EXHIBIT 2
SUBSCRIPTION AGREEMENT
Equity One, Inc.
0000 X.X. Xxxxx Xxxxxxx Xxxxx
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Xxxxx Xxxx Properties & Investments, Ltd. or a wholly owned subsidiary (the
"Investor") hereby tenders this Subscription Agreement ("Agreement") in
accordance with and subject to the terms and conditions set forth herein.
1. Subscription.
1.1 The Investor hereby subscribes for and agrees to purchase the number of
shares of common stock, $.01 par value (the "Common Stock"), of Equity One,
Inc., a Maryland corporation (the "Corporation"), indicated in Sections 1.2 and
1.3 hereof (the "Shares") at the purchase price per Share set forth in such
Sections. In addition, the Corporation shall issue to the Investor warrants to
purchase such number of shares of the Common Stock as are set forth in Section
1.4 hereof for the price and pursuant to the terms and conditions set forth
herein (the "Warrants").
1.2 The Investor shall purchase 1,000,000 Shares at a price of $10.875 per
share at the initial closing (the "Initial Closing"). The payment to be
delivered at the time of the Initial Closing shall be made by the Investor by
wire transfer of $10,875,000 in accordance with instructions that are provided
by the Corporation not later than 24 hours before the Initial Closing (the
"Initial Funding").
1.3 The Investor shall purchase and the Corporation shall sell an
additional 925,000 Shares within 9 months after the Initial Closing. The
Corporation shall determine the time at which each additional closing shall take
place and the number of Shares to be sold; provided, however, that there shall
be no more than three additional closings, with each additional closing covering
no fewer than 200,000 Shares (each, an "Additional Closing"). The Corporation
shall give not less than thirty (30) days prior written notice of each
Additional Closing. Each Additional Closing shall take place not earlier than
thirty (30) days and not later than fifty (50) days after the commencement of a
calendar quarter and may not take place prior to the second Business Day
following the Corporation's release of its quarterly or annual financial results
covering the immediately prior quarter. The price to be paid by the Investor for
each Share sold at each Additional Closing shall be $10.875 per share, subject
to adjustments set forth below.
1.4 The Corporation agrees to issue to the Investor Warrants exercisable,
as set forth herein, for 1,025,000 Shares, pursuant to a Warrant Agreement of
even date herewith. Subject to the restrictions set forth herein relating to the
times of exercise, Warrants for 375,000 Shares shall be exercisable through
December 31, 2001 and Warrants for 650,000 Shares shall be exercisable through
December 31, 2002. The exercise price shall be $10.875 per Share, subject
to adjustments set forth below. The Warrants may be exercised, upon giving ten
(10) Business Days advance written notice to the Corporation, in whole or in
part and from time to time, but only within a 30-50 day period following the end
of each calendar quarter, provided that such exercise date is on or after the
second Business Day following the Corporation's release of its quarterly or
annual financial results. A "Business Day" as used herein shall mean any day on
which banks are open for business in the city of New York.
1.5 Upon receipt by the Corporation of the requisite payment for all Shares
to be purchased by the Investor at the Initial Closing or any Additional Closing
or upon Investor's exercise of any Warrants, as applicable, and subject to the
satisfaction of the conditions set forth herein, the Shares so purchased will be
issued in the name of the Investor, and the name of the Investor will be
registered on the stock transfer books of the Corporation as the record owner of
such Shares. The Corporation will issue to the Investor a stock certificate for
the Shares purchased as of the date of the Initial Closing and any Additional
Closing.
1.6 Subject to the terms and conditions hereof, the Investor hereby agrees
to be bound hereby upon (i) execution and delivery to the Corporation of the
signature page to this Subscription Agreement and (ii) acceptance on the Initial
Closing Date (as hereafter defined) or an Additional Closing Date (as hereafter
defined), as the case may be, by the Corporation of the Investor's subscription
(the "Subscription").
1.7 If the Corporation shall issue or enter into any agreement to issue any
shares of Common Stock (excluding shares issued in connection with a downREIT or
UPREIT transaction, a Dividend Reinvestment Plan, or any existing or future
incentive compensation programs, whether in the form of shares or options) for a
net per share purchase price less than $10.625, then, as of the date of such
subsequent sale (the "Subsequent Issuance"), the purchase price for any
unpurchased Shares and the exercise price for any unexercised Warrants shall be
reduced (but not increased) by an amount (calculated to the nearest cent)
determined by multiplying (a) the amount by which the net consideration per
share for the Subsequent Issuance is less than $10.625 by (b) a fraction, the
numerator of which is the number of new shares issued by the Corporation in the
Subsequent Issuance and the denominator of which is the number of unpurchased
Shares plus the number of unexercised warrants (the "Subsequent Issuance Price
Adjustment"). To the extent that the Corporation makes, from time to time,
capital gain distributions, then, the purchase price of any unpurchased Shares
and/or the exercise price of any unexercised Warrants, as of the date of the
distribution, will also be adjusted downward by an amount, per share, on a fully
diluted basis, so that the Investor will receive the benefit of such
distribution as though it had purchased the Shares or exercised the Warrants,
but only to the extent that it does purchase the Shares and exercise the
Warrants.
