	Tax Claims
	Section 4.1(s)(x)

	 	Unrealized Gains
	Section 4.1(s)(xi)

	 	Excise Taxes
	Section 4.1(v)

	 	Employment Agreements
	Section 4.1(w)

	 	Environmental Matters
	Section 4.1(aa)

	 	Restrictions on Subsidiaries






EQY DISCLOSURE SCHEDULE




	 	 	 

	Section 4.2(h)(b)

	 	No Violation or Default






(iv) 









 







CONTRIBUTION AGREEMENT




     This CONTRIBUTION AGREEMENT (this “Agreement”) is made as of the 23rd day
of May, 2010, by and among Liberty International Holdings Limited, a private company limited by
shares organized under the laws of England and Wales (“LIH”), Equity One, Inc., a Maryland
corporation (“Equity One”), and, solely for the purposes of Section 9.12, Capital
Shopping Centres plc, a public limited company organized under the laws of England and Wales
(“CSC”).



     WHEREAS, LIH and Equity One wish to cause a Delaware limited liability company with the name
EQY-CSC LLC (“EQY-CSC”) to be formed having Equity One (and/or one of its affiliates) and
LIH as members;



     WHEREAS, Equity One wishes to contribute to EQY-CSC a shared appreciation promissory note in
the form attached hereto as Exhibit B (the “EQY Promissory Note”);



     WHEREAS, LIH wishes to contribute to EQY-CSC 100% of the issued and outstanding common stock,
par value $1.00 per share, of C&C (US) No. 1, Inc., a Delaware corporation (the “Company”
and such common stock, the “Company Common Stock”); and



     WHEREAS, the Company is the owner, directly or indirectly, in whole or in part, of the real
estate assets listed on Schedule 1 hereto (the “Properties”).



     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in reliance on all representations, warranties and covenants made by each
of the parties herein, the parties hereto agree as follows:



ARTICLE 1




DEFINITIONS




          1.1 Defined Terms. As used in this Agreement, in addition to the other terms defined
herein, the following capitalized terms shall have the following meanings:




     “Amended EQY Charter” has the meaning ascribed to such term in the Equityholders
Agreement.



     “Authority” means a governmental or regulatory body or agency or arbitrator, court or
tribunal having jurisdiction over Equity One, any Liberty Party and any of their respective
subsidiaries.



     “Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York, New York or London, England are authorized or required by Law to
close.



     “Code” means the Internal Revenue Code of 1986, as in effect from time to time, and
applicable rules and regulations thereunder. Any reference herein to a specific section or



 









 




sections of the Code shall be deemed to include a reference to any corresponding provision of
future Law.




     “Consents” means all authorizations, consents, approvals, elections and waivers from
third parties (including, without limitation, any joint venture partners and tenants-in-common)
necessary to enable each Liberty Party, as applicable, to (i) convey the Company Common Stock to
EQY-CSC, including any consents necessary under any Loan Documents (other than Mortgage Consents),
organizational documents or other agreements by which any Liberty Party or the Properties are bound
or subject, and (ii) enable the performance of all obligations of all Liberty Parties under this
Agreement and the other Transaction Documents.



     “Contract” means any contract, undertaking, commitment, agreement, understanding or
arrangement of any kind.



     “Equityholders Agreement” means that certain Equityholders Agreement, dated as of the
date hereof, among Equity One, LIH, Gazit-Globe Ltd. and the other parties named therein, in the
form attached hereto as Exhibit C.



     “EQY Common Stock” means the common stock, par value $0.01 per share, of Equity One.



     “EQY VWAP Price” means the average of the volume-weighted price daily per share of
Equity One Common Stock (as reported by Bloomberg Financial Services, Inc. or any successor
service) for each of the ten (10) trading days immediately preceding the Closing Date.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.



     “Existing Debt” means certain indebtedness for borrowed money secured by one or more
of the Properties, the original principal amount and the outstanding balance of which, as of
April 30, 2010, is set forth on Section 4.1(q) of the LIH Disclosure Schedule.



     “FIRPTA” means the Foreign Investment in Real Property Tax Act of 1980, as amended,
and the rules and regulations promulgated thereunder.



     “GAAP” means United States generally accepted accounting principles.



     “Improvements” means, with respect to any Property, any and all buildings,
improvements and fixtures located on such Property (other than any of the foregoing to the extent
owned by tenants under Leases), including, without limitation, heating and air-conditioning systems
and facilities, and parking and related facilities and amenities.



     “Law” means any law, rule, regulation, ordinance, code or Order of any Authority.



     “Liberty Party” or “Liberty Parties” means any and all of CSC, LIH, the
Company and its subsidiaries.



2









 





     “Lien” means any mortgage, deed of trust, lien, pledge, hypothecation, assignment,
security interest, or any other encumbrance, charge or transfer of, on or affecting any person, any
of such person’s subsidiaries, or any property (including any Property), including, without
limitation, any conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, the filing of any financing
statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.



     “LIH Disclosure Schedule” means the disclosure schedule, dated as of the date hereof,
delivered by LIH to Equity One at or prior to the execution of this Agreement, as it may be updated
pursuant to Section 5.17.



     “Loan Documents” means all agreements and other instruments securing or evidencing
Existing Debt or any other indebtedness of the Company or any of its subsidiaries for borrowed
money (excluding the CapCo Note (as defined in the Subscription Agreement)), or documents otherwise
executed and delivered in connection therewith.



     “Loss” or “Losses” means any and all losses, damages, costs, liabilities,
Taxes, fines, penalties and expenses, including, without limitation, reasonable attorneys’ fees and
disbursements; provided, however, that “Loss” or “Losses” shall not include
consequential, incidental, indirect, special or punitive damages, including any claim for damages
based on lost profits or revenues, however caused or on any theory.



     “Material Contract” means any Contract to which the Company or any of its subsidiaries
(other than Non-controlled Subsidiaries) is party or by which the Company or any of its
subsidiaries (other than Non-controlled Subsidiaries) is bound that cannot be terminated by the
Company or such subsidiary (i) upon notice of 90 days or less, or (ii) without payment of a
monetary penalty.



     “Non-controlled Subsidiary” means those subsidiaries of the Company that, directly or
indirectly, own the Pacific Financial Center and Trio Apartments Properties.



     “Operating Agreement” means the amended and restated limited liability company
agreement of EQY-CSC to be effective as of the Closing Date, in the form attached hereto as
Exhibit D.



     “Order” means any judgment, order or decree of any Authority.



     “Permitted Exceptions” means, with respect to a Property, (i) all matters listed as
exceptions in the Current Title Policies, (ii) zoning, building, fire, health, environmental and
pollution control Laws and other land use Laws, (iii) Permitted Liens, and (iv) such other title
and survey exceptions as Equity One may approve (in its reasonable discretion) from time to time
prior to the Closing Date.



     “Permitted Lien” means any Lien (i) expressly authorized or created by or pursuant to
any Loan Document, (ii) that qualifies as a Permitted Exception, or (iii) for Taxes that are not
yet due and payable or that are being contested in good faith, or that is in the nature of
mechanic’s liens, materialmen’s liens or other similar liens and encumbrances of service providers
that are



3









 




being appropriately contested in the ordinary course of business and are satisfied or
otherwise removed within sixty (60) days.




     “Registration and Liquidity Rights Agreement” means that certain Registration and
Liquidity Rights Agreement, dated as of the Closing Date, between Equity One and LIH, in the form
attached hereto as Exhibit E.



     “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.



     “Share Allocation Schedule” means a schedule, in the form of Schedule 2 hereto,
setting forth (i) the dollar value and applicable number of EQY LLC Shares, denominated by class,
to be issued by EQY-CSC hereunder to Equity One, and (ii) the dollar value and applicable number of
LIH LLC Shares, denominated by class, to be issued by EQY-CSC hereunder to LIH.



     “Subscription Agreement” means that certain Subscription Agreement, dated as of the
Closing Date, between Equity One and LIH, in the form attached hereto as Exhibit G.



     “Tax” or “Taxes” shall mean any and all taxes, charges, fees, duties, levies
or other assessments of any kind whatsoever, however denominated, imposed by Law, which taxes shall
include, but not be limited to all net income, gross income, gross receipts, excise, alternative
minimum, add-on minimum, windfall profit, paid up capital, capital stock, greenmail, stamp, custom,
duty, real or personal property, natural resources, ad valorem, value added, sales, employee or
other withholding, estimated, social security, employment, unemployment, occupation, use, service,
service use, license, net worth, payroll, franchise, environmental (including taxes under Section
59A of the Code), severance, transfer, recording, escheat, registration, documentation, workers’
compensation, impact, hospital, health, disability or other taxes, whether computed on a separate,
consolidated, unitary, combined, affiliated or any other basis, and any interest, penalties, fees,
charges, assessments, duties, tariffs, imposts or additions to tax attributable thereto.



     “Tax Matters Agreement” means that certain Tax Matters Agreement, dated as of the
Closing Date, among Equity One, EQY-CSC, LIH and CSC, in the form attached hereto as
Exhibit H.



     “Tax Return” shall include any report, return, document, declaration, statement,
election or other filing, including a schedule, statement or certificate and any amendment to any
of the foregoing filed or required to be filed in connection with the determination, assessment, or
collection of any Tax or the administration of any laws, regulations or administrative requirements
relating to any Tax.



     “Transaction Documents” means, collectively, (i) this Agreement, (ii) the Operating
Agreement, (iii) the Subscription Agreement, (iv) the Equityholders Agreement, (v) the Registration
and Liquidity Rights Agreement, (vi) the Tax Matters Agreement, (vii) the EQY Promissory Note, and
(viii) all related documents, schedules, agreements and instruments contemplated herein or therein
or necessary to effect the transactions contemplated herein or therein.



4









 





     “Working Capital Threshold” means zero.



          1.2 List of Other Defined Terms. The following capitalized terms are
defined in the sections or articles set forth below:




	 	 	 

	“Agreement”

	 	Introductory Paragraph
	“Casualty”

	 	Section 5.7(a)
	“Closing” and “Closing Date”

	 	Section 2.4
	“Company”

	 	Recitals
	“Company Common Stock”

	 	Recitals
	“Company Financial Statements”

	 	Section 4.1(j)
	“Company Material Adverse Effect”

	 	Section 4.1(a)
	“CSC”

	 	Introductory Paragraph
	“Current Title Policies”

	 	Section 4.1(o)(ii)
	“Environmental Laws”

	 	Section 4.1(w)(i)
	“Equity One”

	 	Introductory Paragraph
	“Equity One Fundamental Representations”

	 	Section 8.4(a)
	“Equity One Material Adverse Effect”

	 	Section 4.2(m)
	“Equity One Property Subsidiary”

	 	Section 4.2(c)
	“Equity One SEC Reports”

	 	Section 4.2(a)
	“Equity One Subsidiaries”

	 	Section 4.2(c)
	“EQY-CSC”

	 	Recitals
	“EQY LLC Shares”

	 	Section 2.2
	“EQY Promissory Note”

	 	Recitals
	“ERISA”

	 	Section 4.1(y)
	“Escrow Agent”

	 	Section 7.4(a)
	“Escrowed Termination Funds”

	 	Section 7.4(a)
	“Estimated Closing Date Balance Sheet”

	 	Section 3.1(a)
	“Estimated Working Capital Amount”

	 	Section 3.1(b)
	“Estimated Working Capital Deficit”

	 	Section 3.1(b)
	“Estimated Working Capital Surplus”

	 	Section 3.1(b)
	“Exchange Price”

	 	Section 3.1(g)
	“FCPA”

	 	Section 4.1(bb)
	“Final Working Capital Amount”

	 	Section 3.1(d)
	“FIRPTA Relief Request”

	 	Section 6.3(f)
	“FIRPTA Termination Notice”

	 	Section 7.4(a)
	“Hazardous Materials”

	 	Section 4.1(x)
	“Indemnifying Party”

	 	Section 8.3(a)
	“Indemnitee”

	 	Section 8.3(a)
	“Investigation”

	 	Section 5.10(a)
	“IRS”

	 	Section 4.1(s)(x)
	“Leases”

	 	Section 4.1(o)(iv)
	“Licenses”

	 	Section 4.1(t)
	“LIH”

	 	Introductory Paragraph
	“LIH Fundamental Representations”

	 	Section 8.4(a)
	“LIH LLC Shares”

	 	Section 2.3
	“Material Leases”

	 	Section 4.1(o)(iv)






5









 







	 	 	 

	“Money Laundering Laws”

	 	Section 4.1(cc)
	“Mortgage Consent”

	 	Section 5.13(a)
	“Notice of Nonrecognition”

	 	Section 5.26
	“PCBs”

	 	Section 4.1(w)(ii)
	“Plan”

	 	Section 4.1(y)
	“Post-Closing Balance Sheet”

	 	Section 3.1(c)
	“Preliminary Report”

	 	Section 5.5(a)
	“Property” or “Properties”

	 	Recitals
	“Registration Statement”

	 	Section 5.22
	“REIT”

	 	Section 4.1(s)(ix)
	“Release”

	 	Section 4.1(x)
	“Required Estoppels”

	 	Section 5.6
	“SEC”

	 	Section 4.2(a)
	“Securities Laws”

	 	Section 4.2(a)
	“Significant Subsidiaries”

	 	Section 4.2(c)
	“Surveys”

	 	Section 5.5(b)
	“Taking”

	 	Section 5.7(b)
	“Third Party Claim”

	 	Section 8.3(b)
	“Title Company”

	 	Section 5.5(a)
	“Title Policy”

	 	Section 5.5(a)
	“Termination Date”

	 	Section 7.1(a)(ii)
	“Termination Fee”

	 	Section 7.4(c)
	“Termination Rejection Notice”

	 	Section 7.4(c)
	“Working Capital”

	 	Section 3.1(e)
	“Working Capital Decrease Amount”

	 	Section 3.1(d)
	“Working Capital Increase Amount”

	 	Section 3.1(d)






          1.3 Miscellaneous. For purposes of this Agreement:





     (a) “affiliate” shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with such person.
For purposes of this definition, “control,” when used with respect to any person, means the
power to direct the management and policies of such person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise, and the terms
“controlling” and “controlled” shall have meanings correlative to the foregoing.




     (b) “knowledge” shall mean, to the extent that any representation, warranty,
covenant, indemnification or other provision or other statement in this Agreement is
qualified by reference to a party’s knowledge, the actual current knowledge, without any
special investigation or inquiry, of the individual(s) listed on Schedule 3 hereto,
as the case may be.




     (c) “person” shall mean an individual, corporation, partnership (whether
general or limited), limited liability company, trust, estate, unincorporated organization,
association, custodian, nominee or any other individual or entity in its own or any
representative capacity.



6









 






     (d) “subsidiary” shall mean, with respect to any person, any other person 50%
or more of whose outstanding capital stock or other equity interests is directly or
indirectly owned by such person; provided, that wherever the term “subsidiary” is
used in relation to the Company for purposes of the representations made in Section 4.1
hereof (other than the representations made in Sections 4.1(a)–4.1(d),
4.1(i) and 4.1(j)(i)), each such representation shall be deemed to be made
to the knowledge of LIH with respect to the Non-controlled Subsidiaries.




     (e) Whenever herein the singular number is used, the same shall include the plural, and
the plural shall include the singular where appropriate, and words of any gender shall
include the other gender when appropriate. The headings of the Articles and the Sections
contained in this Agreement are for convenience only and shall not be taken into account in
determining the meaning of any provision of this Agreement. The words “hereof” and “herein”
refer to this entire Agreement (including all of the schedules hereto and the LIH Disclosure
Schedule) and not merely the Section in which such words appear. If the last day for
performance of any obligation hereunder is not a Business Day, then the deadline for such
performance or the expiration of the applicable period or date shall be extended to the next
Business Day. When used in reference to information or documents, the phrase “made
available” in this Agreement shall mean that the information or documents referred to have
been made available to the other party (including by posting of the information or documents
in the digital data site prepared by the Company, an index of which is attached hereto as
Section 1.3(e) of the LIH Disclosure Schedule).




     (f) Whenever an action herein is specified as to be taken or not taken by Equity One
causing EQY-CSC to take or not take such action, it shall mean that Equity One shall cause
the board of managers of EQY-CSC to cause EQY-CSC to take or not take such action.



ARTICLE 2




CONTRIBUTIONS; ISSUANCE OF EQY-CSC SHARES; CLOSING




          2.1 Formation of EQY-CSC. Prior to the Closing Date, Equity One shall cause EQY-CSC to be
formed as a Delaware limited liability company by duly filing a certificate of formation in a form
reasonably acceptable to LIH with the Secretary of State for the State of Delaware.




          2.2 Contribution of EQY Promissory Note. On the Closing Date and subject to the terms and
conditions of this Agreement, Equity One shall contribute, assign, convey and deliver to EQY-CSC
the EQY Promissory Note, duly executed by Equity One. In consideration of such contribution and
conveyance, Equity One shall cause EQY-CSC to issue and deliver to Equity One at Closing the
membership interests in EQY-CSC of such classes and in such amount as set forth on the Share
Allocation Schedule (the “EQY LLC Shares”), based upon an agreed-upon valuation of such EQY
LLC Shares as set forth on the Share Allocation Schedule, free and clear of any and all Liens
(other than those imposed by the Operating Agreement and federal and state securities Laws or those
created by Equity One).







7









 








          2.3 Contribution of Company Common Stock. On the Closing Date and subject to the terms and
conditions of this Agreement, LIH shall contribute, assign, convey and deliver to EQY-CSC the
Company Common Stock. In consideration of such contribution and conveyance, Equity One shall cause
EQY-CSC to issue and deliver to LIH at Closing the membership interests of such class and in such
number as set forth on the Share Allocation Schedule (the “LIH LLC Shares”), based upon an
agreed-upon valuation of such LIH LLC Shares as set forth on the Share Allocation Schedule, free
and clear of any and all Liens (other than those imposed by the Operating Agreement and federal and
state securities Laws or those created by LIH).




          2.4 Closing Date. Unless this Agreement is sooner terminated or extended
pursuant to its terms, the closing of the transactions contemplated by this Agreement (the
“Closing”) shall take place on the fifth (5th) Business Day following the day on which each
of the closing conditions specified in Article 6 hereof have been satisfied, or to the
extent permitted, waived (other than those conditions that by their nature are to be satisfied at
the Closing, but subject to the satisfaction or waiver of those conditions) (such date, the
“Closing Date”). The Closing shall occur at the offices of Goodwin Procter LLP, 620 Eighth
Avenue, New York, NY 10018 at 10 a.m., New York Time, on the Closing Date, unless otherwise agreed
to by Equity One and LIH.




          2.5 Deliverables At Closing.





     (a) At the Closing, Equity One shall deliver:




     (i) EQY Promissory Note. To EQY-CSC, the EQY Promissory Note, duly
executed by Equity One in favor of EQY-CSC;




     (ii) Operating Agreement. To LIH, a signature page to the Operating
Agreement, dated as of the Closing Date and duly executed and delivered by Equity
One;




     (iii) Bringdown Certificate. To LIH, a certificate, dated as of the
Closing Date and executed on behalf of Equity One by a duly authorized officer
thereof, as contemplated by Sections 6.3(a) and (b) hereof;




     (iv) Registration and Liquidity Rights Agreement. To LIH, signature
page(s) to the Registration and Liquidity Rights Agreement, dated as of the Closing
Date and duly executed by Equity One;




     (v) Subscription Agreement; Equity One Shares. To LIH, signature
page(s) to the Subscription Agreement, dated as of the Closing Date and duly
executed by Equity One, along with the shares of Equity One Common Stock to be
delivered to LIH pursuant to the terms of the Subscription Agreement;




     (vi) Tax Matters Agreement. To LIH, a signature page to the Tax
Matters Agreement, dated as of the Closing Date and duly executed by Equity One; and



8









 






     (vii) Equity One Board Resolutions. To LIH, a copy of resolutions duly
adopted by the board of directors of Equity One appointing a designee of LIH to the
board of directors of Equity One pursuant to the Equityholders Agreement.




