SC 13D/A

OMB APPROVAL

OMB Number: 3235-0145

Expires: December 31, 2005

Estimated average burden
hours per response...11

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 1)*

EQUITY ONE, INC.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

294752100

(Cusip Number)

Chaim Katzman
1696 N.E. Miami Gardens Drive
North Miami Beach, Florida 33179
(305) 947-1664

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

February 12, 2003

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 294752100
	1.	Name of Reporting Person: CHAIM KATZMAN			I.R.S. Identification Nos. of above persons (entities only):
	2.	Check the Appropriate Box if a Member of a Group (See Instructions):
		(a)	x
		(b)	o
	3.	SEC Use Only:
	4.	Source of Funds (See Instructions): PF, WC, SC
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
	6.	Citizenship or Place of Organization: ISRAEL AND THE UNITED STATES
Number of Shares Beneficially Owned by Each Reporting Person With
			7.	Sole Voting Power: 1,021,274
			8.	Shared Voting Power: 26,321,487
			9.	Sole Dispositive Power: 1,021,274
			10.	Shared Dispositive Power: 26,321,487
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 27,342,761
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o
	13.	Percent of Class Represented by Amount in Row (11): 46.3%%
	14.	Type of Reporting Person (See Instructions): IN

2

CUSIP No. 294752100
	1.	Name of Reporting Person: MGN (USA), INC.			I.R.S. Identification Nos. of above persons (entities only):
	2.	Check the Appropriate Box if a Member of a Group (See Instructions):
		(a)	x
		(b)	o
	3.	SEC Use Only:
	4.	Source of Funds (See Instructions): SC,WC
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
	6.	Citizenship or Place of Organization: NEVADA
Number of Shares Beneficially Owned by Each Reporting Person With
			7.	Sole Voting Power: 0
			8.	Shared Voting Power: 5,088,361
			9.	Sole Dispositive Power: 0
			10.	Shared Dispositive Power: 5,088,361
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 5,088,361
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o
	13.	Percent of Class Represented by Amount in Row (11): 8.6%
	14.	Type of Reporting Person (See Instructions): CO

3

CUSIP No. 294752100
	1.	Name of Reporting Person: MGN AMERICA, INC.			I.R.S. Identification Nos. of above persons (entities only):
	2.	Check the Appropriate Box if a Member of a Group (See Instructions):
		(a)	x
		(b)	o
	3.	SEC Use Only:
	4.	Source of Funds (See Instructions): AF, BK
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
	6.	Citizenship or Place of Organization: NEVADA
Number of Shares Beneficially Owned by Each Reporting Person With
			7.	Sole Voting Power: 0
			8.	Shared Voting Power: 4,284,820
			9.	Sole Dispositive Power: 0
			10.	Shared Dispositive Power: 4,284,820
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 4,284,820
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o
	13.	Percent of Class Represented by Amount in Row (11): 7.2%
	14.	Type of Reporting Person (See Instructions): CO

4

CUSIP No. 294752100
	1.	Name of Reporting Person: GAZIT (1995), INC.			I.R.S. Identification Nos. of above persons (entities only):
	2.	Check the Appropriate Box if a Member of a Group (See Instructions):
		(a)	x
		(b)	o
	3.	SEC Use Only:
	4.	Source of Funds (See Instructions): OO, WC
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
	6.	Citizenship or Place of Organization: NEVADA
Number of Shares Beneficially Owned by Each Reporting Person With
			7.	Sole Voting Power: 0
			8.	Shared Voting Power: 3,612,405
			9.	Sole Dispositive Power: 0
			10.	Shared Dispositive Power: 3,612,405
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 3,612,405
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o
	13.	Percent of Class Represented by Amount in Row (11): 6.1%
	14.	Type of Reporting Person (See Instructions): CO

5

CUSIP No. 294752100
	1.	Name of Reporting Person: GAZIT-GLOBE (1982), LTD.			I.R.S. Identification Nos. of above persons (entities only):
	2.	Check the Appropriate Box if a Member of a Group (See Instructions):
		(a)	x
		(b)	o
	3.	SEC Use Only:
	4.	Source of Funds (See Instructions): WC
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
	6.	Citizenship or Place of Organization: ISRAEL
Number of Shares Beneficially Owned by Each Reporting Person With
			7.	Sole Voting Power: 0
			8.	Shared Voting Power: 26,321,487
			9.	Sole Dispositive Power: 0
			10.	Shared Dispositive Power: 26,321,487
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 26,321,487
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o
	13.	Percent of Class Represented by Amount in Row (11): 44.5%
	14.	Type of Reporting Person (See Instructions): CO

6

CUSIP No. 294752100
	1.	Name of Reporting Person: SILVER MAPLE (2001), INC.			I.R.S. Identification Nos. of above persons (entities only):
	2.	Check the Appropriate Box if a Member of a Group (See Instructions):
		(a)	x
		(b)	o
	3.	SEC Use Only:
	4.	Source of Funds (See Instructions): OO, BK
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
	6.	Citizenship or Place of Organization: NEVADA
Number of Shares Beneficially Owned by Each Reporting Person With
			7.	Sole Voting Power: 0
			8.	Shared Voting Power: 6,793,580
			9.	Sole Dispositive Power: 0
			10.	Shared Dispositive Power: 6,793,580
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 6,793,580
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o
	13.	Percent of Class Represented by Amount in Row (11): 11.5%
	14.	Type of Reporting Person (See Instructions): CO

7

CUSIP No. 294752100
	1.	Name of Reporting Person: FICUS, INC.			I.R.S. Identification Nos. of above persons (entities only):
	2.	Check the Appropriate Box if a Member of a Group (See Instructions):
		(a)	x
		(b)	o
	3.	SEC Use Only:
	4.	Source of Funds (See Instructions): OO
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
	6.	Citizenship or Place of Organization: DELAWARE
Number of Shares Beneficially Owned by Each Reporting Person With
			7.	Sole Voting Power: 0
			8.	Shared Voting Power: 5,386,856
			9.	Sole Dispositive Power: 0
			10.	Shared Dispositive Power: 5,386,856
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 5,386,856
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o
	13.	Percent of Class Represented by Amount in Row (11): 9.1%
	14.	Type of Reporting Person (See Instructions): CO

8

EQUITY ONE, INC.

SCHEDULE 13D

ITEM 1.   SECURITY AND ISSUER.

     This amendment no. 1 to Schedule 13D (this “Amendment No. 1”) is filed as the first amendment to the Statement on the Schedule 13D dated September 20, 2001 (the “Original Schedule 13D”) relating to the common stock, par value $0.01 per share (the “Common Stock”), of Equity One, Inc., a Maryland corporation (the “Issuer”), which has its principal executive offices at 1696 N.E. Miami Gardens Drive, North Miami Beach, Florida 33179.

     This Amendment No. 1 reflects material changes in the information contained in the Original Schedule 13D, which are more fully reflected in Items 2, 3, 5, 6 and 7 below.

ITEM 2.   IDENTITY AND BACKGROUND.

     (a)   This Schedule 13D represents the joint filing of Chaim Katzman, MGN (USA), Inc. (“MGN (USA)”), MGN America, Inc. (“MGN America”), Gazit (1995), Inc. (“Gazit”), Gazit-Globe (1982), Ltd. (“Gazit-Globe”), Silver Maple (2001), Inc. (“Silver Maple”) and Ficus, Inc. (“Ficus”) (collectively, the “Group”). Gazit-Globe is an Israeli publicly held corporation. Information is also provided in Items 2-6 of this Amendment No. 1 for Mr. Dori Segal, President and a director of Gazit-Globe. To the knowledge of the Group, none of the directors of Gazit-Globe individually owns any shares of Common Stock of the Issuer other than Messrs. Katzman and Segal.

     (b)   The address of each member of the Group is as follows:

Chaim Katzman	c/o Equity One, Inc.
	1696 N.E. Miami Gardens Drive
	North Miami Beach, Florida 33179
Gazit-Globe (1982), Ltd.	1 Derech Hashalom
	Tel Aviv, Israel 67892
MGN (USA), Inc.	c/o Gazit Group, Inc.
	1660 N.E. Miami Gardens Drive
	North Miami Beach, Florida 33179
MGN America, Inc.	c/o Gazit Group, Inc.
	1660 N.E. Miami Gardens Drive
	North Miami Beach, Florida 33179
Gazit (1995), Inc.	c/o Gazit Group, Inc.
	1660 N.E. Miami Gardens Drive
	North Miami Beach, Florida 33179
Silver Maple (2001), Inc.	c/o Gazit Group, Inc.
	1660 N.E. Miami Gardens Drive
	North Miami Beach, Florida 33179
Ficus, Inc.	c/o Gazit Group, Inc.
	1660 N.E. Miami Gardens Drive
	North Miami Beach, Florida 33179
The address for Dori Segal is c/o First Capital Realty Inc., 161 Bay Street, Suite 2820, M5J 2S1, Toronto, Ontario, Canada.

Page 9 of 16

Cusip No. 294752100 SCHEDULE 13D Page 10 of 16

     (c)   The occupations of Chaim Katzman and the principal business of the other members of the Group are as follows:

Chaim Katzman	1.   Chairman of the Board and Chief Executive Officer of Equity One, Inc.,* located at 1696 N.E. Miami Gardens Drive, North Miami Beach, Florida 33179
	2.   Chairman of the Board of Gazit-Globe.
	3.   President and a director of each of MGN (USA), MGN America, Gazit, Ficus and Silver Maple.
	4.   Chairman of the Board of First Capital Realty Inc.**, an Ontario corporation, located at 161 Bay Street, Suite 2820, M5J 2S1, Toronto, Ontario, Canada.
Gazit-Globe (1982), Ltd.	Gazit-Globe is engaged in the business of acquiring, renovating, developing and managing real estate projects, both directly and indirectly.
MGN (USA), Inc.	MGN (USA) is engaged in the business of acquiring, renovating, developing and managing real estate projects, both directly and indirectly. MGN (USA) is a wholly-owned subsidiary of Gazit-Globe.
MGN America, Inc.	MGN America is engaged in the business of acquiring, renovating, developing and managing real estate projects, both directly and indirectly. MGN America is a wholly-owned subsidiary of MGN (USA)
Gazit (1995), Inc.	Gazit is engaged in the business of acquiring, renovating, developing and managing real estate projects, both directly and indirectly. Gazit is a wholly-owned subsidiary of MGN (USA)
Silver Maple (2001), Inc.	Silver Maple is engaged in the business of acquiring, renovating, developing and managing real estate projects, both directly and indirectly. Silver Maple is a wholly-owned subsidiary of First Capital Realty Inc.**
Ficus, Inc.	Ficus is engaged in the business of acquiring, renovating, developing and managing real estate projects, both directly and indirectly. Ficus is a wholly-owned subsidiary of First Capital Realty Inc.**

     The occupation of Dori Segal is President and a director of Gazit-Globe and President and CEO of First Capital Realty Inc. Mr. Segal is also a director of Equity One, Inc.*

Page 10 of 16

Cusip No. 294752100 SCHEDULE 13D Page 11 of 16

*Equity One, Inc. is a self-administered, self-managed real estate investment trust, or a REIT, and its the principal business is acquiring, renovating, developing and managing community and neighborhood shopping centers.

**First Capital Realty Inc. is engaged in the business of acquiring, renovating, developing and managing real estate projects, both directly and indirectly. Ficus and Silver Maple are each wholly-owned by First Capital Realty Inc.

     (d)   None of the members of the Group have, during the last five years, been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors).

     (e)   None of the members of the Group have, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he or it was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws.

     (f)   The citizenship of Chaim Katzman and the state or country of organization of the other members of the Group is as follows:

Chaim Katzman	United States and Israel
Gazit-Globe (1982), Ltd.	Israel
MGN (USA), Inc.	Nevada
MGN America, Inc.	Nevada
Gazit (1995), Inc.	Nevada
Silver Maple (2001), Inc.	Nevada
Ficus, Inc.	Delaware
The citizenship of Dori Segal is the United States and Israel.

ITEM 3.   SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.

     Information regarding the sources and amount of funds and other consideration used to acquire the shares of Common Stock owned by the Group as of the date of the Original Schedule 13D was provided therein. The following provides a discussion of the sources and amount of funds and other consideration used to acquire shares of Common Stock by the Group subsequent to that date.

Dividend Reinvestment and Stock Purchase Plan

     On or about February 22, 2000, the Issuer adopted a Dividend Reinvestment and Stock Purchase Plan (the “Dividend Plan”) which allows the Issuer’s stockholders to purchase shares of Common Stock and to reinvest all or a portion of their cash dividends in additional shares of Common Stock. Once enrolled in the Dividend Plan, a stockholder may reinvest dividends paid on all or a portion of its shares of Common Stock, when and if declared by the Issuer’s Board of Directors, to purchase additional shares of Common Stock. Stockholders are also permitted to buy additional shares of Common Stock by making optional cash investments from $100 to $5,000 per month.

     During the period from February, 2000 through June, 2002, certain of the eligible members of the Group participated in the Dividend Plan and acquired an aggregate of 1,002,755 shares of Common Stock through the reinvestment of dividends declared on the shares held by the Group. None of the members of the Group (other than Mr. Katzman with respect to the shares of Common Stock held directly by him and as custodian for his children) has purchased shares of Common Stock under the Dividend Plan since June, 2002 , but may do so in the future under the plan.

Page 11 of 16

Cusip No. 294752100 SCHEDULE 13D Page 12 of 16

Open Market Purchases

     From time to time certain members of the Group have purchased shares of Common Stock in open market transactions. In particular, in July and November 2002, MGN (USA) acquired an aggregate of 152,300 shares of Common Stock in open market purchases. Members of the Group may from time to time purchase additional shares of Common Stock in open market transactions.

Acquisition of IRT Property Company and Concurrent Private Placement

     On February 12, 2003, the Issuer acquired IRT Property Company, a Georgia corporation (“IRT”), by the statutory merger (the “Merger”) of IRT with and into the Issuer pursuant to the terms and conditions of that certain Agreement and Plan of Merger, dated as of October 28, 2002 (the “Merger Agreement”), between the Issuer and IRT. Upon completion of the Merger, MGN (USA), Sliver Maple and Mr. Katzman received 297,855, 13,500 and 1,800 shares of Common Stock, respectively, in exchange for their 330,951, 15,000 and 2,000 shares of IRT common stock, respectively.

     Concurrently with the completion of the Merger, the Issuer completed a private placement of an aggregate of 6,911,000 shares of Common Stock to existing, affiliated investors, including Group members MGN America and Silver Maple, pursuant to the terms and conditions of a Common Stock Purchase Agreement, dated as of October 28, 2002 (the “Stock Purchase Agreement”). The investors were also granted registration rights pursuant to a Registration Rights Agreement dated as of October 28, 2002, with respect to all of the shares purchased in the private placement. MGN (USA) was an original signatory to the Stock Purchase Agreement and the Registration Rights Agreement, but on February 11, 2003, MGN (USA) assigned its rights thereunder to MGN America. On February 12, 2003, in connection with the consummation of the private placement and the Merger, MGN America and Silver Maple purchased an aggregate of 4,284,820 and 1,036,650 shares of Issuer Common Stock for a purchase price of $57,716,525 and $13,963,675, respectively, based on an initial price of $13.47 per share of Issuer Common Stock. The initial purchase price of $13.47 is subject to adjustment up to a maximum of $13.50, in accordance with the Stock Purchase Agreement. If the price is adjusted to the maximum amount, MGN America and Silver Maple will be required to pay an additional aggregate amount of $128,544.60 and $31,099.50, respectively.

     A substantial portion of the purchase price paid by each of MGN America and Silver Maple to the Issuer in connection with the private placement was financed through borrowings from international commercial banks (collectively, the “Bank”). In connection with the closing under the Stock Purchase Agreement, the Bank extended a loan to Gazit-Globe in the aggregate principal amount of $29,000,000. Pursuant to an Intercompany Loan Agreement entered into on February 11, 2003, Gazit-Globe loaned the proceeds of the Bank’s loan to MGN America, an indirect wholly-owned subsidiary of Gazit-Globe. An additional $6,980,000 was loaned directly by the Bank to Silver Maple pursuant to a Loan and Security Agreement dated February 11, 2003. As security for the Bank’s loan to Gazit-Globe, MGN America entered into a Pledge and Security Agreement, (the “Pledge and Security Agreements”), a Guarantee (the “Guarantee”), and a Cash Collateral Agreement (the “Cash Collateral Agreement” and together with the Pledge and Security Agreements and the Guarantee, the “MGN America Security Agreements”) each dated February 11, 2003. In addition, as security for the Bank’s loan to Silver Maple, Silver Maple entered into a Pledge and Security Agreement, dated as of February 11, 2003 (the “Silver Maple Pledge and Security Agreement,” and together with the MGN America Security Agreements, the “Security Agreements”). Pursuant to the Security Agreements, MGN America and Silver Maple have (i) pledged to the Bank all of the Issuer Common Stock purchased pursuant to the Stock Purchase Agreement, (ii) pledged to the Bank certain of their respective rights under the Registration Rights Agreement, (iii) established a deposit account with the Bank for any proceeds related to (i) and (ii), including annual dividends declared and paid by the Issuer, and (iv) granted the Bank an irrevocable proxy to vote the pledged shares of Issuer Common Stock purchased pursuant to the Stock Purchase Agreement upon occurrence and during the continuation of an event of default under the loan and Security Agreements.

Page 12 of 16

Cusip No. 294752100 SCHEDULE 13D Page 13 of 16

ITEM 4.   PURPOSE OF TRANSACTION.

     The purpose of the acquisition of the shares of the Common Stock by each member of the Group was for investment. No member of the Group currently has any plans or proposals that relate to or would result in:

(a)	the acquisition or disposition by any member of the Group of additional securities of the Issuer; PROVIDED, HOWEVER, that each member of the Group reserves the right to acquire additional securities of the Issuer for investment purposes or to dispose of securities of the Issuer at any time;
(b)	an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Issuer or any of its subsidiaries;
(c)	a sale or transfer or a material amount of assets of the Issuer or any of its subsidiaries;
(d)	any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or terms of directors or to fill any existing vacancies on the board;
(e)	any material change in the present capitalization or dividend policy of the Issuer;
(f)	any material change in the Issuer’s present business or corporate structure;
(g)	changes in the Issuer’s present charter, bylaws or similar instruments, or such other actions that may impede the acquisition of control of the Issuer by any person;
(h)	causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;
(i)	a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or
(j)	any action similar to those enumerated above.

     Each member of the Group may, from to time, review or reconsider his or its position and formulate plans or proposals with respect to items (a) through (j) above, but have no present intention of doing so.

ITEM 5.   INTEREST IN SECURITIES OF THE ISSUER.

     (a)(i)   As of February 12, 2003, after giving effect to the Merger, the approximate aggregate percentage of Issuer Common Stock reported beneficially owned by each member of the Group is based on 59,119,107 shares outstanding. As of the date hereof:

               (a)   Chaim Katzman beneficially owns, or may be deemed to exercise control or direction over, 27,342,761 shares of Common Stock, which represents 46.3% of the issued and outstanding shares of the Common Stock. This number includes (1) 5,088,361 shares of Common Stock owned by MGN (USA), (2) 4,284,820 shares of Common Stock owned by MGN America, (3) 3,612,405 shares of Common Stock owned by Gazit, (4) 1,155,465 shares of Common Stock owned by Gazit-Globe, (5) 6,793,580 shares of Common Stock owned by Silver Maple, (6) 5,386,856 shares of Common Stock owned by Ficus, (7) 785,824 shares of Common Stock owned directly by Mr. Katzman, (8) 65,450 shares of Common Stock owned by Mr. Katzman and his wife as custodian for their children and (9) options to acquire an aggregate of 170,000 shares of Common Stock currently exercisable directly by Mr. Katzman. Does not include options to acquire an aggregate of 430,000 shares of

Page 13 of 16

Cusip No. 294752100 SCHEDULE 13D Page 14 of 16

Common Stock not currently exercisable directly by Mr. Katzman. Mr. Katzman is President of each of MGN (USA), MGN America, Gazit, Silver Maple and Ficus and Chairman of the Board of Gazit-Globe;

               (b)   Gazit-Globe beneficially owns 26,321,487 shares of Common Stock, which represents 44.5% of the outstanding shares of the Common Stock. This number includes (1) 5,088,361 shares of Common Stock owned by MGN (USA), a wholly-owned subsidiary of Gazit-Globe, (2) 4,284,820 shares of Common Stock owned by MGN America, an indirect wholly-owned subsidiary of Gazit-Globe, (3) 3,612,405 shares of Common Stock owned by Gazit, an indirect subsidiary of Gazit-Globe, (4) 6,793,580 shares of Common Stock owned by Silver Maple, which is indirectly controlled by Gazit-Globe, (5) 5,386,856 shares of Common Stock owned by Ficus, which is indirectly controlled by Gazit-Globe and (6) 1,155,465 shares of Common stock owned by directly by Gazit-Globe;

               (c)   MGN (USA) beneficially owns 5,088,361 shares of Common Stock, which represents 8.6% of the outstanding shares of the Common Stock.;

               (d)   MGN America beneficially owns 4,284,820 shares of Common Stock, which represents 7.2% of the outstanding shares of the Common Stock;

               (e)   Gazit beneficially owns 3,612,405 shares of Common Stock, which represents 6.1% of the outstanding shares of the Common Stock;

               (f)   Silver Maple beneficially owns 6,793,580 shares of Common Stock, which represents 11.5% of the outstanding shares of the Common Stock; and

               (g)   Ficus beneficially owns 5,386,856 shares of Common Stock, which represents 9.1% of the outstanding shares of the Common Stock.

     (ii)   The Group has been advised that Dori Segal beneficially owns 8,000 shares of Common Stock, which represents less than 1% of the outstanding shares of Common Stock.

     (b)   For information regarding shared versus sole voting and disposition powers of each member of the Group, see Items 7, 8, 9, and 10 on each of the cover pages. The shared voting and disposition power of Mr. Katzman includes (i) 5,088,361 shares of Common Stock owned by MGN (USA), (ii) 4,284,820 shares of Common Stock owned by MGN America, (iii) 3,612,405 shares of Common Stock owned by Gazit, (iv) 1,155,465 shares of Common Stock owned by Gazit-Globe, (v) 6,793,580 shares of Common Stock owned by Silver Maple, (vi) 5,386,856 shares of Common Stock owned by Ficus, and (vii) 785,824 owned by Mr. Katzman, (viii) 65,450 shares of Common Stock owned by Mr. Katzman and his wife as custodians for their children and (ix) options to acquire an aggregate of 170,000 shares of Common Stock currently exercisable directly by Mr. Katzman. Mr. Katzman is the President of MGN (USA), MGN America, Gazit, Silver Maple and Ficus, and is the Chairman of the Board of Gazit-Globe.