1.8 Adjustment for Recapitalization. In case (i) the outstanding shares of
the Common Stock shall be subdivided into a greater number of shares, (ii) a
dividend or other distribution in Common Stock shall be paid in respect of
Common Stock, (iii) the outstanding shares of Common Stock shall be combined
into a smaller number of shares thereof, or (iv) any shares of the Corporation's
capital stock are issued by reclassification of the Common Stock (including any
reclassification upon a consolidation or merger in which the Corporation is the
continuing corporation), the purchase price in effect immediately prior to such
subdivision, combination or reclassification or at the record date of such
dividend or distribution shall simultaneously with
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the effectiveness of such subdivision, combination or reclassification or
immediately after the record date of such dividend or distribution shall be
proportionately adjusted to equal the product obtained by multiplying the
purchase price by a fraction, the numerator of which is the number of
outstanding shares of Common Stock (on a fully diluted basis) prior to giving
effect to such combination, subdivision, reclassification or dividend and the
denominator of which is the number of outstanding shares of Common Stock (on a
fully diluted basis) after giving effect to such combination, subdivision,
reclassification or dividend. For purposes hereof, "on a fully diluted basis"
means that all outstanding options, rights or warrants to subscribe for shares
of common stock and all securities convertible into or exchangeable for shares
of Common Stock (such options, rights, warrants and securities are collectively
referred to herein as "Convertible Securities") and all options or rights to
acquire Convertible Securities have been exercised, converted or exchanged, and
shall be calculated using the treasury stock method basis, whereby options and
warrants will be included in the calculation of the number of outstanding shares
of common stock only to the extent the average market price of the common stock
over the preceding period of ten (10) Business Days exceeds the price of the
options or warrants.
Whenever the per share is adjusted as provided in this Section 1.8, the
number of Shares remaining to be purchased hereunder immediately prior to such
purchase price adjustment shall be adjusted, effective simultaneous with the
purchase price adjustment, either up or down, to equal the product obtained
(calculated to the nearest full share) by multiplying such number of Shares by a
fraction, the numerator of which is the purchase price per share in effect
immediately prior to such purchase price adjustment and the denominator of which
is the purchase price per share in effect upon such purchase price adjustment.
The adjusted number of shares of Common Stock shall thereupon be the number of
shares of Common Stock purchasable hereunder until further adjusted as provided
herein.
2. Offering Material. The Investor represents and warrants that it is in receipt
of and that it has carefully read and understands the following items:
(a) Definitive Proxy Statement filed by the Corporation with the
Securities and Exchange Commission (the "SEC") on Form 14A on May 11, 2000
(the "Proxy Statement");
(b) Annual Report to the SEC on Form 10-K filed by the Corporation for
its fiscal year ended December 31, 1999, as amended by that certain Form
10K-A filed on April 14, 2000 (the "Form 10-K");
(c) Quarterly Reports to the SEC on Form 10-Q filed by the Corporation
for the quarters ended March 31 and June 30, 2000 (the "Forms 10-Q"); and
(d) Registration Statement on Form S-3D filed with the SEC on February
22, 2000 ("DRIP Registration Statement").
Collectively, the Proxy Statement, Forms 10-K, the Forms 10-Q and the DRIP
Registration Statement are referred to herein as the "Public Reports."
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3. Conditions to Investor's Obligations.
3.1 The obligation of the Investor to close the transactions contemplated
by this Agreement (the "Transaction") is subject to the satisfaction on or prior
to the date of the applicable Closing of the following conditions set forth in
Sections 3.2 through 3.3 hereof.
3.2 The representations and warranties made by the Corporation herein shall
be true in all material respects on and as of each Additional Closing Date with
the same effect as if they had been made on and as of the applicable Additional
Closing Date.
3.3 All necessary proceedings to be taken in connection with the
transaction (including having obtained approval of the board of directors of
Investor and Corporation) are to be consummated at or prior to each Closing, and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Investor and its counsel, and the Investor and its counsel
shall have received copies of all documents and information which it may have
reasonably requested in connection with the Transaction and of all corporate
proceedings in connection therewith, in form and substance reasonably
satisfactory to Investor and its counsel.