     (b) At the Closing, LIH shall deliver:




     (i) Company Common Stock. To EQY-CSC, one or more stock certificates
evidencing the Company Common Stock, duly endorsed, free and clear of any and all
Liens (other than those imposed by the Company’s organizational documents and
federal and state securities Laws or created by Equity One or EQY-CSC), accompanied
by evidence reasonably satisfactory to EQY-CSC of the transfer to EQY-CSC of
ownership of the Company Common Stock on the books and records of the Company;




     (ii) Operating Agreement. To Equity One, a signature page to the
Operating Agreement, dated as of the Closing Date and duly executed by LIH;




     (iii) Bringdown Certificate. To Equity One, a certificate, dated as of
the Closing Date and executed on behalf of LIH by a duly authorized officer thereof,
as contemplated by Sections 6.2(a) and (b) hereof;




     (iv) Mortgage Consents. To EQY-CSC, any and all Mortgage Consents;




     (v) Estoppel Certificates. To EQY-CSC, the Required Estoppels;




     (vi) Resignations. To EQY-CSC, the letters of resignation required
pursuant to Section 5.8;




     (vii) Registration and Liquidity Rights Agreement. To Equity One, a
signature page to the Registration and Liquidity Rights Agreement, dated as of the
Closing Date and duly executed by LIH;




     (viii) Tax Matters Agreement. To Equity One and EQY-CSC, a signature
page to the Tax Matters Agreement, dated as of the Closing Date and duly executed by
LIH and CSC; and




     (ix) Subscription Agreement; CapCo Note. To Equity One, signature
page(s) to the Subscription Agreement, dated as of the Closing Date and duly
executed by LIH, along with the CapCo Note (as defined in the Subscription
Agreement) of the Company to be delivered to Equity One pursuant to the terms of the
Subscription Agreement.




     (c) Deliverables of EQY-CSC. At the Closing, Equity One shall cause EQY-CSC to
deliver:




     (i) EQY LLC Shares. To Equity One, a schedule to the Operating
Agreement evidencing issuance of the EQY LLC Shares to Equity One, in such



9









 






amounts and of such classes as set forth on the Share Allocation Schedule and
in accordance with the Operating Agreement;




     (ii) LIH LLC Shares. To LIH, a schedule to the Operating Agreement
evidencing issuance of the LIH LLC Shares to LIH, in such amounts and of such
classes as set forth on the Share Allocation Schedule, as it may be adjusted
pursuant to Section 3.1, and in accordance with the Operating Agreement; and




     (iii) Tax Matters Agreement. To LIH, a signature page to the Tax
Matters Agreement, dated as of the Closing Date and duly executed and delivered by
EQY-CSC.



(d) Opinions. At the Closing, the following shall be delivered:




     (i) Opinions for Equity One and LIH.




     (A) To LIH, an opinion of Greenberg Traurig LLP in the form of
Exhibit I, dated as of the Closing Date, regarding the REIT
qualification of Equity One and its subsidiaries, together with any backup
representation letters or certificates relied on by such counsel in giving
such opinion (such representation letters or certificates also to be in the
form of Exhibit I hereto), or, if such opinion is not delivered by
Greenberg Traurig LLP, a “will” level of opinion from either Goodwin Procter
LLP or Simpson Thacher & Bartlett LLP in a form reasonably
satisfactory to LIH regarding the REIT qualification of Equity One and its
subsidiaries, together with any backup representation letters or
certificates relied on by such counsel in giving such opinion;




     (B) To LIH, the opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
that the contribution by LIH of the Company Common Stock to EQY-CSC should
not be subject to withholding under Section 1445 of the Code, it being
understood that such opinion will be subject to customary assumptions and
limitations and shall be based upon customary representations concerning,
among other things, the classification of the EQY Promissory Note as debt
for purposes of the Code; and




     (C) To Equity One, the opinion of Goodwin Procter LLP that it
is more likely than not that the contribution by LIH of the Company Common
Stock to EQY-CSC will not be subject to withholding under Section 1445 of
the Code, it being understood that such opinion will be subject to customary
assumptions and limitations and shall be based upon customary
representations concerning, among other things, the classification of the
EQY Promissory Note as debt for purposes of the Code.




     (ii) Additional Opinions.



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     (A) To Equity One, the opinion of KPMG LLP, in the form of Exhibit
K-1 hereto, dated as of the Closing Date, regarding the REIT
qualification of the Company, together with any backup representation
letters or certificates relied on by KPMG LLP in giving such opinion (such
representation letters or certificates also to be in the form of Exhibit
K-1 hereto); and




     (B) To Equity One, the opinion of Potter Anderson & Corroon LLP, in the
form of Exhibit K-2 hereto, dated as of the Closing Date, regarding
certain REIT qualification matters relating to the Company, together with
any backup representation letters or certificates relied on for purposes of
rendering such opinion (such representation letters or certificates also to
be in the form of Exhibit K-2 hereto).



          2.6 Equityholders Agreement. The parties acknowledge and agree that the Equityholders
Agreement has been duly executed and delivered by the parties thereto as of the date of this
Agreement and will be effective as of the Closing.




ARTICLE 3




CLOSING ADJUSTMENTS




          3.1 Working Capital Adjustment.





     (a) Prior to the Closing Date, LIH shall, or shall cause the Company to, in good faith
prepare an estimated consolidated balance sheet of the Company and its subsidiaries as of
the Closing Date (the “Estimated Closing Date Balance Sheet”), which for purposes of
this Agreement shall be deemed to be the balance sheet of the Company as of 11:59PM on the
day immediately preceding the Closing Date. The Estimated Closing Date Balance Sheet shall
be prepared in accordance with GAAP, consistently applied by the Company and following the
policies, procedures, principles and methods employed in preparing the audited balance sheet
of the Company as of December 31, 2009 included in the Company Financial Statements and
shall set forth a calculation of the Working Capital reflected thereon calculated in the
manner set forth on Schedule 3.1. Not later than five (5) Business Days prior to
the Closing Date, LIH shall deliver to Equity One the Estimated Closing Date Balance Sheet,
including the calculation of Working Capital, together with worksheets and data that support
the Estimated Closing Date Balance Sheet and any other information that Equity One may
reasonably request in order to verify the amounts reflected on the Estimated Closing Date
Balance Sheet, including the calculation of Working Capital. Not later than three (3)
Business Days prior to the Closing Date, Equity One shall provide LIH with any good faith
objections to the Estimated Closing Date Balance Sheet and the calculation of Working
Capital in writing, together with such documentation as may reasonably support Equity One’s
good faith objections. After considering Equity One’s objections, LIH may make such
revisions to the Estimated Closing Date Balance Sheet as it believes are reasonably
acceptable and deliver a revised Estimated Closing Date Balance Sheet, including the



11









 






calculation of Working Capital, which shall be the Estimated Closing Date Balance Sheet
for all purposes of clause (b) below.




     (b) Pre-Closing Adjustments.




     (i) To the extent that the Working Capital set forth on the final Estimated
Closing Date Balance Sheet (the “Estimated Working Capital Amount”) exceeds
the Working Capital Threshold (such excess, if any, the “Estimated Working
Capital Surplus”), then, at LIH’s election, either:




     (A) LIH shall cause the Company to distribute some or all of the amount
of such Estimated Working Capital Surplus as a dividend to LIH immediately
prior to Closing; and/or




     (B) the number of the LIH LLC Shares to be issued to LIH pursuant to
Sections 2.3 and 2.5(c)(ii) above shall be increased by that
number (rounded to the nearest whole number) which is the quotient of the
Estimated Working Capital Surplus (less the amount of any distribution made
pursuant to clause (A) above) divided by the Exchange Price
(provided, that to the extent such Estimated Working Capital Surplus
exceeds $2,500,000, such excess amount shall be divided by the EQY VWAP
Price instead of the Exchange Price), and the Share Allocation Schedule
shall be amended accordingly.




     (ii) To the extent that the Estimated Working Capital Amount is less than the
Working Capital Threshold (such deficiency, if any, the “Estimated Working
Capital Deficit”), then, at LIH’s election, either:




     (A) LIH shall contribute cash to the Company in an amount equal to the
Estimated Working Capital Deficit immediately prior to Closing; or




     (B) the number of the LIH LLC Shares to be issued to LIH pursuant to
Sections 2.3 and 2.5(c)(ii) above shall be reduced by that
number (rounded to the nearest whole number) which is the quotient of the
Estimated Working Capital Deficit divided by the Exchange Price, and the
Share Allocation Schedule shall be amended accordingly.




     (c) Post-Closing Balance Sheet. As soon as practicable after the Closing Date
(but in no event later than forty-five (45) days after the Closing Date), Equity One shall
deliver to LIH a balance sheet of the Company as of the Closing Date (the “Post-Closing
Balance Sheet”), including a calculation of Working Capital derived from the
Post-Closing Balance Sheet, together with worksheets which detail any adjustments and the
basis thereof and other information used in the preparation of the Post-Closing Balance
Sheet and the calculation of Working Capital reasonably requested by LIH. Equity One shall
use reasonable best efforts to make all of its work papers underlying the preparation of the
Post-Closing Balance Sheet and the calculation of Working Capital reasonably available to
LIH and its representatives and to consult in good faith with LIH and its



12









 






representatives during the review period set forth below. The Post-Closing Balance
Sheet shall include a calculation of the Working Capital at the Closing and shall be binding
upon the parties upon approval of such Post-Closing Balance Sheet by LIH. If LIH does not
agree with any portion or line item contained within the Post-Closing Balance Sheet and/or
the calculation of Working Capital at the Closing stated thereon, and the parties cannot
mutually agree on the same, then within forty-five (45) days following receipt by LIH of the
Post-Closing Balance Sheet, the parties shall appoint an independent auditor to resolve such
dispute as promptly as reasonably practicable. The independent auditor shall be a
nationally recognized certified public accounting firm that is not rendering (and during the
preceding two (2) year period has not rendered) audit or other material services to any of
the Company, LIH or its parent or Equity One. If the parties are unable to agree on such
independent auditor, then the respective accounting firms of each of LIH and Equity One
shall choose the independent auditor. The independent auditor shall act as an arbitrator to
determine, based solely on the presentations by LIH and Equity One, and not by independent
review, only those issues still in dispute. The fees and expenses associated with such
review by the independent auditor shall be borne equally by Equity One and LIH. The
independent auditor’s determination shall be made within thirty (30) days of its engagement
or as soon thereafter as possible and shall be set forth in a written statement delivered to
LIH and Equity One and shall be enforceable in a court of Law.




     (d) Post Closing Adjustment.




     (i) To the extent that the Working Capital set forth on the Post-Closing
Balance Sheet (the “Final Working Capital Amount”) exceeds the Estimated
Working Capital Amount (such excess, if any, the “Working Capital Increase
Amount”), Equity One shall cause EQY-CSC to issue additional LIH LLC Shares to
LIH in an amount (rounded to the nearest whole number) equal to the quotient of the
Working Capital Increase Amount divided by the Exchange Price (provided,
that to the extent such Working Capital Increase Amount, when added to the amount of
any Estimated Working Capital Surplus divided by the Exchange Price pursuant to
Section 3.1(b)(i)(B), exceeds $2,500,000 in the aggregate, such excess
amount shall be divided by the EQY VWAP Price instead of the Exchange Price), and
the Share Allocation Schedule shall be amended accordingly.




     (ii) To the extent that the Final Working Capital Amount is less than the
Estimated Working Capital Amount (such deficiency, if any, the “Working Capital
Decrease Amount”), then Equity One shall cause EQY-CSC to reduce and cancel that
number of LIH LLC Shares previously issued to LIH pursuant to Sections 2.3
and 2.5(c)(ii) hereunder in an amount equal to that number (rounded to the
nearest whole number) which is the quotient of the Working Capital Decrease Amount
divided by the Exchange Price (provided, that to the extent the number of
LIH LLC Shares have been previously increased pursuant to Section
3.1(b)(i)(B), then the value at which LIH LLC Shares to be reduced and canceled
under this clause (ii) shall be commensurate, pro rata, with the value at which



13









 






such LIH LLC Shares were previously increased pursuant to Section
3.1(b)(i)(B)), and the Share Allocation Schedule shall be amended accordingly.




     (e) As used herein, “Working Capital” has the meaning set forth on, and shall
be calculated in accordance with, Schedule 3.1.




     (f) Any increases or decreases to the number of LIH LLC Shares pursuant to this
Section 3.1 shall be treated for Tax purposes as an adjustment to the consideration
issued by EQY-CSC for the contribution of the Company Common Stock by LIH hereunder.




     (g) As used herein, “Exchange Price” means $16.50, subject to adjustment from
time to time as follows:




     (i) Upon Dividends, Distributions, Subdivisions, Splits or
Consolidations. If, at any time after the date of this Agreement, the number of
outstanding shares of EQY Common Stock is (A) increased by a dividend or share
distribution payable in shares of EQY Common Stock (or in securities convertible
into, or exchangeable or exercisable for, EQY Common Stock) or by a subdivision or
forward split of the outstanding shares of EQY Common Stock or (B) decreased by a
consolidation or reverse split of the outstanding shares of EQY Common Stock, then
the Exchange Price shall be adjusted by multiplying such Exchange Price immediately
prior to such event by a fraction, the numerator of which shall be
the number of shares of EQY Common Stock outstanding immediately prior to such event, and the
denominator of which shall be the number of shares of EQY Common Stock outstanding
immediately thereafter; provided that if a dividend or share distribution is
payable in securities convertible into, or exchangeable or exercisable for, EQY
Common Stock, then for purposes of determining the denominator above,
the number of shares of EQY Common Stock outstanding immediately thereafter shall be deemed to
include the maximum number of shares of EQY Common Stock (assuming the satisfaction
of any conditions to convertibility, exercisability or exchangeability but without
regard to any provision contained therein for a subsequent adjustment of such
number) issuable upon the conversion, exercise or exchange of such securities.




     (ii) Other Adjustments. In the event of any reorganization,
recapitalization, reclassification or other like change in the outstanding shares of
EQY Common Stock at any time after the date of this Agreement for which an
adjustment is not otherwise provided under the foregoing clause (i), the
Exchange Price shall be equitably adjusted to reflect the effects of such
reorganization, recapitalization, reclassification or other like change.



          3.2 Survival. The provisions of this Article 3 shall survive the
Closing indefinitely.








14









 








ARTICLE 4




REPRESENTATIONS AND WARRANTIES




          4.1 Representations and Warranties of LIH. Except as set forth in the
corresponding sections or subsections of the LIH Disclosure Schedule, LIH hereby represents and
warrants to Equity One and EQY-CSC as follows:





     (a) Organization and Good Standing of the Company. The Company and each of its
subsidiaries has been duly organized and are validly existing and in good standing under the
Laws of their respective jurisdictions of organization, are duly qualified to do business
and are in good standing in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such qualification, and
have all power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure to be so
qualified or in good standing or have such power or authority would not, individually or in
the aggregate, have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and its subsidiaries taken as a whole or
on the ability of LIH or any of its subsidiaries to perform its obligations under the
Transaction Documents to which they are a party (a “Company Material Adverse
Effect”); provided, however, a Company Material Adverse Effect shall not
include any change or event resulting from, relating to or arising out of (i) general
economic conditions in any of the markets or geographical areas in which the Company and its
subsidiaries operate (except to the extent that such change or event has a disproportionate
effect on the Company and its subsidiaries, taken as a whole, relative to other participants
in the markets or geographical areas in which the Company and its subsidiaries operate);
(ii) any change in economic conditions or the financial, banking, currency or capital
markets in general; (iii) any calamity or other conditions generally affecting the industry
in which the Company operates (except to the extent that such change or event has a
disproportionate effect on the Company and its subsidiaries, taken as a whole, relative to
other participants in the industry in which the Company and its subsidiaries operate); (iv)
changes in Law or in GAAP or interpretations thereof; (v) any actions taken, or failures to
take action, or such other changes or events, in each case, to which Equity One has
consented or (vi) the announcement of, or the taking of any action contemplated by, this
Agreement and the other Transaction Documents, including by reason of the identity of Equity
One or any communication by Equity One regarding the plans or intentions of Equity One with
respect to the conduct of the Company’s business.




     (b) Capitalization. The authorized capital stock of the Company consists of
1,478 shares of Class A common stock, par value $1.00 per share, 7,500 shares of Class B
common stock, par value $1.00 per share, and 125 shares of preferred stock, par value $0.01
per share; as of the date of this Agreement, 1,478 shares of Class A common stock are issued
and outstanding, 1,972 shares of Class B common stock are issued and outstanding, and 125
shares of preferred stock of the Company are issued and outstanding; as of the date of this
Agreement, the Company had no shares of Company Common Stock reserved for issuance; all the
outstanding shares of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-



15









 






assessable and are not subject to any pre-emptive or similar rights; there are no
outstanding rights (including, without limitation, pre-emptive rights), warrants or options
to acquire, or instruments convertible into or exchangeable for, any shares of capital stock
or other equity interest in the Company or any of its subsidiaries, or any Contract of any
kind relating to the issuance of any capital stock of the Company or any such subsidiary,
any such convertible or exchangeable securities or any such rights, warrants or options; and
the Company has no outstanding bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible into or exercisable for securities
having the right to vote) with the stockholders of the Company on any matter.




     (c) Subsidiaries. Section 4.1(c) of the LIH Disclosure Schedule sets forth a
complete list of the Company’s subsidiaries and any and all other entities of any kind in
which the Company owns an equity interest, including a description or designation of the
type of entity or interests (e.g., limited liability company, partnership, qualified REIT
subsidiary, taxable REIT subsidiary, tenant-in-common). Except as set forth on Section
4.1(c) of the LIH Disclosure Schedule, all the outstanding shares of capital stock or other
equity interests of each of the Company’s subsidiaries is owned, directly or indirectly, by
the Company and have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and clear of any
Liens or restrictions on voting. Except as set forth on Section 4.1(c) of the LIH
Disclosure Schedule, the Company does not own any equity investments in any other person.




     (d) Organizational Documents. LIH has previously provided or made available to
Equity One true and complete copies of the certificate of incorporation and bylaws and the
other charter documents, bylaws, organizational documents and partnership, limited liability
company, joint venture, co-tenancy and tenancy-in-common agreements (and in each such case,
all amendments thereto) of the Company and each of its subsidiaries as in effect on the date
of this Agreement. The minute books of the Company and Capital & Counties U.S.A., Inc., as
previously made available to Equity One contain accurate and complete records of all
meetings held of, and corporate action taken by, the shareholders and board of directors, as
applicable, of the Company and Capital & Counties U.S.A., Inc., for the three years prior to
the date hereof.




     (e) Due Authorization; Validity of Agreements. CSC and LIH each has full
right, power and authority to execute and deliver the Transaction Documents to which it is,
or will be, a party and to perform its obligations hereunder and thereunder; each
Transaction Document executed as of the date hereof has been duly authorized, executed and
delivered by each of CSC and LIH, as applicable, and constitutes a valid and legally binding
agreement of such party, and each Transaction Document to be executed and delivered on the
Closing Date has been duly authorized, and upon execution and delivery at the Closing Date,
will constitute a valid and legally binding agreement of such party, in each case,
enforceable against such party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency or similar Laws affecting creditors’ rights
generally or by equitable principles relating to enforceability.



16









 






     (f) No Violation or Default. Except as set forth on Section 4.1(f) of the LIH
Disclosure Schedule, none of the Company or any of its subsidiaries is (i) in violation of
its charter, by-laws, limited partnership agreement or similar organizational documents;
(ii) in default, and no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement, joint
venture, tenancy-in-common or other agreement or instrument to which the Company or any of
its subsidiaries is a party or bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject; or (iii) in violation of any Law, except, in
the case of clauses (ii) and (iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Company Material Adverse Effect.




     (g) No Conflicts. Other than pursuant to the agreements and other documents
listed on Section 4.1(g) of the LIH Disclosure Schedule, the execution, delivery and
performance by each of CSC and LIH of the Transaction Documents to which it is, or will be,
a party and the consummation of the transactions contemplated by the Transaction Documents
will not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or imposition of any
Lien upon any property or assets of the Company or any of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement, joint venture, tenancy-in-common or
other agreement or instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of
the provisions of the charter, by-laws, limited partnership agreement or similar
organizational documents of the Company or any of its subsidiaries or (iii) result in the
violation of any Law, except, in the case of clauses (i) and (iii) above, for any such
conflict, breach, violation, default or creation or imposition of any Lien that would not,
individually or in the aggregate, have a Company Material Adverse Effect.




     (h) Consents. Section 4.1(h) of the LIH Disclosure Schedule lists all material
(i) Consents, and (ii) consents, approvals, authorizations, Orders, licenses, registrations
or qualifications of or with any Authority required for the execution, delivery and
performance by CSC and LIH of the Transaction Documents to which it is, or will be, a party,
and the consummation of the transactions contemplated by the Transaction Documents.




     (i) Company Common Stock. The shares of Company Common Stock to be contributed
by LIH hereunder have been duly authorized and validly issued, are fully paid and
nonassessable. LIH owns the Company Common Stock to be contributed hereunder beneficially
and of record, and has good and valid title to the Company Common Stock, free and clear of
all Liens (other than those imposed by the Company’s organizational documents and federal
and state securities Laws). Upon contribution of the Company Common Stock to EQY-CSC in
accordance with this Agreement, good and valid title to the Company Common Stock will pass
to EQY-CSC, free and clear of any Liens (other than any Liens set forth in the Operating
Agreement, or pursuant to state or federal securities Laws or created by Equity One or
EQY-CSC). Other than (i) as set



17









 






forth on Section 4.1(i) of the LIH Disclosure Schedule or (ii) pursuant to the
Amended and Restated Certificate of Incorporation of the Company and the Operating
Agreement, the Company Common Stock is not subject to any voting agreement, right of first
refusal, rights of assignment, purchase rights or any other rights of any nature whatsoever,
including any that restrict or otherwise relate to the voting, distribution rights or
disposition of the Company Common Stock. The Company Common Stock to be contributed to
EQY-CSC hereunder represents all of the Liberty Parties’ equity interests of any kind,
directly or indirectly, in the Company and its subsidiaries.