     The shared voting and disposition power of Gazit-Globe includes (v) 5,088,361 shares of Common Stock owned by MGN (USA), a wholly-owned subsidiary of Gazit-Globe, (w) 4,284,820 shares of Common Stock owned by MGN America, which is indirectly controlled by Gazit-Globe, (x) 3,612,405 shares of Common Stock owned by Gazit, a wholly-owned subsidiary of Gazit-Globe, (y) 6,793,580 shares of Common Stock owned by Silver Maple, which is indirectly controlled by Gazit-Globe and (z) 5,386,856 shares of Common Stock owned by Ficus, which is indirectly controlled by Gazit-Globe.

     (c)   For information regarding transactions during the last 60 days, see Item 4 above.

     (d)   The shares of Common Stock held by the members of the Group are pledged as security for loans made to individual members of the Group. Pursuant to the promissory notes and other credit documents governing those loans, the respective creditors have the right, upon an event of default, to receive the dividends from the pledged Common Stock. Otherwise, no other person, except those persons identified in this Schedule 13D, has the

Page 14 of 16

Cusip No. 294752100 SCHEDULE 13D Page 15 of 16

right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities reported in this Amendment No. 1.

     As of the date hereof, an aggregate of 23,752,515 shares of Common Stock beneficially owned by the Group, representing approximately 40.2% of the Issuer’s outstanding shares of Common Stock, have been pledged to commercial banks and other financial institutions.

     (e)   Not applicable

ITEM 6.   CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

     There are no contracts, arrangements, understandings or relationships (legal or otherwise) among the members of the Group (or Dori Segal), or between any member of the Group (or Dori Segal) and another person, with respect to any securities of the Issuer, including, but not limited to, the transfer or voting of any securities, finder’s fees, joint ventures, loan or option arrangements, put or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, except for those described in the Original Schedule 13D and the proxy and other arrangements with financial institutions, including the Bank, as security for the loans made to individual members of the Group described in Items 5(c) and (d) above, subject to standard default and similar provisions contained in such loan and related security agreements.

ITEM 7.   MATERIAL TO BE FILED AS EXHIBITS.

Exhibit 1	Loan Agreement, entered into on February 11, 2003, between Gazit-Globe (1982) Ltd. and MGN America, Inc.
Exhibit 2	Loan Agreement, dated as of February 12, 2003, between Silver Maple (2001), Inc. and commercial bank.
Exhibit 3	Pledge and Security Agreement, dated as of February 12, 2003, made by Silver Maple (2001), Inc. in favor of commercial bank.
Exhibit 4	Pledge and Security Agreement, dated as of February 11, 2003, made by MGN America, Inc. in favor of Bank Leumi le Israel B.M.
Exhibit 5	Cash Collateral Agreement, made as of February 11, 2003, by and between MGN America, Inc. and Bank Leumi le Israel B.M.
Exhibit 6	Guarantee, dated as of February 11, 2003, made by MGN America, Inc. in favor of Bank Leumi le Israel B.M.

Page 15 of 16

Cusip No. 294752100 SCHEDULE 13D Page 16 of 16

SIGNATURE

     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

February 25, 2003	/s/ Chaim Katzman
	Chaim Katzman
	MGN (USA), INC.
	By: /s/ Chaim Katzman
	Chaim Katzman President
	MGN AMERICA, INC.
	By: /s/ Chaim Katzman
	Chaim Katzman President
	GAZIT (1995), INC.
	By: /s/ Chaim Katzman
	Chaim Katzman President
	GAZIT-GLOBE (1982), LTD.
	By: /s/ Chaim Katzman
	Chaim Katzman Chairman of the Board
	SILVER MAPLE (2001), INC.
	By: /s/ Chaim Katzman
	Chaim Katzman President
	FICUS, INC.
	By: /s/ Chaim Katzman
	Chaim Katzman President