4. Corporation Representations, Warranties and Covenants. The Corporation
represents and warrants that, as of the date of this Agreement:
(a) The Corporation is a corporation duly organized and validly
existing and in good standing under the laws of the State of Maryland,
entitled to own its property of a material nature and to carry on its
business of a material nature as and in places where such property is now
owned or operated and such business is conducted;
(b) Each of the subsidiaries of the Corporation (the "Subsidiaries")
is a corporation duly organized and validly existing and in good standing
under the laws of the jurisdiction of their respective incorporation,
entitled to own their respective properties of a material nature and to
carry on their respective businesses of a material nature in places where
such properties are now owned or operated and such businesses are
conducted, and, except as disclosed in the Public Reports, there is no
action or proceeding pending or, to the Corporation's best knowledge
threatened, brought by or before any federal or state agency having
jurisdiction over the operations of a material nature of the Corporation
which threatens in any material respect the continued operation of any
material phase of the Corporation's business now conducted by it or its
Subsidiaries;
(c) The Corporation's certified consolidated financial statements as
of December 31, 1999, contained in the Form 10-K, and its unaudited
financial statements as of March 31, 2000 and as of June 30, 2000,
contained in the Forms 10-Q, including the notes contained therein, fairly
present the consolidated financial position of the Corporation at the
respective dates thereof and the results of its consolidated operations for
the periods purported to be covered thereby. Such financial statements have
been prepared in conformity with generally accepted accounting principles
consistently applied with prior periods subject to any comments and notes
contained therein. Since June 30, 2000, there has been no material adverse
change in the financial condition of the
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Corporation from the financial condition stated in such financial
statements subject to changes occurring in the ordinary course of its
business or to changes reflected in the Forms 10-Q;
(d) The Corporation, by appropriate and required corporate action,
has, or will have prior to the Initial Closing Date, duly authorized the
execution of this Agreement, and the issuance and delivery of the Common
Stock and Warrants pursuant to the terms hereof. The Shares are not subject
to preemptive or other rights of any stockholders and when issued in
accordance with the terms of this Agreement, the Shares will be validly
issued, fully paid and nonassessable; and this Agreement constitutes a
valid and binding obligation of the Corporation enforceable against the
Corporation in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or similar laws affecting creditors' rights generally
and by general principles of equity; and
(e) Performance of this Agreement and compliance with the provisions
hereof will not violate any provision of any applicable law or of the
Charter or Bylaws of the Corporation, or of any of its subsidiaries, and
will not conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon, any of
the properties or assets of a material nature of the Corporation, or of any
of its subsidiaries, pursuant to the terms of any indenture, mortgage, deed
of trust or other agreement or instrument binding upon the Corporation, or
any of its subsidiaries, other than such breaches, defaults or liens which
would not have a material adverse effect on the Corporation and its
subsidiaries taken as a whole.
(f) The Corporation agrees to use commercially reasonable efforts to
operate in a manner which will not cause it to be classified other than as
a "real estate investment trust" (a "REIT") under Section 856 of the
Internal Revenue Code of 1986, as amended (after giving effect to the
investment contemplated by this Agreement).
(g) There has been no event or occurrence, since the date of the
Corporation's most recent Quarterly Report on Form 10-Q filed with the SEC
which would reasonably be expected to have a material adverse affect on the
Corporation and its Subsidiaries, taken as a whole.
(h) As of the Initial Closing Date, the authorized capital stock of
the Corporation, immediately prior to the Closing, will consist of a total
of 45,000,000 shares of capital stock, comprised of 40,000,000 shares of
Common Stock, par value one cent ($0.01) per share, 11,873,301 of which are
issued and outstanding, and 5,000,000 shares of preferred stock, par value
one cent ($0.01) per share, none of which are outstanding. All issued and
outstanding shares of Common Stock (a) have been duly authorized and
validly issued, (b) are fully paid and nonassessable, and (c) were issued
in compliance with all applicable state and federal laws concerning the
issuance of securities. Except as discussed in the Public Reports, there
are no outstanding options, warrants, rights (including conversion or
preemptive rights and rights of refusal), proxy or stockholder agreements,
or agreements of any kind for the purchase or acquisition from the
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Corporation of any of its securities. When issued in compliance with the
provisions of this Agreement and the Charter, the Shares will be duly and
validly issued, fully paid and nonassessable, and will be free of any liens
or encumbrances; provided, however, that the Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set
forth herein or as otherwise required by such laws at the time a transfer
is proposed.