     (j) Financial Information.




     (i) LIH has previously delivered to Equity One (i) audited balance sheets of
the Company and its subsidiaries as of December 31, 2009, and the related operating
statements of the Company and its subsidiaries for each of the three fiscal years
then ended and (ii) unaudited balance sheets of the Company and its subsidiaries as
of March 31, 2010, and the related unaudited operating statements of the Company and
its subsidiaries for the three-month period ended March 31, 2010 (collectively, the
“Company Financial Statements”); the Company Financial Statements have been
prepared from the books and records of the Company and its subsidiaries and have
been prepared in accordance with GAAP, applied on a consistent basis by the Company
as of the date, or for the periods presented except as noted therein (except that
the unaudited Company Financial Statements lack any footnote disclosure and are
subject to normal, recurring year-end adjustments) the Company Financial Statements
present fairly in all material respects the financial condition of the Company and
its subsidiaries as of the dates set forth therein (except that the unaudited
Company Financial Statements lack any footnote disclosure and are subject to normal,
recurring year-end adjustments);




     (ii) As of the date of this Agreement none of the Company or any of its
subsidiaries have any liabilities or obligations of any nature (whether known or
unknown and whether absolute, accrued, contingent, or otherwise) that would be
required to be reflected or reserved against in a balance sheet of the Company or
its subsidiaries, prepared in accordance with GAAP applied on a consistent basis by
the Company, except for (A) liabilities or obligations reflected or reserved against
in the most recent balance sheet included in the Company Financial Statements,
(B) those which would not have a Company Material Adverse Effect, (C) liabilities
incurred as a result of the execution of, or as expressly permitted by, this
Agreement, or (D) liabilities set forth on Section 4.1(j) of the LIH
Disclosure Schedule.




     (k) No Material Adverse Effect. Since December 31, 2009, (i) there has been no
Company Material Adverse Effect, whether or not arising in the ordinary course of business;
and (ii) to the date of this Agreement, except as set forth on Section 4.1(k) of the
LIH Disclosure Schedule, there has been no non-cash dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.



18









 






     (l) Absence of Proceedings. As of the date of this Agreement, Section 4.1(l)
of the LIH Disclosure Schedule lists all legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its subsidiaries is a
party or to which any property of the Company or any of its subsidiaries is subject that,
individually or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, as applicable, would have a Company Material Adverse Effect; as of the date of
this Agreement, to the knowledge of LIH, no such investigations, actions, suits or
proceedings are threatened or contemplated by any Authority or threatened by others.




     (m) Reserved.




     (n) Title to Intellectual Property. None of the Company nor any of its
subsidiaries is required to own or possess any trademarks, service marks, trade names or
copyrights in order to conduct the business now operated by it, other than those the failure
to possess or own would not have a Company Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business.




     (o) The Properties.




     (i) The Company, directly or indirectly through one or more of its
subsidiaries, has good and marketable fee simple title to each of the Properties
(other than a portion of the Property known as the Willows Shopping Center for which
the Company’s subsidiary is a tenant pursuant to that certain Property Lease
Agreement between Central Contra Costa Sanitary District and Willows Center Concord,
LLC dated May 9, 2005) and the Improvements thereon, in each case free and clear of
all Liens, other than (A) any Permitted Exceptions, (B) any Liens that relate to the
Existing Debt or (C) any of the foregoing that would not have a Company Material
Adverse Effect.




     (ii) Except as listed on Section 4.1(o)(ii) of the LIH Disclosure Schedule, (a)
with respect to each of the Properties, the Company or one of its subsidiaries has
an owner’s policy of title insurance (the “Current Title Policies”) on the
fee interest therein and (b) on or prior to the date hereof, LIH has provided or
made available to Equity One copies of each such title policy and all matters listed
as exceptions thereto.




     (iii) On or prior to the date hereof, LIH has provided or made available to
Equity One all existing surveys, if any, of each Property as listed on Section
4.1(o)(iii) of the LIH Disclosure Schedule, including, without limitation, any
“as-built” surveys of the Properties, in each case, to the extent in the possession
or control of LIH.




     (iv) LIH has made available to Equity One true, correct and complete copies of
all leases (including, without limitation, exhibits, schedules and amendments
thereto) of space and/or tenancies at the Properties that provide for a base
annualized rent in excess of $100,000 (as listed on Section 4.1(o)(iv) of the LIH
Disclosure Schedule, collectively, the “Leases”). Leases for space and/or



19









 






tenancies at the Properties for 5,000 square feet or more and with remaining
lease terms of at least one year shall be referred to herein as “Material
Leases.” With respect to the Material Leases, LIH has made available to Equity
One true and correct copies of all material tenant correspondence and other
documents. The Material Leases (i) have not been materially modified except as
stated in Section 4.1(o)(iv) of the LIH Disclosure Schedule, and (ii) contain the
entire agreement (other than terms that are not material) between the relevant
subsidiary of the Company and the tenants named therein. To the knowledge of LIH,
no default exists under any such Material Lease except as would not have a Company
Material Adverse Effect. Except as set forth in Section 4.1(o)(iv) of the LIH
Disclosure Schedule, as of the date hereof, neither the Company nor any of its
subsidiaries has given written notice to any tenant of its default under any
Material Lease that has not been cured and has not received any written notice from
any tenant alleging a default by the Company or any of its subsidiaries under any
Material Lease that has not been cured, except in each case for any default that
would not have a Company Material Adverse Effect.




     (v) Neither the Company nor any of its subsidiaries is in default of any of its
obligations under any Material Leases or any other material agreement encumbering or
otherwise recorded against any of the Properties, except in each case for any
default that, individually or in the aggregate, would not have a Company Material
Adverse Effect. As of the date hereof, to the knowledge of LIH, no event has
occurred which, but for the passage of time or the giving of notice, or both, would
constitute a default under any Material Leases or any other material agreement
encumbering or otherwise recorded against the Properties, except in all cases for
any such defaults that would not, individually or in the aggregate, have a Company
Material Adverse Effect.




     (vi) There are no material rental, lease, or other commissions now due and
payable or which may become due or payable with respect to the current term of any
of the Material Leases and there are no material tenant improvement costs and
allowances or other concessions now due or payable in connection with any of the
Material Leases except, in each case, for leasing commissions, brokerage fees and
tenant improvement costs and allowances or other concessions (i) described in
Section 4.1(o)(vi) of the LIH Disclosure Schedule or (ii) as otherwise expressly set
forth in the Material Leases pursuant to which by their terms are not yet due and
payable.




     (vii) Except as set forth on Section 4.1(o)(vii) of the LIH Disclosure Schedule
or as otherwise expressly set forth in the Material Leases, no tenant under any
Material Lease has a right of first offer, first refusal or option to purchase all
or any portion of the premises demised under such Material Lease.




     (viii) Other than as set forth on Section 4.1(o)(viii) of the LIH Disclosure
Schedule, to the knowledge of LIH, as of the date hereof, no tenant under any
Material Lease is the subject of bankruptcy, reorganization or similar proceedings;



20









 






     (ix) There are no condemnation proceedings or zoning changes pending or, to the
knowledge of LIH, threatened against any Property that would, individually or in the
aggregate, have a Company Material Adverse Effect.




     (x) Except as set forth in the Title Policies or the Surveys, there are no
encroachments upon any Property by improvements on an adjacent property, and none of
the Improvements on any Property encroach on any adjacent property, streets or
alleys, except in each case for such encroachments that would not, individually or
in the aggregate, have a Company Material Adverse Effect.




     (xi) LIH has supplied or made available to Equity One true and complete copies
of all material third-party property management and leasing agreements relating to a
Property (except the Material Leases, which are the subject of clauses (iv) through
(vii) above); as of the date hereof, no party is in default under any such property
management agreement, nor, to the knowledge of LIH, has an event occurred which with
the passage of time or the giving of notice, or both, would become a default under
any such property management and leasing agreement and the consummation of the
transactions contemplated herein and in the other Transaction Documents will not
give rise to any default under any such property management and leasing agreement,
except in each case for defaults that, individually or in the aggregate, would not
have a Company Material Adverse Effect.




     (p) No Acquisitions or Dispositions. Except as set forth on Section 4.1(p) of
the LIH Disclosure Schedule (i) as of the date hereof, there are no Contracts with respect
to the direct or indirect acquisition or disposition by any of the Company or any of its
subsidiaries of interests in real property (other than the leasing of the Property in the
ordinary course of business); (ii) neither the Company nor any of its subsidiaries has sold
any real property to a third party during the immediately preceding twenty four (24)
calendar months; and (iii) none of the Properties is subject to any restrictions or
prohibitions on its disposition other than those restrictions set forth in the Loan
Documents.




     (q) Existing Debt. Section 4.1(q) of the LIH Disclosure Schedule sets forth a
complete and accurate schedule of all Existing Debt, along with the outstanding principal
balance and interest rate with respect to all such debt, as of the date hereof. Except as
set forth on Section 4.1(q) of the LIH Disclosure Schedule (i) none of such debt is
convertible into equity securities of the entity owning any Property or any other entity and
none of such debt is cross-defaulted or cross-collateralized with any other property;
(ii) prior to the date hereof, LIH has provided or made available to Equity One true and
complete copies of all Loan Documents and, as of the date hereof, no party to any of the
Loan Documents is in material default thereunder, nor has an event occurred which with the
passage of time or the giving of notice, or both, would become a material default under any
of the Loan Documents; (iii) subject to any requirements under the Loan Documents to obtain
the Mortgage Consents, consummation of the transactions contemplated herein and in the other
Transaction Documents will not cause a material default under any of the Loan Documents or
the Company or other applicable party has



21









 






received a waiver of any such defaults or consent with respect thereto; and (iv) none
of the Company or any of its subsidiaries or affiliates holds participating interests in any
of the indebtedness evidenced or secured by the Loan Documents.




     (r) Contracts. Section 4.1(r) of the LIH Disclosure Schedule sets forth a
true, complete and correct list of all Material Contracts. True, correct and complete
copies of all such Material Contracts have been made available to Equity One. To the
knowledge of LIH, each such Material Contract is in full force and effect and, as of the
date hereof, none of the Company or its subsidiaries has provided or received any written
notice of any default under any Material Contract which has not been cured, except where the
failure to be in full force and effect or for any such default as would not, individually or
in the aggregate, have a Company Material Adverse Effect.




     (s) Tax Matters. For purposes of this Section 4.1(s), the term
“subsidiary” shall include each entity in which the Company owns a direct or indirect
interest.




     (i) Except as set forth on Section 4.1(s)(i) of the LIH Disclosure
Schedule, the Company and each of its current or former subsidiaries (A) has paid
all material federal, state, local and foreign Taxes required to be paid through the
date hereof, other than those being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided on the books of the
applicable entity and (B) have timely filed all material Tax Returns required to be
filed by them through the date hereof, and all such Tax Returns are true, correct
and complete;




     (ii) (A) The Company and each of its current or former subsidiaries have
established adequate reserves for all material Taxes that have accrued but are not
yet due and payable, and (B) to the knowledge of LIH, there is no Tax deficiency
that has been asserted against the Company or any of its current or former
subsidiaries, properties or assets;




     (iii) Equity One has been provided with (or LIH has otherwise made available)
copies of all Tax Returns of the Company and its subsidiaries for taxable years
beginning on or after January 1, 2003, and, except as set forth on Section
4.1(s)(iii) of the LIH Disclosure Schedule, the Company has not received notice
of any audits of such Tax Returns;




     (iv) Except as set forth on Section 4.1(s)(iv) of the LIH Disclosure
Schedule, the Company has not been given or requested any waivers or extensions (or
is or would be subject to a waiver or extension given by any other person) of any
statute of limitations relating to the payment of Taxes or the filing of any Tax
Returns;




     (v) Except as set forth on Section 4.1(s)(v) of the LIH Disclosure Schedule, to
the knowledge of LIH, all material Taxes that the Company was required to withhold
or collect (including without limitation all withholding required under Sections
1441 and 1445, and the Treasury Regulations issued



22









 






thereunder, with respect to the distribution of the CapCo Note (as defined in
the Subscription Agreement) to the Company) have been duly withheld or collected
and, to the extent required, have been paid to the proper Authority or person;




     (vi) Except as set forth on Section 4.1(s)(vi) of the LIH Disclosure Schedule,
there are no pending or, to the knowledge of LIH, threatened claims by any Authority
in any jurisdiction where the Company does not file Tax Returns that the Company is
or may be subject to taxation by that jurisdiction;




     (vii) There are no Liens for Taxes (other than for current Taxes not yet due
and payable or being contested in good faith) on the assets of the Company or any of
its subsidiaries;




     (viii) Neither the Company nor any of its subsidiaries has any liability for
Taxes of any person (other than the Company and its subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by Contract or otherwise, other than any such
liability arising from the existence of the affiliated group of companies of which
the Company was the common parent prior to December 31, 2006;




     (ix) Commencing with its taxable year ending December 31, 2007, the Company has
been owned, organized and operated in conformity with the requirements for
qualification and taxation as a real estate investment trust (a “REIT”)
under the Code, and its proposed method of operation will enable it to meet the
requirements for qualification and taxation as a REIT under the Code for the
Company’s taxable years ending December 31, 2010 and thereafter. Each of the
Company’s subsidiaries that is a corporation for federal income tax purposes, other
than any qualified REIT subsidiary as defined in Section 856(i)(2) of the Code, is,
and will be, in compliance with all requirements applicable to a “taxable REIT
subsidiary” within the meaning of Section 856(l) of the Code and all applicable
regulations under the Code, and the Company is not aware of any fact that would
negatively impact such qualification. Each other direct and indirect subsidiary of
the Company has been properly treated since January 1, 2007, and will continue to be
properly treated, as a partnership or disregarded entity (rather than an association
or partnership taxable as a corporation) within the meaning of Section 7701 of the
Code and all applicable regulations under the Code and no election has been made to
the contrary;




     (x) Section 4.1(s)(x) of the LIH Disclosure Schedule lists each asset of the
Company or any of its subsidiaries the disposition of which would be subject to
rules similar to Section 1374 of the Code as a result of (A) an election under
Internal Revenue Service (“IRS”) Notice 88-19 or Treasury Regulations §
1.337(d)-5T or § 1.337(d)-6 or (B) the application of Treasury Regulations §
1.337(d)-7. For each asset listed under the foregoing sentence, Section 4.1(s)(x)
of the LIH Disclosure Schedule also sets forth the Company’s good faith estimate of
the amount of net unrealized built-in-gain within the meaning of Section 1374(d)(1)
of the Code, the recognition period within the meaning of Section



23









 






1374(d)(7) of the Code, and the federal income tax basis as of December 31,
2009;




     (xi) Except as set forth in Section 4.1(s)(xi) of the LIH Disclosure Schedule,
the Company has incurred no liability for excise Taxes under Sections 857(b), 860(c)
or 4981 of the Code, including without limitation any excise Tax arising from a
prohibited transaction described in Section 857(b)(6) of the Code or any Tax arising
from “redetermined rents, redetermined deductions and excess interest” described in
Section 857(b)(7) of the Code, and neither the Company nor any of its subsidiaries
has incurred any material liability for Taxes other than in the usual, regular and
ordinary course of business;




     (xii) As of the close of its 2007 taxable year, the Company had distributed all
accumulated earnings and profit from non-REIT years and the Company currently has no
C corporation earnings and profits;




     (xiii) The Company has not engaged in any prohibited transactions within the
meaning of Section 857(b)(6)(B)(iii) of the Code;




     (xiv) If the Company’s taxable year beginning on January 1, 2010 ended with the
Closing, no more than 5% of the gross income for the Company for such period would
be derived from the sources not described in Section 856(c)(2) of the Code and (B)
the distributions made by the Company on or prior to the Closing Date would not be
less than the Company’s real estate investment trust taxable income within the
meaning of Section 857(b)(2) of the Code for such taxable year;




     (xv) Since January 1, 2010, the Company has not recognized any gain from the
sale or disposition of a United States real property interest within the meaning of
Section 897(c) of the Code;




     (xvi) Neither the Company nor any of its subsidiaries is a party to any tax
sharing agreement or tax protection agreement pursuant to which it will have any
obligation to make any payments after the Closing. A “tax sharing agreement” means
any written agreement for the allocation or payment of Tax liabilities or payment
for Tax benefits with respect to a consolidated, combined or unitary Tax Return
which Tax Return includes or included the Company or any of its subsidiaries. A
“tax protection agreement” means any written agreement to which the Company or any
of its subsidiaries is a party pursuant to which, in connection with the deferral of
income Taxes of a third party partner in any subsidiary of the Company that is
classified as a partnership for federal income tax purposes, the Company or any of
its subsidiaries has agreed to (a) maintain a minimum level of debt or provide
rights to guarantee debt, (b) retain or not dispose of assets for a period of time,
(c) make or refrain from making Tax elections, and/or (d) only dispose of assets in
a particular manner;



24









 






     (xvii) Neither the Company nor any of its subsidiaries has requested a private
letter ruling from the IRS or any similar ruling from a taxing authority;




     (xviii) Neither the Company nor any of its subsidiaries has been a party to any
“reportable transaction” described in Treasury Regulations Section 1.6011-4(b); and




     (xix) Neither the Company nor any of its subsidiaries has entered into any
“closing agreement” as described in Section 7121 of the Code (or any corresponding
or similar provision of state, local or foreign income tax law).




     (t) Licenses and Permits. The Company and each of its subsidiaries possess all
permits, licenses, approvals, consents and other authorizations (collectively,
“Licenses”) issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them, except where the
failure so to possess would not, individually or in the aggregate, have a Company Material
Adverse Effect; the Company and its subsidiaries are in compliance with the terms and
conditions of all such Licenses, except where the failure so to comply would not,
individually or in the aggregate, have a Company Material Adverse Effect; all of the
Licenses are valid and in full force and effect, except when the invalidity of such Licenses
or the failure of such Licenses to be in full force and effect would not, individually or in
the aggregate, have a Company Material Adverse Effect; and neither the Company nor any of
its subsidiaries has received any notice of proceedings relating to the revocation or
modification of any such Licenses which, if the subject of an unfavorable decision, ruling
or finding, individually or in the aggregate, would have a Company Material Adverse Effect.




     (u) No Labor Disputes. No labor dispute with the employees of the Company or
any subsidiary exists or, to the knowledge of LIH, is imminent, and the Company is not aware
of any existing or imminent labor disturbance by the employees of any of its or any
subsidiary’s principal suppliers, manufacturers, customers or contractors, which, in each
case, would result in a Company Material Adverse Effect.




     (v) Employment Agreements; No Payments to Employees, Officers or Directors.
Section 4.1(v) of the LIH Disclosure Schedule sets forth all employment or similar
agreements to which the Company or any of its subsidiaries is a party. Other than as
described in such agreements, (i) there is no employment or severance payment payable or
other benefit due to any employee, officer or director of the Company or any subsidiary of
the Company solely as a result of the execution of this Agreement or any other Transaction
Document, or the consummation of the transactions contemplated hereby and thereby; (ii) no
gross-up payments of any kind are due to any current or former employee of the Company or
any subsidiary of the Company in the event that such employee or former employee becomes
subject to an excise Tax or other penalty under the Code solely as a result of the execution
of this Agreement or any other Transaction Document, nor the consummation of the
transactions contemplated hereby and thereby; and (iii) neither the execution of this
Agreement or any other Transaction Document, nor the consummation of the transactions
contemplated hereby and thereby,



25









 






will, alone or in conjunction with another event (e.g., termination of
employment), result in payments under any plan or agreement to which the Company or any of
its subsidiaries is bound which would not be deductible under Section 162(m) or Section 280G
of the Code.




     (w) Compliance with and Liability under Environmental Laws.




     (i) Except as set forth on Section 4.1(w) of the LIH Disclosure Schedule or as
would not, individually or in the aggregate, have a Company Material Adverse Effect,
the Company and its current subsidiaries (A) are in compliance with applicable Laws
governing pollution or protection of the environment, including those governing the
generation, storage, treatment, use, handling, transportation, Release or threatened
Release of Hazardous Materials (collectively, “Environmental Laws”), (B)
have obtained and are in compliance with all permits, licenses, certificates or
other authorizations or approvals required of them under applicable Environmental
Laws to conduct their respective businesses, (C) have not received written notice of
any actual or alleged liability under, or actual or alleged violation of,
Environmental Laws, including for the investigation or remediation of Releases or
threatened Releases of Hazardous Materials, (D) are not conducting or paying for any
costs for any investigation, remediation or other corrective action at any location
under any Environmental Law, (E) are not a party to, or otherwise subject to, any
Order that imposes any current obligation or liability on the Company or any of its
current subsidiaries under any Environmental Law, and (F) have not been named as a
“potentially responsible party” under any Environmental Laws, including, but not
limited to, the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended.