Page 16 of 16 EX-1 3 g80918exv1.txt LOAN AGREEMENT DATED 2/11/03 EXHIBIT 1 LOAN AGREEMENT This Loan Agreement (this "Agreement") is entered into on February 11, 2003, by and between Gazit-Globe (1982) Ltd., an Israeli corporation (the "Lender") and MGN AMERICA, INC., a Nevada corporation (the "Borrower"); the Lender and the Borrower shall collectively be referred to herein as the "Parties". W I T N E S S E T H: WHEREAS MGN (USA), Inc. committed to purchase up to 4,284,820 Common Stock Shares (the "Shares") of Equity One, Inc. ("EQY") according to a Common Stock Purchase Agreement (the "Share Purchase Agreement") between EQY and MGN (USA), Inc. and MGN (USA), Inc. subsequently assigned its rights to purchase the Shares to the Borrower pursuant to an Assignment Agreement (the "Assignment Agreement") between MGN (USA), Inc. and the Borrower; and WHEREAS the Borrower is a subsidiary indirectly wholly owned by Lender; and WHEREAS the Borrower requested a loan from the Lender, and the Lender has agreed to make a loan to the Borrower, for the purpose of financing the purchase price of the Shares according to the Share Purchase Agreement, upon the terms and conditions contained below; NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. The above recitals are an integral part hereof. 2. Immediately prior to each of the Closings, as this term is defined in the Share Purchase Agreement, the Lender will lend the Borrower the purchase price of the Shares to be transferred to the Borrower at such Closing. According to the provisions of the Share Purchase Agreement and the Assignment Agreement, the aggregate number of Shares to be purchased by Borrower in all Closings shall be no less than 3,720,000 Shares and no more than 4,284,820 Shares, and therefore the total amount of the loan will be no less than US$49,476,000 and no more than US$56,988,106 (each and all of such amounts shall be referred to as the "Loan"). 3. 50% of the Loan shall bear interest at the rate of 3 months Libor + 2.2% per year ("Part A of the Loan"), and 50% of the Loan shall bear interest at the rate of 3 months Libor + 2% per year ("Part B of the Loan"). Interest shall be calculated on the basis of a 360 day year. 4. The repayment of principal of the Loan (or any part of the Loan) shall be as follows: 4.1. 25% of the principal of Part A of the Loan, which constitutes 12.5% of the entire Loan, shall be paid during the first 3 years as of the grant of the Loan (or any part of the Loan), in 12 installments each at the end of every 3-months-quarter (ending on March 31, June 30, September 30 and December 31). 4.2. 75% of the principal of Part A of the Loan, which constitutes 37.5% of the entire Loan, shall be paid in one installment to be paid at the end of 36 months as of the grant of the Loan (or any part of the Loan). 4.3. The principal of the entire Part B of the Loan, which constitutes 50% of the entire Loan, shall be paid in one installment to be paid at the end of 60 months as of the grant of the Loan (or any part of the Loan). 5. Payment of interest shall be made at the end of every 3-months-quarter (ending on March 31, June 30, September 30 and December 31) as of the grant of the Loan (or any part of the Loan). 6. As a security for the repayment of the Loan, the Borrower shall pledge the Shares to Bank. The Borrower shall provide and sign any documents and instruments as required for the pledge of the Shares. IN WITHNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on their behalf, by their respective officers, thereunto duly authorized, on the date first written above. GAZIT-GLOBE (1982) LTD. By: /s/ Dori Segal -------------------------------- Name: Dori Segal Title: President By: /s/ Gil Kotler -------------------------------- Name: Gil Kotler Title: CFO MGN AMERICA, INC. By: /s/ Dori Segal --------------------------------- Name: Title: - 2 - EX-2 4 g80918exv2.txt LOAN AGREEMENT DATED 2/12/03 EXHIBIT 2 LOAN AGREEMENT THIS LOAN AGREEMENT dated as of February 12, 2003, between SILVER MAPLE (2001), INC., a Nevada corporation (the "Borrower"), and [Commercial Bank] (the "Lender"). W I T N E S S E T H: WHEREAS, the Borrower has requested that the Lender make available to it a term loan credit of up to $7,000,000 in the aggregate upon the terms, and subject to the conditions, set forth herein to partially finance the purchase by Pledgor of up to 1,036,650 shares of the common stock of Equity One, Inc.; and WHEREAS, the Lender is willing to provide such financing to the Borrower only upon the terms and subject to the conditions set forth herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows: SECTION 1. DEFINITIONS. 1.1. Certain General Definitions. For all purposes of this Agreement and the other Loan Documents, unless the context otherwise requires: "Agreement" means this Loan Agreement, as the same may be amended or otherwise modified from time to time, and the terms "herein," "hereof," "hereunder" and like terms shall be taken as referring to this Agreement in its entirety and shall not be limited to any particular section or provision thereof. "Affiliate" means as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to (a) vote 5% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. "Agreement and Plan of Merger" means that certain Agreement and Plan of Merger dated October 28, 2002, between IRT and EOI, as amended, supplemented and modified from time to time. "Business Day" means a day on which (i) dealings in Dollar deposits are carried on in the London Interbank Eurodollar market and (if payment is required to be made on such day) on which banks are open for business in London and in New York, and (ii) the Lender shall be open for ordinary business in New York. In the Lender's discretion, its office in New York may be closed on any Saturday, Sunday, legal holiday or other day on which it is lawfully permitted to close. "Calculation Date" shall have the meaning provided therefor in Section 5.7(a). "Change in Control" means (i) an event whereby any "person" or "group" (as such terms are used in Sections 12(d) and 13(d) of the Exchange Act, other than the Parent Shareholder of the Borrower on the Closing Date, shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more than 20% of the outstanding common stock of the Borrower; (ii) the board of directors of the Borrower shall cease to consist of a majority of Continuing Directors; (iii) an event whereby any "person" or "group" (as such terms are used in Sections 12(d) and 13(d) of the Exchange Act, other than the shareholders of the Parent Shareholder on the Closing Date, shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more than 20% of the outstanding common stock of the Parent Shareholder, or (ii) the board of directors of each Parent Shareholder shall cease to consist of a majority of Continuing Directors. "Closing Date" means the date on which all of the conditions specified in Section 4.1 have been satisfied. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collateral" means the Pledged Collateral (as defined in the Pledge and Security Agreement). "Collateral Account" shall have the meaning provided therefor in the Pledge and Security Agreement. "Commonly Controlled Entity" means an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414 of the Code. "Continuing Directors" means the directors of the Borrower or each Parent Shareholder, as the case may be, on the Closing Date, and each other director, if, in each case, such other director's nomination for election to the board of directors of the Borrower or such Parent Shareholder, as the case may be, is recommended by a majority of the then Continuing Directors or by a nominations committee thereof. "Control" means the power to direct or cause the direction of the management and policies of a Person, either alone or in conjunction with others and whether through the ownership of voting securities, by contract or otherwise. "Debt" means, as to any Person, the aggregate of such Person's liabilities as reflected in such Person's most recent financial statements, but not including subordinated debt. 2 "Default" means any condition, event or act which, with notice or lapse of time, or both, would constitute an Event of Default. "Dollars" and "$" means dollars in lawful currency of the United States. "EOI" means Equity One, Inc., a Maryland corporation. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, including the rules and regulations promulgated thereunder. "Equity One, Inc. Common Stock Purchase Agreement": means that certain Equity One, Inc. Common Stock Purchase Agreement dated as of October 28, 2002, between EOI and each of the purchasers party thereto (including, without limitation, Pledgor), as amended, supplemented or modified from time to time. "Event of Default" means any of the events specified in Section 7.1, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute. "GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time. "Governmental Authority" means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, the Federal Deposit Insurance Corporation, any central bank or any comparable authority. "Indebtedness" of any Person means indebtedness incurred by that Person to banks or financial institutions. "Initial Funding Loan(s)" means, if expressly requested and designated by the Borrower in its Notice of Borrowing delivered to the Lender, the initial Loan made to the Borrower hereunder on the Closing Date, and each subsequent Loan, if any, made to the Borrower hereunder on the Business Day immediately preceding each "Subsequent Closing" (as such term is defined in the Equity One, Inc. Common Stock Purchase Agreement so requested and designated by the Borrower in its Notice of Borrowing delivered to the Lender in connection therewith. "Insolvency" means with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA. "Insolvent" means pertaining to a condition of Insolvency. "Interest Payment Date" means the last day of each Interest Period. 3 "Interest Period" means, (i) with respect to any Loan (other than an Initial Funding Loan) bearing interest at the Libor Rate, (A) initially, the period commencing on the date of borrowing (or date of interest rate conversion) and ending three (3) months thereafter, and (B) thereafter, each period commencing on the last day of the preceding Interest Period and ending three (3) months thereafter; provided, however, that (aa) if any Interest Period would otherwise end on a day which is not a Business Day, the termination thereof shall be postponed to the next succeeding Business Day, unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the immediately preceding day which is a Business Day, (bb) if any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), then such Interest Period shall end on the last Business Day of a calendar month, (cc) any Interest Period that would otherwise extend beyond the Maturity Date shall end on the Maturity Date, and (dd) the initial Interest Period with respect to the Loan made on the Closing Date shall commence on the Closing Date and end on March 31, 2003; (ii) with respect to an Initial Funding Loan bearing interest at the Libor Rate, the period commencing on the date of borrowing and ending one (1) Business Day thereafter, and (iii) with respect to any Loan bearing interest at the Reference Rate, (A) initially, the period commencing on the date of borrowing (or date of interest rate conversion) and ending on the last Business Day of the next succeeding calendar quarter of March, June, September or December, as the case may be, and (B) thereafter, each period commencing on the last day of the preceding Interest Period and ending on the last Business Day of the next succeeding calendar quarter of March, June, September or December, as the case may; provided, however, any Interest Period that would otherwise extend beyond the Maturity Date shall end on the Maturity Date. "IRT" means IRT Property Company, a Georgia corporation. "Libor Base Rate" means, relative to any Interest Period for any Loan (i) the rate quoted by the British Bankers Association in London as its "LIBOR" rate for U.S. dollar deposits at or about 11:00 a.m., London time, on the second Business Day prior to the commencement of the Interest Period; provided, however, that if the Lender adopts generally in its business a different rate quoting system or service for obtaining the rate of interest commonly known as "LIBOR" for U.S. dollar deposits, then upon giving prompt notice to the Borrower such alternative rate quoting system or service shall be utilized for determining "LIBOR" in lieu of the rate quoted by the British Bankers Association, and (ii) if the rate may not be determined by the Lender as provided in the preceding clause (i) for any reason, as determined by the Lender in its reasonable judgment, then the rate equal to the rate of interest per annum at which U.S. dollar deposits in the approximate amount of the amount of the Loan to be made or continued hereunder by the Lender and having a maturity comparable to such Interest Period would be offered to the Lender in 4 the London Interbank market at its request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period. "Libor Reserve Percentage" means, relative to any Interest Period for loans hereunder, the percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) in effect on such day (whether or not applicable to the Lender) under regulations issued from time to time by the Federal Reserve System Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Federal Reserve System Board). "Libor Rate" means, relative to any Loan to be made or continued hereunder for any Interest Period, the rate of interest per annum (rounded upwards to the next 1/32nd of 1%) determined by the Lender as follows: Libor Base Rate Libor Rate = --------------------------------- 1.00 - Libor Reserve Percentage "Lien" means any floating or fixed charge, lien, mortgage, pledge, security interest or other encumbrance of any nature whatsoever upon, of or in property or other assets of a Person, whether absolute or conditional, voluntary or involuntary, whether created pursuant to agreement, arising by force of statute, by judicial proceedings or otherwise. "Loan" shall have the meaning provided therefor in Section 2.1. "Loan Documents" means this Agreement and the Pledge and Security Agreement. "Margin" means 2.2 % per annum. "Material Adverse Effect" means (X) a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of the Borrower, (b) the validity or enforceability of this Agreement or any other Loan Document in any manner that prevents the practical realization by Lender of the benefits intended by this Agreement and/or any other Loan Document, or (c) the rights or remedies of Lender hereunder or under any other Loan Document in any manner that prevents the practical realization of the benefits purported to be provided by such rights and remedies with respect to Lender's ability to realize upon the principal benefits or security intended to be provided by this Agreement and/or any other Loan Document, (Y) any impairment to the validity, perfection or priority of the security interest of Lender in the Collateral in any manner whatsoever, and/or (Z) an Event of Default. "Maturity Date" means, with respect to a Loan other than an Initial Funding Loan, March 31, 2006, and with respect to an Initial Funding Loan, the day which is one (1) Business Day after the date such Initial Funding Loan is made. 5 "Multiemployer Plan" means a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Non-Excluded Taxes" shall have the meaning provided therefor in Section 2.13(a). "Non-U.S. Lender" shall have the meaning provided therefor in Section 2.13(b). "100% Participant" means any Participant who has acquired a 100% participating interest in any Loan. "Parent Shareholder" means, each and all shareholders of the Borrower's direct parent company shareholder on the Closing Date. "Participant" shall have the meaning therefor in Section 8.15. "PBGC" means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA. "Person" means any individual, partnership, limited liability company, joint venture, corporation (including, without limitation, the Borrower), trust, estate, unincorporated organization or association or Governmental Authority. If any Person is a corporation, unless otherwise provided, the use of the term "Person" to refer to that corporation means that corporation as a single entity and not as consolidated with its Subsidiaries. "Plan" means at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. "Pledge and Security Agreement" means the Pledge and Security Agreement dated as of the date of this Agreement between the Borrower and the Lender, as the same may be amended, supplemented or otherwise modified from time to time. "Pledged Shares" shall have the meaning provided therefor in the Pledge and Security Agreement. "Reference Rate" means the rate of interest designated by the Lender, and in effect from time to time, as the Lender's "Reference Rate" on a particular day for commercial loans; such rate is not necessarily intended to be the lowest rate of interest charged by the Lender in connection with loans and other extensions of credit. Each change in the Reference Rate shall be effective on the date such change is determined by the Lender. "Registration Rights Agreement" means that certain Registration Rights Agreement dated as of October 28, 2002, among EOI and the purchasers party thereto, 6 including, without limitation, Pledgor, as may be amended, supplemented or modified from time to time. "Reorganization" means with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA. "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsections .22, .25, .27 or .28 of PBGC Reg. Section 4043. "Requirement of Law" means as to any Person, the certificate of incorporation, certificate of formation, limited liability company agreement, and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Shareholders' Loans" shall have the meaning provided therefor in Section 6.3. "Single Employer Plan" means any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan. "Subsidiary" means, when used with reference to any corporation, any corporation of which at least a majority of the outstanding stock, having by the terms thereof ordinary voting power to elect a majority of the Board of Directors of such corporation, is at the time directly or indirectly owned by such first-mentioned corporation. "Tangible Equity" means, with respect to the Borrower, the share capital, undistributed profits, funds and reserves, shareholders' loans which have been subordinated in favor of the Lender; less deferred expenses, intangible assets such as goodwill, patents trade marks, business names copyrights and the like, treasury shares, debts owed by interested parties, subsidiaries or Affiliates; and less guarantees given by the Borrower to secure the debts of interested parties, subsidiaries or Affiliates; as the same appear in the quarterly and annual financial reports of the Borrower. "Term Loan Commitment Period" means the period from and including the Closing Date to, and including, April 15, 2004 or the next Business Day thereafter if such day is not a Business Day. "Total Outstanding Credit" shall have the meaning provided therefor in Section 5.7(a). "Transaction" means the purchase by the Borrower of up to 1,036,650 shares of the common stock, par value $0.01 per share, of EOI pursuant to the terms and conditions of the Equity One, Inc. Common Stock Purchase Agreement. 7 "Transferee" means any Participant or any assignee of the interests of the Lender under this Agreement or any other Loan Documents. "Uniform Commercial Code" means the Uniform Commercial Code in effect from time to time in any state to the extent the same is applicable by law to any portion of the Collateral. 1.2. Use of Accounting Terms. Accounting terms used herein shall be construed, calculations hereunder shall be made and financial data required hereunder shall be prepared, both as to classification of items and as to amounts, in accordance with GAAP as of the date thereof consistently applied, which principles shall be consistent with those used in the preparation of the most recent reviewed financial statements of such Person delivered to the Lender. All statements relating to earnings and expenses shall set forth separately or otherwise identify all extraordinary and nonrecurring items. SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENT 2.1. Term Loan Commitment. The Lender agrees, subject to and upon the terms and conditions herein set forth, to make one or more term loans (each a "Loan") immediately available to the Borrower from time to time during the Term Loan Commitment Period in an aggregate principal amount not to exceed Seven Million Dollars ($7,000,000), or such lesser amount as is in effect from time to time pursuant to Section 2.7 (the "Term Loan Commitment"). Loans (other than Initial Funding Loans) borrowed under this Section 2.1 and repaid or prepaid may not be reborrowed. Each Initial Funding Loan may be repaid and reborrowed once, in whole or in part, in order to consummate the Transaction, provided that amount of such reborrowing, together with the aggregate principal amount of all other Loans then outstanding, does not exceed the outstanding Term Loan Commitment. 2.2. Procedure for Borrowing. (a) The Borrower may borrow under the Term Loan Commitment during the Term Loan Commitment Period on any Business Day, provided that, unless the Lender otherwise agrees, the Borrower shall deliver to the Lender irrevocable written notice of borrowing in form and substance acceptable to the Lender (each a "Notice of Borrowing") not later than 10:00 a.m., New York, New York time, two (2) Business Days prior to the requested borrowing date. Unless the Borrower and the Lender (and any 100% Participant) otherwise mutually agree, the Lender will make each Loan (including any Initial Funding Loan) to the Borrower by automatically crediting the loan proceeds thereof to the Collateral Account. Thereafter, and subject to the other terms and conditions of this Agreement, the Lender will disburse the proceeds of each Loan (other than an Initial Funding Loan) credited to the Collateral Account in accordance with the wiring instructions specified in the Borrower's Notice of 8 Borrowing. The Borrower must expressly specify in its Notice of Borrowing if the requested borrowing is to be made as an Initial Funding Loan. (b) Unless otherwise agreed by the Lender (and any 100% Participant), all borrowings shall be in minimum amounts of $1,000,000 or a whole multiple of $20,000 in excess thereof, or, the remaining amount under the Term Loan Commitment, if such amount is less than $1,000,000, provided that, the Loan or the Initial Funding Loan made to the Borrower on the Closing Date shall each be in an amount not less than $1,750,000. 2.3. Use of Proceeds of Loans. The proceeds of the Loans shall be utilized by the Borrower in accordance with Section 3.12. 2.4. Repayment of the Loans; Evidence of Debt. The aggregate unpaid principal amount of the Loans shall be repaid to the Lender as follows: (a) The Borrower shall repay the first $1,750,000 of Loans made to the Borrower hereunder (other than any Initial Funding Loan made to the Borrower on the Closing Date, which Initial Funding Loan shall be repaid on the Maturity Date thereof) in twelve consecutive equal quarterly installments on the last day of each March, June, September and December (or, if such day is not a Business Day, then on the immediately preceding Business Day), commencing on June 30, 2003. (b) The Borrower shall repay to the Lender the outstanding balance of all Loans, together with all accrued interest thereon and any unpaid fees and other amounts due to the Lender under this Agreement, on the Maturity Date; it being understood that the Borrower hereby authorizes the Lender to repay each Initial Funding Loan, if any, on its Maturity Date by debiting the Collateral Account for all such sums then due and payable. (c) The Lender shall maintain on its books and records in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower under this Agreement resulting from each Loan made from time to time, including (i) the amount of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to the Lender hereunder, and (iii) the amount of any sum received by the Lender hereunder from the Borrower. (d) The entries recorded by the Lender in its books and records shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, the failure of the Lender to record any entry, or any error in any record, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by the Lender in accordance with the terms of this Agreement. 9 (e) The Borrower agrees that, upon the request of the Lender, the Borrower will execute and deliver to the Lender a promissory note of the Borrower evidencing the Loans, in form and substance satisfactory to the Lender. 2.5. Fees. (a) The Borrower agrees to pay to the Lender a non-refundable up-front fee of $7,000.00 on the Closing Date. (b) The Borrower agrees to pay to the Lender a commitment fee of 0.125% per annum (based on a 360-day year) of the average daily unused portion of the Term Loan Commitment, payable monthly in arrears on the last Business Day of each month and on the Maturity Date (other than the Maturity Date of an Initial Funding Loan) or such earlier date as the Term Loan Commitment shall terminate, commencing on the first such date to occur after the date hereof. (c) The Borrower agrees to pay the Lender any other usual and standard fees customarily charged by the Lender for services relating to the making of Loans, the establishment and maintenance of the Collateral Account (as defined in the Pledge and Security Agreement), and the administration of the Loans, the Term Loan Commitment and the Collateral. 2.6. Optional Prepayment of Loans. (a) The Borrower may at any time and from time to time prepay a Loan, in whole or in part, without premium or penalty, except as expressly set forth in this Agreement upon at least five (5) Business Days' irrevocable notice to the Lender (which notice must be received by the Lender prior to 10:00 a.m., New York time, on the date upon which such notice is due), specifying the date and amount of prepayment. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with any amounts payable pursuant to Section 2.14 and accrued interest to such date on the amount prepaid. If any prepayment of a Loan shall be made other than on the last day of an Interest Period thereof, the Borrower shall also pay to the Lender any amount required to compensate the Lender for any losses, costs or expenses that it may reasonably incur as a result of such prepayment. Each partial prepayment shall be in an aggregate principal amount of $1,000,000, or a whole multiple of $100,000 in excess thereof. (b) Any repayment of a Loan made pursuant to Section 2.6(a) shall be applied first, to any accrued interest, and second, to the then outstanding principal installments thereof in the inverse order of maturity. 2.7. Optional and Mandatory Termination or Reduction of Term Loan Commitment 10 (a) The Borrower shall have the right, upon not less than five (5) Business Days' notice to the Lender, to terminate the Term Loan Commitment or, from time to time, to reduce the amount of the Term Loan Commitment. Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple of $100,000 in excess thereof, and shall reduce permanently the Term Loan Commitment then in effect. If any such commitment termination or reduction involves the repayment of Loans, and if such repayment is made other than on the last day of an Interest Period thereof, the Borrower shall also pay to the Lender any amount required to compensate the Lender for any losses, costs or expenses that it may reasonably incur as a result of such prepayment. (b) Each principal installment repayment pursuant to Section 2.4(a) shall reduce permanently the Term Loan Commitment then in effect by the amount of each such principal installment repayment. 2.8. Interest. (a) Each Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Libor Rate determined for such day plus the Margin. (b) If all or a portion of (i) any principal of any Loan, (ii) any interest payable thereon, or (iii) any fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), then the principal of such Loan and any such overdue interest, fee or other amount shall bear interest at a rate per annum which is (x) in the case of principal, the rate that would otherwise be applicable thereto pursuant to Section 2.8(a) plus 2%, or (y) in the case of any such overdue interest, fee or other amount, the rate described in paragraph (a) of this subsection plus 2%, in each case from the date of such non-payment until such overdue principal, interest, fee or other amount is paid in full (as well before or after judgment). (c) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (b) of this Section shall be payable from time to time on demand. (d) Notwithstanding anything to the contrary contained herein, in no event shall the Borrower be obligated to pay interest in excess of the maximum amount which is chargeable under applicable law. 2.9. Computation of Interest and Fees. (a) Interest and commitment fees shall be calculated on the basis of a 360-day year for the actual days elapsed. 11 (b) Each determination of the Libor Rate by the Lender pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower in the absence of manifest error. 2.10. Inability to Determine Libor Rate. If prior to the first day of any Interest Period: (a) the Lender shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Libor Rate for such Interest Period, or (b) the Lender shall have determined that the Libor Rate determined (which determination shall be conclusive and binding upon the Borrower) for such Interest Period will not adequately and fairly reflect the cost to the Lender of making or maintaining its affected Loans during such Interest Period, then the Lender shall give telecopy or telephonic notice thereof to the Borrower as soon as practicable thereafter. If such notice is given and until such notice has been withdrawn by the Lender, (X) any Loan requested to be made on the first day of such Interest Period shall bear interest at the Reference Rate, and (Y) all outstanding Loans will bear interest at the Reference Rate, commencing on the first day of next Interest Period applicable thereto. 2.11. Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for the Lender to make or maintain Loans as contemplated by this Agreement, (a) the commitment of the Lender hereunder to make Loans or continue Loans shall forthwith be canceled, and (b) the Loans then outstanding shall automatically bear interest at the Reference Rate on the first day of the next succeeding Interest Period applicable thereto, or at such earlier time as required by law. If any such interest rate conversion for a Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, then the Borrower shall pay to the Lender such amounts, if any, as may be required pursuant to Section 2.14. 2.12. Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by the Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (1) shall subject the Lender to any tax of any kind whatsoever with respect to this Agreement, or any Loan made by it, or change the basis of taxation of payments to the Lender in respect thereof 12 (except for Non-Excluded Taxes covered by Section 2.13 and changes in the rate of net income taxes or franchise taxes (imposed in lieu of net income taxes) of the Lender); (2) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of the Lender which is not otherwise included in the determination of the Libor Rate hereunder; or (3) shall impose on the Lender any other condition; and the result of any of the foregoing is to increase the cost to the Lender, by an amount which the Lender deems to be material, of making, continuing or maintaining Loans bearing interest at the Libor Rate, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay the Lender such additional amount or amounts as will compensate the Lender for such increased cost or reduced amount receivable. (b) If the Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by the Lender or any corporation controlling the Lender with any request or directive regarding capital adequacy (whether or not having the force of law, if compliance therewith is a customary banking practice) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on the Lender's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such corporation would have achieved but for such adoption, change or compliance by the Lender or such corporation (taking into consideration the Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by the Lender to be material, then from time to time, the Borrower shall promptly pay to the Lender such additional amount or amounts as will compensate the Lender for such reduction. (c) If the Lender becomes entitled to claim any additional amounts pursuant to this Section 2.12, it shall promptly notify the Borrower of the event by reason of which it has become so entitled. In determining such amounts, the Lender may use any reasonable averaging and attribution methods, applied in a non-discriminatory manner with respect to the Borrower. A certificate as to any additional amounts payable pursuant to this Section 2.12 submitted by the Lender to the Borrower, together with the calculations used by the Lender in determining such additional amounts, shall be conclusive in the absence of manifest error. The agreements in 13 this Section 2.12 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 2.13. Taxes. (a) All payments made by the Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Lender as a result of a present or former connection between the Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to the Lender hereunder or under any Note, the amounts so payable to the Lender shall be increased to the extent necessary to yield to the Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement. Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as possible thereafter the Borrower shall send to the Lender for its own account, a certified copy of an original official receipt received by the Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Lender the required receipts or other required documentary evidence, the Borrower shall indemnify the Lender for any incremental taxes, interest or penalties that may become payable by the Lender as a result of any such failure. (b) Each Transferee that is not a "U.S. Person" as defined in Section 7701(a)(30) of the Code of 1986, as amended (a "Non-U.S. Lender") shall deliver to the Borrower (or, in the case of a Participant, to the Lender) two duly completed copies of U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or applicable successor forms as the case may be, properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from U.S. federal withholding tax on all payments by the Borrower under this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation). In addition, each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the 14 Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver. 2.14. Indemnity. The Borrower agrees to indemnify the Lender and to hold the Lender harmless from any loss or expense which the Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of a Loan after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment or payment after the Borrower has given a notice thereof in accordance with the provisions of this Agreement, or (c) the making of a prepayment or payment of a Loans bearing interest at the Libor Rate on a day which is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, for the period from the date of such prepayment or of such failure to borrow to the last day of such Interest Period (or in the case of the failure to borrow, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by the Lender) which would have accrued to the Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. 2.15. Security for the Loans. The Loans and other indebtedness of the Borrower owing to the Lender under this Agreement and the other Loan Documents shall be secured by a first priority Lien on the Collateral pursuant to the Pledge and Security Agreement. 2.16. Manner and Place of Payment. All payments hereunder shall be made without set-off, counterclaim or deduction and shall be made in lawful money of the United States in immediately available funds by the Borrower to the Lender, prior to 2:00 p.m., New York time, at its offices at ___________________ _____________________, or at such other place as may be designated by the Lender to the Borrower in writing. Any payment received after 2:00 p.m., New York time, shall be deemed received on the next Business Day. If any payment of principal of or interest on the Loans or any other amount under this Agreement or any other Loan Document falls due on a day that is not a Business Day, it shall be payable on the next succeeding Business Day (unless such day would be a day in the next calendar month, and in such case payment shall be due on the immediately preceding Business Day), and the resulting additional or decreased time (if any) shall be included in or deducted from the computation of interest. 15 SECTION 3. REPRESENTATIONS AND WARRANTIES. To induce the Lender to enter into this Agreement and to make the Loans hereunder, the Borrower represents, warrants and covenants to the Lender that: 3.1. Corporate Existence. The Borrower is a duly organized and validly existing corporation in good standing under the laws of the jurisdiction of its formation and has the corporate power and authority to own its properties and other assets and to transact the business in which it is now engaged or proposes to engage. The Borrower is duly qualified to do business and is in good standing in each jurisdiction in which the failure to qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 3.2. Control and Holdings. All of the capital stock of the Borrower is beneficially owned by the Parent Shareholder. The Borrower has no Subsidiaries. 3.3. Authorization and Execution. The Borrower has the corporate power and authority to execute, deliver and carry out the terms and provisions of the Transaction and the Loan Documents. The execution, delivery and performance by the Borrower of the Transaction and the Loan Documents and the borrowing hereunder have been duly authorized by all requisite corporate action. This Agreement and the Pledge and Security Agreement, when executed and delivered by the Borrower pursuant hereto, will be legal, valid and binding obligations of the Borrower, enforceable against the Borrower, in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by the application by a court of equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). 3.4. Compliance with Other Instruments. The Borrower is not in default in the performance, observance or fulfillment of any of the material obligations, covenants or conditions contained in any evidence of Indebtedness of the Borrower, or contained in any material instrument under or pursuant to which any such evidence of Indebtedness has been issued or made and delivered. Neither the execution and delivery of the Loan Documents, nor the consummation of the transactions herein contemplated, including but not limited to the use of the proceeds of the Loan for the purposes set forth herein, will conflict with or result in a breach of any of the terms, conditions or provisions of the certificate of incorporation or by-laws or other organizational charter and instruments of the Borrower, or of any material agreement or instrument to which the Borrower is now a party or otherwise bound or to which the Borrower's properties or other assets are subject, or of any law, statute, rule or regulation or any order or decree of any court or governmental instrumentality, or of any arbitration award, franchise or permit, or constitute a default thereunder, or if any action was required under such instrumentality, award, franchise or permit, it could not reasonably be expected to have a Material Adverse Effect, or result in the creation 16 or imposition of any Lien upon any of the properties or other assets of the Borrower, except as herein contemplated. 3.5. Consents. No consent or approval of, or exemption by, any Person, and no waiver of any right by any Person is required to authorize or permit, or is otherwise required in connection with, the execution, delivery and performance of the Loan Documents, or with respect to the required use by the Borrower of the proceeds of the Loan, except those which shall have been obtained on or prior to the date hereof. 3.6. Financial Statements. (a) The Borrower has heretofore furnished to the Lender copies of the unqualified audited financial statements of the Borrower as of December 31, 2001 and for the year then ended and such financial statement presents fairly the financial position of the Borrower on the date of the balance sheet included therein and the results of the operations of the Borrower for the period involved, and have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (subject to, in the case of the interim financial statements, normal year-end audit adjustments not material in amount). (b) No Material Changes. There has been no material adverse change in the business, properties or other assets or in the condition, financial or otherwise, of the Borrower since the date of the Borrower's most recent balance sheet delivered to the Lender. 3.7. Litigation. There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Borrower threatened in writing against the Borrower at law or in equity or before or by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or before any arbitrator of any kind, which could reasonably be expected to have a Material Adverse Effect, except as has been disclosed in writing to the Lender prior to the date hereof. 3.8. Compliance with Law. The Borrower is in compliance, in all material respects, with all applicable Requirements of Law, the noncompliance with which could reasonably be expected to have a Material Adverse Effect. 3.9. Investment Company. The Borrower is not an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, or the regulations under such act. 3.10. Regulation U. None of the proceeds of the Loans will be used, directly or indirectly, for any purpose that will violate, or cause the Lender to be in violation of, Regulation U (12 CFR, Part 221) of the Board of Governors of the Federal Reserve System. Neither the Borrower nor any agent acting on its behalf has taken or will take (or has omitted or will omit to take) any action which might 17 cause this Agreement, the Note, any borrowing, the making of any Loan, or the application of the proceeds of any Loan to violate Regulation U or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, in each case as in effect on the date or dates of such borrowing and use of proceeds. At the time of the making of each Loan, the amount of such Loan will not exceed fifty percent (50%) of the aggregate current market value of the Pledged Shares then pledged to the Lender pursuant to the Pledge and Security Agreement. 3.11. ERISA. Neither a Reportable Event nor an "accumulated funding deficiency" (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits. Neither Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan, and neither the Borrower nor any Commonly Controlled Entity would become subject to any liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The present value (determined using actuarial and other assumptions which are reasonable in respect of the benefits provided and the employees participating) of the liability of the Borrower and each Commonly Controlled Entity for post retirement benefits to be provided to their current and former employees under Plans which are welfare benefit plans (as defined in Section 3(l) of ERISA) does not, in the aggregate, exceed the assets under all such Plans allocable to such benefits by an amount in excess of $100,000. 3.12. Use of Proceeds. The proceeds of the Loans shall be utilized by the Borrower to partially finance the Transaction, or in the case of an Initial Funding Loan, proceeds of such Initial Funding Loan held in the Collateral Account may be used to repay such Initial Funding Loan on the Maturity Date thereof. SECTION 4. CONDITIONS PRECEDENT TO THE LOANS. 4.1. Conditions to Initial Funding Loan. The obligation of the Lender to make the first Initial Funding Loan to the Borrower hereunder is subject to the satisfaction, on or before the making of such Initial Funding Loan, of each of the following conditions precedent which are solely for the benefit of the Lender: 18 (a) Loan Documents. The Lender shall have received (i) this Agreement and the Pledge and Security Agreement, executed and delivered by a duly authorized officer of the Borrower. (b) Closing Certificate of Borrower. The Lender shall have received a certificate of an officer of the Borrower, dated the Closing Date; (i) attaching the certified certificate of incorporation and by-laws of the Borrower; (ii) attaching the resolutions of the Board of Directors of the Borrower with respect to the transactions contemplated hereby; (iii) certifying that such resolutions have not been amended, modified, revoked or rescinded as of the date of such certificate; and (iv) certifying as to the incumbency and signature of the officers of the Borrower executing any Loan Document; such certificate (and the attachments thereto) shall be in form and substance satisfactory to the Lender. (c) Collateral Account. The Collateral Account shall have been established by the Borrower with the Lender pursuant to the Pledge and Security Agreement, and all account documentation related thereto shall have been executed and delivered by the Borrower and shall be in form and substance satisfactory to the Lender. (d) Legal Opinion. The Lender shall have received an executed legal opinion of Alan J. Marcus, Esq., special New York counsel to the Borrower, in form and substance satisfactory to the Lender. (e) Lien Searches. The Lender shall have received the results of a recent search by a Person reasonably satisfactory to the Lender, of the Uniform Commercial Code, judgment and tax lien filings which may have been filed with respect to personal property of the Borrower and the results of such search shall be reasonably satisfactory to the Lender. (f) Actions to Perfect Liens. The Lender shall have received evidence in form and substance reasonably satisfactory to it that all filings, recordings, registrations and other actions, including, without limitation, the filing of duly executed financing statements on form UCC-1, necessary or, in the reasonable opinion of the Lender, desirable to perfect the Liens created by the Pledge and Security Agreement. (g) Notice of Borrowing. The Lender shall have received a Notice of Borrowing in form and substance satisfactory to the Lender. (h) Fees. The Lender shall have received payment of all accrued fees due and payable from the Borrower on the Closing Date pursuant to this Agreement. (i) Miscellaneous. The Lender shall have received such other opinions, agreements or documents, in form and substance satisfactory to the Lender, as the Lender reasonably requests. 19 4.2. Conditions to Each Loan (Other than Initial Funding Loans). The obligation of the Lender to make a Loan (other than Initial Funding Loans) to the Borrower hereunder is subject to the satisfaction to the Lender of the following conditions: (a) Regulation U Compliance. The Lender shall have received a signed and completed Form U-1 from the Borrower dated as of the date of the "Initial Closing" or "Subsequent Closing" (as such terms are defined in the Equity One, Inc. Common Stock Purchase Agreement), in form and substance satisfactory to the Lender. (b) IRT and EOI Merger Effective. The Lender shall have received evidence satisfactory to it that the merger of IRT into EOI has been effected in accordance with the Agreement and Plan of Merger. (c) Pledged Shares Purchase Price. The Lender shall have received evidence satisfactory to it that the actual purchase price of the Pledged Shares under the Equity One, Inc. Common Stock Purchase Agreement does not exceed $13.60 per share. (d) Pledged Shares and Undated Stock Powers. The Lender shall have received share certificates of EOI, registered in the name of the Borrower, evidencing shares purchase by the Borrower in consummation of the Transaction and having a then current market value of not less than two times the amount of such Loan, together with undated stock powers covering such shares executed by the Borrower, all in form and substance satisfactory to the Lender. (e) Irrevocable Proxy. The Lender shall have received an Irrevocable Proxy, in the form of Exhibit A to the Pledge and Security Agreement, duly executed by the Borrower and dated as of the date of the "Initial Closing" or "Subsequent Closing" (as such terms are defined in the Equity One, Inc. Common Stock Purchase Agreement. (f) Acknowledgment of Pledge by EOI. The Lender shall have received an acknowledgment duly executed by EOI dated as of the date of the "Initial Closing" or "Subsequent Closing" (as such terms are defined in the Equity One, Inc. Common Stock Purchase Agreement), acknowledging the pledge by the Borrower of the Pledge Shares in favor of the Lender, in form and substance satisfactory to the Lender. (g) Irrevocable Instructions by Borrower to EOI. The Lender shall have received an irrevocable letter of instruction regarding the Pledged Shares, dated as of the date of the "Initial Closing" or "Subsequent Closing" (as such terms are defined in the Equity One, Inc. Common Stock Purchase Agreement), executed and delivered by a duly authorized officer of the Borrower and EOI, all in form and substance satisfactory to the Lender 20 (h) Officer's Certificate of EOI. The Lender shall have received a certificate of an officer of EOI, dated as of the date of the "Initial Closing" or "Subsequent Closing" (as such terms are defined in the Equity One, Inc. Common Stock Purchase Agreement); (i) attaching the certified certificate of incorporation and by-laws of EOI; and (ii) certifying as to the incumbency and signature of the officers of the Borrower executing its Acknowledgment; such certificate (and the attachments thereto) shall be in form and substance satisfactory to the Lender. (i) Miscellaneous. The Lender shall have received such other opinions, agreements or documents, in form and substance satisfactory to the Lender, as the Lender reasonably requests. 4.3. Conditions to Each Loan (Including Initial Funding Loans). The obligation of the Lender to make a Loan (including Initial Funding Loans) to the Borrower hereunder is subject to the satisfaction to the Lender of the following conditions: (a) Representations and Warranties. Each of the representations and warranties made by the Borrower in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date. (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Loan requested to be, or being, made on such date. (c) Each Loan borrowing by the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date thereof that the conditions contained in this subsection 4.3 have been satisfied. SECTION 5. AFFIRMATIVE COVENANTS. The Borrower hereby agrees that, so long as the Term Loan Commitment remains in effect or any amount is owing to the Lender hereunder or under any other Loan Document, the Borrower shall 5.1. Pay Principal and Interest. The Borrower will punctually pay or cause to be paid the principal and interest to become due in respect of the Loans according to the terms hereof. 5.2. Tangible Equity to Debt Ratio. The Borrower will maintain at all times a Tangible Equity to Debt ratio in excess of .70 to 1.0 (excluding non-recourse loans and assets financed by non-recourse loans). 5.3. Keep Books. The Borrower will keep proper books of record and account in which true, correct and complete entries will be made of the transactions of the Borrower in accordance with GAAP. 21 5.4. Payment of Taxes; Corporate Existence; Maintenance of Properties. The Borrower will: (a) Pay and discharge promptly all taxes (including, without limitation, all payroll withholdings), assessments and governmental charges or levies imposed upon it or upon its income or profits or upon any of its property, real, personal or mixed, or upon any part thereof, before the same shall become in default, as well as all claims for labor, materials and supplies which, if unpaid, might by law become a Lien upon its property; provided, however, that it shall not be required to pay any such tax, assessment, charge, levy or claim or discharge any such Lien if the validity thereof shall be contested in good faith by appropriate proceedings and if it shall have set aside on its books such reserves, if any, as may be required in accordance with GAAP with respect to the tax, assessment, charge, levy or claim so contested; (b) Conduct its business according to good business practices; keep in full force and effect its corporate existence and material rights, licenses, permits and franchises, and comply in all material respects with all of the laws, rules and regulations governing or applicable to it or its business, including, without limitation, the Exchange Act, and all "margin" and other rules and regulations under Regulations T, U and X of the Board of Governors of the Federal Reserve System; and make all such reports and pay all such franchise and other taxes and license fees and do all such other things as may be lawfully required, to maintain the material rights, licenses, powers and franchises of the Borrower under the laws of the United States and of the States or jurisdictions in which it is organized or does business. 5.5. Financial Statements and Reports; Notices. The Borrower will furnish to the Lender in duplicate: (a) As soon as practicable and when available, and in any event within 140 days after the end of each fiscal year of the Borrower, annual unqualified financial reports of the Borrower, on an individual basis and on a consolidated basis with the Parent Shareholder, including, inter alia, a balance sheet, a profit and loss statement, and statement of cash flow for such fiscal year, setting forth in comparative form the corresponding figures for the preceding fiscal year, audited by independent certified public accountants or chartered accountants of recognized standing selected by the Borrower and/or the Parent Shareholder, as the case may be, and acceptable to the Lender; (b) As soon as practicable and when available, and in any event within 60 days after the end of each fiscal quarter of the Borrower (other than the 4th quarter), a consolidated balance sheet, a profit and loss statement, and statement of cash flow for such fiscal quarter, of the Borrower and the 22 Parent Shareholder, showing its financial condition as of the last day of such fiscal quarter and the results of operations for such fiscal quarter, reviewed by independent certified public accountants or chartered accountant of recognized standing selected by the Borrower and/or the Parent Shareholder, as the case may be, and acceptable to the Lender, and certified by the chief financial officers of the Borrower or the Parent Shareholder, as the case may be, as to (i) fair presentation of its financial position and the results of operations, and (ii) having been prepared in accordance with GAAP consistently applied; (c) Concurrently with the delivery of the financial statements referred to in Sections 5.5(a) and (b), a certificate of the chief financial officer of the Borrower (i) stating that, to the best of such officer's knowledge, during such period (A) no Subsidiary has been formed or acquired, (B) the Borrower has observed or performed all of its material covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Loan Documents to be observed, performed or satisfied by it, and (C) such officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate, and (ii) setting forth the computations used by the Borrower in determining (as of the end of such fiscal period) compliance with the covenants contained in Sections 5.2 and 6.1; (d) Not later than ten (10) days after the end of each month, a certificate of the chief financial officer of the Borrower setting forth the computations used by the Borrower in determining (as of the end of such preceding month) compliance with the covenants contained in Section 5.7; (e) Promptly following the occurrence thereof, notice of any Default or Event of Default hereunder or of any default under any other Loan Document; (f) Such other information as to the financial condition, operations, business, properties and other assets of the Borrower and/or the Parent Shareholder as the Lender may from time to time reasonably request; (g) Promptly after the filing thereof, copies of any permit, notice, report or other document that the Borrower is obligated to file or provide with its shareholders or any Governmental Authority; (h) The Borrower shall cause all audited financial statements required to be delivered to the Lender pursuant to this Section 5.5 to be delivered to the Lender by the independent certified public accountant or chartered accountant who performed the audit; and (i) If the Borrower shall receive from its shareholders and/or any third party any demand for the payment of any amount whatsoever on account of or in connection with any Shareholders' Loan or dividends, the Borrower 23 shall immediately notify the Lender of such occurrence, and shall consult with the Lender with regard to such demand. 5.6. EOI Cash Dividends. The Borrower undertakes and agrees that all cash dividends and other cash proceeds attributable to the Pledged Shares shall be deposited in the Collateral Account in accordance with the terms of the Pledge and Security Agreement. 5.7. Maintenance of Minimum Market Value of Pledged Shares. (a) Subject to Section 3.10 of this Agreement, in the event that on the last business day of any month (the "Calculation Date"), the amount due to the Lender from the Borrower in respect of the Loans and Loan Documents, by way of principal, interest, commissions, bank charges and/or expenses of any kind whatsoever (the "Total Outstanding Credit") is greater than 55% of the then aggregate current market value of the Pledged Shares, the Borrower shall, as soon as practicable but within no later than seven (7) days of the Lender's first request, either (i) grant additional collateral, to the satisfaction of the Lender, in an amount equal to the difference on the Calculation Date between 55% of the then aggregate current market value of the Pledged Shares and the Total Outstanding Credit or, at the discretion of the Lender (ii) prepay part of the Total Outstanding Credit so that the remaining Total Outstanding Credit shall be equal to or less than 55% of the aggregate current market value of the Pledged Shares on the Calculation Date. (b) In the event the aggregate current market value of the Pledged Shares shall depreciate by a margin of ten percent (10%) in the aggregate, over ten (10) consecutive Business Days, the Borrower shall, as soon as practicable but within no later than seven (7) days of the Lender's first request, either (i) grant additional collateral, to the satisfaction of the Lender, in an amount equal to the difference between the amount which is equal to 55% of the then aggregate current market value of the Pledged Shares and the Total Outstanding Credit at that time, or, at the discretion of the Lender, (ii) prepay part of the Total Outstanding Credit so that the remaining Total Outstanding Credit at that time shall be equal to or less than 55% of the then aggregate current market value of the Pledged Shares. (c) Unless otherwise agreed to in writing by the Lender, a prepayment required by the Lender in accordance with the terms of Section 5.7(a) or 5.7(b) above shall be effected in accordance with one of the following options at the discretion of the Borrower: (1) forthwith upon, but in any event no later than within seven (7) days of, the request of the Lender and subject to any fine and breakage cost as determined by the Lender; or 24 (2) on the next Interest Payment Date following the request of the Lender to prepay, provided that an amount equal to the difference between 55% of the then aggregate current market value of the Pledged Shares and the Total Outstanding Credit is deposited with the Lender in a deposit in the name of the Borrower which deposit shall be pledged by the Borrower in favor of the Lender. 5.8. ERISA Compliance. The Borrower will comply, in all material respects, and cause each Commonly Controlled Entity, to comply, in all material respects, with the provisions of ERISA, if applicable, with respect to each of its or their respective Plans and as soon as possible after the Borrower knows or has reason to know that any Reportable Event with respect to any Plan has occurred, furnish to the Lender a statement signed by its chief executive officer or its chief financial officer setting forth details as to such Reportable Event and the action, if any, which the Borrower or such Commonly Controlled Entity proposes to take with respect thereto, together with a copy of the notice of such Reportable Event furnished to PBGC. SECTION 6. NEGATIVE COVENANTS. The Borrower hereby agrees that, as long as the Term Loan Commitment remains in effect or any amount is owing to the Lender hereunder or under any other Loan Document, the Borrower shall not, directly or indirectly: 6.1. Tangible Equity. Permit its Tangible Equity at any time to be less than (i) thirty-five percent (35%) of its total assets as set forth in its balance sheet on a consolidated basis (excluding non recourse loans and assets financed by non recourse loans), or (ii) $30,000,000; as such figures shall appear in the quarterly and annual financial reports of the Borrower on a consolidated and/or individual basis. 6.2. Limitation on Dividends, Distributions and Redemptions. Declare or pay any dividend on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of capital stock of the Borrower or any warrants or options to purchase any such stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower. 6.3. Limitation on Shareholders' Loans. Pay to its shareholders and/or to any of their family members and/or to any companies under the Control of its shareholders and/or to any third party (who shall come in their place or on their behalf), in any manner whatsoever, directly or indirectly, any amount whatsoever from or on account or in connection with Shareholders' Loans, including, but without derogation from the generality of the foregoing, payments of principal, interest, linkage differentials, indemnities, damages, commissions and expenses (the amounts of the loans and all amounts derived or arising therefrom as aforesaid are 25 hereinafter collectively called "Shareholders' Loans," provided that the foregoing term shall not apply to any of the following: (i) related intracompany loans, management fees or other fees up to an aggregate annual amount of $1,000,000, (ii) any and all interest on intracompany loans, without limitation as to the amount, (iii) principal repayment on intracompany loans on or after September 30, 2001, based on a 25 year or greater amortization schedule, and (iv) any and all unrelated third party fees and costs. 6.4. Limitation on Issuance of Bearer Securities. Issue any bearer securities. 6.5. Use of Proceeds of Loan. Use any part of the proceeds of the Loan for any purpose other than those specified in Section 3.12. 6.6. Disposal of Property. Wind up, liquidate or dissolve, sell, exchange, lease, transfer or otherwise dispose of all or substantially all of its properties or other assets (or agree to do any of the foregoing). 6.7. Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of all or substantially all of its property, business or assets. SECTION 7. DEFAULTS AND REMEDIES. 7.1. If any of the following events shall occur and be continuing: (a) Any representation, warranty or statement made herein or in any certificate or document hereafter signed and delivered by the Borrower in favor of the Lender, whether pursuant to this Agreement, any other Loan Document or otherwise, shall prove to have been false, incorrect or misleading in any material respect when made or deemed made; or (b) The Borrower shall fail to pay to the Lender any principal, interest, fees or other amounts, including, without limitation, any payment of principal of or interest on the Loans, or any fee or other amount under this Agreement or the other Loan Documents, or under any other document, note or agreement hereafter signed and delivered by the Borrower in favor of the Lender, as and when the same shall become due and payable, whether at the due date thereof, by acceleration, mandatory prepayment or otherwise; or (c) Any default shall occur in the due observance or performance by the Borrower of any other covenant, agreement or condition to be performed by it herein or in any other Loan Document, or in any other document, note or agreement hereafter signed and delivered by the Borrower in favor of the Lender; or 26 (d) The Borrower shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Borrower shall make a general assignment for the benefit of its creditors; or (e) There shall be commenced against the Borrower any case, proceeding or other action of a nature referred to in clause (d) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days, or there shall be commenced against the Borrower any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distrait or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (f) The Borrower shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (d) or (e) above; or (g) The Borrower shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (h) Any Loan Document shall become invalid or unenforceable, or the Borrower so asserts; or (A) the Pledge and Security Agreement shall cease for any reason to be in full force and effect, or the Borrower shall so assert, or (B) the Lien created by the Pledge and Security Agreement in the Collateral shall cease to be enforceable and of the same effect and priority purported to be created thereby; or (i) Any default shall occur with respect to any Indebtedness (other than the Indebtedness evidenced by this Agreement) of the Borrower for or relating to borrowed money, or under any agreement under which any evidence of Indebtedness may be issued by the Borrower, and such default shall continue for more than the period of grace, if any, specified therein, if the effect of such default is to accelerate the maturity of such Indebtedness or to permit the holder thereof, or any trustee, to cause the same to become due prior to its stated maturity, or if any such Indebtedness shall not be paid when due (after giving effect to any grace period); or 27 (j) Final judgment for the payment of money in excess of $100,000 (to the extent not covered by insurance or bond) shall be rendered by a court of record against the Borrower, and the Borrower shall not discharge the same or provide for its discharge in accordance with its terms, or procure a stay of execution thereof within twenty-one (21) days from the date of entry thereof and within such period of twenty-one (21) days, or such longer period during which execution of such judgment shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or (k) An attachment shall be levied on the assets of the Borrower or any part thereof, or execution proceedings shall be instituted against the Borrower or its assets and such attachment or execution proceedings shall not be discharged within twenty-one (21) days after the commencement thereof; or (l) In the Lender's opinion, the occurrence of any Material Adverse Effect; or (m) (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Lender, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the Lender is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other adverse event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to involve an aggregate amount of liability to the Borrower in excess of $50,000; or (n) Any Change in Control shall occur; or (o) The Borrower shall become an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, or the regulations under such Act; or 28 (p) EOI shall declare and pay dividends on its common shares of less than $0.24 per share on a quarterly basis or $0.96 per share on an annual basis; or (q) The cash dividends and other cash proceeds attributable to the Pledged Shares are for any reason not deposited into the Collateral Account pursuant to the Pledge and Security Agreement; then, and in any such event, (A) if such event is an Event of Default specified in clause (e) above, the Term Loan Commitment shall automatically and immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) the Lender may by notice to the Borrower declare the Term Loan Commitment to be terminated forthwith, whereupon the Term Loan Commitment shall immediately terminate; and (ii) the Lender may, by notice to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section 7.1, presentment, demand, protest and all other notices of any kind are hereby expressly waived. 