5. Restrictions on Transfer; Registration Rights.
5.1 Investor represents and warrants that it is acquiring the Shares and
Warrants for its own account and for the purpose of investment and not with a
view to any distribution or resale thereof within the meaning of the Act, and
any applicable state or other securities laws ("State Acts"). The Investor
further agrees that it will not sell, assign or transfer any of the Shares or
the Warrants, or shares of Common Stock issuable upon the exercise of the
Warrants, in violation of the Act or State Acts and acknowledges that, in taking
unregistered securities, it must continue to bear the economic risk of its
investment for an indefinite period of time because of the fact that such Shares
and Warrants, and shares of Common Stock issuable upon the exercise of such
Warrants, have not been registered under the Act or State Acts and further
realizes that such Shares or Warrants, or shares of Common Stock issuable upon
the exercise of such Warrants, cannot be sold unless subsequently registered
under the Act and State Acts or an exemption from such registration is
available. The Investor further recognizes that the Corporation is not assuming
any obligation to register such Shares or the Warrants, or shares of Common
Stock issuable upon the exercise of such Warrants, except as expressly set forth
herein. The Investor also acknowledges that appropriate legends reflecting the
status of the Shares and the Common Stock underlying the Warrants under the Act
and State Acts may be placed on the face of the certificates for such Common
Stock at the time of their transfer and delivery to the holder thereof.
5.2 The Shares and Warrants issued pursuant to this Agreement, and shares
of Common Stock issuable upon the exercise of such Warrants, may not be
transferred except in a transaction which is in compliance with the Act and
State Acts. Except as provided hereafter with respect to registration of the
Shares and shares of Common Stock issuable upon the exercise of the Warrants, it
shall be a condition to any such transfer that the Corporation shall be
furnished with an opinion of counsel to the holder thereof, reasonably
satisfactory to the Corporation, to the effect that the proposed transfer would
be in compliance with the Act and State Acts.
5.3 After the passage of 24 months after the Initial Closing Date, and upon
receiving a demand therefor from the Investor, the Corporation shall use its
best efforts to prepare and file with the SEC, on up to three occasions, a
registration statement and such other documents as may be necessary in the
opinion of both counsel for the Corporation and counsel for the Investor, in
order to comply with the provisions of the Act so as to permit the registered
resale of the Shares, and Shares issuable upon the exercise of the Warrants, for
18 consecutive months (each a "Demand Registration"). The Corporation may
postpone for up to six months the filing or the effectiveness of a registration
statement pursuant to a Demand Registration if the Corporation notifies the
Investor that such Demand Registration would reasonably be expected to have an
adverse effect on any business plan of the Corporation or any of its
subsidiaries; provided that in such event, the Investor will be entitled to
withdraw such request and, if such request is
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withdrawn, such Demand Registration will not count as one of the permitted
Demand Registrations hereunder and the Corporation shall pay all registration
expenses in connection with such registration. In the event circumstances change
and Demand Registration would no longer have an adverse effect on any business
plan of the Corporation or any of its subsidiaries, the Corporation shall within
30 days file with the SEC a registration statement and such other documents as
may be necessary in the opinion of both counsel for the Corporation and counsel
for the Investor, in order to comply with the provisions of the Act so as to
permit the registered resale of the Shares, and Shares issuable upon the
exercise of the Warrants.
5.4 (a) Additionally, if at any time after 24 months after the Initial
Closing Date, the Corporation proposes to register any of its common stock under
the Act for sale to the public, whether for its own account or for the account
of other security holders or both (except with respect to registration
statements on Form X-0, X-0 or another form not available for registering the
Shares of Common Stock for sale to the public), each such time the Corporation
will give written notice to the Investor of its intention to do so. Upon the
written request of the Investor to register any of its Shares, and shares of
Common Stock issuable upon the exercise of the Warrants, which notice must be
received by the Corporation within 15 Business Days after the Corporation has
given notice of the proposed registration to the Investor, the Corporation will
use its best efforts to cause the Common Stock as to which registration shall
have been so requested to be included in the securities to be covered by the
registration statement proposed to be filed by the Corporation, all to the
extent required to permit the sale or other disposition by the Investor (in
accordance with such written request) of such shares of Common Stock so
registered (a "Piggy-Back Registration"). Notwithstanding anything to the
contrary contained herein, the Corporation may elect, at any time, to register
the Shares or the Common Stock underlying the Warrants, in which event the
Investor agrees to reasonably cooperate to facilitate such registration.
(b) Notwithstanding anything to the contrary contained in this Section 5.4,
the Corporation may withdraw any registration statement referred to in Section
5.4 without thereby incurring any liability to the Investor; provided, however,
that to the extent such registration statement withdrawn by the Corporation
without a bona fide business reason, the Corporation shall reimburse the
reasonable expenses incurred by the Investor with respect to such registration
statement.