     (ii) Except as set forth on Section 4.1(w) of the LIH Disclosure Schedule or
except as would not, individually or in the aggregate, have a Company Material
Adverse Effect, to the knowledge of LIH, there are no (A) polychlorinated biphenyls
(“PCBs”) or PCB-containing equipment; (B) asbestos or asbestos containing
materials; (C) mold or airborne contaminants; or (D) lead-based paints at, on, in,
or under any of the Properties.




     (iii) Except as set forth on Section 4.1(w) of the LIH Disclosure Schedule, to
the knowledge of LIH, there are no aboveground or underground storage tanks,
dry-cleaning facilities or service stations currently or formerly located at, on, in
or under any of the Properties, except where present and maintained in accordance
with applicable Environmental Laws and do not currently require investigation,
remediation, abatement or removal under applicable Environmental Laws.




     (x) Hazardous Materials. Except as would not, individually or in the
aggregate, have a Company Material Adverse Effect, to the knowledge of LIH, there has been
no generation, storage, treatment, use, handling, transportation, or Release of Hazardous
Materials at, on, under or from any property or facility currently or previously



26









 






owned, operated or leased by the Company or any of its subsidiaries, in a manner or
amount or to a location that would reasonably be expected to result in any liability to the
Company or any of its subsidiaries under Environmental Law. “Hazardous Materials”
means any hazardous or toxic material, chemical, substance, waste, pollutant, contaminant,
compound, mixture, or constituent thereof, including petroleum (including crude oil or any
fraction thereof) and petroleum products, natural gas liquids, asbestos and asbestos
containing materials, and radioactive materials, that is regulated under any Environmental
Law. “Release” means any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing,
dispersing, or migrating in, into or through the environment, or in, into, from or through
any building or structure. The parties agree that Section 4.1(w) and Section
4.1(x) are the only representations and warranties made by the Company with respect to
environmental matters.




     (y) Compliance with ERISA. (i) Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), for which the Company or any of its subsidiaries would have any material
liability (each, a “Plan”), has been maintained in compliance in all material
respects with its terms and the requirements of any applicable Law and Orders, including but
not limited to ERISA and the Code; (ii) to the knowledge of LIH, no prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with
respect to any Plan excluding transactions effected pursuant to a statutory or
administrative exemption that would result in a liability to the Company or its
subsidiaries; (iii) neither the Company nor any subsidiary maintains or has ever maintained
any Plan that is or was subject to Title IV of ERISA, Section 412 of the Code, Section 302
of ERISA or is a “multiemployer plan” (within the meaning of Section 3(37) of ERISA); (iv)
neither the Company nor any subsidiary has incurred, nor reasonably expects to incur, any
liability under Title IV of ERISA; and (v) as of the date hereof, there is no pending or, to
the knowledge of LIH, threatened audit or investigation by the IRS, the U.S. Department of
Labor, the Pension Benefit Guaranty Corporation or any other governmental agency or any
foreign regulatory agency, or any pending or, to the knowledge of LIH, threatened
litigation, with respect to any Plan, except, all cases, as would not, individually or in
the aggregate, have a Company Material Adverse Effect. As of the date hereof, none of the
following events has occurred or, to the knowledge of LIH, is reasonably likely to occur:
(x) an increase in the aggregate amount of contributions required to be made to all Plans by
the Company or its subsidiaries in the current fiscal year of the Company and its
subsidiaries compared to the amount of such contributions made in the Company and its
subsidiaries’ most recently completed fiscal year; or (y) an increase in the Company and its
subsidiaries’ “accumulated post-retirement benefit obligations” (within the meaning of
Statement of Financial Accounting Standards 106) compared to the amount of such obligations
in the Company and its subsidiaries’ most recently completed fiscal year, except in each
case for such increases that would not, individually or in the aggregate, have a Company
Material Adverse Effect.




     (z) Insurance. (i) As of the date hereof, each of the Company and its
subsidiaries and each of the Properties are insured by insurers of recognized financial



27









 






responsibility against such losses and risks and in such amounts as are prudent and
customary in the businesses in which they are engaged; (ii) as of the date hereof, neither
the Company nor any of its subsidiaries has received written notice from any insurer or
agent of such insurer that capital improvements or other expenditures are required to be
made in order to continue such insurance; and (iii) to the knowledge of LIH, the Company and
its subsidiaries should be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage at reasonable cost from similar insurers as
may be necessary to continue its business.




     (aa) No Restrictions on Subsidiaries. Except as set forth in Section 4.1(aa)
of the LIH Disclosure Schedule, no subsidiary of the Company is currently prohibited,
directly or indirectly, under any agreement or other instrument to which it is a party or is
subject, from paying any dividends to the Company, from making any other distribution on
such subsidiary’s capital stock, from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such subsidiary’s properties or
assets to the Company or any other subsidiary of the Company.




     (bb) Foreign Corrupt Practices Act. Neither the Company or any of its
subsidiaries, nor, to the knowledge of LIH, any director, officer, agent, employee,
affiliate or other person acting on behalf of the Company or any of its subsidiaries is
aware of or has taken any action, directly or indirectly, that would result in a violation
by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in the furtherance of
an offer, payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign political party or
official thereof or any candidate for foreign political office, in contravention of the FCPA
and the Company and to the knowledge of LIH, the Company’s affiliates have conducted their
businesses in compliance in all material respects with the FCPA and have instituted and
maintain policies and procedures designed to ensure and which are reasonably expected to
continue to ensure, continued compliance therewith.




     (cc) Money Laundering Laws. The operations of the Company are and have been
conducted at all times in material compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency (collectively, the “Money Laundering Laws”),
and, as of the date hereof, no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of
LIH, threatened.




     (dd) OFAC. Neither the Company or any of its subsidiaries, nor, to the
knowledge of LIH, any director, officer, agent, employee, affiliate or person acting on



28









 






behalf of the Company is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department.




     (ee) Accredited Investor. LIH is an “accredited investor” as that term is
defined in Regulation D promulgated under the Securities Act as in effect as of the date
hereof. LIH acknowledges and agrees that the LIH LLC Shares received hereunder will be
subject to the restrictions on transfer that are, or will be, set forth in the Operating
Agreement and the Equityholders Agreement and the shares of EQY Common Stock received in
redemption of LIH LLC Shares will be subject to the restrictions on transfer that are set
forth in the organizational documents of Equity One and the Equityholders Agreement and such
securities may otherwise not be sold, transferred, offered for sale, pledged, hypothecated
or otherwise disposed of by it without registration under the Securities Act, except
pursuant to an exemption from such registration under the Securities Act, and in compliance
with applicable “blue sky” Laws.




     (ff) As of the Closing Date, none of the Company or its subsidiaries, on the one hand,
and LIH or any of its affiliates (other than the Company or its subsidiaries), on the other
hand, will have any indebtedness of any kind outstanding between them (other than the CapCo
Note (as defined in the Subscription Agreement)).



          4.2 Representations and Warranties of Equity One. Equity One hereby
represents and warrants to LIH as follows:





     (a) SEC Reports. Equity One has filed or furnished, as applicable, all forms,
schedules, statements, reports and other documents required to be filed or furnished, as
applicable, with or to the Securities and Exchange Commission (the “SEC”) since
January 1, 2007 (together with all required exhibits, financial statements and schedules
thereto and all information incorporated by reference therein, collectively, the “Equity
One SEC Reports”), all of which were prepared in all material respects in accordance
with the applicable requirements of the Exchange Act, the Securities Act (together, the
“Securities Laws”). As of their respective dates, the Equity One SEC Reports (a)
complied in all material respects with the applicable requirements of the Securities Laws
and (b) did not, and any Equity One SEC Report filed or furnished subsequent to the date
hereof and prior to the Closing will 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 made therein, in light of the circumstances under which they were made, not
misleading.




     (b) Organization and Good Standing. Equity One has been duly organized and is
validly existing and in good standing under the Laws of the State of Maryland, is duly
qualified to do business and is in good standing in each jurisdiction in which its ownership
or lease of property or the conduct of its businesses requires such qualification, and has
all power and authority necessary to own or hold its properties and to conduct the
businesses in which it is engaged, except where the failure to be so qualified or in good
standing or have such power or authority would not, individually or in the aggregate, have
an Equity One Material Adverse Effect (as defined below). 



29









 






     (c) Good Standing of Subsidiaries. Each significant subsidiary of Equity One
(as such term is defined in Rule 1-02(w) of Regulation S-X, the “Significant
Subsidiaries”) and each subsidiary of Equity One that owns any real property (each, an
“Equity One Property Subsidiary” collectively and, together with the Significant
Subsidiaries, the “Equity One Subsidiaries”) has been duly organized and is validly
existing and in good standing under its jurisdiction of organization, is duly qualified to
do business and is in good standing in each jurisdiction in which its ownership or lease of
property or the conduct of its businesses requires such qualification, and has all power and
authority necessary to own or hold its properties and to conduct the businesses in which it
is engaged, except where the failure to be so qualified or in good standing or have such
power or authority would not, individually or in the aggregate, have an Equity One Material
Adverse Effect. All the outstanding shares of capital stock, partnership interests, limited
liability company interests or other equivalent equity interests of each Equity One
Subsidiary have been duly and validly authorized and issued and are fully paid and
nonassessable. Except as otherwise set forth in the Equity One SEC Reports, all the
outstanding shares of capital stock or other equity interests of each Equity One Subsidiary
is owned, directly or indirectly, by Equity One and have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned directly or indirectly by Equity
One, free and clear of any Lien or restriction on voting.




     (d) Capitalization. The authorized capital stock of Equity One as of the date
of this Agreement consists of 150,000,000 shares of EQY Common Stock, and 10,000,000 shares
of preferred stock, par value $0.01 per share and as of the Closing Date shall consist of
149,999,999 shares of EQY Common Stock, one (1) share of Series A Common Stock, and
10,000,000 shares of preferred stock, par value $0.01 per share; as of the date of this
Agreement, 92,493,230 shares of EQY Common Stock are issued and outstanding and no shares of
preferred stock of Equity One are issued and outstanding; as of the date of this Agreement,
Equity One had 3,922,561 shares of EQY Common Stock reserved for issuance; all the
outstanding shares of capital stock of Equity One have been duly and validly authorized and
issued and are fully paid and non-assessable and are not subject to any pre-emptive or
similar rights; except as set forth in the Equity One SEC Reports, there are no outstanding
rights (including, without limitation, pre-emptive rights), warrants or options to acquire,
or instruments convertible into or exchangeable for, any shares of capital stock or other
equity interest in Equity One, or any Contract relating to the issuance of any capital stock
of Equity One, any such convertible or exchangeable securities or any such rights, warrants
or options; and Equity One has no outstanding bonds, debentures, notes or other obligations
the holders of which have the right to vote (or which are convertible into or exercisable
for securities providing the right to vote) with the stockholders of Equity One on any
matter. Except such as have been filed as exhibits to the Equity One SEC Reports, there are
no material Contracts, between Equity One and Gazit Group (as defined in the Equityholders
Agreement) relating to the EQY Common Stock or any other securities of Equity One.




     (e) Equity One Common Stock.




     (i) Issuance. The shares of EQY Common Stock issuable in redemption
of the LIH LLC Shares have been duly authorized for issuance and,




30











 






when issued and delivered by Equity One against delivery of the LIH LLC
Shares in accordance with the Operating Agreement, will be validly issued and
fully paid and non-assessable.




     (ii) Description. The EQY Common Stock conforms to all statements
relating thereto contained in the Equity One SEC Reports and such description
conforms to the rights set forth in the instruments defining the same, to the
extent applicable in each case.




     (iii) No Preemptive Rights. The issuance of shares of EQY Common
Stock in redemption of LIH LLC Shares will not be subject to the preemptive or
other similar rights of any security holder of Equity One.




     (iv) Listing Requirement. As of the Closing Date, the shares of EQY
Common Stock issuable upon redemption of LIH LLC Shares shall be approved for
listing on the New York Stock Exchange or such other national securities exchange
on which shares of EQY Common Stock are then listed.




     (f) Due Authorization; Validity of Agreements. Each of Equity One and its
subsidiaries (including EQY-CSC, when formed) has full right, power and authority to execute
and deliver the Transaction Documents to which it is, or will be, a party and to perform its
obligations hereunder and thereunder; the execution and delivery of each Transaction
Document has been (or will be, in the case of EQY-CSC) duly authorized by each of Equity One
and its subsidiaries, and constitutes or will constitute a valid and legally binding
agreement of such party, enforceable against such party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency or similar Laws
affecting creditors’ rights generally or by equitable principles relating to enforceability.




     (g) EQY Promissory Note. Equity One has all necessary corporate power and has
taken, or will before the Closing take, all requisite corporate action required to issue the
EQY Promissory Note and to perform its obligations thereunder. The EQY Promissory Note,
when issued and delivered in accordance with the terms of this Agreement against the
delivery to Equity One of the EQY LLC Shares, will be duly authorized and validly issued,
and issued in compliance with applicable state and federal securities Laws and will
constitute a legal, valid and binding obligation of Equity One, enforceable in accordance
with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other Laws of general application affecting enforcement of creditors’ rights generally).




     (h) No Violation or Default. (a) None of Equity One or any Equity One
Subsidiary is (i) in violation of its charter, by-laws, limited partnership agreement or
similar organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, joint venture, tenancy-in-common or other agreement or instrument to
which Equity One or any Equity One Subsidiary is a party or bound, or to



31









 







which any of the property or assets of Equity One or any Equity One Subsidiary is
subject; or (iii) in violation of any Law, except, in the case of clauses (ii) and (iii)
above, for any such default or violation that would not, individually or in the aggregate,
have an Equity One Material Adverse Effect and (b) each stockholder listed on Schedule
4.2(h)(b) is, and at all times during the period from November 4, 1996 has been, an
“Excepted Holder” under the charter of Equity One as currently in effect and as in effect at
all times during such period.




     (i) No Conflicts. The execution, delivery and performance by Equity One or any
Equity One Subsidiary of the Transaction Documents to which it is, or will be, a party and
the contribution of the EQY Promissory Note by Equity One hereunder does not and will not
(i) conflict with or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of any Lien upon any
property or assets of Equity One or any Equity One Subsidiary pursuant to, any indenture,
mortgage, deed of trust, loan agreement, joint venture, tenancy-in-common or other agreement
or instrument to which Equity One or any Equity One Subsidiary is a party or by which Equity
One or any Equity One Subsidiary is bound or to which any of the property or assets of
Equity One or any Equity One Subsidiary is subject, (ii) result in any violation of the
provisions of the charter, by-laws, limited partnership agreement or similar organizational
documents of Equity One or any Equity One Subsidiary or (iii) result in the violation of any
Law, except, in the case of clauses (i) and (iii) above, for any such conflict, breach,
violation, default or creation or imposition of any Lien that would not, individually or in
the aggregate, have an Equity One Material Adverse Effect.




     (j) No Consents. Except (i) for the filing of the Registration Statement with
the SEC, (ii) listing applications with the New York Stock Exchange and (iii) for
shareholder approval of the Amended EQY Charter, no authorizations, consents, approvals,
elections or waivers from any Authority or other third party and no approval of Equity One’s
stockholders pursuant to any applicable Law, Equity One’s organizational documents or any
rule or regulation of the New York Stock Exchange or any other securities exchange upon
which the EQY Common Stock is listed or traded is necessary or required for the execution,
delivery and performance by Equity One of the Transaction Documents to which it is or will
be a party, except for any such authorization, consent, approval, election or waiver from
any Authority or other third party the failure of which to obtain or make would not have an
Equity One Material Adverse Effect.




     (k) Independent Accountants. The accountants who certified the financial
statements and supporting schedules included in the Equity One SEC Reports are independent
public accountants as required by the Securities Act.




     (l) Financial Statements. The financial statements included in the Equity One
SEC Reports, together with the related schedules and notes, present fairly in all material
respects the financial position of Equity One and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders’ equity and cash flows of Equity One
and its consolidated subsidiaries for the periods presented. Such financial statements



32









 







have been prepared from the books and records of Equity One and its subsidiaries and
have been prepared in accordance with GAAP applied on a consistent basis by Equity One for
the periods presented except as noted therein. The supporting schedules, if any, present
fairly in all material respects in accordance with GAAP the information required to be
stated therein. The selected financial data and the summary financial information included
in the Equity One SEC Reports present fairly in all material respects the information shown
therein and have been compiled on a basis consistent with that of the audited financial
statements included in the Equity One SEC Reports. All disclosures contained in the Equity
One SEC Reports regarding “non-GAAP financial measures” (as such term is defined by the
rules and regulations of the SEC) comply with Regulation G under the Exchange Act and Item
10 of Regulation S-K of the Securities Act, to the extent applicable. As of the date hereof,
Equity One does not have any liabilities or obligations of any nature (whether known or
unknown and whether absolute, accrued, contingent, or otherwise) that would be required to
be reflected or referred against in a consolidated balance sheet of Equity One, prepared in
accordance with GAAP applied on a consistent basis by Equity One, except for (i) liabilities
or obligations reflected or reserved against in the most recent balance sheet included, or
otherwise disclosed, in an Equity One SEC Report, (ii) those which would not have an Equity
One Material Adverse Effect, or (iii) liabilities incurred as a result of the execution of,
or as expressly permitted by, this Agreement.




     (m) No Material Adverse Effect. Except as otherwise stated in the Equity One
SEC Reports, since December 31, 2009, there has been no material adverse effect on, or
change in, the business, properties, financial condition or results of operations of Equity
One and its subsidiaries taken as a whole or on the ability of Equity One or any of its
respective subsidiaries to perform their obligations under the Transaction Documents to
which they are a party (an “Equity One Material Adverse Effect”), whether or not
arising in the ordinary course of business; provided, however, an Equity One
Material Adverse Effect shall not include any change or event resulting from, relating to or
arising out of (a) general economic conditions in any of the markets or geographical areas
in which Equity One and its subsidiaries operate (except to the extent that such change or
event has a disproportionate effect on Equity One and its subsidiaries, taken as a whole,
relative to other participants in the markets or geographical areas in which Equity One and
its subsidiaries operate); (b) any change in economic conditions or the financial, banking,
currency or capital markets in general; (c) any calamity or other conditions generally
affecting the industry in which Equity One operates (except to the extent that such change
or event has a disproportionate effect on Equity One and its subsidiaries, taken as a whole,
relative to other participants in the industry in which Equity One and its subsidiaries
operate); (d) changes in Law or in GAAP or interpretations thereof; (e) any actions taken,
or failures to take action, or such other changes or events, in each case, to which the
Company has consented; or (f) the announcement of, or the taking of any action contemplated
by, this Agreement and the other Transaction Documents. Except as otherwise stated in the
Equity One SEC Reports and except for regular quarterly dividends on the EQY Common Stock,
since December 31, 2009 to the date hereof, there has been no dividend or distribution of
any kind declared, paid or made by Equity One on any class of its capital stock.



33









 






     (n) Absence of Labor Dispute. As of the date hereof, no material labor dispute
with the employees of Equity One or any subsidiary exists or, to the knowledge of Equity
One, is imminent. 




     (o) Absence of Proceedings. As of the date hereof, other than as
disclosed in the Equity One SEC Reports, there are no investigations, actions, suits or
proceedings pending by or before any Authority to which Equity One is a party or to which
any property of Equity One or any of its subsidiaries is subject that, individually or in
the aggregate, if determined adversely to Equity One, would have an Equity One Material
Adverse Effect; as of the date hereof, to the knowledge of Equity One, no such
investigations, actions, suits or proceedings are threatened by any Authority or threatened
by others.




     (p) Accuracy of Exhibits. There are no Contracts or documents which are
required to be described in the Equity One SEC Reports which have not been so described and
filed as required.




     (q) Possession of Intellectual Property. Neither Equity One nor any of its
subsidiaries is required to own or possess any trademarks, service marks, trade names or
copyrights in order to conduct the business now operated by it, other than those the failure
to possess or own would not have an Equity One Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business.




     (r) Licenses and Permits. Equity One and each of the Equity One Subsidiaries
possess all Licenses issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them, except where the
failure so to possess would not, individually or in the aggregate, result in an Equity One
Material Adverse Effect; Equity One and its subsidiaries are in compliance with the terms
and conditions of all such Licenses, except where the failure so to comply would not,
individually or in the aggregate, result in an Equity One Material Adverse Effect; all of
the Licenses are valid and in full force and effect, except when the invalidity of such
Licenses or the failure of such Licenses to be in full force and effect would not,
individually or in the aggregate, result in an Equity One Material Adverse Effect; and
neither Equity One nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Licenses which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in
an Equity One Material Adverse Effect.