7.2. Suits for Enforcement. If any one or more of such Events of Default shall occur and be continuing, the Lender may proceed, to the extent permitted by law, to protect and enforce its rights either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, condition or agreement contained in the Loan Documents or in aid of the exercise of any power granted in the Loan Documents, or proceed to enforce the payment of the Loans or to enforce any other legal or equitable right of the Lender under any Loan Document. 7.3. Remedies Cumulative. No right or remedy herein or in any other agreement or instrument conferred upon the Lender is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and shall be in addition to every other right and remedy given hereunder or under any Loan Document or now or hereafter existing at law or in equity or by statute or otherwise. Without limiting the generality of the foregoing, if the Loans or any of the other obligations of the Borrower to the Lender shall not be paid when due, whether at the stated maturity thereof, by acceleration or otherwise, the Lender shall not be required to resort to any particular security, right or remedy or to proceed in any particular order of priority, and the Lender shall have the right at any time and from time to time, in any manner and in any order, to enforce its security interests, liens, rights and remedies, or any of them, as it deems appropriate in the circumstances and apply the proceeds of its collateral to such obligations of the Borrower as it determines in its sole discretion. 29 SECTION 8. MISCELLANEOUS. 8.1. Amendments and Waivers. (a) Neither this Agreement nor any other Loan Document, nor any terms hereof or thereof, may be amended, supplemented or modified except in accordance with the provisions of this Section 8.1. The Lender may, from time to time, (i) enter into with the Borrower written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lender or of the Borrower hereunder or thereunder, or (ii) waive, on such terms and conditions as the Lender may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences. Any such waiver and any such amendment, supplement or modification shall be binding upon the Borrower and the Lender and all future holders of the Loans. In the case of any waiver, the Borrower and the Lender shall be restored to their former positions and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. (b) No modification or waiver of any provisions of this Agreement or of any other agreement or instrument made or issued pursuant hereto or contemplated hereby, nor consent to any departure by the Borrower therefrom, shall in any event be effective, irrespective of any course of dealing between the parties, unless the same shall be in a writing executed by the Lender, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Borrower in any case shall thereby entitle the Borrower to any other or further notice or demand in the same, similar or other circumstances. Any transaction or matter excepted from the operation of any Section of this Agreement shall nevertheless be subject to the prohibitions and limitations contained elsewhere in this Agreement, unless expressly stated otherwise. 8.2. Notices. Unless otherwise expressly provided herein, all notices, approvals, requests, demands, consents and other communications hereunder, including any notice of default, to or upon the respective parties hereto to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand or by overnight courier, when delivered, or (b) in the case of delivery by facsimile transmission, when sent and receipt has been confirmed, 30 addressed as follows in the case of the Borrower and the Lender, or to such other address as may be hereafter notified by the respective parties hereto If to the Borrower: Silver Maple (2001), Inc. 1696 N.E. Miami Gardens Drive, 2nd Floor North Miami Beach, FL 33179 Attention: Chaim Katzman, President Facsimile: (305) 947-1734 with a copy to: Silver Maple (2001), Inc. 161 Bay Street, Suite 2820 Box 219 Toronto, Ontario M5J 2S1 Attention: Dori Segal, Vice President Facsimile: (416)941-1655 with a copy to: Alan J. Marcus, Esq. 20803 Biscayne Blvd., Suite 301 Aventura, FL 33180 Facsimile: (305) 937-1857 If to the Lender: [Commercial Bank] _________________________ _________________________ Attention: __________________ Facsimile: __________________ with copy to: _________________________ _________________________ _________________________ Attention: ___________________ Facsimile: ___________________ and with a copy to: 31 Shaw Pittman LLP 335 Madison Avenue, 26th Floor New York, NY 10017-4605 Attention: John C. Simons, Esq. Facsimile: (212) 603-6848 8.3. No Waiver. No failure or delay on the part of the Lender in exercising any right, power or privilege hereunder or under any Loan Document, nor any course of dealing between the Borrower and the Lender, shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise or the exercise of any other right, power or privilege. 8.4. Expenses. The Borrower agrees (a) to pay or reimburse the Lender for all of its out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of this Agreement, the other Loan Documents, and any other documents prepared in connection herewith or therewith, and any amendment, supplement or modification thereof or thereto, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements of counsel to the Lender, and (b) to pay or reimburse the Lender for all its out-of-pocket costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, including, without limitation, the reasonable fees and disbursements of counsel to the Lender. 8.5. Set-Off. In addition to any rights and remedies of the Lender provided by law, the Lender shall have the right, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final, including, without limitation, the Collateral Account), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Lender or any branch, agency or (to the extent permitted by applicable law) banking affiliate thereof to or for the credit or the account of the Borrower. The Lender agrees promptly to notify the Borrower after any such set-off and application made by the Lender, provided that the failure to give such notice shall not affect the validity of the set-off and application. 8.6. Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Lender. 32 8.7. Severability. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 8.8. Integration. This Agreement and the other Loan Documents represent the agreement of the Borrower and the Lender with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents. 8.9. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 8.10. Submission to Jurisdiction. The Borrower hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in Section 8.2 or at such other address of which the Lender shall have been notified pursuant thereto; (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (e) waives, except in the case of bad faith, willful misconduct or gross negligence (and otherwise to the maximum extent not prohibited by law), any right it may have to claim or recover in any legal action or proceeding 33 referred to in this Section 8.10 any special, exemplary, or consequential damages. 8.11. WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 8.12. Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents; (b) The Lender has no fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Lender and the Borrower, in connection herewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby between the Borrower and the Lender. 8.13. Headings. Section headings are for convenience only and shall not affect the interpretation or construction of this Agreement or any other Loan Document. 8.14. Release of Collateral. Promptly after the Borrower shall have repaid the Loans in full and shall have paid and repaid to the Lender any and all of the sums due to the Lender hereunder and under all other Loan Documents, and provided any and all of the sums due to the Lender under documents signed between the Borrower and the Lender shall have been paid to the Lender in full, the Lender shall release the Liens over the Collateral. 8.15. Successors and Assigns; Participations and Assignments. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender, and their respective successors and assigns, except that the Borrower may not assign or transfer any of their rights or obligations under this Agreement without the prior written consent of the Lender. (b) The Lender may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time sell to one or more banks or other financial institutions ("Participants") participating interests in any Loan owing to the Lender, the Term Loan Commitment or any other interest of the Lender hereunder and under the other Loan Documents. In the event of any such sale by the Lender of a participating 34 interest to a Participant, the Lender's obligations under this Agreement shall remain unchanged, the Lender shall remain solely responsible for the performance thereof, the Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Loan Documents, and the Borrower shall continue to deal solely and directly with the Lender in connection with the Lender's rights and obligations under this Agreement and the other Loan Documents. The Lender shall not be entitled to create in favor of any Participant, in the participation agreement pursuant to which such Participant's participating interest shall be created or otherwise, any right to vote on, consent to or approve any matter relating to this Agreement or any other Loan Document except for those specified in clauses (i) and (ii) of the proviso to Section 8.1 or otherwise expressly set forth in this Agreement or any other Loan Document. The Borrower agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lender the proceeds thereof as fully as if it were a Lender hereunder. The Borrower also agrees that each Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.14 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it was a Lender; provided that, in the case of Section 2.13, such Participant shall have complied with the requirements of said subsection, and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such subsection than the Lender would have been entitled to receive in respect of the amount of the participation transferred by the Lender to such Participant had no such transfer occurred. The Lender shall provide the Borrower with written notice of the identity of any such Participant and the amount of any such participating interest. (c) The Borrower authorizes the Lender to disclose to any Participant and any prospective Participant any and all financial information in the Lender's possession concerning the Borrower and its Affiliates which has been delivered to the Lender by or on behalf of the Borrower pursuant to this Agreement or which has been delivered to the Lender by or on behalf of the Borrower in connection with the Lender's credit evaluation of the Borrower and its Affiliates prior to becoming a party to this Agreement, provided that any such Participant agrees to hold such information in confidence. Nothing herein shall be construed so as to authorize Lender or any Participant to use any such information for any improper purpose. 35 (d) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this Section 8.15 concerning assignments of Loans relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including, without limitation, any pledge or assignment by the Lender of any Loan to any Federal Reserve Bank in accordance with applicable law. [SIGNATURE PAGE TO FOLLOW] 36 IN WITNESS WHEREOF, the Borrower and the Lender have caused this Agreement to be duly executed and delivered by their duly authorized officers, all as of the date first above written. SILVER MAPLE (2001), INC. By: /s/ Dori Segal ------------------------------- Dori Segal Vice President [COMMERCIAL BANK] By: /s/ ------------------------------- Name: Title: By: /s/ ------------------------------- Name: Title: EX-3 5 g80918exv3.txt PLEDGE & SECURITY AGREEMENT DATED 2/12/03 EXHIBIT 3 PLEDGE AND SECURITY AGREEMENT THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of February 12, 2003, made by SILVER MAPLE (2001), INC., a Nevada corporation ("Pledgor"), in favor of [Commercial Bank] ("Lender"). W I T N E S S E T H: WHEREAS, Lender has agreed to extend credit to Pledgor up to an aggregate amount of $7,000,000 (the "Credit") to partially finance the purchase by Pledgor of up to 1,036,650 shares of the common stock, par value $.01 per share, of Equity One, Inc. (collectively, the "EOI Shares"), upon the terms, and subject to the conditions, set forth in that certain Loan Agreement dated as of the date hereof, between Pledgor and Lender (the "Loan Agreement"); and WHEREAS, it is a condition precedent to the obligation of Lender to grant the Credit that, among other things, Pledgor, execute and deliver this Agreement to Lender to secure the payment and performance of Pledgor's obligations under the Loan Agreement; NOW, THEREFORE, in consideration of the premises and to induce Lender to grant the Credit under the Loan Agreement, Pledgor and Lender hereby agree as follows: 1. Defined Terms. (a) Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement. All terms not defined herein or in the Loan Agreement shall have the meanings set forth in the UCC (as hereinafter defined), except where the context otherwise requires, provided that, if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, then such term shall have the meaning specified in Article 9 of the UCC. (b) The following additional terms, as used herein, shall have the following respective meanings: "Agreement and Plan of Merger": means that certain Agreement and Plan of Merger dated October 28, 2002, between IRT and EOI, as amended, supplemented and modified from time to time. "Collateral Account": shall have the meaning specified in Section 4 hereof. "EOI": means Equity One, Inc., a Maryland corporation. "Equity One, Inc. Common Stock Purchase Agreement": means that certain Equity One, Inc. Common Stock Purchase Agreement dated as of October 28, 2002, between EOI and each of the purchasers party thereto (including, without limitation, Pledgor), as amended, supplemented or modified from time to time. "Equity One, Inc. Voting Agreement": means that certain Equity One, Inc. Voting Agreement dated October 28, 2002, among IRT, EOI and certain stockholders party thereto ( including, without limitation, Pledgor), as amended, supplemented or modified from time to time. "IRT": means IRT Property Company, a Georgia corporation. "Issuer": means EOI. "Material Adverse Effect": means (X) a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of Pledgor, (b) the validity or enforceability of this Agreement, the Loan Agreement, or any other Loan Document in any manner that prevents the practical realization by Lender of the benefits intended by this Agreement, the Loan Agreement, and/or the other Loan Documents, or (c) the rights or remedies of Lender hereunder or under the Loan Agreement, or any other Loan Document in any manner that prevents the practical realization of the benefits purported to be provided by such rights and remedies with respect to Lender's ability to realize upon the principal benefits or security intended to be provided by this Agreement, the Loan Agreement, and/or any other Loan Document, (Y) any impairment to the validity, perfection or priority of the security interest of Lender in the Pledged Collateral in any manner whatsoever, and/or (Z) an Event of Default. "Pledged Shares": means all EOI Shares, purchased at any time and from time to time by Pledgor from the Issuer pursuant to the Equity One, Inc. Common Stock Purchase Agreement, up to a maximum aggregate number of 1,036,650 shares of such stock, and all proceeds thereof. "Registration Rights Agreement": means that certain Registration Rights Agreement dated as of October 28, 2002, among EOI and the purchasers party thereto, including, without limitation, Pledgor, as may be amended, supplemented or modified from time to time. "Secured Obligations": means all obligations, liabilities and indebtedness of Pledgor now or hereafter owing to Lender under or in connection with the Loans, or any other loan, extension of credit or accommodation now or hereafter made or granted by Lender (each such other loan, extension of credit or accommodation, an "Other Credit"), including, without limitation, all obligations, liabilities and indebtedness of Pledgor under this Agreement and the Loan Agreement, including, without limitation, (i) all unpaid principal of, and accrued interest (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of Pledgor, whether or not allowed or allowable as a claim in any such proceeding) on, any loan or other credit granted under or in connection with the Loan Agreement, or any Other Credit, (ii) all expenses, costs of collection and any other amounts payable to Lender - 2 - by Pledgor under this Agreement and the Loan Agreement or any Other Credit (including, without limitation, all fees and disbursements of counsel to Lender that are required to be paid by Pledgor to Lender pursuant to this Agreement, the Loan Agreement, or any Other Credit), and (iii) any renewals or extensions of the Loans or the Loan Agreement or any Other Credit. "Securities Act": shall have the meaning specified in subsection 12(a) hereof. "UCC": shall have the meaning specified in subsection 12(a) hereof. (c) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and paragraph references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 2. Pledge; Grant of Security Interest. As collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations, Pledgor hereby assigns, pledges and hypothecates to the Lender, and grants to Lender a security interest in (all being collectively referred to as the "Pledged Collateral"), all of its right, title and interest in and to: (a) the Pledged Shares and the certificates representing the Pledged Shares, and all stock dividends, cash dividends, payments, securities and property from time to time received, receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Shares; (b) all contract and other rights related to the foregoing, including without limitation, all registration rights under the Registration Rights Agreement; provided, however, the foregoing described rights shall cover only one (1) "Demand Registration" (as such term is defined in Section 2.1 of the Registration Rights Agreement) (collectively, the "Pledged Shares Rights"); (c) the Collateral Account, and all monies held therein or credited thereto; and (d) all proceeds of any of the foregoing. 3. Delivery of Pledged Shares. All certificates or instruments representing or evidencing the Pledged Shares shall be delivered to and held by or on behalf of Lender pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed undated instruments of transfer or assignment in blank, substantially in the form of Exhibit B hereto, all in form and substance satisfactory to Lender. Lender shall have the right, at any time in its discretion and without notice to Pledgor following the occurrence and during the - 3 - continuance of an Event of Default, to transfer to or to register in the name of Lender any or all of the Pledged Shares. In addition, Lender shall have the right to exchange certificates or instruments representing or evidencing Pledged Shares for certificates or instruments of smaller or larger denominations. 4. Collateral Account. (a) Pledgor has established, and shall hereafter maintain, with Lender at ________________________________________, a non interest-bearing cash collateral deposit account number ____________ and an interest bearing cash collateral deposit account number ____________ (collectively, the "Collateral Account"). All cash dividends and other cash proceeds attributable to the Pledged Shares shall be deposited into the Collateral Account promptly upon receipt of same by Pledgor or by direct wire transfer by the Issuer into the Collateral Account. The Collateral Account shall be deemed to be a "deposit account" within the meaning of Article 9 of the UCC. The Collateral Account shall be subject to the terms of this Agreement and shall be under the "control" (within the meaning of Section 9-104(a)(1) of the UCC) of Lender pursuant to the terms of this Agreement. The Collateral Account, and all monies deposited therein or credited thereto, including all accrued interest, if any, thereon, shall constitute security for the Secured Obligations. (b) The current record dates of the Issuer for the payment of dividends are March 31, June 30, September 30 and December 31. Pledgor shall give Lender notice of each (i) anticipated dividend payment when declared, which notice will include the payment date and amount, and (ii) any change in the record dates. Payments by check shall be sent to [Commercial Bank], ____________, New York, New York 10036, Attention: Ms. _____________, and wire transfers shall be sent pursuant to wire transfer instructions supplied by Lender to the Issuer from time to time. (c) Lender shall not make or permit the withdrawal or other disposition of any funds in the Cash Collateral Account without Lender's and, in the event that Lender at any time sells a 100% participation in the Secured Obligations to another financial institution (a "100% Participant"), the 100% Participant's, prior written consent. (d) Except as otherwise expressly provided in this Agreement, no interest in the Collateral Account, or any beneficial interest therein, may be (i) pledged, sold, assigned or transferred, (X) by any party hereto, or (Y) other than by operation of law, or (ii) taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any party hereto other than Pledgor. (e) Pledgor shall pay Lender an annual fee of $15,000 (the "Fee") for each calendar year in consideration of its maintenance of the Collateral Account. The Fee shall be paid concurrently with the execution of this Agreement, and on the anniversary date hereof. If the Fee is not paid within ten (10) days of its due date, Lender may debit the Collateral Account for such amount. - 4 - 5. Representations and Warranties. Pledgor hereby represents and warrants that the following statements are true, correct and complete in all material respects: (a) Each of the representations and warranties made by Pledgor in the Loan Agreement is true and correct on and as of the date hereof as though made on and as of the date hereof. (b) On the date of each "Initial Closing" or "Subsequent Closing" (as such terms are defined in the Equity One, Inc. Common Stock Purchase Agreement, hereinafter a "Purchase Closing Date"), (i) Pledgor will be the record, legal and beneficial owner of that number of EOI Shares so purchased in accordance with the Equity One, Inc. Common Stock Purchase Agreement and will promptly so notify Lender in writing, (ii) such EOI Shares, to Pledgor's knowledge, will have been duly authorized and validly issued and will be fully paid and nonassessable, and (iii) there will be no outstanding warrants, options, subscriptions or other contractual arrangements for the purchase or sale of such EOI Shares or any outstanding securities convertible into such EOI Shares, and there will be no preemptive rights of Issuer or any other Person with respect to such EOI Shares, other than in connection with the Agreement and Plan of Merger. (c) Pledgor is not and will not become a party to or otherwise bound by any agreement, other than this Agreement, the Equity One, Inc. Common Stock Purchase Agreement, the Registration Rights Agreement and the Equity One, Inc. Voting Agreement, which restricts in any manner the rights of Lender or any other present or future holder of any of the Pledged Shares with respect thereto. (d) Upon each purchase by Pledgor of EOI Shares in accordance with the Equity One, Inc. Common Stock Purchase Agreement, and the making of the Loan by Lender in connection therewith, this Agreement will create in favor of Lender a valid security interest in such EOI Shares, and such EOI Shares shall constitute Pledged Shares securing the payment and performance of the Secured Obligations. Upon delivery to Lender of the stock certificate(s) evidencing such Pledged Shares endorsed to Lender or in blank by an effective endorsement, Lender shall have a duly perfected security interest in such Pledged Shares, free of any adverse claim. (e) This Agreement is effective to create in favor of Lender a valid security interest in the Collateral Account securing the payment and performance of the Secured Obligations. Upon execution and delivery of this Agreement by Pledgor, Lender will have a first priority duly perfected security interest in the Collateral Account and such security interest shall remain perfected so long as Lender retains "control" (as defined in Section 9-104 of the UCC) of the Collateral Account. (f) Upon (i) filing a financing statement in recordable form with the Office of the Secretary of State of Nevada naming Pledgor as debtor and Lender as secured party, describing the Pledged Shares Rights, and (ii) each purchase by Pledgor of EOI Shares in accordance with the Equity One, Inc. Common Stock Purchase Agreement, - 5 - Lender will have a duly perfected security interest in all right, title and interest of Pledgor in the Pledged Shares Rights with respect to such EOI Shares. (g) Subject to the restrictions contained in the Agreement and Plan of Merger, the Equity One, Inc. Voting Agreement, the Equity One, Inc. Common Stock Purchase Agreement and the Registration Rights Agreement, no consent, authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other Person is required for (i) the pledge by Pledgor of, or the grant by Pledgor of a security interest in, the Pledged Collateral pursuant to this Agreement, (ii) the execution, delivery or performance of this Agreement by Pledgor, or (iii) the exercise by Lender of any rights (including without limitation, voting rights) or remedies provided for in this Agreement in respect of the Pledged Collateral (except for the filing of the financing statement as described in Section 5(f) above, or as has already been obtained or taken, or as may be required in connection with the disposition of the Pledged Shares by laws affecting the offering and sale of securities generally). (h) The execution, delivery and performance of this Agreement and the transactions contemplated hereby, including, without limitation, the purchase and delivery of the EOI Shares to Lender on each Purchase Closing Date, (A) do not and will not conflict with or result in any breach or contravention of any applicable law, regulation, judicial order or decree to which Pledgor is subject, including, without limitation, Regulations T, U or X of the Board of Governors of the Federal Reserve System, and (B) do not and will not violate, conflict with, constitute a default or event of default under, or result in any rights to accelerate or modify any obligations under any agreement, instrument, lease, mortgage or indenture to which Pledgor is a party or subject, or to which any of its assets is subject, other than as set forth in the Equity One, Inc. Voting Agreement and the Registration Rights Agreement. (i) Pledgor has the corporate power and authority to enter into this Agreement and to grant to Lender a security interest in the Pledged Collateral hereunder. This Agreement has been duly executed and delivered by Pledgor and is the legal, valid and binding obligation of Pledgor enforceable against it in accordance with the terms hereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting generally the enforcement of creditors' rights, and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any case or proceeding therefore may be brought. (j) Pledgor (i) is the sole owner of, and has rights in, and good and marketable title to, the Collateral Account, free and clear of any and all liens, charges, encumbrances, security interests or claims thereon of any Person (other than Lender), and (ii) on each Purchase Closing Date, will be the sole owner of, and will have rights in, and good and marketable title to, the EOI Shares so purchased and the related Pledged Shares Rights, free and clear of any and all liens, charges, encumbrances, security interests or claims thereon of any Person (other than Lender and as set forth in the Equity One, Inc. Voting Agreement). No financing statement or other public notice with respect to all or - 6 - any part of the Pledged Collateral is on file or of record in any public office, except such as have been filed in favor of Lender pursuant to this Agreement. There are no liens, security interests, charges or other encumbrances of any kind on, in or against the Pledged Collateral, except those in favor of Lender, other than in connection with the Equity One, Inc. Voting Agreement. (k) The name of Pledgor set forth on the first page of this Agreement is Pledgor's correct and complete legal name. Pledgor's chief executive office and principal place of business since its inception has been located at Pledgor's address(es) specified in Section 18 of this Agreement. Pledgor is a Nevada corporation and its federal tax identification number is 65-1117277. (l) All information heretofore, herein or hereafter supplied to Lender by or on behalf of Pledgor with respect to the Pledged Collateral is and will be accurate and complete in all material respects. (m) There are no agreements, understandings or other contractual arrangements of any kind (written or oral) between Pledgor and any other Person (including any affiliate of Pledgor), regarding the exercise of the registration rights with respect to the Pledged Shares, other than as expressly set forth in this Agreement and the Registration Rights Agreement. 