(c) In the event that any registration pursuant to this Section 5.4 shall
be, in whole or in part, an underwritten public offering, the number of shares
of Common Stock of the Investor and the other holders of the securities of the
Corporation requested to be included in such underwritten offering (the
"Requesting Holders") may be reduced (pro-rata among the Investor and the
Requesting Holders based upon the number of securities held by the Investor and
the Requesting Holders) if and to the extent that the managing underwriter
believes that such inclusion would adversely affect the marketing of the
securities to be sold by the Corporation therein. The Investor agrees to execute
and deliver a customary lock-up agreement as may be requested by the managing
underwriter; provided, however, that all Requesting Holders of similar
securities in an amount equal to or greater than that held by Investor shall
have agreed to execute such agreements.
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5.5 The obligations of the Corporation identified in this Section 5 shall
be suspended and tolled for such period of time (the "Registration Suspension
Period") as is necessary so that under no circumstances shall the registered
resale of the Shares, and shares of Common Stock issuable upon the exercise of
the Warrants, by the holders thereof commence within ninety days after the
commencement of an underwritten primary public offering of the Corporation's
equity securities (a "Public Offering"). The Investor acknowledges and agrees
that during the Registration Suspension Period it shall not resell the Shares,
or shares of Common Stock issuable upon the exercise of the Warrants. The
Investor further agrees that it shall, upon request, enter into an agreement
with the underwriter of a Public Offering, pursuant to which the Investor shall
agree not to resell the Shares, or shares of Common Stock issuable upon the
exercise of the Warrants, during the Registration Suspension Period.
5.6 If and whenever the Corporation is required by the provisions of this
Agreement to use its best efforts to effect the registration of the Shares, and
shares of Common Stock issuable upon the exercise of the Warrants, under the Act
for the account of an the Investor, the Corporation will, as promptly as
possible:
(a) prepare and file with the SEC a registration statement with
respect to such securities and use its best efforts to cause such
registration statement to become and remain effective;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to
comply with the requirements of the Act and the rules and regulations
promulgated by the SEC thereunder relating to the sale or other disposition
of the securities covered by such registration statement;
(c) furnish to the Investor such numbers of copies of a prospectus,
including a preliminary prospectus, complying with the requirements of the
Act, and such other documents as the Investor may reasonably request in
order to facilitate the public sale or other disposition of the Shares
owned by the Investor, and shares of Common Stock issuable upon the
exercise of the Warrants, but the Investor shall not be entitled to use any
selling materials other than a prospectus and such other materials as may
be approved by the Corporation, which approval will not be unreasonably
withheld; and
(d) use its best efforts to register or qualify the securities covered
by such registration statement under the State Acts as the Investor shall
reasonably request, and do any and all such other acts and things as may be
necessary or advisable to enable the Investor to consummate the public sale
or other disposition of the Shares owned by the Investor, and shares of
Common Stock issuable upon the exercise of the Warrants, in such states;
provided, however, that the Corporation shall not be obligated to register
or qualify such securities in any jurisdiction in which such registration
or qualification would require the Corporation to qualify as a foreign
corporation or file any general consent to service of process where it is
not then so qualified or has not theretofore so consented.
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5.7 Except as provided below in this Section 5, the expenses incurred by
the Corporation in connection with action taken by the Corporation to comply
with this Section 5, including, without limitation, all registration and filing
fees, printing and delivery expenses, accounting fees, fees and disbursements of
counsel to the Corporation, consultant and expert fees, premiums for liability
insurance, if the Corporation chooses to obtain such insurance, obtained in
connection with a registration statement filed to effect such compliance and all
expenses, including counsel fees, of complying with State Acts, shall be paid by
the Corporation. All fees and disbursements of any counsel, experts, or
consultants employed by the Investor shall be borne by the Investor. The
Corporation shall not be obligated in any way in connection with any
registration pursuant to this Section 5 for any selling commissions or discounts
payable by the Investor to any underwriter or broker of securities to be sold by
the Investor. It shall be a condition precedent to the obligation of the
Corporation to take any action pursuant to this Section 5 that the Corporation
shall have received an undertaking satisfactory to it from the Investor to pay
all expenses required to be borne by the Investor and to furnish or cause to be
furnished to the Corporation specifically for use in the preparation of the
registration statement and prospectus written information concerning the
securities held by the Investor and also concerning any underwriter of such
securities and the intended method of disposition thereof and any additional
information or documentation as the Corporation shall reasonably request and as
may be required by administrators of the Act or State Acts in connection with
the action to be taken by the Corporation hereunder pursuant to such
registration.