     (s) Properties. Except as disclosed in the Equity One SEC Reports, Equity One
and the Equity One Property Subsidiaries have good and marketable fee simple title to or
leasehold title in all real property and all other properties and assets owned or leased by
them, in each case, free and clear of all Liens that would have an Equity One Material
Adverse Effect; except as disclosed in the Equity One SEC Reports, no tenant under any lease
to which Equity One or the Equity One Property Subsidiaries lease any portion of its
property is in default under such lease, except in any case where such default would not
have an Equity One Material Adverse Effect; each of the properties of any of Equity One or
the Equity One Property Subsidiaries complies with all applicable codes and



34









 







zoning Laws and regulations except in any case where such non-compliance would not have
an Equity One Material Adverse Effect; and neither Equity One nor any of the Equity One
Property Subsidiaries has knowledge of any pending or threatened condemnation, zoning change
or other proceeding or action that will in any manner affect the size of, use of,
improvements on, construction on, or access to the properties of any of Equity One or the
Equity One Property Subsidiaries except in any case where such action or proceeding would
not have an Equity One Material Adverse Effect.




     (t) Environmental Laws. Except as described in the Equity One SEC Reports, or
as would not, individually or in the aggregate, have an Equity One Material Adverse Effect,
Equity One and the Equity One Property Subsidiaries (i) are in compliance with applicable
Environmental Laws, (ii) have obtained and are in compliance with all permits, licenses,
certificates or other authorizations or approvals required of them under applicable
Environmental Laws to conduct their respective businesses, (iii) have not received written
notice of any actual or alleged liability under, or actual or alleged violation of,
Environmental Laws, including for the investigation or remediation of Releases or threatened
Releases of Hazardous Materials, (iv) are not conducting or paying for, in whole or in part,
any investigation, remediation or other corrective action at any location under any
Environmental Law, (v) are not a party to any Order or governmental agreement that imposes
any obligation or liability under any Environmental Law, and (vi) have not been named as a
“potentially responsible party” under any Environmental Laws, including, but not limited to,
the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
amended.




     (u) Periodic Review of Costs of Environmental Compliance. In the ordinary
course of its business, Equity One periodically reviews the effect of Environmental Laws on
the business, operations and properties of Equity One and the Equity One Property
Subsidiaries, in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, Equity One has reasonably
concluded that such associated costs and liabilities would not, singly or in the aggregate,
have an Equity One Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the Equity One SEC
Reports.




     (v) Accounting Controls and Disclosure Controls.




     (i) Equity One and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (1)
transactions are executed in accordance with management’s general or specific
authorization; (2) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain accountability for
assets; (3) access to assets is permitted only in accordance with management’s
general or specific authorization; and (4) the recorded accountability for assets is



35









 







compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.




     (ii) Equity One and its consolidated subsidiaries have established and maintain
“internal controls over financial reporting” and “disclosure controls and
procedures,” in each case as required by Rule 13a-15 under the Exchange Act. To the
knowledge of Equity One, Equity One’s internal control over financial reporting and
disclosure controls and procedures are effective at a reasonable assurance level to
perform the functions for which they were designed and established. Except as
described in the Equity One SEC Reports, since the end of Equity One’s most recent
audited fiscal year, there has been (I) no material weakness in Equity One’s
internal control over financial reporting (whether or not remediated) and (II) no
change in Equity One’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, Equity One’s internal
control over financial reporting.




     (w) Compliance with the Sarbanes-Oxley Act. There is and has been no failure
on the part of Equity One or, to the knowledge of Equity One, any of Equity One’s directors
or officers, in their capacities as such, to comply in all material respects with any
provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith, including Section 402 related to loans and Sections 302 and 906
related to certifications.




     (x) Tax Matters.




     (i) All material Tax Returns required to be filed by or on behalf of Equity
One or any of its subsidiaries have been filed with the appropriate taxing
authorities in all jurisdictions in which such Tax Returns are required to be
filed (after giving effect to any valid extensions of time in which to make such
filings), and all such Tax Returns, as amended, were true, accurate and complete
in all material respects. All material Taxes payable by or on behalf of Equity
One or any of its subsidiaries have been paid (other than those being contested
in good faith by appropriate proceedings and for which adequate reserves have
been provided on the books of the applicable entity), and, with respect to any
period for which Tax Returns have not yet been filed or for which Taxes are not
yet due or owing, have made adequate accruals for the projected material amount
of such Taxes in their books and records and in the most recent financial
statements contained in the Equity One SEC Reports filed with the SEC prior to
the date of this Agreement. To the knowledge of Equity One, there is no Tax
deficiency that has been asserted against Equity One or any of its current or
former subsidiaries, properties or assets;




     (ii) Commencing with its taxable year ending December 31, 2002, Equity One
has been organized and operated in conformity with the requirements for
qualification and taxation as a REIT under the Code, and its currently proposed
ownership and method of operation will enable it to meet



36









 







the requirements for qualification and taxation as a REIT under the Code for
Equity One’s taxable years ending December 31, 2010 and thereafter;




     (iii) Equity One has incurred no unpaid liability for excise Taxes under
Sections 857(b), 860(c) or 4981 of the Code, including without limitation any
excise Tax arising from a prohibited transaction described in Section 857(b)(6)
of the Code or any Tax arising from “redetermined rents, redetermined deductions
and excess interest” described in Section 857(b)(7) of the Code, and neither
Equity One nor any of its subsidiaries has incurred any material liability for
Taxes other than in the usual, regular and ordinary course of business;




     (iv) There are no pending or, to the knowledge of Equity One, threatened
claims by any Authority in any jurisdiction where Equity One or its subsidiaries
do not file Tax Returns that Equity One or its subsidiaries is or may be subject
to taxation by that jurisdiction; and




     (v) Not more than 29% of the stock of Equity One is owned directly or
indirectly by foreign persons. For purposes of the foregoing, the phrase “owned
directly or indirectly by foreign persons” shall have the meaning used for purposes
of applying Section 897(h)(4) of the Code, except that (i) in the case of a REIT, if
any class of stock of such REIT is regularly traded on an established securities
market within the United States, persons that are not named as a reporting person or
otherwise in a Schedule 13D or 13G made under the Exchange Act with the SEC with
respect to such REIT shall be treated as U.S. persons unless the issuer of such
stock has actual knowledge or should have had knowledge to the contrary,
provided that, for purposes of determining whether the issuer should have
had knowledge to the contrary, the issuer shall be under no independent duty,
implied or otherwise, to make any inquiry with respect to its direct or indirect
stockholders, and (ii) any shares held directly or indirectly by an entity
classified as a domestic corporation (other than a REIT) for U.S. federal income tax
purposes shall be treated as held by a U.S. person.




     (y) Insurance and Title Insurance. As of the date hereof, each of Equity One,
the Significant Subsidiaries and the Equity One Property Subsidiaries and each of their
respective properties are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the businesses in
which they are engaged. All policies of insurance and fidelity or surety bonds insuring
Equity One, the Significant Subsidiaries and the Equity One Property Subsidiaries or their
respective properties, businesses, assets, employees, officers and directors are in full
force and effect, except for the failure to insure or lapses in policies which would not
have an Equity One Material Adverse Effect. Title insurance in favor of Equity One and the
Equity One Property Subsidiaries is maintained with respect to each shopping center property
owned by any such entity in an amount at least equal to (a) the cost of acquisition of such
property or (b) the cost of construction of such property (measured at the time of such
construction), except, in each case, where the failure to maintain such title insurance
would not have an Equity One Material Adverse Effect.



37









 






     (z) Mortgages, Deeds of Trust. The mortgages and deeds of trust encumbering the
properties and assets described in the Equity One SEC Reports (i) are not convertible (in
the absence of foreclosure) into an equity interest in the property or asset described
therein or in Equity One or any of its subsidiaries, nor does Equity One or any of its
subsidiaries hold a participating interest therein, (ii) except as set forth in the Equity
One SEC Reports, are not cross-defaulted to any indebtedness other than indebtedness of
Equity One or any of its subsidiaries and (iii) are not cross-collateralized to any property
not owned by Equity One or any of its subsidiaries.




     (aa) Foreign Corrupt Practices Act. Neither Equity One nor, to the knowledge of
Equity One, any director, officer, agent, employee, affiliate or other person acting on
behalf of Equity One or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the FCPA,
including without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in the furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as such term is
defined in the FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA and Equity One and to the knowledge
of Equity One, its affiliates have conducted their businesses in compliance in all material
respects with the FCPA and have instituted and maintain policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, such continued compliance
therewith.




     (bb) Money Laundering Laws. The operations of Equity One are and have been
conducted at all times in material compliance with the Money Laundering Laws and no action,
suit or proceeding by or before any Authority involving Equity One with respect to the Money
Laundering Laws is pending or, to the knowledge of Equity One, threatened as of the date
hereof.




     (cc) OFAC. Neither Equity One nor, to the knowledge of Equity One, any
director, officer, agent, employee, affiliate or person acting on behalf of Equity One is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department.




     (dd) Accredited Investor. Equity One is an “accredited investor” as that term
is defined in Regulation D promulgated under the Securities Act as in effect as of the date
hereof. Equity One acknowledges and agrees that the EQY LLC Shares received hereunder will
be subject to the restrictions on transfer set forth in the Operating Agreement and may
otherwise not be sold, transferred, offered for sale, pledged, hypothecated or otherwise
disposed of by it without registration under the Securities Act, except pursuant to an
exemption from such registration under the Securities Act, and in compliance with applicable
“blue sky” laws.




     (ee) EQY-CSC. EQY-CSC will be formed prior to the Closing. As of the Closing,
EQY-CSC will be duly organized and validly existing and in good standing under its
jurisdiction of formation. EQY-CSC will not be a “resulting partnership” as



38









 







defined in Treas. Reg. § 1.708-1(c)(1). At all times from its formation, EQY-CSC will
be classified for Tax purposes either as a partnership or as an entity that is disregarded
as separate from its owner. EQY-CSC will not make an election to be classified for Tax
purposes other than as a partnership or an entity that is disregarded as separate from its
owner. EQY-CSC will be formed solely for the purpose of engaging in the transactions
contemplated by the Transaction Documents and, from the date of formation until the Closing,
EQY-CSC will engage in no other business activities and will conduct its operations only as
contemplated by the Transaction Documents. From the date of formation until the Closing,
all shares of EQY-CSC will be owned directly by Equity One or its affiliate. From the date
of formation until the Closing, EQY-CSC will have no assets or liabilities.



ARTICLE 5



CERTAIN COVENANTS



          5.1 Management and Operation of Properties. Except as otherwise expressly permitted by the
terms of this Agreement, with respect to each Property, from the date of this Agreement to the
Closing Date, LIH shall cause the Company and each of its subsidiaries to conduct their ownership
and operation of such Property in the usual, regular and ordinary course in substantially the same
manner as previously conducted and use commercially reasonable efforts to preserve relevant
business relationships with tenants and others having business dealings with them. The Company
shall provide Equity One with copies of any material written notices from any parties which it
receives with respect to the Company or any of its subsidiaries, including, without limitation, any
material notice received with respect to the Existing Debt, the Leases, or the Licenses. In
addition (and without limiting the generality of the foregoing), except as otherwise expressly
permitted or required by the terms of this Agreement or the other Transaction Documents or as set
forth on Schedule 5.1, LIH shall cause the Company not to do (nor permit any of its
subsidiaries to do) any of the following without the prior written consent of Equity One, which
consent shall not be unreasonably withheld or delayed:





     (a) amend the organizational documents of the Company or any of its subsidiaries;




     (b) issue any equity interest in the Company or any of its subsidiaries or any option,
warrant or right relating thereto or any securities convertible into or exchangeable for any
equity interest in the Company or any of its subsidiaries;




     (c) incur or assume any liabilities, obligations or indebtedness for borrowed money or
guarantee any such liabilities, obligations or indebtedness, other than in the ordinary
course of business and consistent with past practice; provided, however,
that in no event shall the Company or any of its subsidiaries incur or assume any long-term
indebtedness for borrowed money in an aggregate principal amount exceeding $1,000,000;




     (d) make any acquisition or capital expenditure over $50,000 other than in the ordinary
course of business;



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     (e) declare, set aside, make or pay any distribution other than in cash;




     (f) intentionally permit, allow or suffer any Property to become subjected to any Liens
of any nature whatsoever (other than Permitted Exceptions or any Lien that does not
materially and adversely affect the value of the Property subject to such Lien or materially
interfere with the use of the Property subject to such Lien);




     (g) fail to pay any insurance premiums due on existing insurance policies or permit
such policies to lapse;




     (h) materially amend or cancel any Existing Debt or waive any claims or rights of
substantial value (individually or in the aggregate);




     (i) pay, loan or advance any amount to, or sell, transfer or lease any of its assets
to, or enter into any agreement or arrangement with, LIH, CSC or any of their affiliates;




     (j) acquire by merging or consolidating with, or by purchasing a substantial portion of
the assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or otherwise acquire any
assets that are material, individually or in the aggregate, to the Properties;




     (k) sell, lease, license or otherwise dispose of any of its assets that are material,
individually or in the aggregate, to the Properties;




     (l) hire any additional employees (other than for the purpose of replacing employees
employed by the Company as of the date hereof whose employment has been terminated or
otherwise ceased after the date hereof) or provide salary increases (other than in the
ordinary course of business), amend the terms of any existing employment contract, or enter
into any employment contract with an employee who is employed by the Company as of the date
hereof;




     (m) enter into any new Material Lease or terminate, modify, amend or grant a waiver
under any existing Material Lease, other than such new Material Leases, terminations,
modifications, amendments or waivers (1) that are on commercially reasonable terms
consistent with the Company’s past practices, and (2) that do not result in a reduction of
rent under, or termination of any other Material Lease at, the applicable Property;
provided, however that the foregoing restriction shall not apply to any new
leasing transaction with respect to which Equity One has approved prior to the date hereof
(all such items on Schedule 5.1(m) being so approved);




     (n) enter into, terminate or materially amend any Material Contract;




     (o) except as would not be materially adverse to any Property (1) grant, terminate,
modify, amend or permit the lapse of any reciprocal easement or similar agreements affecting
a Property, or (2) consent to or enter into the sublease or assignment of any Material Lease
or Loan Document;



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     (p) make or amend any material Tax election unless either (i) such election would
reduce or eliminate what would otherwise be the liability of the Company or any current or
former subsidiary for Taxes under Sections 897 or 1445 of the Code, or (ii) the Company
reasonably determines, after prior consultation with Equity One, that such action is (i)
required by Law or (ii) necessary or appropriate to preserve the Company’s status as a REIT;




     (q) vote or abstain from voting on any matter with respect to any Property held
pursuant to a joint venture, limited liability company agreement, co-tenancy or tenancy in
common agreement with any third-party, other than such matter that would be permitted under
this Section 5.1 with respect to a Property that is wholly-owned by the Company or
its subsidiaries; or




     (r) authorize any of, or commit or agree to take, whether in writing or otherwise, to
do any of, the foregoing actions.



          5.2 Interim Operating Covenants of Equity One.



Except as otherwise expressly permitted by the terms of this Agreement, from the date of this
Agreement to the Closing Date, Equity One shall conduct the ownership and operation of its business
in the usual, regular and ordinary course in substantially the same manner as previously conducted.
In addition (and without limiting the generality of the foregoing), except as otherwise expressly
permitted or required by the terms of this Agreement or the other Transaction Documents, Equity One
shall not do any of the following without the prior written consent of LIH, which consent shall not
be unreasonably withheld or delayed:





     (a) amend the organizational documents of Equity One;




     (b) declare, set aside, make or pay any dividend or other distribution (whether in
cash, stock or property) in respect of shares of EQY Common Stock, other than regular
quarterly cash dividends by Equity One consistent with past practice;




     (c) adopt or implement a plan of complete or partial liquidation or resolution
providing for or authorizing such liquidation or a dissolution, merger, restructuring,
consolidation, recapitalization or other reorganization of Equity One or enter into any
agreement relating to a merger of Equity One with or into another person that would result
in a change of control of Equity One; or




     (d) authorize any of, or commit or agree to take, whether in writing or otherwise, to
do any of, the foregoing actions.



          5.3 Reserved.




          5.4 Insurance With respect to each Property, from the date hereof until the
Closing Date, LIH shall cause the Company and each of its subsidiaries to, use commercially
reasonable efforts to continue to maintain the existing insurance policies relating to such
Property





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          5.5 Title





     (a) On or prior to the Closing Date, Equity One may order, at its sole expense, a
current extended coverage preliminary title report (a “Preliminary Report”) from
Chicago Title Insurance Company or the title company who issued the Current Title Policies
(the “Title Company”) for each Property and a commitment by the Title Company to
issue an original title insurance policy or a non-imputation endorsement to the Current
Title Policies with respect to such Property, in either case, dated as of the Closing Date,
insuring fee simple title to the Property, subject only to the Permitted Exceptions,
including customary endorsements (such title insurance policy, a “Title Policy”).
LIH agrees to cooperate with Equity One and its representatives as reasonably necessary to
facilitate the issuance of the Preliminary Reports by the Title Company (including by
facilitating access to the Properties during regular business hours). Notwithstanding
anything to the contrary set forth herein, LIH shall be obligated to remove or cause the
Title Company to insure over all Liens set forth on Schedule 5.5(a) hereto as of the
Closing Date. If requested by Equity One, LIH shall use commercially reasonable efforts to
deliver to EQY-CSC on or prior to the Closing Date an owner’s title affidavit with respect
to each Property (for the purpose of EQY-CSC obtaining a new title policy and/or
non-imputation endorsements to its title insurance policies) in the form required by the
Title Company.




     (b) On or prior to the Closing Date, Equity One may order, at its sole expense, from a
surveyor or surveying firm, licensed by the State of California, an American Land Title
Association survey of each Property (the “Surveys”) reflecting the total area of
each Property, the location of all Improvements, recorded easements and encroachments, if
any, located thereon and other matters of record with respect thereto and such other matters
as may be requested by Equity One. LIH agrees to cooperate with Equity One and its
representatives as reasonably necessary to facilitate preparation of the Surveys (including
by facilitating access to the Properties during regular business hours).



          5.6 Estoppel Certificates. On or prior to the Closing Date, LIH shall cause
the Company to obtain and deliver to Equity One estoppel certificates in the form attached as
Exhibit L dated no more than ninety (90) days prior to the Closing Date from each of the
tenants listed on Schedule 5.6 hereto (the “Required Estoppels”). In addition, LIH
shall cause the Company to mail estoppel certificates in the form attached as Exhibit L to
all other tenants under Material Leases and to use its commercially reasonable efforts (which
efforts shall exclude the payment of money, other than incidental administrative charges or counsel
fees) to obtain such estoppel certificates dated no more than ninety (90) days prior to the Closing
Date from all other tenants under Material Leases. Notwithstanding anything contained in this
Section 5.6 to the contrary, an estoppel certificate shall be deemed obtained hereunder if
the tenant or other applicable third-party certifies (1) the name of the party possessing all of
the right, title and interest to the Material Lease, (2) that to the certifying party’s knowledge,
the Material Lease is in full force and effect, (3) that it has not been amended, modified,
supplemented or extended except as disclosed therein, and (4) that no known default or known event
which, with the passage of time or notice, or both, would constitute a material default under the
Material Lease has occurred and is continuing.




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          5.7 Casualty and Condemnation.





     (a) If, on or prior to the Closing Date, any Property suffers damage or destruction by
fire or other casualty (a “Casualty”), LIH shall promptly give Equity One written
notice of such event. LIH shall cause the Company to use commercially reasonable efforts in
the recovery of insurance proceeds under the existing insurance policies, or, at Equity
One’s election, shall assign any and all of their rights to negotiate recovery of such
insurance proceeds to EQY-CSC following the Closing and shall have no further obligation
under this Section 5.7. LIH shall cause the Company not to settle, compromise or
discharge any insurance claim related to such Casualty, and shall not apply any insurance
proceeds received with respect thereto, without the approval of Equity One (such approval
not to be unreasonably withheld or delayed), unless such actions are otherwise required to
be taken pursuant to any lease or Loan Document. Promptly following such settlement,
compromise or discharge of such insurance claim, LIH shall cause the Company or its
applicable subsidiary to make commercially reasonable efforts, in good faith, to repair such
damage or destruction to the extent of the insurance proceeds recovered. All insurance
proceeds (including any thereof intended to compensate the Company or its subsidiary for
loss of business or rental income for the period prior to the Closing Date) received in
respect of any such damage or destruction on or prior to the Closing Date and not applied to
the repair, replacement or restoration of the applicable Property, and the rights to recover
any such insurance proceeds to the extent not so collected, shall be contributed to EQY-CSC.
The terms of this Section 5.7(a) are subject in all respects to the rights of
lenders under any applicable Loan Document.