6. Covenants Relating to the Pledged Collateral. Pledgor covenants and agrees with Lender that, from and after the date of this Agreement until the Secured Obligations are indefeasibly paid in full and this Agreement is terminated and the security interests created hereby are released: (a) On each Purchase Closing Date, Pledgor will deliver, or cause to be delivered, to Lender to hold as Pledged Collateral pursuant to this Agreement, one or more share certificates, duly issued and registered in the name of Pledgor, evidencing the EOI Shares purchased by Pledgor from EOI on such Purchase Closing Date, together with an undated stock power covering each such share certificate, duly executed by Pledgor. Pledgor will, from time to time, at Pledgor's expense, and upon Lender's request, promptly execute and/or deliver all further instruments and documents and take all further action that may be necessary or desirable, or that Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby, to enable Lender to exercise and enforce the rights and remedies of Lender hereunder with respect to any Pledged Collateral or to carry out the provisions and purposes hereof. Without limiting the generality of the foregoing, Pledgor will at its sole expense: (i) upon Lender's request, authenticate, in recordable form, and deliver to Lender any financing or continuation statements, or amendments thereto, and such other instruments, assurances, documents or notices and take such further actions, as may be necessary or desirable, or as Lender may reasonably request, in order to vest in and assure to Lender its rights hereunder and in the Pledged Collateral, and otherwise to perfect and preserve the security interests and full benefits granted or purported to be granted hereby under the laws of any applicable jurisdiction; and (ii) upon Lender's request, appear in and defend - 7 - any action or proceeding that may affect Pledgor's title to or the security interest of Lender in the Pledged Collateral. (b) Pledgor will, promptly upon request, provide to Lender all information and evidence it may reasonably request concerning the Pledged Collateral to enable Lender to enforce the provisions of this Agreement. (c) Pledgor will, immediately upon receipt of same as registered owner of the Pledged Shares, deliver to Lender copies of all notices, letters and other written communications and information received from time to time from Issuer. (d) Promptly upon its purchase or acquisition of any additional non-registered shares of stock of the Issuer, Pledgor will make a good-faith effort to give Lender written notice of each such purchase or acquisition and the details thereof (including, without limitation, whether or not Pledgor was granted or otherwise received registration rights in respect of such additional shares). (e) Pledgor will comply with all Requirements of Law applicable to it and the Pledged Collateral or any portion thereof, except to the extent that the failure to comply would not reasonably be expected to have a Material Adverse Effect. (f) Pledgor will pay promptly when due any taxes, assessments and governmental charges or levies imposed upon the Pledged Collateral or in respect of its income or profits therefrom, as well as all claims of any kind, unless any of the foregoing are have been effectively stayed within 10 days of the occurrence or imposition thereof, or are being contested in good faith by Pledgor and as to which adequate reserves have been set aside on its books. (g) Pledgor will advise Lender promptly in writing, in reasonable detail, of (A) any lien, charge, claim or other encumbrance made or asserted against Pledgor or any of the Pledged Collateral, (B) any material change in the composition of the Pledged Collateral, (C) the occurrence of any event or condition which to its knowledge is likely to have a Material Adverse Effect, and (D) any bankruptcy or litigation case or proceeding relating to Pledgor or any of the Pledged Collateral. (h) Pledgor will not amend or modify, or waive compliance with, any term, condition or provision of the Equity One, Inc. Voting Agreement, Equity One, Inc. Common Stock Purchase Agreement, the Registration Rights Agreement or its Articles of Incorporation without the prior written consent of Lender, which consent shall not be unreasonably withheld. (i) Pledgor will not create, incur, assume or suffer to exist any lien, security interest, encumbrance or charge of any kind upon the Pledged Collateral, except liens, security interests, encumbrances or charges in favor of Lender or as set forth in the Equity One, Inc. Voting Agreement. - 8 - (j) Pledgor will not sell, transfer or otherwise dispose of any Pledged Collateral, or attempt, offer or contract to do so, except as expressly permitted by this Agreement. (k) Pledgor will not, without giving Lender at least forty-five (45) days prior written notice thereof, change its name, identity or organizational structure to such an extent that any financing statement filed by Lender in connection with this Agreement would become seriously misleading. (l) Pledgor will indemnify Lender, its directors, officers and employees and each legal entity, if any, who controls Lender (the "Indemnified Parties"), and hold each Indemnified Party harmless from and against, any and all claims, damages, losses, liabilities, costs and expenses (including, without limitation, all legal fees and expenses of internal or external counsel with whom any Indemnified Party may consult and all expenses of litigation or preparation therefor), which any Indemnified Party may incur or which may be asserted against any Indemnified Party as a result of the execution, delivery or enforcement of, or performance under, this Agreement, provided that the foregoing indemnity agreement shall not apply to claims, damages, losses, liabilities and expenses solely attributable to an Indemnified Party's gross negligence or willful misconduct. The indemnity agreement contained in this subsection shall survive the termination of this Agreement and the repayment of the Secured Obligations. Pledgor may participate at its expense in the defense of any such claim. (m) Pledgor will give Lender not less than thirty (30) days prior written notice of its intention to exercise its right to one (1) "Demand Registration" pursuant to Section 2.1 of the Registration Rights Agreement. Except as expressly set forth in the preceding sentence, Pledgor will not exercise any of Pledgor's registration rights (including, without limitation, the other right to a "Demand Registration") under the Registration Rights Agreement, without the prior written consent of Lender; it being understood and agreed that such other right to a "Demand Registration" and all other rights under the Registration Rights Agreement constitute Pledged Collateral subject to Lender's security interest pursuant to this Agreement. (n) Pledgor will not enter into, or suffer to exist, any agreement, understanding or other contractual arrangement of any kind (written or oral) between Pledgor and any other Person (including any affiliate of Pledgor), regarding the exercise of the Pledged Shares Rights with respect to the Pledged Shares, other than as expressly set forth in this Agreement and the Registration Rights Agreement. 7. Voting Rights; Dividends; Etc. (a) So long as no Event of Default shall have occurred and is continuing and Lender shall not have delivered to Pledgor notice of its election to exercise the rights set forth in subsection (b) below, Pledgor shall be entitled, subject to the Equity One, Inc. Voting Agreement, to exercise any and all voting and other consensual rights pertaining to the Pledged Shares or any part thereof for any purpose not - 9 - inconsistent with the terms of this Agreement or the Loan Agreement; provided, however, that Pledgor shall not exercise or refrain from exercising any such right if, in Lender's reasonable judgment, such action or inaction would have a Material Adverse Effect or a material adverse effect on the value of the Pledged Collateral or any part thereof; and provided further, that Pledgor shall not exercise any such right to amend or modify Article VII of Issuer's Articles of Amendment and Restatement without the prior written consent of Lender. Notwithstanding the foregoing to the contrary, Pledgor may exercise such voting rights in any way that may dilute its percentage interest in the Issuer evidenced by the Pledged Shares from the percentage interest in effect immediately prior to such action or inaction with the prior written consent of Lender (which consent shall not be unreasonably withheld so long as (i) no Default or Event of Default has occurred and is continuing, and (ii) Lender is reasonably satisfied that the Issuer has or will receive fair consideration for the issuance of any new shares or other action causing such dilution). (b) Upon the occurrence and during the continuance of an Event of Default, all rights of Pledgor to exercise the voting and other consensual rights which Pledgor would otherwise be entitled to exercise pursuant to subsection 7(a) shall cease to be effective upon notice by Lender to Pledgor of Lender's intent to exercise its rights hereunder, and upon delivery of such notice, all such rights shall become vested in Lender, who shall thereupon have the sole right to exercise such voting and other consensual rights so long as such voting and other consensual rights are not exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc. Voting Agreement. In order to effect such transfer of rights, Lender shall have the right, upon such notice, to date and present to Issuer the irrevocable proxy executed by Pledgor substantially in the form attached hereto as Exhibit A. It is understood and agreed by the parties hereto that upon termination of the Equity One, Inc. Voting Agreement in accordance with its terms, (i) the foregoing irrevocable proxy and voting and other consensual rights granted to Lender pursuant to this subsection shall no longer be subject to, or limited in any way by, the Equity One, Inc. Voting Agreement, and/or (ii) Pledgor shall, upon the request of Lender, promptly execute and deliver to Lender such additional and/or replacement irrevocable proxies as may be required by Lender in order to effect_under applicable law the voting and other consensual rights intended to be transferred by Pledgor to Lender pursuant to this subsection. (c) Any and all (i) cash dividends and other cash distributions received, receivable or otherwise paid or payable in respect of any of the Pledged Shares (including without limitation any sums paid upon or in respect of the Pledged Shares pursuant to the recapitalization or reclassification of the capital of the Issuer or pursuant to the reorganization, liquidation or dissolution of the Issuer) shall be received in trust for the benefit of Lender as additional Pledged Collateral, shall be segregated from other funds of Pledgor, and shall be deposited forthwith into the Collateral Account in the same form as so received (with any necessary endorsement), and (ii) any and all stock dividends, securities, instruments and other rights, property or proceeds (other than cash or checks) received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Shares (including without limitation any distribution upon or in respect of - 10 - the Pledged Shares pursuant to the recapitalization or reclassification of the capital of the Issuer or pursuant to the reorganization, liquidation or dissolution of the Issuer), shall be received in trust for the benefit of Lender, and shall be delivered forthwith to Lender in the same form as so received (with any necessary endorsement) to be held as Pledged Collateral under this Agreement. 8. Transfers and Other Liens; Additional Shares. (a) Except as otherwise permitted by this Agreement, Pledgor agrees that it will not (i) sell, assign (by operation of law or otherwise), transfer, exchange or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral, (ii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Collateral, or any interest therein, except for the security interests created by this Agreement, or (iii) enter into any other contractual obligations (other than the Equity One, Inc. Voting Agreement, the Equity One, Inc. Common Stock Purchase Agreement and the Registration Rights Agreement) which could reasonably be expected to restrict or inhibit Lender's rights or ability to sell or otherwise dispose of the Pledged Collateral or any part thereof after the occurrence of an Event of Default. (b) Pledgor agrees that, except as set forth in the Agreement and Plan of Merger and the Equity One, Inc. Voting Agreement, it will (i) not cause, approve or vote to permit Issuer to issue any stock or other securities (including any warrants, options, subscriptions or other contractual arrangements for the purchase of stock or securities convertible into stock) in substitution for the Pledged Shares without the prior written consent of Lender, and (ii) deliver hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all writings evidencing any additional Pledged Collateral. Pledgor hereby authorizes Lender to modify this Agreement by unilaterally amending the description of the Pledged Collateral to include such shares of stock or other securities. 9. Lender Appointed Attorney-in-Fact. Pledgor hereby irrevocably appoints Lender as Pledgor's attorney-in-fact, with full power of substitution and with full authority in the place and stead of Pledgor and in the name of Pledgor, Lender or otherwise, from time to time in Lender's sole discretion to take any action (including completion and presentation of any proxy) and to execute and deliver any instrument, assignment, mortgage, notice, pledge, document or agreement that Lender may deem necessary or advisable to accomplish the purposes of the creation, attachment, perfection, maintenance or continuance of Lender's security interest in the Pledged Collateral under any applicable law, in each instance, so long as such power of attorney is not exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc. Voting Agreement, including, without limitation, but subject to the foregoing qualification, to (i) receive, endorse and collect all instruments made payable to Pledgor representing any dividend or other distribution in respect of the Pledged Collateral or any part thereof, (ii) exercise the voting and other consensual rights pertaining to the Pledged Collateral in accordance with subsection 7(b), so long as such voting and other consensual rights are not exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc. Voting Agreement; (iii) exercise on and - 11 - after the occurrence of any Event of Default any demand, piggyback or other registration rights provided in the Registration Rights Agreement constituting Pledged Shares Rights, and (iv) sell, transfer, pledge, make any agreement with respect to, or otherwise deal with, any of the Pledged Collateral as fully and completely as though Lender was the absolute owner thereof for all purposes, and to do, at Lender's option and Pledgor's expense, at any time or from time to time, all acts and things that Lender deems necessary to protect, preserve or realize upon the Pledged Collateral in accordance with the provisions hereof. Pledgor hereby ratifies and approves all acts of Lender made or taken pursuant to this Section 9. Except as specifically set forth in Section 11 hereof, neither Lender nor any person designated by Lender shall be liable for any acts or omissions or for any error of judgment or mistake of fact or law. This power of attorney, being coupled with an interest, shall be irrevocable until all Secured Obligations (other than indemnity obligations) shall have been paid in full and the Loan Agreement shall have been terminated. It is understood and agreed by the parties hereto that upon termination of the Equity One, Inc. Voting Agreement in accordance with its terms, (i) the foregoing irrevocable power of attorney granted to Lender pursuant to this section shall no longer be subject to, or limited in any way by, the Equity One, Inc. Voting Agreement, and/or (ii) Pledgor shall, upon the request of Lender, promptly execute and deliver to Lender such additional and/or replacement irrevocable powers of attorney as may be required by Lender in order to effect under applicable law the power of attorney intended to be granted by Pledgor to Lender pursuant to this section. 10. Lender May Perform. If Pledgor fails to perform any agreement contained herein, then Lender may itself perform, or cause performance of, such agreement, and the expenses of Lender incurred in connection therewith shall be payable by Pledgor under Section 15 hereof, and shall be a part of the Secured Obligations. 11. Limitation on Duty of Lender with Respect to the Pledged Collateral. The powers conferred on Lender hereunder are solely to protect its interest in the Pledged Collateral and shall not impose any duty on it to exercise any such powers. Except for the safe custody of any Pledged Collateral in its possession and the accounting for monies actually received by it hereunder and other collection and enforcement rights of a secured party under the UCC requiring the exercise in a commercially reasonable manner, Lender shall have no other duty with respect to any Pledged Collateral. Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded treatment that is substantially equivalent to that which Lender accords its own property, it being expressly agreed that Lender shall have no responsibility (other than to exercise certain collection and enforcement rights in a commercially reasonable manner as specifically required by the UCC) for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not Lender has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral, but Lender may do so and all expenses incurred in connection therewith shall be payable by and for the sole account of Pledgor. 12. Remedies upon Event of Default. If any Event of Default shall have occurred and is continuing: - 12 - (a) Lender may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party under the Uniform Commercial Code (the "UCC") in effect in the State of New York at that time, whether or not the UCC applies to the affected Pledged Collateral, and Lender may also, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below), to or upon Pledgor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), forthwith sell, assign, give option or options to purchase, or otherwise dispose of and deliver the Pledged Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale, at any exchange, broker's board or office, or at any of Lender's offices or elsewhere, for cash, on credit, or for future delivery, without assumption of any credit risk, at such price or prices and upon such other terms and conditions as Lender deems commercially reasonable. Pledgor acknowledges and agrees that such a private sale may result in prices and other terms that may be less favorable to the seller than if such sale were a public sale. Pledgor agrees that, to the extent notice of sale shall be required by law, at least fourteen (14) days' notice to Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification, and to the extent that notice of sale shall not be required by law, Lender agrees to use its commercially reasonable best efforts to give to Pledgor at least fourteen (14) days' prior written notice of the time and place of any public or private sale of the Pledged Collateral. At any sale of the Pledged Collateral, if permitted by law, Lender may bid (which bid may be, in whole or in part, in the form of cancellation of indebtedness) for the purchase of the Pledged Collateral or any portion thereof. Lender shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. Lender may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Lender shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit Issuer to register such securities for public sale under the Securities Act of 1933, as from time to time amended (the "Securities Act"), or under applicable state securities laws, even if Issuer would agree to do so. To the extent permitted by law, Pledgor hereby specifically waives (i) all rights of redemption, stay or appraisal which Pledgor has or may have under any law now existing or hereafter enacted, and (ii) all claims, damages and demands it may acquire against Lender arising out of the exercise by Lender of any rights hereunder or at law, except for bad faith, willful misconduct and gross negligence. To the extent that applicable law imposes duties on Lender to exercise remedies in a commercially reasonable manner, Pledgor acknowledges and agrees that it is not commercially unreasonable for Lender (i) to fail to exercise collection remedies against Issuer, or (ii) to disclaim disposition warranties on sale of any Pledged Collateral. (b) Any cash held by Lender as Pledged Collateral and all cash proceeds received by Lender in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Collateral may, in the discretion of Lender, be held by - 13 - Lender as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to Lender pursuant to Section 15), in whole or in part, by Lender against all or any part of the Secured Obligations in the manner provided in Section 14 hereof. Any surplus of such cash or cash proceeds held by Lender and remaining after payment in full of all the Secured Obligations shall be paid over to Pledgor or to whomsoever may be lawfully entitled to receive such surplus or as a court of competent jurisdiction may direct; provided, that in the event that all of the conditions to the termination of this Agreement pursuant to Section 16 shall not have been fulfilled, such balance shall be held during the continuance of an Event of Default and applied from time to time as provided in this subsection 12(b) until all such conditions shall have been fulfilled. (c) Pledgor recognizes that Lender may be unable to effect a public sale of all or part of the Pledged Collateral and may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such Pledged Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Pledgor acknowledges that any such private sales may be at prices and on terms less favorable to the seller than if sold at public sales through exercise of any registration rights, and agrees that Lender has no obligation to delay sale of any such Pledged Collateral for the period of time necessary to permit Issuer to register such Pledged Collateral for public sale under the Securities Act. Pledgor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Collateral pursuant to this Section valid and binding and in compliance with any and all other applicable Requirements of Law. Pledgor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to Lender, and that Lender has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 12 shall be specifically enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants, except for a defense that no Event of Default had occurred and was continuing at the time that Lender exercised any of its remedies pursuant to this Agreement. 13. Remedies Cumulative. (a) No failure on the part of Lender to exercise, and no delay in exercising and no course of dealing with respect to, any power, privilege or right under the Loan Agreement or this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of any power, privilege or right under the Loan Agreement or this Agreement preclude any other or further exercise thereof or the exercise of any other such power, privilege or right. Lender shall not be required to make any demand upon or pursue or exhaust any of its rights or remedies against Pledgor or others with respect to the payment of the Secured Obligations, and shall not be required to marshal the Pledged Collateral or to resort to the Pledged Collateral in any particular order. The powers, privileges and rights in this Agreement and the Loan Agreement are cumulative and are not exclusive of any other remedies provided by law. - 14 - (b) Lender shall have, in addition to any other rights and remedies contained in this Agreement, the Loan Agreement, and any other agreements, guaranties, notes, instruments and documents heretofore, now, or at any time or times hereafter executed by Pledgor or any other Person and delivered to Lender, all of the rights and remedies of a secured party under the UCC in force in any state in which the Pledged Collateral is located at any time, all of which rights and remedies shall be cumulative and nonexclusive to the extent permitted by law. 14. Application of Proceeds. Upon the occurrence and during the continuance of an Event of Default, the proceeds of any sale of, or other realization upon, all or any part of the Pledged Collateral shall be applied: first to all reasonable fees, costs and expenses incurred by Lender with respect to this Agreement, the Loan Agreement and the Pledged Collateral, including, without limitation, those described in Section 15 herein; second, to all fees, costs and expenses incurred by any Lender in connection with any action to enforce the Loan Agreement, this Agreement or to collect any payments due from Pledgor; third, to accrued and unpaid interest on the Secured Obligations (including any interest which but for the provisions of the Bankruptcy Code (Title 11 U.S.C.), would have accrued on such amounts); fourth, to the principal amounts of the Secured Obligations outstanding; fifth, to any other Secured Obligations, Any proceeds remaining after application of the foregoing will be paid to Pledgor. 15. Expenses. Pledgor shall promptly pay to Lender all reasonable costs and expenses of Lender (both before and after the execution hereof) in connection with protecting or perfecting Lender's security interest in the Pledged Collateral, in connection with any realization or collection of the Pledged Collateral or Lender's enforcement or defense of any of its rights or remedies under this Agreement or at law, or in connection with any matters contemplated by or arising out of this Agreement or the Loan Agreement. 16. Termination of Security Interests; Release of Pledged Collateral. Upon payment and performance in full of all Secured Obligations (other than indemnity obligations) and termination of the Loan Agreement, the security interests granted herein shall terminate and all rights to the Pledged Collateral shall revert to Pledgor. Upon the sale of any Pledged Collateral, to the extent permitted by this Agreement or the Loan Agreement, Lender's security interests in such Pledged Collateral shall terminate and the rights in such Pledged Collateral shall revert to Pledgor or such purchaser. Upon such termination of the security interests or release of any Pledged Collateral, Lender will, at the expense of Pledgor, execute and/or file and deliver such documents as Pledgor shall reasonably request to evidence the termination of the security interests or the release of such Pledged Collateral which has not yet theretofore been sold or otherwise applied or released. Such release shall be without recourse or warranty to Lender. 17. Amendments, Waivers and Consents. No amendment, modification, termination or waiver of any provision of this Agreement, or consent to any departure by Pledgor therefrom, shall in any event be effective without the written concurrence of Lender and Pledgor. 18. Notices. Unless otherwise expressly provided herein, all notices, approvals, requests, demands, consents and other communications hereunder, including any notice of default or notice of sale, to or upon the respective parties hereto to be effective shall be - 15 - in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand or by overnight courier, when delivered, or (b) in the case of delivery by facsimile transmission, when sent and receipt has been confirmed, addressed as follows in the case of Pledgor and Lender, or to such other address as may be hereafter notified by the respective parties hereto: If to Pledgor: Silver Maple (2001), Inc. 1660 N.E. Miami Gardens Drive North Miami Beach, FL 33179 Attention: Chaim Katzman, President Facsimile: (305) 947-1734 with a copy to: Alan Marcus, Esq. 20803 Biscayne Blvd. Aventura, FL 33180 Facsimile: (305) 937-1857 If to Lender: [Commercial Bank] _______ Avenue _________________________ Attention: ______________ Facsimile: ______________ with a copy to: Shaw Pittman 335 Madison Avenue, 26th Floor New York, NY 10017-4605 Attention: John C. Simons, Esq. Facsimile: (212) 603-6848 19. Continuing Security Interest; Successors and Assigns. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until termination of the security interests in the Pledged Collateral pursuant to Section 16 hereof, (ii) be binding upon Pledgor, its successors and assigns, and (iii) inure, together with the rights and remedies of Lender hereunder and its successors and assigns. Without limiting the generality of the foregoing clause (iii), Lender may assign or otherwise transfer all or any portion of the Credit to any other Person as permitted in the Loan Agreement, and such other Person shall thereupon become vested with all the benefits in respect thereof - 16 - granted to Lender herein or otherwise. Pledgor may not assign or transfer any of its interests or obligations hereunder without the prior consent of Lender. 20. Irrevocable Authorization and Instruction to Issuer. Pledgor hereby authorizes and instructs Issuer to comply with any instruction received by it from Lender in writing that (a) states that an Event of Default has occurred and is continuing, and (b) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from Pledgor, and Pledgor agrees that Issuer shall be fully protected in so complying. 21. Waiver. (a) In addition to any other waivers herein, Pledgor waives to the greatest extent it may lawfully do so, and agrees that it shall not at any time insist upon, plead or in any manner whatever claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, marshalling of assets, redemption or similar law, or exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance by Pledgor of its obligations under, or the enforcement by Lender of, this Agreement. Pledgor hereby waives diligence, presentment and demand (whether for nonpayment or protest or of acceptance, maturity, extension of time, change in nature or form of the Secured Obligations, acceptance of further security, release of further security, composition or agreement arrived at as to the amount of, or the terms of the Secured Obligations, notice of adverse change in Pledgor's or any other Person's financial condition or any other fact which might materially increase the risk to Pledgor) with respect to any of the Secured Obligations or all other demands whatsoever and waives the benefit of all provisions of law which are or might be in conflict with the terms of this Agreement. To the maximum extent permitted by applicable law, Pledgor hereby waives any requirement on the part of the holder of the Credit to mitigate the damages resulting from any default under the Credit. (b) If Lender may, under applicable law, proceed to realize its benefits under this Agreement, the Loan Agreement or any other agreement or document giving Lender a Lien upon any collateral, whether owned by Pledgor or by any other Person, either by judicial foreclosure or by non-judicial sale or enforcement, Lender may, at its sole option, determine which of its remedies or rights it may pursue without affecting any of the rights and remedies of Lender under this Agreement. 22. Reinstatement. This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any amount received by Lender in respect of the Secured Obligations is rescinded or must otherwise be restored or returned by Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Pledgor or upon the appointment of any intervenor or conservator of, or trustee or similar official for, Pledgor or any substantial part of its assets, or otherwise, all as though such payments had not been made. 23. Severability. The provisions of this Agreement are severable, and if any clause or provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, - 17 - in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Agreement in any jurisdiction. 24. Time is of Essence. Time is of the essence of each provision of this Agreement of which time is an element. 25. Survival of Provisions. All agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement and the Loan Agreement. Notwithstanding anything in this Agreement, the Loan Agreement or implied by law to the contrary, the agreements, representations and warranties of Pledgor set forth herein shall terminate only upon payment of the Secured Obligations (other than indemnity obligations) and the termination of this Agreement. 26. Statute of Limitations; Suretyship Defenses. Pledgor hereby waives the right to plead any statute of limitations as a defense to any indebtedness or obligation hereunder or secured hereby to the full extent permitted by law, and hereby waives all suretyship defenses. 27. Headings Descriptive. The headings in this Agreement are for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. 28. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same agreement. 29. GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS RULES OF THE STATE OF NEW YORK. 30. Submission To Jurisdiction; Waivers. Pledgor hereby irrevocably and unconditionally: (i) submits for itself and its property in any legal action or proceeding relating to this Agreement to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (ii) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Pledgor at its address set forth - 18 - in Section 18 hereof, or at such other address of which the Lender shall have been notified pursuant thereto; (iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (v) waives, except in the case of bad faith, willful misconduct or gross negligence (and otherwise to the maximum extent not prohibited by law), any right it may have to claim or recover in any legal action or proceeding referred to in this Section 30 any special, exemplary, or consequential damages. 31. WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, PLEDGOR AND LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. [SIGNATURE PAGE TO FOLLOW] - 19 - IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed and delivered as of the day and year first above written. SILVER MAPLE (2001), INC. By /s/ Chaim Katzman -------------------------------- Chaim Katzman President By acceptance hereof as of the date first above written, Lender agrees to be bound by the provisions hereof. [Commercial Bank], as Lender By /s/ Name: Title: By /s/ Name: Title: EXHIBIT A Irrevocable Proxy The undersigned hereby appoints [Commercial Bank] ("Lender"), as proxy with full power of substitution, and hereby authorizes Lender to represent and vote all of the shares of the capital stock of Equity One, Inc. acquired by the undersigned pursuant to that certain Equity One, Inc. Common Stock Purchase Agreement, dated as of October 28, 2002 (the "Pledged Shares") and all shares of the capital stock of Equity One, Inc. acquired by the undersigned in respect of or in exchange for the Pledged Shares, all held of record by the undersigned on the date of exercise hereof or at any meeting or at any other time chosen by Lender in its sole discretion, but only at the times and in the circumstances provided in that certain Pledge and Security Agreement dated as of February 12, 2003, executed by the undersigned in favor of Lender. SILVER MAPLE (2001), INC. Date:______________________ By:_______________________________ Chaim Katzman President EXHIBIT B Assignment Separate From Certificate FOR VALUE RECEIVED, SILVER MAPLE (2001), INC. hereby sells, assigns and transfers unto ______________________________________________ (__________) Shares of the Common Stock of Equity One, Inc., a Maryland corporation (the "Corporation"), standing in its name on the books of the Corporation represented by Certificate(s) No. ___________ herewith and does hereby irrevocably constitute and appoint ______________________ attorney to transfer the said stock on the books of the Corporation with full power of substitution in the premises. Date: _______________ SILVER MAPLE (2001), INC. By:_______________________________ Name: Title: EX-4 6 g80918exv4.txt PLEDGE & SECURITY AGREEMENT DATED 2/11/03 EXHIBIT 4 PLEDGE AND SECURITY AGREEMENT (MGN AMERICA, INC.) THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of February 11, 2003, made by MGN AMERICA, INC., a Nevada corporation ("Pledgor"), in favor of BANK LEUMI LE-ISRAEL B.M. ("Lender"). W I T N E S S E T H: WHEREAS, Lender has agreed to extend credit up to an aggregate amount of US$30,000,000 (the "Credit") to GAZIT GLOBE (1982) LTD., a company incorporated under the laws of Israel ("Gazit"), upon the terms and subject to the conditions set forth in that certain (i) commitment letter dated October 28, 2002, between Lender and Gazit (as amended, supplemented or otherwise modified from time to time, the "Commitment Letter"), (ii) General Conditions for Opening an Account and Receiving Credits in Foreign Currency and in Israeli Currency dated November 25, 1994, between Lender and Gazit (as amended, supplemented or otherwise modified from time to time, the "General Terms"), (iii) Letter of Undertaking (re: compliance with margin regulations) dated February 11, 2003, from Gazit in favor of Lender (as amended, supplemented or otherwise modified from time to time, the "Letter of Undertaking"), and (iv) Deed of Pledge (Pledge and assignment of rights by way of charge) dated February 11, 2003, between Gazit and Lender (as amended, supplemented or otherwise modified from time to time, the "Deed of Pledge," and together with the Commitment Letter, the General Terms and the Letter of Undertaking, and any other documents or agreements entered into by Gazit in favor of Lender in connection with the Credit, the "Credit Documents"); and WHEREAS, Gazit intends to loan or contribute the proceeds of the Credit to Pledgor, its subsidiary, in order that Pledgor may purchase of up to 4,284,820 shares of the common stock, par value $.01 per share, of Equity One, Inc.(collectively, the "EOI Shares"); and WHEREAS, pursuant to an Assignment Agreement dated February 11, 2003, between MGN (USA), Inc. and Pledgor, MGN (USA), Inc. has assigned to Pledgor (i) its rights to purchase the EOI Shares under the Equity One, Inc. Common Stock Purchase Agreement (as hereinafter defined), and (ii) its registration rights under the Registration Rights Agreement (as hereinafter defined) with respect to the EOI Shares; and WHEREAS, it is a condition precedent to the obligation of Lender to grant the Credit that, among other things, Pledgor, (i) guarantee the payment and performance of the Credit and all other obligations of Gazit under the Credit Documents pursuant to the Guarantee (as hereinafter defined), and (ii) execute and deliver this Agreement to Lender to secure the payment and performance of Pledgor's obligations under the Guarantee; NOW, THEREFORE, in consideration of the premises and to induce Lender to grant the Credit under the Credit Documents, Pledgor hereby agrees as follows: 1. Defined Terms. (a) Unless otherwise defined herein, terms defined in the Guarantee and used herein shall have the meanings given to them in the Guarantee. All terms not defined herein or in the Guarantee shall have the meanings set forth in the UCC (as hereinafter defined), except where the context otherwise requires, provided that, if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, then such term shall have the meaning specified in Article 9 of the UCC. (b) The following additional terms, as used herein, shall have the following respective meanings: "Agreement and Plan of Merger": means that certain Agreement and Plan of Merger dated October 28, 2002, between IRT and EOI, as amended, supplemented and modified from time to time. "Cash Collateral Account Agreement": means that certain Cash Collateral Account Agreement dated as of the date hereof, among Lender, Pledgor and Bank Leumi USA, as amended, supplemented or modified from time to time. "Collateral Account": shall have the meaning specified in Section 4 hereof. "EOI": means Equity One, Inc., a Maryland corporation. "Equity One, Inc. Common Stock Purchase Agreement": means that certain Equity One, Inc. Common Stock Purchase Agreement dated as of October 28, 2002, between EOI and each of the purchasers party thereto (including, without limitation, MGN (USA), Inc.), as amended, supplemented or modified from time to time. "Equity One, Inc. Voting Agreement": means that certain Equity One, Inc. Voting Agreement dated October 28, 2002, among IRT, EOI and certain stockholders party thereto (including, without limitation, MGN (USA), Inc.), as amended, supplemented or modified from time to time. "Event of Default": means the occurrence and continuance of any of the following; (i) the default by Pledgor or Gazit in the observance or performance of any its agreements, undertakings or obligations, now or hereafter existing, (A) under and in accordance with this Agreement, the Guarantee, the Cash Collateral Account Agreement, or any Credit Document, or (B) in connection with any other loan or other extension of credit now or hereafter made available by Lender to Pledgor or Gazit, as the case may be, (ii) any representation or warranty given by Pledgor or Gazit (A) in this Agreement, the Guarantee, the Cash Collateral Account Agreement, or in any Credit Document, or (B) in connection with any other loan or other extension of credit now or hereafter made available by Lender to Pledgor or Gazit, as the case may be, proves to have been incorrect in any material respect on or as of the date made or deemed made, or (iii) any event that entitles Lender in accordance with any Credit - 2 - Document, or any other agreement, undertaking, instrument or document now or hereafter entered into by Pledgor or Gazit, to require, prior to the maturity date thereof, immediate repayment of all or any outstanding amount of the Credit or any other loan or other extension of credit now or hereafter made available by Lender to Pledgor or Gazit, including without limitation, any event deemed to be an "event of default" under any Credit Document or any such other agreement, undertaking, instrument or document. "Guarantee": means that certain Guarantee dated as of the date hereof from Pledgor in favor of Lender, pursuant to which Pledgor has unconditionally guaranteed the prompt payment and performance of the Credit and all other obligations, liabilities and indebtedness of Gazit, now existing or hereafter incurred, under or in connection with the Credit Documents or any other loan, extension of credit or accommodation now or hereafter made or granted by Lender, as the Guarantee may be amended, supplemented or otherwise modified from time to time. "IRT": means IRT Property Company, a Georgia corporation. "Issuer": means EOI. "Material Adverse Effect": means (X) a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of Pledgor or Gazit, (b) the validity or enforceability of this Agreement, the Guarantee, the Cash Collateral Account Agreement, or any of the Credit Documents in any manner that prevents the practical realization by Lender of the benefits intended by this Agreement, the Guarantee, the Cash Collateral Account Agreement, and/or the Credit Documents, or (c) the rights or remedies of Lender hereunder or under the Guarantee, the Cash Collateral Account Agreement, or any of the Credit Documents in any manner that prevents the practical realization of the benefits purported to be provided by such rights and remedies with respect to Lender's ability to realize upon the principal benefits or security intended to be provided by this Agreement, the Guarantee, the Cash Collateral Account Agreement, and/or the Credit Documents, (Y) any impairment to the validity, perfection or priority of the security interest of Lender in the Pledged Collateral in any manner whatsoever, and/or (Z) an Event of Default. "Person": means an individual, partnership, limited liability company, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature. "Pledged Shares": means all EOI Shares, purchased at any time and from time to time by Pledgor from the Issuer pursuant to the Equity One, Inc. Common Stock Purchase Agreement, up to a maximum aggregate number of 4,284,820 shares of such stock, and all proceeds thereof. "Registration Rights Agreement": means that certain Registration Rights - 3 - Agreement dated as of October 28, 2002, among EOI and the purchasers party thereto, including, without limitation, MGN (USA), Inc., as may be amended, supplemented or modified from time to time. "Requirement of Law" means as to any Person, the certificate of incorporation, certificate of formation, limited liability company agreement, and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule, regulation, decree or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Secured Obligations": means all obligations, liabilities and indebtedness of Pledgor and/or Gazit now or hereafter owing to Lender under or in connection with the Credit or any other loan, extension of credit or accommodation now or hereafter made or granted by Lender (each such other loan, extension of credit or accommodation, an "Other Credit"), including, without limitation, all obligations, liabilities and indebtedness of Pledgor and/or Gazit under this Agreement, the Guarantee, the Cash Collateral Account Agreement, and/or the Credit Documents, as the case may be, including, without limitation, (i) all unpaid principal of, and accrued interest (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of Pledgor or Gazit, whether or not allowed or allowable as a claim in any such proceeding) on, any loan or other credit granted under or in connection with the Credit Documents or any Other Credit, (ii) all expenses, costs of collection and any other amounts payable to Lender by Pledgor or Gazit under this Agreement, the Guarantee, the Cash Collateral Account Agreement, and/or any Credit Document, or any Other Credit, as the case may be (including, without limitation, all fees and disbursements of counsel to Lender that are required to be paid by Pledgor or Gazit to Lender pursuant to this Agreement, the Guarantee, the Cash Collateral Account Agreement, or any Credit Document, or any Other Credit, as the case may be), and (iii) any renewals or extensions of the Credit or Credit Documents or any Other Credit. "Securities Act": shall have the meaning specified in subsection 12(a) hereof. "UCC": shall have the meaning specified in subsection 12(a) hereof. (c) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and paragraph references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 2. Pledge; Grant of Security Interest. As collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by - 4 - acceleration or otherwise) of the Secured Obligations, Pledgor hereby assigns, pledges and hypothecates to the Lender, and grants to Lender a security interest in (all being collectively referred to as the "Pledged Collateral"), all of its right, title and interest in and to: (a) the Pledged Shares and the certificates representing the Pledged Shares, and all stock dividends, cash dividends, payments, securities and property from time to time received, receivable or otherwise distributed in respect of, or in exchange for, any or all of the Pledged Shares; (b) all contract and other rights related to the foregoing, including without limitation, all registration rights under the Registration Rights Agreement; provided, however, the foregoing described rights shall cover only one (1) "Demand Registration" (as such term is defined in Section 2.1 of the Registration Rights Agreement) (collectively, the "Pledged Shares Rights"); (c) the Collateral Account, and all monies held therein or credited thereto; and (d) all proceeds of any of the foregoing. 3. Delivery of Pledged Shares. All certificates or instruments representing or evidencing the Pledged Shares shall be delivered to and held by or on behalf of Lender pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed undated instruments of transfer or assignment in blank, substantially in the form of Exhibit B hereto, all in form and substance satisfactory to Lender. Lender shall have the right, at any time in its discretion and without notice to Pledgor following the occurrence and during the continuance of an Event of Default, to transfer to or to register in the name of Lender any or all of the Pledged Shares. In addition, Lender shall have the right to exchange certificates or instruments representing or evidencing Pledged Shares for certificates or instruments of smaller or larger denominations. 4. Collateral Account. Pledgor has established, and shall hereafter maintain, with Bank Leumi USA in New York, New York, non interest-bearing cash collateral deposit account number 22-005641-18 and interest bearing cash collateral deposit account number 22-005641-02 (collectively, the "Collateral Account"). All cash dividends and other cash proceeds attributable to the Pledged Shares shall be deposited into the Collateral Account promptly upon receipt of same by Pledgor. The Collateral Account shall be subject to the terms of this Agreement and shall be under the "control" (as defined in section 9-104 of the UCC) of Lender pursuant to the terms of the Cash Collateral Account Agreement. The Collateral Account, and all monies deposited therein or credited thereto, shall constitute security for the Secured Obligations. 5. Representations and Warranties. Pledgor hereby represents and warrants that the following statements are true, correct and complete in all material respects: - 5 - (a) Each of the representations and warranties made by Pledgor in the Guarantee and the Cash Collateral Account Agreement is true and correct on and as of the date hereof as though made on and as of the date hereof. (b) On the date of each "Initial Closing" or "Subsequent Closing" (as such terms are defined in the Equity One, Inc. Common Stock Purchase Agreement, hereinafter a "Purchase Closing Date"), (i) Pledgor will be the record, legal and beneficial owner of that number of EOI Shares so purchased in accordance with the Equity One, Inc. Common Stock Purchase Agreement and promptly notified to Lender in writing, (ii) such EOI Shares, to Pledgor's knowledge, will have been duly authorized and validly issued and will be fully paid and nonassessable, and (iii) there will be no outstanding warrants, options, subscriptions or other contractual arrangements for the purchase or sale of such EOI Shares or any outstanding securities convertible into such EOI Shares, and there will be no preemptive rights of Issuer or any other Person with respect to such EOI Shares, other than in connection with the Agreement and Plan of Merger. (c) Pledgor is not and will not become a party to or otherwise bound by any agreement, other than this Agreement, the Equity One, Inc. Common Stock Purchase Agreement, the Registration Rights Agreement and the Equity One, Inc. Voting Agreement, which restricts in any manner the rights of Lender or any other present or future holder of any of the Pledged Shares with respect thereto. (d) Upon each purchase by Pledgor of EOI Shares in accordance with the Equity One, Inc. Common Stock Purchase Agreement, and the making of the Loan by Lender in connection therewith, this Agreement will create in favor of Lender a valid security interest in the EOI Shares, and such EOI Shares shall constitute Pledged Shares securing the payment and performance of the Secured Obligations. Upon delivery to Lender of the stock certificate(s) evidencing such Pledged Shares indorsed to Lender or in blank by an effective endorsement, Lender shall have a duly perfected security interest in such Pledged Shares, free of any adverse claim. (e) This Agreement is effective to create in favor of Lender a valid security interest in the Collateral Account securing the payment and performance of the Secured Obligations. Upon execution and delivery of the Cash Collateral Account Agreement by the parties thereto, Lender will have a first priority duly perfected security interest in the Collateral Account and such security interest shall remain perfected so long as Lender retains "control" (as defined in Section 9-104 of the UCC) of the Collateral Account. (f) Upon filing a financing statement in recordable form with the Office of the Secretary of State of Nevada naming Pledgor as debtor and Lender as secured party, describing the Pledged Shares Rights, and (ii) each purchase by Pledgor of EOI Shares in accordance with the Equity One, Inc. Common Stock Purchase Agreement, Lender will have a duly perfected security interest in all right, title and interest of Pledgor in the Pledged Shares Rights with respect to such EOI Shares. - 6 - (g) Subject to the restrictions contained in the Agreement and Plan of Merger, the Equity One, Inc. Voting Agreement, the Equity One, Inc. Common Stock Purchase Agreement and the Registration Rights Agreement, no consent, authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other Person is required for (i) the pledge by Pledgor of, or the grant by Pledgor of a security interest in, the Pledged Collateral pursuant to this Agreement, (ii) the execution, delivery or performance of this Agreement by Pledgor, or (iii) the exercise by Lender of any rights (including without limitation, voting rights) or remedies provided for in this Agreement in respect of the Pledged Collateral (except for the filing of the financing statement as described in Section 5(f) above, or as has already been obtained or taken, or as may be required in connection with the disposition of the Pledged Shares by laws affecting the offering and sale of securities generally). (h) The execution, delivery and performance of this Agreement and the transactions contemplated hereby, including, without limitation, the purchase and delivery of the EOI Shares to Lender on each Purchase Closing Date, (A) do not and will not conflict with or result in any breach or contravention of any applicable law, regulation, judicial order or decree to which Pledgor is subject, including, without limitation, Regulations T, U or X of the Board of Governors of the Federal Reserve System, and (B) do not and will not violate, conflict with, constitute a default or event of default under, or result in any rights to accelerate or modify any obligations under any agreement, instrument, lease, mortgage or indenture to which Pledgor is a party or subject, or to which any of its assets is subject, other than as set forth in the Equity One, Inc. Voting Agreement and the Registration Rights Agreement. (i) Pledgor has the corporate power and authority to enter into this Agreement and to grant to Lender a security interest in the Pledged Collateral hereunder. This Agreement has been duly executed and delivered by Pledgor and is the legal, valid and binding obligation of Pledgor enforceable against it in accordance with the terms hereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting generally the enforcement of creditors' rights, and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any case or proceeding therefore may be brought. (j) Pledgor (i) is the sole owner of, and has rights in, and good and marketable title to, the Collateral Account, free and clear of any and all liens, charges, encumbrances, security interests or claims thereon of any Person (other than Lender), and (ii) on each Purchase Closing Date, will be the sole owner of, and will have rights in, and good and marketable title to, the EOI Shares so purchased and the related Pledged Shares Rights, free and clear of any and all liens, charges, encumbrances, security interests or claims thereon of any Person (other than Lender and as set forth in the Equity One, Inc. Voting Agreement). No financing statement or other public notice with respect to all or any part of the Pledged Collateral is on file or of record in any public office, except such as have been filed in favor of Lender pursuant to this Agreement. There are no liens, security interests, charges or other encumbrances of any kind on, in or against the Pledged - 7 - Collateral, except those in favor of Lender, other than in connection with the Equity One, Inc. Voting Agreement. (k) The name of Pledgor set forth on the first page of this Agreement is Pledgor's correct and complete legal name. Pledgor's chief executive office and principal place of business since its inception has been located at Pledgor's address(es) specified in Section 18 of this Agreement. (l) All information heretofore, herein or hereafter supplied to Lender by or on behalf of Pledgor with respect to the Pledged Collateral is and will be accurate and complete in all material respects. (m) There are no agreements, understandings or other contractual arrangements of any kind (written or oral) between Pledgor and any other Person (including any affiliate of Pledgor), regarding the exercise of the registration rights with respect to the Pledged Shares, other than as expressly set forth in this Agreement and the Registration Rights Agreement. 6. Covenants Relating to the Pledged Collateral. Pledgor covenants and agrees with Lender that, from and after the date of this Agreement until the Secured Obligations are indefeasibly paid in full and this Agreement is terminated and the security interests created hereby are released: (a) On each Purchase Closing Date, Pledgor will deliver, or cause to be delivered, to Lender to hold as Pledged Collateral pursuant to this Agreement, one or more share certificates, duly issued and registered in the name of Pledgor, evidencing the EOI Shares purchased by Pledgor from EOI on such Purchase Closing Date, together with an undated stock power covering each such share certificate, duly executed by Pledgor. Pledgor will, from time to time, at Pledgor's expense, and upon Lender's request, promptly execute and/or deliver all further instruments and documents and take all further action that may be necessary or desirable, or that Lender may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby, to enable Lender to exercise and enforce the rights and remedies of Lender hereunder with respect to any Pledged Collateral or to carry out the provisions and purposes hereof. Without limiting the generality of the foregoing, Pledgor will at its sole expense: (i) upon Lender's request, authenticate, in recordable form, and deliver to Lender any financing or continuation statements, or amendments thereto, and such other instruments, assurances, documents or notices and take such further actions, as may be necessary or desirable, or as Lender may reasonably request, in order to vest in and assure to Lender its rights hereunder and in the Pledged Collateral, and otherwise to perfect and preserve the security interests and full benefits granted or purported to be granted hereby under the laws of any applicable jurisdiction; and (ii) upon Lender's request, appear in and defend any action or proceeding that may affect Pledgor's title to or the security interest of Lender in the Pledged Collateral. - 8 - (b) Pledgor will, promptly upon request, provide to Lender all information and evidence it may reasonably request concerning the Pledged Collateral to enable Lender to enforce the provisions of this Agreement. (c) Pledgor will, immediately upon receipt of same as registered owner of the Pledged Shares, deliver to Lender copies of all notices, letters and other written communications and information received from time to time from Issuer. (d) Promptly upon its purchase or acquisition of any additional non-registered shares of stock of the Issuer, Pledgor will make a good-faith effort to give Lender written notice of each such purchase or acquisition and the details thereof (including, without limitation, whether or not Pledgor was granted or otherwise received registration rights in respect of such additional shares). (e) Pledgor will comply with all Requirements of Law applicable to it and the Pledged Collateral or any portion thereof, except to the extent that the failure to comply would not reasonably be expected to have a Material Adverse Effect. (f) Pledgor will pay promptly when due any taxes, assessments and governmental charges or levies imposed upon the Pledged Collateral or in respect of its income or profits therefrom, as well as all claims of any kind, unless any of the foregoing are have been effectively stayed within 10 days of the occurrence or imposition thereof, or are being contested in good faith by Pledgor and as to which adequate reserves have been set aside on its books. (g) Pledgor will advise Lender promptly in writing, in reasonable detail, of (A) any lien, charge, claim or other encumbrance made or asserted against Pledgor or any of the Pledged Collateral, (B) any material change in the composition of the Pledged Collateral, (C) the occurrence of any event or condition which to its knowledge is likely to have a Material Adverse Effect, and (D) any bankruptcy or litigation case or proceeding relating to Pledgor or any of the Pledged Collateral. (h) Concurrently with the execution and delivery of this Agreement, Pledgor shall execute and deliver to Lender, the Cash Collateral Account Agreement. (i) Pledgor will not amend or modify, or waive compliance with, any term, condition or provision of the Equity One, Inc. Voting Agreement, Equity One, Inc. Common Stock Purchase Agreement, the Registration Rights Agreement or its Articles of Incorporation without the prior written consent of Lender, which consent shall not be unreasonably withheld. (j) Pledgor will not create, incur assume or suffer to exist any lien, security interest, encumbrance or charge of any kind upon the Pledged Collateral, except liens, security interests, encumbrances or charges in favor of Lender or as set forth in the Equity One, Inc. Voting Agreement. - 9 - (k) Pledgor will not sell, transfer or otherwise dispose of any Pledged Collateral, or attempt, offer or contract to do so, except as expressly permitted by this Agreement. (l) Pledgor will not, without giving Lender at least forty-five (45) days prior written notice thereof, change its name, identity or organizational structure to such an extent that any financing statement filed by Lender in connection with this Agreement would become seriously misleading. (m) Pledgor will indemnify Lender, its directors, officers and employees and each legal entity, if any, who controls Lender (the "Indemnified Parties"), and hold each Indemnified Party harmless from and against, any and all claims, damages, losses, liabilities, costs and expenses (including, without limitation, all legal fees and expenses of internal or external counsel with whom any Indemnified Party may consult and all expenses of litigation or preparation therefor), which any Indemnified Party may incur or which may be asserted against any Indemnified Party as a result of the execution, delivery or enforcement of, or performance under, this Agreement, provided that the foregoing indemnity agreement shall not apply to claims, damages, losses, liabilities and expenses solely attributable to an Indemnified Party's gross negligence or willful misconduct. The indemnity agreement contained in this subsection shall survive the termination of this Agreement and the repayment of the Secured Obligations. Pledgor may participate at its expense in the defense of any such claim. (n) Pledgor will give Lender not less than thirty (30) days prior written notice of its intention to exercise its right to one (1) "Demand Registration" pursuant to Section 2.1 of the Registration Rights Agreement. Except as expressly set forth in the preceding sentence, Pledgor will not exercise any of Pledgor's registration rights (including without limitation the other right to "Demand Registration" s) under the Registration Rights Agreement, without the prior written consent of Lender; it being understood and agreed that such other right to a "Demand Registration" and all other rights under the Registration Rights Agreement constitute Pledged Collateral subject to Lender's security interest pursuant to this Agreement. (o) Pledgor will not enter into, or suffer to exist, any agreement, understanding or other contractual arrangement of any kind (written or oral) between Pledgor and any other Person (including any affiliate of Pledgor), regarding the exercise of the Pledged Shares Rights with respect to the Pledged Shares, other than as expressly set forth in this Agreement and the Registration Rights Agreement. 7. Voting Rights; Dividends; Etc. (a) So long as no Event of Default shall have occurred and is continuing and Lender shall not have delivered to Pledgor notice of its election to exercise the rights set forth in subsection (b) below, Pledgor shall be entitled, subject to the Equity One, Inc. Voting Agreement, to exercise any and all voting and other consensual rights pertaining to the Pledged Shares or any part thereof for any purpose not - 10 - inconsistent with the terms of this Agreement or the Guarantee; provided, however, that Pledgor shall not exercise or refrain from exercising any such right if, in Lender's reasonable judgment, such action or inaction would have a Material Adverse Effect or a material adverse effect on the value of the Pledged Collateral or any part thereof; and provided further, that Pledgor shall not exercise any such right to amend or modify [Article VII of Issuer's Articles of Amendment and Restatement] without the prior written consent of Lender. Notwithstanding the foregoing to the contrary, Pledgor may exercise such voting rights in any way that may dilute its percentage interest in the Issuer evidenced by the Pledged Shares from the percentage interest in effect immediately prior to such action or inaction with the prior written consent of Lender (which consent shall not be unreasonably withheld so long as (i) no Default or Event of Default has occurred and is continuing, and (ii) Lender is reasonably satisfied that the Issuer has or will receive fair consideration for the issuance of any new shares or other action causing such dilution). (b) Upon the occurrence and during the continuance of an Event of Default, all rights of Pledgor to exercise the voting and other consensual rights which Pledgor would otherwise be entitled to exercise pursuant to subsection 7(a) shall cease to be effective upon notice by Lender to Pledgor of Lender's intent to exercise its rights hereunder, and upon delivery of such notice, all such rights shall become vested in Lender, who shall thereupon have the sole right to exercise such voting and other consensual rights so long as such voting and other consensual rights are not exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc. Voting Agreement. In order to effect such transfer of rights, Lender shall have the right, upon such notice, to date and present to Issuer the irrevocable proxy executed by Pledgor substantially in the form attached hereto as Exhibit A. It is understood and agreed by the parties hereto that upon termination of the Equity One, Inc. Voting Agreement in accordance with its terms, (i) the foregoing irrevocable proxy and voting and other consensual rights granted to Lender pursuant to this subsection shall no longer be subject to, or limited in any way by, the Equity One, Inc. Voting Agreement, and/or (ii) Pledgor shall, upon the request of Lender, promptly execute and deliver to Lender such additional and/or replacement irrevocable proxies as may be required by Lender in order to effect under applicable law - the voting and other consensual rights intended to be transferred by Pledgor to Lender pursuant to this subsection." (c) Any and all (i) cash dividends and other cash distributions received, receivable or otherwise paid or payable in respect of any of the Pledged Shares (including without limitation any sums paid upon or in respect of the Pledged Shares pursuant to the recapitalization or reclassification of the capital of the Issuer or pursuant to the reorganization, liquidation or dissolution of the Issuer) shall be received in trust for the benefit of Lender as additional Pledged Collateral, shall be segregated from other funds of Pledgor, and shall be deposited forthwith into the Collateral Account in the same form as so received (with any necessary endorsement), and (ii) any and all stock dividends, securities, instruments and other rights, property or proceeds (other than cash or checks) received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Shares (including without limitation any distribution upon or in respect of - 11 - the Pledged Shares pursuant to the recapitalization or reclassification of the capital of the Issuer or pursuant to the reorganization, liquidation or dissolution of the Issuer), shall be received in trust for the benefit of Lender, and shall be delivered forthwith to Lender in the same form as so received (with any necessary endorsement) to be held as Pledged Collateral under this Agreement. 