5.8 In the event of any registration under the Act pursuant to this Section
5, the Corporation will indemnify and hold harmless the Investor, its officers,
directors and each underwriter of such securities, and any person who controls
the Investor or underwriter within the meaning of Section 15 of the Act, against
all claims, actions, losses, damages, liabilities and expenses, joint or
several, to which any of such persons may become subject under the Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Investor, its officers, directors
and each underwriter of such securities, and each such controlling person or
entity for any legal and any other expenses reasonably incurred by the Investor,
such underwriter, or such controlling person or entity in connection with
investigating or defending any such loss, action, claim, damage, liability, or
action; provided, however, that the Corporation will not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in said registration statement, said
preliminary prospectus or said prospectus, or said amendment of supplement in
reliance upon and in conformity with written information furnished to the
Corporation by the Investor or such underwriter specifically for use in the
preparation thereof, and provided further however, that the Corporation will not
be liable in any such case to the extent that any such loss, claim, damage or
liability or action arises out of or is based upon an untrue or alleged untrue
statement or omission or an alleged omission made in any preliminary prospectus
or final prospectus if (i) the Investor failed to send or deliver a copy of the
final prospectus or prospectus supplement with or prior to
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the delivery of written confirmation of the sale of the Common Stock, and (ii)
the final prospectus or prospectus supplement would have corrected such untrue
statement or omission.
5.9 In the event of any registration of any securities under the Act
pursuant to this Section 5, the Investor will, or will furnish the written
undertaking of such other person or entity as shall be acceptable to the
Corporation to, indemnify and hold harmless the Corporation, its officers,
directors and any person who controls such Corporation within the meaning of
Section 15 of the Act, against any losses, claims, damages, liabilities, or
actions, joint or several, to which the Corporation, its officers, directors, or
such controlling person or entity may become subject under the Act or otherwise,
insofar as such losses, claims, damages, liabilities, or actions arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which such securities were
registered under the Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent and only to the extent that any such
loss, claim, damage, liability, or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in said registration statement, said preliminary prospectus or said
prospectus or said amendment or supplement in reliance upon and in conformity
with written information furnished to the Corporation by the Investor or any
underwriter of the Investor's securities specifically for use in the preparation
thereof.
6. Closing.
6.1 The Initial Closing shall take place at the offices of the
______________, on or before ______________ (the "Initial Closing Date"), at
such time as the Corporation and Investor shall mutually agree. The Corporation
and the Investor may extend the Initial Closing Date to a date not later than
November 17, 2000.
7. Investor Representations, Warranties and Covenants. The Investor hereby
represents, warrants and acknowledges and agrees with the Corporation as
follows:
7.1 The Investor has carefully read and understands the Public Reports.
With respect to individual or partnership tax and other economic considerations
involved in this investment, the Investor is not relying on the Corporation (or
any agent or representative of it). The Investor has carefully considered and
has, to the extent the Investor believes such discussion necessary, discussed
with the Investor's professional legal, tax, accounting and financial advisers
the suitability of an investment in the Common Stock for the Investor's
particular tax and financial situation and has determined that the Shares and
Warrants being subscribed for by the Investor are a suitable investment for the
Investor.
7.2 The Investor acknowledges that all documents, records and books
pertaining to this investment which the Investor has requested have been made
available for inspection by the Investor and the Investor's attorney, accountant
or other adviser(s).
7.3 The Investor and/or the Investor's advisor(s) has/have had a reasonable
opportunity to ask questions of and receive answers from a person or persons
acting on behalf of
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the Corporation concerning the Offering and all such questions have been
answered to the full satisfaction of the Investor.
7.4 The Investor is not subscribing for Shares of Common Stock as a result
of or subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or meeting.
7.5 The Investor is an "accredited investor," within the meaning of Rule
501(a) of Regulation D under the Act. The Investor, by reason of the Investor's
business or financial experience or the business or financial experience of the
Investor's professional advisers who are unaffiliated with and who are not
compensated by the Corporation or any affiliate of it, directly or indirectly,
can be reasonably assumed to have the capacity to protect its interests in
connection with an investment in the Common Stock.
7.6 The Investor is able to bear the substantial economic risks of an
investment in the Common Stock for an indefinite period of time, has no need for
liquidity in such investment and, at the present time, could afford a complete
loss of such investment.
7.7 The Investor or the Investor's purchaser representative, as the case
may be, has such knowledge and experience in financial, tax and business matters
so as to enable the Investor to utilize the information made available to the
Investor in connection with the Offering to evaluate the merits and risks of an
investment in the Common Stock and to make an informed investment decision with
respect thereto.
7.8 The Investor acknowledges that neither the Shares herein subscribed for
nor the Warrants have been registered under the Act and under the securities
laws of any state. The Investor will not sell, transfer or otherwise dispose of
the Shares or Warrants (or the Common Stock underlying the Warrants) unless they
are registered under the Act and any applicable state securities laws or
pursuant to available exemptions from such registration, provided that the
Investor delivers to the Corporation an opinion of counsel satisfactory to the
Corporation confirming the availability of such exemption. The Investor
represents that the Investor is purchasing the Common Stock for the Investor's
own account, for investment and not with a view to resale or distribution except
in compliance with the Act and the restrictions contained in the immediately
preceding sentence. The Investor has not offered or sold any portion of the
Shares or Warrants being acquired nor does the Investor have any present
intention of selling, distributing or otherwise disposing of the Shares, the
Warrants or the Common Stock underlying the Warrants, either currently or after
the passage of a fixed or determinable period of time or upon the occurrence or
nonoccurrence of any predetermined event or circumstance in violation of the
Act. The Investor acknowledges that, except as specifically set forth herein,
the Corporation has no obligation to register the resale of the Shares.