     (b) In the event, prior to the Closing, all or any portion of any Property shall be
condemned or taken by eminent domain by any Authority (a “Taking”), LIH shall
promptly give Equity One written notice of such event. LIH shall cause the Company to use
commercially reasonable efforts to settle and agree to the award for such Taking;
provided, that same shall not be settled and agreed to, nor shall such award be
applied, without the approval of Equity One, unless such actions are otherwise required to
be taken pursuant to any Material Lease or Loan Document. Promptly following receipt of the
award for the Taking, LIH shall cause the Company or its applicable subsidiary to make
commercially reasonable efforts, in good faith, to repair any damage resulting from the
Taking to the extent of the award recovered. All awards from a Taking (including any
thereof intended to compensate the Company or its subsidiary for loss of business or rental
income for the period prior to the Closing Date) received in respect of any such Taking on
or prior to the Closing Date and not applied to the repair or restoration of the applicable
Property, and the rights to recover any such awards to the extent not so collected, shall be
contributed to EQY-CSC. The terms of this Section 5.7(b) are subject to the rights
of lenders under any applicable Loan Document.




     (c) The provisions of this Section 5.7 shall, to the extent permitted under
applicable Law, supersede any statutory provisions applicable to “risk of loss” for
condemnation and/or Casualty.



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     (d) For the avoidance of doubt, notwithstanding anything in this Agreement to the
contrary, any and all amounts received or to be received by the Company or its subsidiaries
as a result of a Casualty or a Taking shall not be included for purposes of any of the
calculations or determinations made or to be made under Article 3 hereof.



          5.8 Resignations. On the Closing Date, LIH shall cause to be delivered to EQY-CSC duly signed
resignations, effective immediately following the Closing, of all directors of the Company and each
of its subsidiaries and shall take such other action as is necessary to accomplish the foregoing;
provided, that LIH shall not be required to deliver resignations hereunder from such
directors that are the employees or designees of third parties pursuant to joint venture, tenant in
common or similar arrangements.




          5.9 Employee Matters. From and after the Closing Date, LIH hereby agrees to pay, and indemnify
and hold harmless Equity One, the Company, EQY-CSC and their respective affiliates from and against
any and all claims for the liabilities of the Company or any of its subsidiaries of the type
described in Section 4.1(v)(i) or 4.1(v)(ii) made by any employee of the Company or
its subsidiaries.




          5.10 Access to Information





     (a) From the date of this Agreement through the Closing Date, LIH shall, and shall
cause the Company to, confer (which may be telephonically) with Equity One on a weekly basis
(subject to the provisos in the following sentence) with respect to the Company’s business
and the Properties generally. Without limiting the foregoing, with respect to each
Property, LIH shall, and shall cause the Company to, afford to Equity One and its lenders,
accountants, counsel and other representatives reasonable access, upon reasonable notice
during normal business hours and, at LIH’s election, in the presence of an authorized
representative of the Company, during the period prior to the Closing Date, to all the
records, due diligence materials, personnel, properties, books, Contracts and Tax Returns of
such Property and relevant subsidiaries of the Company, and during such period shall furnish
promptly to Equity One any information concerning such Property and applicable subsidiary of
the Company as Equity One may reasonably request; provided, however, that
such access does not unreasonably disrupt the normal operations of the Company or
Properties; and, provided, further, such access shall not include or
contemplate any intrusive investigation (an “Investigation”) of any Property
(whether by testing, sampling, digging, boring or otherwise), without the express prior
written consent of LIH. All such Investigations, if any, shall be at Equity One’s sole cost
and expense. Equity One assumes all risk and expense relating to Equity One’s entry on the
Property, and Equity One hereby agrees to indemnify, defend, protect and hold LIH and the
Company and their respective officers, directors, employees, agents and representatives
harmless from and against any and all Losses resulting from any such Investigation. The
indemnification obligations of Equity One set forth in this Section 5.10(a) shall
survive the Closing or any expiration or earlier termination of this Agreement.




     (b) From the date of this Agreement through the Closing Date, LIH shall cause the
Company to use its commercially reasonable efforts, upon Equity One’s request, to arrange
interviews with tenants under Material Leases set forth on Schedule



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5.10(b) upon reasonable notice during normal business hours during the period
prior to the Closing Date; provided, however, that a representative of LIH
or the Company may be present at any such interviews.



          5.11 Confidentiality; Publicity. Each party hereto agrees to maintain in confidence all
material and information received from the other party regarding the parties hereto, the Properties
and the other matters which are the subject of this Agreement or the other Transaction Documents in
accordance with the terms and conditions of that certain confidentiality agreement, dated December
23, 2009, which shall continue in full force and effect following execution of this Agreement.
Notwithstanding anything to the contrary contained herein, except as otherwise required by Law, the
parties hereto will obtain the other party’s prior approval of any press release to be issued
immediately following the execution of this Agreement and the Closing of the transactions
contemplated by this Agreement and the other Transaction Documents, and the parties shall work
together in good faith to determine the form, timing and substance of, and to issue, all other
publicity concerning the transactions contemplated by this Agreement and other Transaction
Documents.




          5.12 Non-Solicit. Until the earlier of the Closing or termination of this Agreement, LIH agrees
not to (and shall cause its controlled affiliates not to) market the Company, any of its
subsidiaries or any of the Properties for sale during the term of this Agreement or entertain or
discuss any offer to purchase or acquire the same with any person other than Equity One and its
affiliates.




          5.13 Consent of Mortgage Lenders.





     (a) From the date of this Agreement until the Closing Date, LIH shall, and shall cause
the Company to, use commercially reasonable, good faith and diligent efforts to procure from
the holders of the Existing Debt encumbering the Properties, written consent from each of
the required lenders listed on Schedule 5.13(a) (each a “Mortgage Consent”)
(to the extent required under the applicable Loan Documents) to the matters set forth on
Schedule 5.13(a) attached hereto. LIH shall keep Equity One reasonably informed in
all material respects of the status and details of each Mortgage Consent, including, without
limitation, providing Equity One with copies of all material written correspondence related
to a Mortgage Consent. LIH shall cause the Company to execute, or cause to be executed by
its applicable subsidiary, any customary documents reasonably required by each such lender
in connection therewith. Equity One will reasonably cooperate with LIH and the Company in
such efforts to obtain the Mortgage Consents, which obligation of Equity One shall include,
without limitation, at Equity One’s expense, (A) causing EQY-CSC (and/or any applicable
subsidiary) and its property manager to execute any customary documents reasonably required
by each applicable lender in connection therewith, (B) causing a law firm acceptable to
each applicable lender to issue any opinion customarily required by such lender on behalf of
the borrower, and (C) causing Equity One or other creditworthy entity acceptable to the
applicable lender to execute indemnities and guaranties as to customary non-recourse
carveouts and environmental indemnifications (provided, however, that the
lender may substitute its most current forms of such documents so long as such current forms
are customary and commercially reasonable). LIH agrees, within fifteen (15) Business Days



45









 







of the date hereof, to request or cause the Company to request, in writing, a Mortgage
Consent from each applicable lender (a copy of which request shall be simultaneously
delivered by LIH to Equity One).




     (b) With respect to each Property, LIH shall pay (i) all of the lender’s costs and
expenses in connection with securing the Mortgage Consents, including, without limitation,
any processing fees, legal fees, rating confirmation costs, title charges and other
out-of-pocket expenses, and (ii) all mortgage assumption fees and penalties incurred in
connection with such Mortgage Consents and/or pursuant to the applicable Loan Documents.




     (c) Subject to Section 5.13(a) above, in the event a Mortgage Consent is not
received for any Property by October 1, 2010, then Equity One shall have the right, by
written notice to LIH on or prior to such date, to assume all negotiations with the relevant
lenders during the period from October 1, 2010 until the later of (i) the date that LIH
receives notice from the IRS that it shall grant the FIRPTA Relief Request and (ii) November
15, 2010 (but in any event not later than December 31, 2010) for the purpose of procuring
such Mortgage Consent by the Closing Date; provided, in the event Equity One
exercises such right and the Termination Date pursuant to Section 7.1(a)(ii) would
otherwise occur during such period, the Termination Date shall be extended until the later
of (i) the date that LIH receives notice from the IRS that it shall grant the FIRPTA Relief
Request and (ii) November 15, 2010 (but in any event not later than December 31, 2010);
provided further, however, that in exercising its rights under this
Section 5.13(c), Equity One shall be responsible for any incremental cost to obtain
those Mortgage Consents with respect to which Equity One exercises its rights hereunder, and
LIH shall continue to be solely responsible for the costs set forth in Section
5.13(b) in obtaining such Mortgage Consents. The exercise of such rights and
corresponding automatic extension of the Termination Date shall be at the election of Equity
One; provided, that at all times during such extension period Equity One shall
continue to use its commercially reasonable efforts to obtain such Mortgage Consents.




     (d) If the Mortgage Consent is still not received by the Termination Date (as extended
pursuant to the terms of Section 5.13(c), if applicable), then Equity One and LIH
shall have the right to terminate this Agreement pursuant to Section 7.1(a)(ii).




     (e) Notwithstanding anything in this Section 5.13 to the contrary, at any time
following the date hereof prior to the termination of this Agreement, Equity One shall have
the right, by written notice to LIH, to elect to prepay any Existing Debt in full (or if not
permitted under the terms of the relevant Loan Document, defeased in full) on or prior to
the Closing Date; provided, that Equity One shall pay any and all prepayment
penalties (or costs of defeasance) and other related lender costs under the applicable Loan
Documents.



          5.14 Tax Matters. From and after the date of this Agreement until the Closing
Date, LIH shall cause the Company to take all actions, and refrain from taking all actions, as are
necessary to ensure that the Company will continue to qualify for taxation as a REIT under the
Code.





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          5.15 Expenses; Transfer and Stamp Taxes.





     (a) Whether or not the Closing takes place, and except as otherwise expressly provided
in this Agreement or in the applicable Transaction Documents, all costs and expenses
incurred in connection with this Agreement and the Transaction Documents and the
transactions contemplated hereby and thereby shall be paid by the party incurring such
expense.




     (b) Any transfer Taxes, recordation Taxes, notarial tariffs or stamp Taxes applicable
to the contribution of the Company Common Stock to EQY-CSC pursuant to this Agreement and
any other transfer or documentary Taxes or any filing, registration or recording fees
applicable to such conveyance and transfer shall be paid by LIH. Each party shall use
reasonable efforts to avail itself of any available exemptions from any such Taxes or fees,
and to cooperate with the other parties in providing any information and documentation that
may be necessary to obtain such exemptions and in making any required filings.



          5.16 Brokers or Finders. Other than as set forth on Schedule 5.16, each of Equity One
and LIH represent to the other, as to itself and its affiliates, that no agent, broker, investment
banker or other firm or person is or will be entitled to any broker’s or finder’s fee or any other
commission or similar fee in connection with any of the transactions contemplated by this Agreement
or the other Transaction Documents. In the event that any broker or finder claims a commission or
finder’s fee based upon any contact, dealings or communication, the party through whom or through
whose affiliate such broker or finder makes its claim shall be solely responsible for such
commission or fee and for all costs and expenses (including, without limitation, reasonable
attorneys’ fees and disbursements) incurred by the other party and its affiliates in defending
against the same. The party through whom or through whose affiliate such broker or finder makes a
claim shall hold harmless, indemnify and defend the other parties hereto, their successors and
assigns, agents, employees, officers and directors, from and against any and all Losses, arising
out of, based on, or incurred as a result of such claim.




          5.17 Supplemental Disclosure.





     (a) The LIH Disclosure Schedule shall be construed with and as an integral part of this
Agreement to the same extent as if the same had been set forth herein. Notwithstanding
anything to the contrary contained in this Agreement, any matter disclosed pursuant to the
LIH Disclosure Schedule, to the extent that such disclosure is reasonably discernable, shall
be deemed to be disclosed for all purposes under this Agreement but such disclosure shall
not be deemed to be an admission or representation as to, or evidence of, the materiality of
the item so disclosed, nor shall it establish any standard of material for any purpose
whatsoever. LIH shall have the right until the Closing to supplement or amend the LIH
Disclosure Schedule with respect to any matter hereafter arising or discovered after the
date hereof that, if existing or known at the date hereof, would have been required to be
set forth or described in the LIH Disclosure Schedule. Any such supplement or amendment of
the LIH Disclosure Schedule shall not give rise to any right of Equity One to terminate this
Agreement; provided, such supplement or amendment shall not impair Equity One’s
right to terminate this



47









 







Agreement pursuant to Section 7.1(a)(iii) in the event the facts, events or
occurrences disclosed on such supplement or amendment relate to breaches of the
representations and warranties of LIH contained in this Agreement which (i) would result in
the failure of the condition set forth in Section 6.2(a) or (b) and (ii)
cannot be or are not cured prior to the Termination Date. Any supplement or amendment
hereunder shall be provided to Equity One not less than three (3) Business Days prior to the
Closing Date; provided that a new supplement or amendment may be provided prior to
the Closing for any fact, event or occurrence that arises following the second Business Day
prior to the Closing but prior to the Closing. Except to the extent any fact, event or
occurrence disclosed on any supplement or amendment of the LIH Disclosure Schedule arises as
a result of a breach of Section 5.1 of this Agreement, such supplement or amendment
of the LIH Disclosure Schedule shall be given effect after the Closing for purposes of
determining whether any Indemnitee is entitled to any rights of indemnification pursuant to
Section 8.1;




     (b) Equity One shall promptly notify LIH of, and furnish LIH any information it may
reasonably request with respect to, the occurrence to the knowledge of Equity One of any
event or condition or the existence to the knowledge of Equity One of any fact that would
cause any of the conditions to LIH’s obligation to consummate the transactions contemplated
by this Agreement not to be fulfilled; and




     (c) LIH shall promptly notify Equity One of, and furnish Equity One any information it
may reasonably request with respect to, the occurrence to the knowledge of LIH of any event
or condition or the existence to the knowledge of LIH of any fact that would cause any of
the conditions to Equity One’s obligation to consummate the transactions contemplated by
this Agreement not to be fulfilled.



          5.18 Post-Closing Cooperation. Equity One and LIH shall cooperate with each other, and shall
cause their officers, employees, agents, auditors and representatives to cooperate with each other
to ensure the orderly transition of the Company and Properties to EQY-CSC and its affiliates and to
minimize any disruption to the Properties and the other respective businesses of the Company and
Equity One that might result from the transactions contemplated hereby. After the Closing Date,
upon reasonable written notice, Equity One and LIH shall furnish or cause to be furnished to each
other and their employees, counsel, auditors and representatives access, during normal business
hours, to such information and assistance relating to the Company, its subsidiaries and the
Properties (to the extent within the control of such party) as is reasonably necessary for
financial reporting and accounting matters. No party shall be required by this Section
5.18 to take any action that would unreasonably interfere with the conduct of its business or
unreasonably disrupt its normal operations.




          5.19 Further Assurances. Subject to the terms and conditions of this Agreement and except as
otherwise expressly provided herein (including in Section 6.4), each of LIH and Equity One
shall use its commercially reasonable efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary, proper or advisable to consummate the transactions
contemplated hereby and the other Transaction Documents. Without limiting the foregoing, from time
to time, as and when requested by any party, each party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or cause to be taken,
all such further or other actions as such other






48









 







party may reasonably deem necessary or desirable to consummate the transactions contemplated hereby
and by the other Transaction Documents.




          5.20 Name Change. At Equity One’s discretion, and as soon as reasonably practicable (but in no
event earlier than January 1, 2011), Equity One shall (directly or indirectly) cause EQY-CSC to
cause the Company to file a certificate of amendment to the Amended and Restated Certificate of
Incorporation of the Company for the purpose of changing the Company’s name.




          5.21 Amendment of Organizational Documents. LIH shall, and shall cause the Company to, use
commercially reasonable efforts to effect, as of immediately prior to the Closing, such procedural
amendments to the Company’s bylaws as may be requested by Equity One; provided, that such
amendments would not reasonably be expected to have a material adverse effect on LIH, the Company
or any of their respective subsidiaries or that, in the good faith judgment of LIH, may cause LIH
to be treated as having engaged in a deemed exchange of its equity interest in the Company for U.S.
federal income tax purposes.




          5.22 The Registration Statement. Prior to the Closing, Equity One shall prepare, file with the
SEC and cause to be declared effective a registration statement (which shall be an “automatic shelf
registration statement” as defined under Rule 405 under the Securities Act on Form S-3, if
available) permitting the public offering and sale on a continuous basis pursuant to Rule 415 under
the Securities Act of all shares of EQY Common Stock received by LIH under the Transaction
Documents or issuable in redemption of LIH LLC Shares (the “Registration Statement”);
provided, however, that before filing such Registration Statement or any amendments
or supplements thereto, Equity One will furnish copies of all such documents proposed to be filed
to LIH and provide reasonable time for LIH and its counsel to comment upon such documents. As of
its effective date and as of the Closing Date, the Registration Statement will not include any
untrue statement of a material fact or omit to state any 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. In connection with the filing of the Registration Statement, LIH shall
furnish in writing to Equity One such information regarding LIH (and any of its Affiliates)
requested by Equity One as is necessary or it reasonably deems advisable for inclusion in the
Registration Statement.




          5.23 Cooperation Relating to Tax Opinions, EQY Promissory Note “Bringdown,” and FIRPTA Relief
Request LIH shall reasonably cooperate with Equity One’s counsel in connection
with the preparation and delivery of the opinion referenced in Section 2.5(d)(i)(C), and
Equity One shall reasonably cooperate with LIH’s counsel in connection with the preparation and
delivery of the opinion referenced in Section 2.5(d)(i)(B). Such cooperation shall include
but not be limited to delivering such representations in the form of an officer certificate as may
be reasonably requested by counsel to LIH and/or counsel to Equity One, upon which such counsel may
rely for purposes of rendering its opinion; provided, that nothing in this Section
5.23 shall be read to require Equity One to commit to taking any action, or refrain from taking
any action, with respect to the Properties, the Company or EQY-CSC following the Closing. In order
to facilitate the delivery of the opinions referenced in Section 2.5(d)(i)(B) and
Section 2.5(d)(i)(C), LIH and Equity One shall reasonably cooperate in connection with



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procuring a “bringdown” confirmation from a nationally recognized financial advisory firm reasonably acceptable to LIH of the opinion concerning the EQY Promissory Note
delivered as of the day hereof and attached hereto as Exhibit J, it being understood that
such opinion is, and such bringdown confirmation may be, subject to customary assumptions and
limitations and shall be based upon customary representations concerning matters such as leverage
ratios and payment expectations with respect to the EQY Promissory Note. LIH shall keep Equity One
informed on a reasonably current basis of the status of the FIRPTA Relief Request, and, upon
request, shall provide Equity One with copies of all material written communication received from
the IRS and/or U.S. Treasury Department relating thereto.




          5.24 Intercompany Debt. At or prior to the Closing, LIH shall deliver to Equity
One evidence reasonably satisfactory to Equity One that (i) claims with respect to £500,000,000
(GBP) of intercompany debt of CSC has been subordinated to claims against CSC under any Transaction
Document or (ii) CSC has been capitalized such that CSC’s net equity is at least £300,000,000
(GBP). From and after the Closing Date and until such time as CSC no longer has any obligations
under any Transaction Document, CSC covenants and agrees that it shall maintain such claim
subordination or level of net equity.




          5.25 Modification of EQY Promissory Note. To the extent required to facilitate
the delivery of the bringdown certificate described in Section 5.23, the parties agree to
make such amendments to the terms and conditions of the EQY Promissory Note to be delivered
pursuant to Section 2.2 as shall be reasonably necessary; provided, that neither
party shall be obligated hereunder to consent to such changes to terms and conditions as would have
a material adverse effect on the benefits expected to be received, or costs incurred, in connection
with the transactions contemplated by this Agreement.




          5.26 FIRPTA Withholding. Pursuant to IRS Notice 89-57 and Treas. Reg. §
1.1445-2(d)(2)(i)(A), LIH shall deliver to EQY-CSC at or prior to the Closing the Notice of
Nonrecognition in the form of Exhibit F hereto (the “Notice of Nonrecognition”).
Within ten (10) days of the receipt of the Notice of Nonrecognition by EQY-CSC, Equity One shall
cause EQY-CSC to deliver the Notice of Nonrecognition to the IRS as required by Treas. Reg. §
1.1445-2(d)(2)(i)(B), together with a cover letter in the form of Exhibit F-1 hereto.
Equity One shall cause EQY-CSC to (i) certify to LIH that EQY-CSC has satisfied its obligations
under this Section 5.26, (ii) provide LIH with a copy of any certified mail certificates or
receipts related to the Notice of Nonrecognition and its delivery to and receipt by the IRS, and
(iii) provide LIH with copies of any correspondence between EQY-CSC and the IRS concerning the
Notice of Nonrecognition.