7.9 The Investor recognizes that investment in the Common Stock involves
substantial risks, including loss of the entire amount of such investment.
Further, the Investor has carefully read and considered the matters set forth
under "Risk Factors" in the Public Reports, and has taken full cognizance of and
understands all of the risks related to a purchase of the Common Stock.
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7.10 The Investor acknowledges that each certificate representing the
Shares or the Common Stock underlying the Warrants, until such shares are
registered under the Act, shall be stamped or otherwise imprinted with a legend
substantially in the following form:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH
REGISTRATION, PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY CONFIRMING THE
AVAILABILITY OF SUCH EXEMPTION. INVESTORS SHOULD BE AWARE THAT THEY
MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
7.11 If this Subscription Agreement is executed and delivered on behalf of
a partnership, corporation, trust or estate: (i) such partnership, corporation,
trust or estate has the full legal right and power and all authority and
approval required (a) to execute and deliver, or authorize execution and
delivery of, this Subscription Agreement and all other instruments executed and
delivered by or on behalf of such partnership, corporation, trust or estate in
connection with the purchase of the Shares, (b) to delegate authority pursuant
to a power of attorney and (c) to purchase and hold such Shares; (ii) the
signature of the party signing on behalf of such partnership, corporation, trust
or estate is binding upon such partnership, corporation, trust or estate; and
(iii) such partnership, corporation or trust has not been formed for the
specific purpose of acquiring the Shares, unless each beneficial owner of such
entity is qualified as an "accredited investor" within the meaning of Rule
501(a) of Regulation D under the Act ("Regulation "D") and has submitted
information substantiating such individual qualification.
7.12 The Investor shall indemnify and hold harmless the Corporation and
each officer, director or control person of any such entity, who is or may be a
party or is or may be threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of or arising from any actual or alleged
misrepresentations or misstatement of facts or omission to represent or state
facts made or alleged to have been made by the Investor to the Corporation (or
any agent or representative of either of them) or omitted or alleged to have
been omitted by the Investor, concerning the Investor or the Investor's
authority to invest or financial position in connection with the Transactions,
including, without limitation, any such misrepresentation, misstatement or
omission contained in the Questionnaire or any other document submitted by the
Investor, against losses, liabilities and expenses actually and reasonably
incurred by the Corporation or any officer, director or control person in
connection with such action, suit or proceeding for
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which the Corporation or such officer, director or control person has not
otherwise been reimbursed (including attorneys' fees, judgments, fines and
amounts paid in settlement).
7.13 Investor agrees to use commercially reasonable efforts to take such
actions as may be reasonably necessary to allow the Corporation to maintain its
status as a REIT and to reasonably refrain from taking such actions as shall
cause the Corporation to lose its status as a REIT.
8. Understandings.
The Investor understands, acknowledges and agrees with the Corporation as
follows:
8.1 The Investor will be entitled to participate in the Corporation's
Dividend Reinvestment Plan to the full extent of its purchased Shares, Shares
that it has a right to purchase hereunder but has not yet purchased (the
"Unfunded Shares") and unexercised Warrants, to the extent they have not
expired. With respect to the amounts that would have been paid with respect to
the Unfunded Shares and unexercised Warrants, had the Shares been acquired, the
Investor will remit to the Corporation sufficient funds to purchase the
associated number of shares. The Investor acknowledges and agrees that the
Corporation may, at any time and in its sole discretion, suspend its Dividend
Reinvestment Plan and that the Dividend Reinvestment Plan has been so suspended
by the Corporation as of September 1, 2000.
8.2 The Investor and Corporation acknowledge that they are concurrently
entering into a Stockholders Agreement with certain other Corporation
stockholders addressing, among other things, representation of Investor on the
board of directors of the Corporation.
8.3 Except as otherwise specifically set forth herein, the Investor hereby
acknowledges and agrees that the Subscription hereunder is irrevocable by the
Investor, that, except as required by law, the Investor is not entitled to
cancel, terminate or revoke this Subscription Agreement.
8.4 The offering is intended to be exempt from registration under the Act
by virtue of Section 4(2) of the Act and the provisions of Regulation D
thereunder, which is in part dependent upon the truth, completeness and accuracy
of the statements made by the Investor herein.
8.5 The Investor acknowledges that, to the extent it has received
information that is not publicly available, if any, from or on behalf of the
Corporation in connection with this offering, such information shall be treated
as confidential and nonpublic by Investor and shall be used by Investor solely
for the purpose of evaluating its investment in the Corporation. Investor
acknowledges that any other use of such information by the Investor may be in
violation of the securities laws.
8.6 The representations, warranties and agreements of the Investor and the
Corporation contained herein and in any other writing delivered in connection
with the transactions contemplated hereby shall be true and correct in all
respects on and as of the date of the sale of the Shares and the exercise of any
Warrants as if made on and as of such date and
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shall survive the execution and delivery of this Subscription Agreement and the
purchase of the Shares.
8.7 IN MAKING AN INVESTMENT DECISION, THE INVESTOR MUST RELY ON ITS OWN
EXAMINATION OF THE CORPORATION AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED AND THE INFORMATION SET FORTH IN THE PUBLIC REPORTS.
THE SHARES AND WARRANTS HAVE NOT BEEN RECOMMENDED, NOR HAS THERE BEEN ANY
FINDING AS TO THE FAIRNESS OF THE TERMS OF THIS OFFERING, BY ANY FEDERAL OR
STATE SECURITIES COMMISSION ON REGULATORY AUTHORITY.
9. Miscellaneous.
9.1 Except as set forth elsewhere herein, any notice or demand to be given
or served in connection herewith shall be deemed to be sufficiently given or
served for all purposes by being sent as registered or certified mail, return
receipt requested, postage prepaid, in the case of the Corporation, addressed to
it at the address set forth below;
Attention: Xxxxxx X. Xxxxxxx
Chief Financial Officer and Treasurer
Equity One, Inc.
0000 XX Xxxxx Xxxxxxx Xxxxx
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
and in the case of Investor to the address set forth below Investor's signature
on the signature page hereof.
9.2 This Subscription Agreement shall be enforced, governed and construed
in all respects in accordance with the laws of the State of Florida, as such
laws are applied by Florida courts to agreements entered into and to be
performed in Florida by and between residents of Florida, and shall be binding
upon the Investor, the Investor's heirs, estate, legal representatives,
successors and assigns and shall inure to the benefit of the Corporation and its
respective successors and permitted assigns. If any provision of this
Subscription Agreement is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed to be modified to conform
with such statute or rule of law. Any provision hereof that may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.
9.3 Except with respect to sales pursuant to registration statements that
have been declared effective or sales made pursuant to Rule 144, this Agreement
and the rights granted hereunder may not be assigned, sold, transferred,
pledged, hypothecated or otherwise disposed. Notwithstanding any other provision
contained herein, the Shares may not be sold, transferred, pledged, hypothecated
or otherwise disposed of except as follows: (a) to a person who, in the opinion
of counsel to the Corporation, is a person to whom the Shares may legally be
transferred without registration and without the delivery of a current
prospectus under the Securities Act with respect thereto and then only against
receipt of an agreement of such person to comply with
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the provisions of this Agreement with respect to any resale or other disposition
of such securities; or (b) to any person upon delivery of a prospectus then
meeting the requirements of the Securities Act relating to such securities and
the offering thereof for such sale or disposition, and thereafter to all
successive assignees. The rights provided under Section 5 relating to the Shares
are not assignable except to a party who is a lawful purchaser of the Shares.
This Agreement shall be binding upon and inure to the benefit of the
Corporation, the Investor and their successors and permitted assigns.
9.4 In any action, proceeding or counterclaim brought to enforce any of the
provisions of this Agreement or to recover damages, costs and expenses in
connection with any breach of the Agreement, the prevailing party shall be
entitled to be reimbursed by the opposing party for all of the prevailing
party's attorneys' fees, costs and other out-of-pocket expenses incurred in
connection with such action, proceeding or counterclaim.
9.5 All references to "dollars" or "$" in this Agreement shall be deemed to
be to the lawful currency of the United States of America.
9.6 The parties hereto shall be entitled to enforce their rights under this
Subscription Agreement specifically, to recover damages by reason of any breach
of any provision of this Subscription Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Subscription Agreement and that the Corporation and the Investor may in their
sole discretion apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief (without posting a bond or
other security) in order to enforce or prevent any violation of the provisions
of this Subscription Agreement.
10. Each party hereto shall bear its own fees and expenses relating to the
transactions contemplated herein, except as otherwise specifically set forth.
Equity One, Inc.
By:_________________________________
Name:_______________________________
Title:______________________________
Xxxxx Xxxx Properties & Investments, Ltd.
By:_________________________________
Name:_______________________________
Title:______________________________
Address:
____________________________________
____________________________________
____________________________________
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