          5.27 Modifications to Reflect United Kingdom Tax Requirements. The parties
acknowledge and agree that: (i) LIH is subject to tax under the laws of the United Kingdom; and
(ii) in order for the contribution of the Company Common Stock to EQY-CSC to qualify for tax-free
roll-over treatment under the tax laws of the United Kingdom, EQY-CSC must be treated as a
“company” or “corporation” for purposes of such law. In light of the foregoing, prior to Closing,
the parties agree to make such changes or amendments to the Operating Agreement as may be requested
by LIH that are reasonably necessary to ensure that, to the reasonable satisfaction of LIH, EQY-CSC
is classified as a “company” or “corporation” for purposes of the



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tax laws of the United Kingdom;
provided, however, that such changes or amendments shall not have a material
adverse impact on Equity One or EQY-CSC.




ARTICLE 6



CONDITIONS TO CLOSING



          6.1 Conditions to Each Party’s Obligations. The obligations of LIH and Equity One to
consummate the transactions contemplated hereunder on the Closing Date are subject to the
satisfaction or waiver on or prior to the Closing Date of the following condition:





     (a) No Injunctions or Restraints. No applicable Law or injunction enacted,
entered, promulgated, enforced or issued by any Authority or other legal restraint or
prohibition preventing the consummation of the of transactions contemplated by this
Agreement or the other Transaction Documents on the Closing Date shall be in effect.



          6.2 Conditions to Equity One’s Obligations. The obligation of Equity One to
consummate the transactions contemplated hereunder on the Closing Date shall be subject to the
satisfaction or waiver by Equity One of each of the conditions set forth below:





     (a) Accuracy of Representations and Warranties. All of the representations and
warranties of LIH set forth in this Agreement that are qualified as to “materiality” or
“Company Material Adverse Effect” shall be true and accurate in all respects as of the
Closing Date (other than representations and warranties that address matters only as of a
particular date or with respect to a specified period, which need only be true and accurate
as of such date or with respect to such period) and any such representations and warranties
that are not so qualified shall be true and accurate in all material respects as of the
Closing Date (other than representations and warranties that address matters only as of a
particular date or with respect to a specified period, which need only be true and accurate
as of such date or with respect to such period); and a certificate to such effect shall be
executed and delivered by LIH;




     (b) Performance of Covenants. Each Liberty Party shall have performed and
observed, in all material respects, all covenants and agreements of this Agreement to be
performed and observed by them as of the Closing Date; and a certificate to such effect
shall be executed and delivered by LIH;




     (c) Delivery of Documents. On the Closing Date, LIH shall have delivered the
documents and deliveries set forth in Section 2.5(b).




     (d) Mortgage Consents. Any required Mortgage Consents pursuant to Section
5.13 shall have been obtained, or the applicable Existing Debt shall have been defeased
or prepaid in full, on or prior to the Closing Date;




     (e) Opinions. Equity One shall have received the opinions set forth in
Section 2.5(d)(i)(C) and 2.5(d)(ii); and



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     (f) Equityholders Agreement. Equity One shall continue to be entitled to the
benefits of the Equityholders Agreement and the Equityholders Agreement shall remain
enforceable as against LIH.



          6.3 Conditions to LIH’s Obligations. The obligation of LIH to consummate the
transactions contemplated hereunder on the Closing Date shall be subject to the satisfaction or
waiver by LIH of each of the conditions set forth below:





     (a) Accuracy of Representations and Warranties. All of the representations and
warranties of Equity One set forth in this Agreement that are qualified as to “materiality”
or “Equity One Material Adverse Effect” shall be true and accurate in all respects as of the
Closing Date (other than representations and warranties that address matters only as of a
particular date or with respect to a specified period, which need only be true and accurate
as of such date or with respect to such period) and any such representations and warranties
that are not so qualified shall be true and accurate in all material respects as of the
Closing Date (other than representations and warranties that address matters only as of a
particular date or with respect to a specified period, which need only be true and accurate
as of such date or with respect to such period); and a certificate to such effect shall be
executed and delivered by Equity One;




     (b) Performance of Covenants. Equity One shall have performed and observed, in
all material respects, all covenants and agreements of this Agreement to be performed and
observed by it as of the Closing Date, and a certificate to such effect shall be executed
and delivered by Equity One;




     (c) Delivery of Documents. On the Closing Date, Equity One shall have executed
and delivered the documents and deliveries set forth in Section 2.5(a) and EQY-CSC
shall have executed and delivered the documents and deliveries set forth in Section
2.5(c);




     (d) Opinions. LIH shall have received the opinions set forth in Section
2.5(d)(i)(A) and 2.5(d)(i)(B);




     (e) Equityholders Agreement. LIH shall continue to be entitled to the benefits
of the Equityholders Agreement and the Equityholders Agreement shall remain enforceable as
against Equity One, Gazit-Globe Ltd. and the other parties thereto; and




     (f) 9100 Relief. The IRS shall have granted the Company’s application for
relief submitted on May 12, 2010 pursuant to Rev. Proc. 2008-27 or issued an IRS private
letter ruling granting such relief pursuant to Treasury Regulation 301.9100-3 in a form
reasonably acceptable to LIH (the “FIRPTA Relief Request”); provided, that
LIH shall not have the right to waive the condition set forth in this Section 6.3(f)
if the amount of the aggregate liability covered by Section 3.9 of the Tax Matters Agreement
would exceed $10 million.



          6.4 Mutual Obligation In Connection With the Delivery of Opinions. Each of LIH and Equity One
shall use its respective commercially reasonable efforts to cause the opinion of its respective
counsel described in Sections 2.5(d)(i)(B) and 2.5(d)(i)(C) to be delivered at the



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Closing. In the event that either such opinion cannot be rendered, each of Equity One and LIH agrees to
negotiate in good faith to make any required modifications or amendments to the terms of the
Transaction Documents that would enable such opinions to be rendered. Notwithstanding
anything to the contrary contained in this Agreement, in no event shall either Equity One or LIH be
required to agree to any modification or amendment to the terms of any Transaction Document that
would adversely affect the tax, economic or other benefits expected by such party to be received in
connection with the transactions contemplated by the Transaction Documents.




ARTICLE 7



TERMINATION, AMENDMENT AND WAIVER



          7.1 Termination.





     (a) Notwithstanding anything to the contrary in this Agreement, this Agreement may be
terminated and the other transactions contemplated by this Agreement abandoned at any time
prior to the Closing Date:




     (i) by mutual written consent of LIH and Equity One;




     (ii) subject to the extension rights pursuant to Sections 5.13(c) or
7.6 hereof, by either LIH or Equity One, as the case may be, if the Closing
shall not have occurred by the earlier of (i) December 31, 2010 or (ii) the date
that is ten (10) Business Days after either (a) the satisfaction of the condition
set forth in Section 6.3(f) or (b) LIH receives notice from the IRS that it
shall not grant the FIRPTA Relief Request (as may be extended pursuant to
Section 5.13(c) or 7.6 hereof, the “Termination Date”);
provided that in no event shall the Termination Date be earlier than October
1, 2010.




     (iii) by Equity One if there has been a breach of the representations and
warranties or non-performance of covenants of LIH contained in this Agreement which
(A) would result in the failure of the condition set forth in Section 6.2(a)
or 6.2(b) and (B) is not cured within the notice period in Section
7.1(c) or cannot be cured by the earlier of (1) the notice period in Section
7.1(c) or (2) the Termination Date;




     (iv) by LIH if there has been a breach of the representations and warranties or
non-performance of covenants of Equity One contained in this Agreement which (A)
would result in the failure of the condition set forth in Section 6.3(a) or
6.3(b) and (B) is not cured within the notice period in Section
7.1(c) or cannot be cured by the earlier of (1) the notice period in Section
7.1(c) or (2) the Termination Date; or




     (v) by either LIH or Equity One pursuant to Section 7.4 below;


provided, however, that the party seeking termination pursuant to any of clauses
(ii) through (iv) above is not then in material breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.





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     (b) Subject to Section 7.1(c), in the event of termination by LIH or
Equity One pursuant to this Section 7.1, written notice thereof shall forthwith be
given to the other and the transactions contemplated by this Agreement shall be terminated,
without further action by any party. If the transactions contemplated by this Agreement are
terminated pursuant to this Section 7.1:




     (i) each party shall return all documents and other material received from the
other relating to the transactions contemplated hereby, whether so obtained before
or after the execution hereof, to the other party (provided, that a party
may keep one copy of such materials for its legal files); and




     (ii) all confidential information received by either party with respect to the
businesses of the other party shall be treated in accordance with Sections
5.11 and 7.2 which shall remain in full force and effect notwithstanding
the termination of this Agreement.




     (c) In the event Equity One or LIH seeks to terminate this Agreement pursuant to
Section 7.1(a)(iii) or (iv), respectively, written notice of such party’s
intent to so terminate shall forthwith be given to the other party, specifying the grounds
for such termination and the proposed effective date of such termination (which may be no
earlier than ten (10) days from the date of such notice). The defaulting party shall have
the right to cure such default to the reasonable satisfaction of the non-defaulting party
before such termination effective date, whereupon the termination notice shall lapse and be
of no further effect.




     (d) In the event that this Agreement is terminated by LIH or Equity One on December 31,
2010 pursuant to Section 7.1(a)(ii) and as of such date (i) the condition set forth
in Section 6.1(a) has been satisfied, (ii) the Mortgage Consents have been obtained
such that the condition set forth in Section 6.2(d) has been satisfied and (iii) the
condition set forth in Section 6.3(f) (9100 Relief) shall not have been satisfied
but all other conditions to LIH’s obligation to close set forth in Section 6.3 would
have been satisfied (other than those conditions that by their nature are to be satisfied at
the Closing, but subject to such conditions being capable of being satisfied and
provided that the opinions of counsel pursuant to Sections 2.5(d)(i)(B) and
2.5(d)(i)(C) shall not be required), then LIH shall promptly pay Equity One a cash
payment in an amount equal to the Termination Fee set forth in Section 7.4(c) and
the provisions of Section 7.5 hereof shall apply as if Equity One accepted LIH’s
written notice of termination of this Agreement pursuant to Section 7.4(a).



          7.2 Effect of Termination. If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described in Section 7.1, (A) this
Agreement shall become null and void and of no further force and effect, except for the provisions
of (i) Article 1, (ii) Section 5.10, but only the indemnification obligations
specified therein, (iii) Section 5.11 relating to the obligation of the parties to keep
confidential certain information and data, which shall survive for two (2) years following such
termination, (iv) Section 5.15 relating to certain expenses, (v) Section 5.16
relating to finder’s fees and broker’s fees, (vi) Section 7.1 and this
Section 7.2, and (vii) Article 9, and (B) any other Transaction





54









 







Document that has at the date of termination of this Agreement been executed and
delivered shall automatically terminate and shall become null and void and of no further force and
effect, except for any provision thereof that such other Transaction Document expressly provides
shall survive a termination. Nothing in this Section 7.2 shall be deemed to release any
party from any liability for fraud or for any breach by such party of the terms and provisions of
this Agreement or any other Transaction Document that has at the date of termination of this
Agreement been executed and delivered or to impair the right of any party to compel specific
performance by any other party of its surviving obligations under this Agreement or such other
Transaction Document.





     7.3 Election of Remedies.




     (a) Specific Performance. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed by them
in accordance with the terms hereof or were otherwise breached and that each party shall be
entitled to an injunction or injunctions or any other equitable relief to prevent breaches
of the provisions hereof (without any requirement to post any bond or other security in
connection with seeking such relief). In addition, the parties agree that the Company and
the Properties have unique attributes such that an adequate remedy would not be available at
Law for a breach of this Agreement. Each party shall have the right to seek specific
performance or other equitable relief in connection with enforcing the terms hereof (without
any requirement to post any bond or other security in connection with seeking such relief)
in accordance with Section 9.7. The parties agree not to raise any objections or
defenses to the availability of equitable remedies (including that a remedy at Law would be
adequate) to prevent or restrain breaches of this Agreement by LIH, on the one hand, or
Equity One, on the other hand, and to specifically enforce the terms and provisions of this
Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the
covenants and obligations of the parties under this Agreement, in each case prior to, and in
connection with, the Closing. The parties agree that any party hereto may seek a specific
performance remedy in lieu of terminating this Agreement even if such party otherwise is
entitled to terminate this Agreement. For the avoidance of doubt, nothing in this
Section 7.3 is intended to limit or restrict any other remedies available to a party
except as expressly provided in Section 7.3(b) and (c).




     (b) Default by LIH. Without limiting Section 6.2, if LIH is in
material default with respect to the performance of any of its obligations hereunder on or
prior to the Closing Date, then Equity One, at its election and as its sole and exclusive
remedy, may elect to waive any objections, defects or imperfections of LIH’s performance and
proceed to Closing and seek an injunction or injunctions or other equitable relief or order
to specifically enforce the provisions of this Agreement to which such default applies and,
in any event, to specifically enforce the Closing to occur.




     (c) Default by Equity One. Without limiting Section 6.3, if Equity One
is in material default with respect to the performance of any of its obligations hereunder
on or prior to the Closing Date, then LIH, at its election and as its sole and exclusive
remedy, may elect to waive any objections, defects or imperfections of Equity One’s
performance and proceed to Closing and seek an injunction or injunctions or other equitable
relief or



55









 






order to specifically enforce the provisions of this Agreement to which such default
applies and, in any event, to specifically enforce the Closing to occur.




     (d) Alternative Damages. Notwithstanding anything to the contrary in this
Agreement, in the event a court of competent jurisdiction has declined to specifically
enforce the obligations of a defaulting party hereunder pursuant to a claim for specific
performance brought by the non-defaulting party, then the non-defaulting party may pursue an
action for monetary damages for breach of this Agreement. If such a court has granted an
award of monetary damages for such breach, the non-defaulting party may enforce such award
and accept damages for such breach.




     7.4 FIRPTA Relief Request.




     (a) In the event that LIH receives notice from the IRS that the IRS shall not grant the
FIRPTA Relief Request, then LIH shall have the right to terminate this Agreement by written
notice to Equity One, which notice shall include copies of all correspondence received from
the IRS; provided, LIH shall be required to deliver such notice of termination of
this Agreement to Equity One if the amount of the aggregate liability covered by Section 3.9
of the Tax Matters Agreement exceeds $10 million. Any such notice of termination is
referred to as a “FIRPTA Termination Notice”. Any such FIRPTA Termination Notice
shall be delivered by LIH to Equity One in writing within five (5) Business Days of receipt
of the notice from the IRS. As soon as practicable following delivery of such FIRPTA
Termination Notice (but in any event before the end of the first Business Day following the
date of delivery of such FIRPTA Termination Notice), LIH shall deposit an amount in cash
equal to the Termination Fee (the “Escrowed Termination Funds”) with an escrow agent
reasonably acceptable to the parties (it being agreed that Skadden, Arps, Slate, Meagher &
Flom, LLP shall be deemed reasonably acceptable to the parties) (the “Escrow
Agent”). In the event that Equity One receives a FIRPTA Termination Notice from LIH
pursuant to this Section 7.4(a), Equity One shall have the right, at its sole
election by written notice delivered to LIH within five (5) Business Days after Equity One’s
receipt of such FIRPTA Termination Notice and subject to the terms of Section 3.9 of the Tax
Matters Agreement, to elect not to accept any such termination (any such notice from Equity
One electing not to accept such termination being referred to as a “Termination
Rejection Notice”). In the event Equity One delivers a Termination Rejection Notice to
LIH within five (5) Business Days after Equity One’s receipt of such FIRPTA Termination
Notice, subject to the satisfaction or waiver of all of the other conditions to the Closing
set forth in Article 6 hereof, the parties shall proceed to the Closing without
prejudice to any other terms of this Agreement or any other Transaction Document
(provided, that the opinions of counsel pursuant to Sections 2.5(d)(i)(B)
and 2.5(d)(i)(C)) will not be required). The Escrow Agent shall be instructed to
release the Escrowed Termination Funds (i) to Equity One (a) as promptly as practicable upon
receipt by the Escrow Agent of a written notice from Equity One that Equity One is accepting
the FIRPTA Termination Notice and this Agreement shall be deemed terminated or (b) on the
sixth (6th) Business Day following the date of delivery of the FIRPTA Termination Notice if
Equity One has not delivered a Termination Rejection Notice to LIH within five (5) Business
Days after Equity One’s receipt of the FIRPTA Termination Notice and this Agreement shall be
deemed terminated or (ii) to



56









 






LIH in the event Equity One delivers a Termination Rejection Notice to LIH within five
(5) Business Days after Equity One’s receipt of such FIRPTA Termination Notice.




     (b) In the event that (i) LIH receives notice from the IRS that the IRS shall not grant
the FIRPTA Relief Request, (ii) the amount of the aggregate liability covered by Section 3.9
of the Tax Matters Agreement does not exceed $10 million and (iii) LIH affirmatively agrees
in writing to assume all liability relating to the FIRPTA Relief Request, then the Agreement
shall not be terminated pursuant to this Section 7.4(b) and the condition to Closing
set forth in Section 6.3(f) shall be deemed satisfied, whereupon, subject to the
satisfaction or waiver of all of the other conditions to the Closing set forth in
Article 6 hereof, the parties shall proceed to the Closing without prejudice to any
other terms of this Agreement or any other Transaction Document (provided, that the
opinions of counsel pursuant to Sections 2.5(d)(i)(B) and 2.5(d)(i)(C)) will
not be required); provided, however, that in the event that LIH does not
affirmatively agree in writing to assume the amount of the aggregate liability covered by
Section 3.9 of the Tax Matters Agreement under this Section 7.4(b), and gives
written notice thereof within five (5) Business Days of receipt of the notice from the IRS,
then Equity One shall have the right to terminate this Agreement by written notice delivered
to LIH within five (5) Business Days after the date LIH provides written notice to Equity
One that LIH is not assuming such liability pursuant to this Section 7.4(b).




     (c) The “Termination Fee” shall be an amount equal to a cash payment of
$5,000,000.




     (d) Notwithstanding anything to the contrary in this Agreement, the parties hereto
expressly acknowledge and agree that, with respect to any termination of this Agreement in
circumstances where the Termination Fee is payable in accordance with this Section
7.4, the payment of the Termination Fee shall constitute liquidated damages with respect
to any claim for damages or any other claim which Equity One would otherwise be entitled to
assert against LIH or any of its respective assets with respect to this Agreement and the
transactions contemplated hereby and shall constitute the sole and exclusive remedy
available to Equity One. The parties hereto expressly acknowledge and agree that, in light
of the difficulty of accurately determining actual damages with respect to the foregoing
upon any termination of this Agreement in circumstances where the Termination Fee is payable
under this Section 7.4, the rights to payment of the Termination Fee (i) constitute
a reasonable estimate of the damages that will be suffered by reason of any such proposed or
actual termination of this Agreement pursuant to Section 7.1(a)(v) and (ii) shall be
in full and complete satisfaction of any and all damages arising as a result of the
foregoing.




     (e) CSC and LIH acknowledge that the agreements contained in Section 7.4 are an
integral part of the transaction contemplated by this Agreement, and that, without these
agreements, Equity One would not enter into this Agreement; accordingly, if LIH fails
promptly to pay the Termination Fee, and, in order to obtain such payment, Equity One
commences a suit that results in a final adjudication on the merits against LIH for the
Termination Fee, LIH shall pay to Equity One interest on the Termination Fee from and
including the date payment of the Termination Fee was due to but excluding the date of



57









 






actual payment at the prime rate of Bank of America, National Association in effect on
the date such payment was required to be made, and LIH shall pay to Equity One all of the
reasonable costs incurred by Equity One to secure payment of the Termination Fee.



          7.5 No Shop. In the event this Agreement is terminated pursuant to Section
7.4(a) or Section 7.1(d) above, and Equity One accepts such termination, then
notwithstanding any provision of this Agreement to the contrary, (i) for a period of 180 days
following the effective date of such termination, LIH agrees not to (and shall cause its controlled
affiliates not to) market for sale or other disposition either (a) the Company and its subsidiaries
substantially as a whole or (b) any of the Properties set forth on Schedule 7.5, or
entertain or discuss any offer to purchase or acquire any of the foregoing with any person other
than Equity One and its affiliates and (ii) during the 180-day period starting on the date that is
181 days following the effective date of such termination, LIH agrees that it shall not (and shall
cause its controlled affiliates to not) enter into any exclusive negotiations with third parties
with respect to the sale or other disposition of either (a) the Company and its subsidiaries
substantially as a whole or (b) any of the Properties set forth on Schedule 7.5.




          7.6 Amended EQY Charter. Notwithstanding anything herein to the contrary, Equity One shall
have the right, by written notice to LIH, to extend the Termination Date set forth in Section
7.1 by up to forty-five (45) days for the purpose of obtaining the approval of Equity One’s
stockholders to the Amended EQY Charter; provided, that at all times during such extended
period Equity One shall diligently use its commercially reasonable efforts to obtain such approval.




ARTICLE 8



INDEMNIFICATION



          8.1 Indemnification by LIH. From and after the Closing Date, LIH agrees to
indemnify, defend and hold harmless Equity One, the Company and EQY-CSC from and against all Losses
which are incurred or suffered by any of them based upon, arising out of, in connection with or by
reason of (i) the breach by LIH of its representations or warranties set forth in this Agreement
(other than those set forth in Section 4.1(s) hereof, the indemnification obligations for
which are addressed exclusively in the Tax Matters Agreement), or (ii) failure by LIH to perform
any of the covenants or agreements applicable to it under this Agreement; provided,
however, that (A) no claim for indemnification shall be made hereunder unless and until the
value of all indemnifiable Losses, in the aggregate, shall equal or exceed $2,500,000 as of the
date such claim or claims are made, and then, only for the amount of such Losses in excess of
$2,500,000, and (B) such indemnification obligations shall not exceed, in the aggregate,
$40,000,000 (provided, that the foregoing threshold and cap shall not apply to (x) Losses
arising as a result of the breach of any LIH Fundamental Representation, (y) the failure to perform
the covenants and agreements set forth in Section 5.13(b) or 5.15, or (z) claims
based on fraud), and (C) no claim for indemnification shall be made under clause (i) above to the
extent any of the individuals listed for Equity One on Schedule 3 attached hereto had
actual knowledge, as of the date hereof, of such breach. Equity One, the Company and EQY-CSC shall
not be entitled to any recovery unless a claim for indemnification is made in accordance with
Section 8.3 and within the time period set forth in such Section 8.3 (and in any
event prior to the date the






58









 







representations, warranties, covenants and agreements that are subject of such claim
cease to survive as set forth in Section 8.4) and the person seeking indemnification
complies with the procedures set forth in such Section.




          8.2 Indemnification by Equity One. From and after the Closing Date, Equity One
shall indemnify and hold LIH harmless from and against any and all Losses which are incurred or
suffered by it based upon, arising out of, in connection with or by reason of (i) the breach by
Equity One of its representations or warranties set forth in this Agreement (other than those set
forth in Section 4.2(x) hereof, the indemnification obligations for which are addressed
exclusively in the Tax Matters Agreement) or (ii) failure by Equity One to perform any of the
covenants or agreements applicable to it under this Agreement; provided, however,
that (A) no claim for indemnification shall be made hereunder unless and until the value of all
indemnifiable Losses, in the aggregate, shall equal or exceed $2,500,000 as of the date such claim
or claims are made, and then, only for the amount of such Losses in excess of $2,500,000, (B) such
indemnification obligations shall not exceed, in the aggregate, $40,000,000 (provided, the
foregoing threshold and cap shall not apply to (x) Losses arising as a result of any Investigation
or the breach of any Equity One Fundamental Representation or (y) claims based on fraud), and
(C) no claim for indemnification shall be made under clause (i) above to the extent any of the
individuals listed for LIH on Schedule 3 attached hereto had actual knowledge, as of the
date hereof, of such breach; provided, that the limitation in clause (C) shall not be
applicable with respect to any breach of Equity One’s representations and warranties set forth in
Section 4.2(h)(b). For the avoidance of doubt, notwithstanding anything to the contrary
contained in this Agreement, LIH’s rights to indemnification and to assert a failure of the
condition set forth in Section 6.3(a) as a result of a breach of Equity One’s
representations and warranties set forth in Section 4.2(h)(b) shall not be limited or
otherwise restricted as a result of any knowledge LIH has now or hereinafter obtains with respect
to the facts giving rise to such breach. LIH shall not be entitled to any recovery unless a claim
for indemnification is made in accordance with Section 8.3 and within the time period set
forth in such Section 8.3 (and in any event prior to the date the representations,
warranties, covenants and agreements that are subject of such claim cease to survive as set forth
in Section 8.4) and the person seeking indemnification complies with the procedures set
forth in Section 8.3.





     8.3 Indemnification Procedure




     (a) Each person entitled to indemnification pursuant to this Article 8 (an
“Indemnitee”) shall give written notice to the indemnifying party or parties from
whom indemnity is sought (the “Indemnifying Party”), promptly after obtaining
knowledge of any claim that it may have under this Article 8 and, in the case of a
Third Party Claim, not later than fifteen (15) days thereafter. The notice shall set forth
in reasonable detail the claim and the basis for indemnification and, in the case of a Third
Party Claim, a copy of any related third party demand, claim or complaint. Failure to give
the notice in a timely manner shall not release the Indemnifying Party from its obligations
under this Article 8 except to the extent such failure prejudices the Indemnifying
Party in relation to such claim.




     (b) Defense of Third Party Claims. If a claim for indemnification pursuant to
this Article 8 shall arise from any action that involves an indemnifiable claim
(other than



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a claim brought by a governmental authority with respect to Taxes the defense of which
is addressed exclusively in the Tax Matters Agreement) brought by a third party (a
“Third Party Claim”), the Indemnifying Party may assume the defense of the Third
Party Claim, provided the Indemnifying Party proceeds with diligence and in good faith with
respect thereto. If the Indemnifying Party assumes the defense of the Third Party Claim,
the defense shall be conducted by counsel chosen by the Indemnifying Party, which shall be
reasonably acceptable to Indemnitee, provided that the Indemnitee shall retain the
right to employ its own counsel and participate in the defense of the Third Party Claim
which shall be at its own expense unless (i) the Indemnitee is advised by counsel reasonably
satisfactory to the Indemnifying Party, that use of counsel of the Indemnifying Party’s
choice would be expected to give rise to a conflict of interest, (ii) the Indemnifying Party
shall not have employed counsel to represent the Indemnitee within a reasonable time after
notice of the assertion of any such claim or institution of any such action or proceeding,
or (iii) the Indemnifying Party shall authorize the Indemnitee in writing to employ separate
counsel at the reasonable expense of the Indemnifying Party. In no event shall the
Indemnifying Party be obligated to pay the fees and expenses of more than one counsel (other
than local counsel) for all Indemnitees with respect to any claim indemnified under this
Article 8. Notwithstanding the foregoing provisions of this Section 8.3, no
Indemnifying Party shall be entitled to settle any Third Party Claim for which
indemnification is sought under this Article 8 without the Indemnitee’s prior
written consent (which consent shall not be unreasonably withheld or delayed) unless the
sole relief provided that is binding on the Indemnitee is monetary damages that are
paid in full by the Indemnifying Party.




     (c) Cooperation in Defense. Each party indemnified under any indemnity
contained in this Agreement shall cooperate in all reasonable respects in the defense of the
Third Party Claim pursuant to which the Indemnifying Party is alleged to have liability.




     8.4 Survival.




     (a) Except as otherwise provided herein, all the representations and warranties set
forth in Article 4 shall survive for a period of twelve (12) months from the Closing
Date; provided, however, that any claim based on (i) fraud, or (ii) a
failure to perform the covenants and agreements set forth in Sections 5.13(b) or
5.15, will survive until the expiration of the applicable statute of limitations.
The representations and warranties of LIH set forth in Sections 4.1(a) (Organization
and Good Standing), 4.1(b) (Capitalization), 4.1(e) (Due Authorization;
Validity of Agreements) and 4.1(i) (Company Common Stock) (collectively, the
“LIH Fundamental Representations”) shall not expire; and provided,
further, however, that the representations and warranties of Equity One set forth in
Sections 4.2(b) (Organization and Good Standing), 4.2(d) (Capitalization),
4.2(e) (Equity One Common Stock), 4.2(f) (Due Authorization; Validity of
Agreements), 4.2(g) (EQY Promissory Note), 4.2(h)(b) (No Violation or
Default) and 4.2(ee) (EQY-CSC) (collectively, the “Equity One Fundamental
Representations”) shall not expire; and provided further, however, that
the survival of the representations and warranties set forth in Sections 4.1(s) (Tax
Matters) and 4.2(x) (Tax Matters) are addressed exclusively in the Tax Matters
Agreement. All of the covenants and other



60









 






agreements contained in this Agreement shall survive the Closing until the date or
dates specified therein.




     (b) In the event that any written notice of a claim shall be given hereunder in
accordance with the terms of this Article 8 within the applicable survival period,
the representations, warranties, covenants and other agreements that are the subject of such
indemnity claim shall survive until such claim is finally resolved but only with respect to
such claim and any directly related matters.



          8.5 Insurance. The indemnity obligations of the parties under this Article
8 shall be further limited as set forth in this Section 8.5.




          (a) If any Losses sustained by an Indemnitee are covered by an insurance policy or an
indemnification, contribution or similar obligation of another person (other than an affiliate of
such Indemnitee), the Indemnitee shall use commercially reasonable efforts to collect such
insurance proceeds or indemnity, contribution or similar payments. If the Indemnitee receives such
insurance proceeds or indemnity, contribution or similar payments prior to being indemnified, held
harmless and reimbursed under Section 8.1 or Section 8.2, as applicable, with
respect to such Losses, the payment by an Indemnifying Party under this Article 8 with
respect to such Losses shall be reduced by the net amount of such insurance proceeds or indemnity,
contribution or similar payments to the extent related to such Losses, less reasonable attorney’s
fees, Taxes and other expenses incurred in connection with such recovery. If the Indemnitee
receives such insurance proceeds or indemnity, contribution or similar payments after being
indemnified and held harmless by an Indemnifying Party with respect to such Losses, the Indemnitee
shall pay to the Indemnifying Party the net amount of such insurance proceeds or indemnity,
contribution or similar payment to the extent related to such Losses, less reasonable attorney’s
fees, Taxes and other expenses incurred in connection with such recovery. If any Indemnitee
receives payment under this Article 8 on account of a claim that an Indemnifying Party
believes in good faith is covered by an insurance policy or an indemnification, contribution or
similar obligation of another person (other than an affiliate of such Indemnitee), that Indemnitee
shall (i) on written request of the Indemnifying Party assign, to the extent assignable, its rights
under such insurance policy or indemnification, contribution or similar obligation with respect to
such claim to the Indemnifying Party and (ii) be relieved of any further obligation to pursue
collection of such insurance or indemnification, contribution or similar obligation (except that,
if requested to do so by the Indemnifying Party, the Indemnitee shall reasonably cooperate with the
Indemnifying Party at the Indemnifying Party’s sole expense, to collect any such insurance or
indemnification, contribution or similar obligation).




          (b) The amount of any Loss for which indemnification is provided under this Article 8
shall be reduced to take account of any net Tax benefit realized by the Indemnitee arising from the
incurrence or payment of any such Loss and shall be increased by the amount of the income Tax, if
any, attributable to the receipt of such indemnity payments; provided that if an entity
filing Tax Returns as a REIT is the Indemnitee, it shall be assumed that no Tax benefits are
realized.








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          (c) No claim for indemnification shall be made against LIH with respect to any Loss to the
extent such Loss was reflected as a liability in the Final Working Capital Amount.




          8.6 Exclusivity. After the Closing, to the extent permitted by Law, the
indemnities set forth in this Article 8 shall be the exclusive remedies of each party
hereto and its respective officers, directors, employees, agents and affiliates for any breach of
this Agreement (other than claims based on fraud), and the parties shall not be entitled to, and
hereby waive their rights to, a rescission of this Agreement or to any further indemnification
rights or claims of any nature whatsoever in respect of any such breach of this Agreement (other
than claims based on fraud). Nothing in this Section 8.6 shall limit the indemnification
provisions set forth in any of the other Transaction Documents.




ARTICLE 9



MISCELLANEOUS



          9.1 Entire Agreement; No Amendment. This Agreement, collectively with the
other Transaction Documents, represents the entire agreement among each of the parties hereto with
respect to the subject matter hereof. It is expressly understood that no representations,
warranties, guarantees or other statements shall be valid or binding upon a party unless expressly
set forth in a Transaction Document. It is further understood that any prior agreements or
understandings between the parties with respect to the subject matter hereof have merged in this
Agreement and the other Transaction Document, which alone fully expresses all agreements of the
parties hereto as to the subject matter hereof and supersedes all such prior agreements and
understandings. This Agreement may not be amended, modified or otherwise altered except by a
written agreement signed by the party hereto against whom enforcement is sought. It is agreed that
no obligation under this Agreement which by its terms is to be performed or continue to be
performed after Closing and no provision of this Agreement which is expressly to survive Closing
shall merge upon Closing, but shall survive Closing.




          9.2 Notices. Any notice or communication required under or otherwise delivered
in connection with this Agreement to any of the parties hereto shall be written and shall be
delivered to such party at the following address:




     If to any Liberty Party:



          Capital Shopping Centres Group plc




          40 Broadway




          London SW1H OBT




          United Kingdom




          Attn: Company Secretary




          Fax: (44) 207 887 0001




     with copies to (which shall not constitute notice to LIH):





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          Skadden, Arps, Slate, Meagher & Flom, LLP



          155 North Wacker Drive




          Chicago, Illinois 60606




          Attn: Rodd M. Schreiber, Esq.




          Fax: (312) 407-0411




     If to Equity One:



          Equity One, Inc.




          1600 N.E. Miami Gardens Drive




          North Miami Beach, Florida 33179




          Attn: General Counsel




          Fax: (305) 957-1734




     with copies to (which shall not constitute notice to Equity One):



          Goodwin Procter LLP




          Exchange Place, 53 State St.




          Boston, Massachusetts 02109




          Attn: Gilbert G. Menna, Esq.




          Attn: Yoel Kranz, Esq.




          Fax: (617) 523-1231



Each notice shall be in writing and shall be sent to the party to receive it, postage prepaid by
certified mail, return receipt requested, or by a nationally recognized overnight courier service
that provides tracking and proof of receipt. Inclusion of fax numbers is for convenience only, and
notice by fax shall neither be sufficient nor required. Notices shall be deemed delivered upon
receipt.




          9.3 No Assignment. Neither this Agreement nor any of the rights or obligations
hereunder may be assigned by any party hereto without the prior written consent of the other
parties hereto.




          9.4 Multiple Counterparts. This Agreement may be executed manually or by
facsimile in multiple counterparts. If so executed, all of such counterparts shall constitute but
one agreement, and, in proving this Agreement, it shall not be necessary to produce or account for
more than one such counterpart.




          9.5 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future Laws, such provision shall be fully
severable, this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the remaining provisions
of this Agreement shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance from this Agreement, unless such severance
and construction would materially alter the parties’ intent with respect to the transactions
contemplated by this Agreement.




          9.6 Prior Agreements . This Agreement supersedes and nullifies in all respects
that certain letter of intent between Equity One and Liberty International plc,
effective as of





63









 







February 19, 2010, relating to the matters contemplated hereby and such letter
of intent shall henceforth be deemed null and void for all purposes.




          9.7 Jurisdiction. Each party irrevocably submits to the exclusive jurisdiction
of (a) the Supreme Court of the State of New York, New York County, and (b) the United States
District Court for the Southern District of New York, for the purposes of any suit, action or other
proceeding arising out of this Agreement, any other Transaction Document or any transaction
contemplated hereby or thereby. Each party agrees to commence any such action, suit or proceeding
either in the United States District Court for the Southern District of New York or if such suit,
action or other proceeding may not be brought in such court for jurisdictional reasons, in the
Supreme Court of the State of New York, New York County. Each party irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement, any other Transaction Document or the transactions contemplated
hereby and thereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the
United States District Court for the Southern District of New York, and hereby and thereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an inconvenient
forum. Each party hereto irrevocably consents to the service of process outside the territorial
jurisdiction of the courts referred to in this Section 9.7 in any such action or proceeding
by mailing copies thereof by registered United States mail, postage prepaid, return receipt
requested, to its address as specified in or pursuant to Section 9.2. However, the
foregoing shall not limit the right of a party hereto to effect service of process on the other
party by any other legally available method.




          9.8 Waiver of Jury Trial. Each party hereto hereby waives, to the fullest
extent permitted by applicable Law, any right it may have to a trial by jury in respect to any
litigation directly or indirectly arising out of, under or in connection with this Agreement, any
other Transaction Document or any transaction contemplated hereby or thereby. Each party
(a) certifies that no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of litigation, seek to
enforce that foregoing waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement and the other Transaction Documents, as applicable, by, among
other things, the mutual waivers and certifications in this Section 9.8.




          9.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal Laws of the State of New York applicable to agreements made and to be
performed entirely within such State, without regard to the conflicts of law principles of such
State.




          9.10
Waiver. Any term or condition of this Agreement may be waived at any time (to the extent
permitted by Law) by the party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term or condition of this Agreement,
in any one or more instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion.




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          9.11 No Third Party Beneficiary. The terms and provisions of this Agreement are
intended solely for the benefit of each party hereto and their respective successors or permitted
assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon
any other person other than any person entitled to indemnity under Article 8.




          9.12 CSC Guarantee. CSC hereby guarantees the full and timely performance of
the obligations of LIH under this Agreement. This guaranty shall be a guaranty of payment and
performance and not of collection, and CSC hereby agrees that its obligations hereunder shall be
primary and unconditional, subject to the terms and conditions of this Agreement, irrespective of
any action to enforce the same or any other circumstances that might otherwise constitute a legal
or equitable discharge to CSC.




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]






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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first
above written.




	 	 	 	 	 
	 	LIBERTY INTERNATIONAL HOLDINGS LIMITED

 	 
	 	By:  	/s/ David Fischel
 	 
	 	 	Name:  	David Fischel 	 
	 	 	Title:  	Director 	 
	 
	 
	 	CAPITAL SHOPPING CENTRES PLC

 	 
	 	By:  	/s/ David Fischel
 	 
	 	 	Name:  	David Fischel 	 
	 	 	Title:  	Director 	 
	 
	 
	 	EQUITY ONE, INC.

 	 
	 	By:  	/s/ Jeffrey S. Olson
 	 
	 	 	Name:  	Jeffrey S. Olson 	 
	 	 	Title:  	Chief Executive Officer 	 



66









 






	 	 	 	 	 



Schedule 1




The Properties


Pacific Financial Center, 800 West Sixth Street, Los Angeles, California, 90017.



Parnassus Heights Medical Center, 350 Parnassus Avenue, San Francisco, California 94117.



Serramonte Center, 3 Serramonte Center, Daly City, California 94015.



Willows Shopping Center, 1961-1975 Diamond Boulevard, Concord, California 94520.



Senator Office Building, 1121 L Street, Sacramento, California 95814.



The Marketplace, 1301-1491 W. Covell Boulevard, Davis, California 95616.



Park Plaza, 1303 J Street, Sacramento, California 95814.



Plaza Escuela, 1100-1192 Locust Street, Walnut Creek, California 94596.



Danville-San Ramon Medical Center, 901-919 San Ramon Valley Boulevard, Danville California
94526.



222 Sutter Street, San Francisco, California 94108.



Trio Apartments, 621 Colorado Boulevard, Pasadena, California 91101.



595 East Colorado Boulevard, Pasadena, California 91101.



Retail Land, Slatten Ranch Road, Antioch, California 94531.



2455 South Figueroa Street, Los Angeles, California 90007.



625 3rd Street, San Francisco, California 94107.








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Schedule 2




Share Allocation Schedule



	 	 	 

	(i) Dollar value of EQY LLC Shares,

	 	Class A: $421,463,000(1)
	denominated by class, to be issued by

	 	 
	EQY-CSC LLC to Equity One

	 	Class B: $178,537,000(2)
	 
	 	 
	(ii) Number of EQY LLC Shares,

	 	Class A: 25,543,212(3)
	denominated by class, to be issued by

	 	 
	EQY-CSC LLC to Equity One

	 	Class B: 10,820,424(3)
	 
	 	 
	(iii) Dollar value of LIH LLC Shares,

	 	Class A: $180,627,000(4)
	denominated by class, to be issued by
	 	 
	EQY-CSC LLC to LIH
	 	 
	 
	 	 
	(iv) Number of LIH LLC Shares,

	 	Class A: 10,947,091(5)
	denominated by class, to be issued by
	 	 
	EQY-CSC LLC to LIH
	 	 








 




			
	(1)	 	Equal to 70% of the total Class A shares.
	 
	(2)	 	Equal to $600,000,000 face amount of EQY Participating Note less amount allocated to Class A
shares.
	 
	(3)	 	Equal to amounts allocated to EQY’s Class A or Class B shares, as applicable, divided by
Exchange Price of $16.50.
	 
	(4)	 	Equal to $247,627,000 less $67,000,000 face amount of the CapCo Note. Subject to working
capital adjustment.
	 
	(5)	 	Equal to $180,627,000 divided by Exchange Price of $16.50. Subject to working capital
adjustment. Exchange ratio subject to adjustment as set forth in the Contribution Agreement.






68