8. Transfers and Other Liens; Additional Shares. (a) Except as otherwise permitted by this Agreement, Pledgor agrees that it will not (i) sell, assign (by operation of law or otherwise), transfer, exchange or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral, (ii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Pledged Collateral, or any interest therein, except for the security interests created by this Agreement, or (iii) enter into any other contractual obligations (other than the Equity One, Inc. Voting Agreement, the Equity One, Inc. Common Stock Purchase Agreement and the Registration Rights Agreement) which could reasonably be expected to restrict or inhibit Lender's rights or ability to sell or otherwise dispose of the Pledged Collateral or any part thereof after the occurrence of an Event of Default. (b) Pledgor agrees that, except as set forth in the Agreement and Plan of Merger and the Equity One, Inc. Voting Agreement, it will (i) not cause, approve or vote to permit Issuer to issue any stock or other securities (including any warrants, options, subscriptions or other contractual arrangements for the purchase of stock or securities convertible into stock) in substitution for the Pledged Shares, without the prior written consent of Lender, and (ii) deliver hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all writings evidencing any additional Pledged Collateral. Pledgor hereby authorizes Lender to modify this Agreement by unilaterally amending the description of the Pledged Collateral to include such shares of stock or other securities. 9. Lender Appointed Attorney-in-Fact. Pledgor hereby irrevocably appoints Lender as Pledgor's attorney-in-fact, with full power of substitution and with full authority in the place and stead of Pledgor and in the name of Pledgor, Lender or otherwise, from time to time in Lender's sole discretion to take any action (including completion and presentation of any proxy) and to execute and deliver any instrument, assignment, mortgage, notice, pledge, document or agreement that Lender may deem necessary or advisable to accomplish the purposes of the creation, attachment, perfection, maintenance or continuance of Lender's security interest in the Pledged Collateral under any applicable law, in each instance, so long as such power of attorney is not exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc. Voting Agreement, including, without limitation, but subject to the foregoing qualification, to (i) receive, endorse and collect all instruments made payable to Pledgor representing any dividend or other distribution in respect of the Pledged Collateral or any part thereof, (ii) exercise the voting and other consensual rights pertaining to the Pledged Collateral in accordance with subsection 7(b), so long as such voting and other consensual rights are not exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc. Voting Agreement; (iii) exercise on and - 12 - after the occurrence of any Event of Default any demand, piggyback or other registration rights provided in the Registration Rights Agreement constituting Pledged Shares Rights, and (iv) sell, transfer, pledge, make any agreement with respect to, or otherwise deal with, any of the Pledged Collateral as fully and completely as though Lender was the absolute owner thereof for all purposes, and to do, at Lender's option and Pledgor's expense, at any time or from time to time, all acts and things that Lender deems necessary to protect, preserve or realize upon the Pledged Collateral in accordance with the provisions hereof. Pledgor hereby ratifies and approves all acts of Lender made or taken pursuant to this Section 9. Except as specifically set forth in Section 11 hereof, neither Lender nor any person designated by Lender shall be liable for any acts or omissions or for any error of judgment or mistake of fact or law. This power of attorney, being coupled with an interest, shall be irrevocable until all Secured Obligations (other than indemnity obligations) shall have been paid in full and the Credit Documents shall have been terminated. It is understood and agreed by the parties hereto that upon termination of the Equity One, Inc. Voting Agreement in accordance with its terms, (i) the foregoing irrevocable power of attorney granted to Lender pursuant to this section shall no longer be subject to, or limited in any way by, the Equity One, Inc. Voting Agreement, and/or (ii) Pledgor shall, upon the request of Lender, promptly execute and deliver to Lender such additional and/or replacement irrevocable powers of attorney as may be required by Lender in order to effect under applicable law the power of attorney intended to be granted by Pledgor to Lender pursuant to this section. 10. Lender May Perform. If Pledgor fails to perform any agreement contained herein, then Lender may itself perform, or cause performance of, such agreement, and the expenses of Lender incurred in connection therewith shall be payable by Pledgor under Section 15 hereof, and shall be a part of the Secured Obligations. 11. Limitation on Duty of Lender with Respect to the Pledged Collateral. The powers conferred on Lender hereunder are solely to protect its interest in the Pledged Collateral and shall not impose any duty on it to exercise any such powers. Except for the safe custody of any Pledged Collateral in its possession and the accounting for monies actually received by it hereunder and other collection and enforcement rights of a secured party under the UCC requiring the exercise in a commercially reasonable manner, Lender shall have no other duty with respect to any Pledged Collateral. Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded treatment that is substantially equivalent to that which Lender accords its own property, it being expressly agreed that Lender shall have no responsibility (other than to exercise certain collection and enforcement rights in a commercially reasonable manner as specifically required by the UCC) for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not Lender has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral, but Lender may do so and all expenses incurred in connection therewith shall be payable by and for the sole account of Pledgor. 12. Remedies upon Event of Default. If any Event of Default shall have occurred and is continuing: - 13 - (a) Lender may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party under the Uniform Commercial Code (the "UCC") in effect in the State of New York at that time, whether or not the UCC applies to the affected Pledged Collateral, and Lender may also, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below), to or upon Pledgor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), forthwith sell, assign, give option or options to purchase, or otherwise dispose of and deliver the Pledged Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale, at any exchange, broker's board or office, or at any of Lender's offices or elsewhere, for cash, on credit, or for future delivery, without assumption of any credit risk, at such price or prices and upon such other terms and conditions as Lender deems commercially reasonable. Pledgor acknowledges and agrees that such a private sale may result in prices and other terms that may be less favorable to the seller than if such sale were a public sale. Pledgor agrees that, to the extent notice of sale shall be required by law, at least fourteen (14) days' notice to Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification, and to the extent that notice of sale shall not be required by law, Lender agrees to use its commercially reasonable best efforts to give to Pledgor at least fourteen (14) days' prior written notice of the time and place of any public or private sale of the Pledged Collateral. At any sale of the Pledged Collateral, if permitted by law, Lender may bid (which bid may be, in whole or in part, in the form of cancellation of indebtedness) for the purchase of the Pledged Collateral or any portion thereof. Lender shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. Lender may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Lender shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit Issuer to register such securities for public sale under the Securities Act of 1933, as from time to time amended (the "Securities Act"), or under applicable state securities laws, even if Issuer would agree to do so. To the extent permitted by law, Pledgor hereby specifically waives (i) all rights of redemption, stay or appraisal which Pledgor has or may have under any law now existing or hereafter enacted, and (ii) all claims, damages and demands it may acquire against Lender arising out of the exercise by Lender of any rights hereunder or at law, except for bad faith, willful misconduct and gross negligence. To the extent that applicable law imposes duties on Lender to exercise remedies in a commercially reasonable manner, Pledgor acknowledges and agrees that it is not commercially unreasonable for Lender (i) to fail to exercise collection remedies against Issuer, or (ii) to disclaim disposition warranties on sale of any Pledged Collateral. (b) Any cash held by Lender as Pledged Collateral and all cash proceeds received by Lender in respect of any sale of, collection from, or other realization upon all or any part of the Pledged Collateral may, in the discretion of Lender, be held by - 14 - Lender as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to Lender pursuant to Section 15), in whole or in part, by Lender against all or any part of the Secured Obligations in the manner provided in Section 14 hereof. Any surplus of such cash or cash proceeds held by Lender and remaining after payment in full of all the Secured Obligations shall be paid over to Pledgor or to whomsoever may be lawfully entitled to receive such surplus or as a court of competent jurisdiction may direct; provided, that in the event that all of the conditions to the termination of this Agreement pursuant to Section 16 shall not have been fulfilled, such balance shall be held during the continuance of an Event of Default and applied from time to time as provided in this subsection 12(b) until all such conditions shall have been fulfilled. (c) Pledgor recognizes that Lender may be unable to effect a public sale of all or part of the Pledged Collateral and may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such Pledged Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Pledgor acknowledges that any such private sales may be at prices and on terms less favorable to the seller than if sold at public sales through exercise of any registration rights, and agrees that Lender has no obligation to delay sale of any such Pledged Collateral for the period of time necessary to permit Issuer to register such Pledged Collateral for public sale under the Securities Act. Pledgor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Collateral pursuant to this Section valid and binding and in compliance with any and all other applicable Requirements of Law. Pledgor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to Lender, and that Lender has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 12 shall be specifically enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants, except for a defense that no Event of Default had occurred and was continuing at the time that Lender exercised any of its remedies pursuant to this Agreement. 13. Remedies Cumulative. (a) No failure on the part of Lender to exercise, and no delay in exercising and no course of dealing with respect to, any power, privilege or right under the Credit Documents, the Guarantee, the Cash Collateral Account Agreement or this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of any power, privilege or right under any of the Credit Documents, the Guarantee, the Cash Collateral Account Agreement or this Agreement preclude any other or further exercise thereof or the exercise of any other such power, privilege or right. Lender shall not be required to make any demand upon or pursue or exhaust any of its rights or remedies against Pledgor or others with respect to the payment of the Secured Obligations, and shall not be required to marshal the Pledged Collateral or to resort to the Pledged Collateral in any particular order. The powers, privileges and rights in this - 15 - Agreement, the Guarantee, the Cash Collateral Account Agreement and the Credit Documents are cumulative and are not exclusive of any other remedies provided by law. (b) Lender shall have, in addition to any other rights and remedies contained in this Agreement, the Guarantee, the Cash Collateral Account Agreement and the Credit Documents, and any other agreements, guaranties, notes, instruments and documents heretofore now or at any time or times hereafter executed by Pledgor or any other Person and delivered to Lender, all of the rights and remedies of a secured party under the UCC in force in any state in which the Pledged Collateral is located at any time, all of which rights and remedies shall be cumulative and nonexclusive to the extent permitted by law. 14. Application of Proceeds. Upon the occurrence and during the continuance of an Event of Default, the proceeds of any sale of, or other realization upon, all or any part of the Pledged Collateral shall be applied: first to all reasonable fees, costs and expenses incurred by Lender with respect to this Agreement, the Guarantee, the Cash Collateral Account Agreement, the Credit Documents and the Pledged Collateral, including, without limitation, those described in Section 15 herein; second, to all fees, costs and expenses incurred by any Lender in connection with any action to enforce the Guarantee, the Cash Collateral Account Agreement, any Credit Document or to collect any payments due from Pledgor; third, to accrued and unpaid interest on the Secured Obligations (including any interest which but for the provisions of the Bankruptcy Code (Title 11 U.S.C.), would have accrued on such amounts); fourth, to the principal amounts of the Secured Obligations outstanding; fifth, to any other Secured Obligations Any proceeds remaining after application of the foregoing will be paid to Pledgor. 15. Expenses. Pledgor shall promptly pay to Lender all reasonable costs and expenses of Lender (both before and after the execution hereof) in connection with protecting or perfecting Lender's security interest in the Pledged Collateral, in connection with any realization or collection of the Pledged Collateral or Lender's enforcement or defense of any of its rights or remedies under this Agreement or at law, or in connection with any matters contemplated by or arising out of this Agreement, the Guarantee, the Cash Collateral Account Agreement or any of the Credit Documents. 16. Termination of Security Interests; Release of Pledged Collateral. Upon payment and performance in full of all Secured Obligations (other than indemnity obligations) and termination of the Guarantee, the Cash Collateral Account Agreement and the Credit Documents, the security interests granted herein shall terminate and all rights to the Pledged Collateral shall revert to Pledgor. Upon the sale of any Pledged Collateral, to the extent permitted by this Agreement, the Guarantee, the Cash Collateral Account Agreement, or the Credit Documents, Lender's security interests in such Pledged Collateral shall terminate and the rights in such Pledged Collateral shall revert to Pledgor or such purchaser. Upon such termination of the security interests or release of any Pledged Collateral, Lender will, at the expense of Pledgor, execute and/or file and deliver such documents as Pledgor shall reasonably request to evidence the termination of the security interests or the release of such Pledged Collateral which has not yet theretofore been sold or otherwise applied or released. Such release shall be without recourse or warranty to Lender. - 16 - 17. Amendments, Waivers and Consents. No amendment, modification. termination or waiver of any provision of this Agreement, or consent to any departure by Pledgor therefrom, shall in any event be effective without the written concurrence of Lender and Pledgor. 18. Notices. Unless otherwise expressly provided herein, all notices, approvals, requests, demands, consents and other communications hereunder, including any notice of default or notice of sale, to or upon the respective parties hereto to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand or by overnight courier, when delivered, or (b) in the case of delivery by facsimile transmission, when sent and receipt has been confirmed, addressed as follows in the case of Pledgor and Lender, or to such other address as may be hereafter notified by the respective parties hereto: If to Pledgor: MGN America, Inc. 1660 N.E. Miami Gardens Drive North Miami Beach, FL 33179 Attention: Chaim Katzman, President Facsimile: (305) 947-1734 with a copy to: Jeffrey Oshinsky, Esq. White & Case LLP 200 S. Biscayne Blvd. Miami, FL 33180 Facsimile: (305) 358-5744 If to Lender: Bank Leumi le-Israel B.M. Construction and Real Estate Division 32 Yehuda Halevy Street Tel Aviv, Israel 65121 Attention: Dafna Landau Facsimile: (972) 3-514-8980 - 17 - with a copy to: Shaw Pittman 335 Madison Avenue, 26th Floor New York, NY 10017-4605 Attention: John C. Simons, Esq. Facsimile: (212) 603-6848 19. Continuing Security Interest; Successors and Assigns. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until termination of the security interests in the Pledged Collateral pursuant to Section 16 hereof, (ii) be binding upon Pledgor, its successors and assigns, and (iii) inure, together with the rights and remedies of Lender hereunder and its successors and assigns. Without limiting the generality of the foregoing clause (iii), Lender may assign or otherwise transfer all or any portion of the Credit to any other Person as permitted in the Credit Documents, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to Lender herein or otherwise. Pledgor may not assign or transfer any of its interests or obligations hereunder without the prior consent of Lender. 20. Irrevocable Authorization and Instruction to Issuer. Pledgor hereby authorizes and instructs Issuer to comply with any instruction received by it from Lender in writing that (a) states that an Event of Default has occurred and is continuing, and (b) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from Pledgor, and Pledgor agrees that Issuer shall be fully protected in so complying. 21. Waiver. (a) In addition to any other waivers herein, Pledgor waives to the greatest extent it may lawfully do so, and agrees that it shall not at any time insist upon, plead or in any manner whatever claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, marshalling of assets, redemption or similar law, or exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance by Pledgor of its obligations under, or the enforcement by Lender of, this Agreement. Pledgor hereby waives diligence, presentment and demand (whether for nonpayment or protest or of acceptance, maturity, extension of time, change in nature or form of the Secured Obligations, acceptance of further security, release of further security, composition or agreement arrived at as to the amount of, or the terms of the Secured Obligations, notice of adverse change in Pledgor's or any other Person's financial condition or any other fact which might materially increase the risk to Pledgor) with respect to any of the Secured Obligations or all other demands whatsoever and waives the benefit of all provisions of law which are or might be in conflict with the terms of this Agreement. To the maximum extent permitted by applicable law, Pledgor hereby waives any requirement on the part of the holder of the Credit to mitigate the damages resulting from any default under the Credit. - 18 - (b) If Lender may, under applicable law, proceed to realize its benefits under the Guarantee, the Cash Collateral Account Agreement or any of the Credit Documents giving Lender a Lien upon any collateral, whether owned by Pledgor or by any other Person, either by judicial foreclosure or by non-judicial sale or enforcement, Lender may, at its sole option, determine which of its remedies or rights it may pursue without affecting any of the rights and remedies of Lender under this Agreement. 22. Reinstatement. This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any amount received by Lender in respect of the Secured Obligations is rescinded or must otherwise be restored or returned by Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Pledgor or upon the appointment of any intervenor or conservator of, or trustee or similar official for, Pledgor or any substantial part of its assets, or otherwise, all as though such payments had not been made. 23. Severability. The provisions of this Agreement are severable, and if any clause or provision shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Agreement in any jurisdiction. 24. Time is of Essence. Time is of the essence of each provision of this Agreement of which time is an element. 25. Survival of Provisions. All agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement, the Guarantee and the Cash Collateral Account Agreement. Notwithstanding anything in this Agreement, the Guarantee, the Cash Collateral Account Agreement or implied by law to the contrary, the agreements, representations and warranties of Pledgor set forth herein shall terminate only upon payment of the Secured Obligations (other than indemnity obligations) and the termination of this Agreement. 26. Statute of Limitations; Suretyship Defenses. Pledgor hereby waives the right to plead any statute of limitations as a defense to any indebtedness or obligation hereunder or secured hereby to the full extent permitted by law, and hereby waives all suretyship defenses. 27. Headings Descriptive. The headings in this Agreement are for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. 28. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same agreement. 29. GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL - 19 - LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS RULES OF THE STATE OF NEW YORK. 30. Submission To Jurisdiction; Waivers. Pledgor hereby irrevocably and unconditionally: (i) submits for itself and its property in any legal action or proceeding relating to this Agreement to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (ii) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to Pledgor at its address set forth in Section 18 hereof, or at such other address of which the Lender shall have been notified pursuant thereto; (iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (v) waives, except in the case of bad faith, willful misconduct or gross negligence (and otherwise to the maximum extent not prohibited by law), any right it may have to claim or recover in any legal action or proceeding referred to in this section 30 any special, exemplary, or consequential damages. 31. WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, PLEDGOR AND LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. [SIGNATURE PAGE TO FOLLOW] - 20 - IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed and delivered as of the day and year first above written. MGN AMERICA, INC. By /s/ Chaim Katzman --------------------------------- Chaim Katzman President By acceptance hereof as of the date first above written, Lender agrees to be bound by the provisions hereof. BANK LEUMI LE-ISRAEL B.M., as Lender By /s/ _________________________________ Name: Title: By /s/ _________________________________ Name: Title: EXHIBIT A Irrevocable Proxy The undersigned hereby appoints BANK LEUMI LE-ISRAEL B.M. ("Lender"), as proxy with full power of substitution, and hereby authorizes Lender to represent and vote all of the shares of the capital stock of Equity One, Inc. acquired by the undersigned pursuant to that certain Equity One, Inc. Common Stock Purchase Agreement, dated as of October 28, 2002 (the "Pledged Shares") and all shares of the capital stock of Equity One, Inc. acquired by the undersigned in respect of or in exchange for the Pledged Shares, all held of record by the undersigned on the date of exercise hereof or at any meeting or at any other time chosen by Lender in its sole discretion, but only at the times and in the circumstances provided in that certain Pledge and Security Agreement dated as of February 11, 2003, executed by the undersigned in favor of Lender. MGN AMERICA, INC. Date: _____________ By:_________________________________ Chaim Katzman President EXHIBIT B Assignment Separate From Certificate FOR VALUE RECEIVED, MGN AMERICA, INC. hereby sells, assigns and transfers unto _______________________________ _______________________ (__________) Shares of the Common Stock of Equity One, Inc., a Maryland corporation (the "Corporation"), standing in its name on the books of the Corporation represented by Certificate(s) No. ___________ herewith and does hereby irrevocably constitute and appoint ______________________ attorney to transfer the said stock on the books of the Corporation with full power of substitution in the premises. Date: _______________ MGN AMERICA, INC. By:_________________________________ Name: Title: EX-5 7 g80918exv5.txt CASH COLLATERAL AGREEMENT DATED 2/11/03 EXHIBIT 5 CASH COLLATERAL AGREEMENT Cash Collateral Agreement made as of February 11, 2003, by and among MGN America, Inc. ("MGN"), Bank Leumi Le-Israel B.M. (the "Bank"), and Bank Leumi USA ("BLUSA"). WHEREAS, the Bank has agreed to extend credit up to an aggregate amount of US$30,000,000 (the "Credit") to Gazit Globe (1982) Ltd. ("Gazit"), upon the terms and conditions set forth in that certain (i) commitment letter dated October 28, 2002, between the Bank and Gazit, and (ii) General Conditions for Opening an Account and Receiving Credits in Foreign Currency and in Israeli Currency dated November 25, 1994, between the Bank and Gazit (the principal with accrued interest and fees thereon, the "Loan Obligations"); and WHEREAS, Gazit has loaned the proceeds of the Credit to MGN, its subsidiary, to finance the purchase by MGN of up to 4,284,820 shares of common stock (the "Common Shares") of Equity One, Inc., a Maryland corporation (the "Company"); and WHEREAS, MGN has guaranteed the prompt and full payment and performance of the Loan Obligations pursuant to that certain Guarantee dated as of February 11, 2003 (the "Guarantee"), executed by MGN in favor of the Bank; and WHEREAS, MGN and the Bank have entered into a Pledge and Security Agreement, dated as of February 11, 2003 (the "Pledge and Security Agreement") wherein and whereby MGN, as Pledgor, has pledged to the Bank, among other things, the Common Shares and all dividends or other cash paid on or by reason of MGN's ownership of the Common Shares (together with interest thereon, the "Cash Collateral") as security for the full and faithful performance by MGN of its obligations under the Guarantee; and WHEREAS, the Pledge and Security Agreement provides, among other things, that (i) MGN shall establish a cash collateral bank account with BLUSA (the "Cash Collateral Account"), to be pledged in favor of the Bank as security for the performance by MGN of its obligations under the Guarantee, (ii) all dividends or other cash paid by the Company on or by reason of the Common Shares shall be deposited into the Cash Collateral Account, and (iii) that the Bank's Pledged Collateral (as defined in the Pledge and Security Agreement) shall include the Cash Collateral Account; and WHEREAS, the parties are entering into this Cash Collateral Agreement in order to implement the provisions of the Pledge and Security Agreement with respect to the Cash Collateral Account, including perfection of the security interest of the Bank in the Cash Collateral Account. NOW THEREFORE, the parties agree: 1. The Account. BLUSA hereby is establishing a Cash Collateral Account, in the name of MGN, at BLUSA's office located at 564 Fifth Avenue, New York, New York (Numbers ____________ and ____________) into which there shall be deposited all cash 1 dividends paid by the Company on account of the Common Shares, and all other cash payments made by the Company on or by reason of the Common Shares. The Cash Collateral Account is a "deposit account" within the meaning of Article 9 of the Uniform Commercial Code of the State of New York (the "UCC"). BLUSA will not agree with any third party to comply with instructions or other directions concerning the Cash Collateral or the disposition of funds in the Cash Collateral Account originated by such third party without the prior written consent of the Bank and MGN. The Cash Collateral Account shall be of such type as is mutually agreeable to MGN and the Bank; provided, however, that withdrawals therefrom may only be made in accordance with the terms of this Cash Collateral Agreement. Notwithstanding the foregoing, MGN may require that the Cash Collateral be deposited in an interest bearing money market account. Interest earned on the Cash Collateral shall be part of, and included in, the Cash Collateral, and shall remain in the Cash Collateral Account subject to the terms of this Cash Collateral Agreement and the Pledge and Security Agreement. Dividends and any other deposits in the Cash Collateral Account, and any interest earned thereon, shall be deemed for the benefit of MGN which shall be responsible for payment of all taxes thereon. MGN represents that it is a Nevada corporation and that its federal tax identification number is 02-0533433. 2. Condition Precedent. This Cash Collateral Agreement shall be effective upon the receipt by BLUSA of a fully executed counterpart of a letter of direction to the Company, in form and substance like Exhibit A annexed hereto. 3. Deposits. MGN agrees that until such time as it shall have received notice from the Bank that this Cash Collateral Agreement has been terminated, and that the Cash Collateral Account has been closed, all cash dividends and other cash proceeds attributable to the Common Shares shall be deposited directly into the Cash Collateral Account either by check payable to MGN (duly endorsed and which BLUSA is hereby authorized and directed to deposit into the Cash Collateral Account) or by direct wire transfer into the Cash Collateral Account. The current record dates of the Company for the payment of dividends are March 31, June 30, September 30 and December 31. MGN shall give BLUSA notice of each (i) anticipated dividend payment when declared, which notice will include the payment date and amount, and (ii) any change in the record dates. Payments by check shall be sent to Bank Leumi USA 564 Fifth Avenue, New York, New York 10036, Attention: Ms. Shirly Yechilevich, and wire transfers shall be sent pursuant to wire transfer instructions supplied by BLUSA to the Company from time to time. 4 Withdrawals. BLUSA shall not make or permit the withdrawal or other disposition of any Cash Collateral in the Cash Collateral Account without the Bank's prior written direction. 5. No Liens. Except as is otherwise provided in Section 9, no interest in the Cash Collateral, or any beneficial interest therein, may be (i) pledged, sold, assigned or transferred, (a) by any party hereto, except as is expressly provided herein and in the Pledge and Security Agreement, or (b) other than by operation of law, or (ii) taken or reached by any legal or equitable process in satisfaction of any debt or other liability of any party hereto other than MGN. 2 6. Final Disbursement. When the Bank, in its sole discretion, is satisfied that each of MGN and Gazit has indefeasibly satisfied all of its obligations to the Bank, and has given BLUSA notice thereof, the balance of the Cash Collateral, if any, shall be remitted to MGN by BLUSA, and BLUSA shall be fully relieved and discharged from any further duties hereunder, and released from all further responsibility and liability hereunder with respect to the Cash Collateral. 7. Conflicts. BLUSA's obligations hereunder shall be as a depository only, and BLUSA shall not be responsible or liable in any manner whatever for the sufficiency, correctness, genuineness or validity of any notice, instructions or instrument furnished to it or deposited with it, or for the form of execution of any thereof, or for the identity, authority or rights of any person executing, furnishing or depositing the same except to the extent of its gross negligence or willful misconduct. BLUSA shall not have any duties or responsibilities except those set forth in this Cash Collateral Agreement, and shall not incur any liability in acting upon any signature, notice, request, waiver, consent, receipt or other paper or document reasonably believed by it to be genuine, and unless BLUSA has received Notice to the contrary, BLUSA may presume that any of (i) Dafna Landau, (ii) Tomer Grinshpon, and (iii) Avi Flumin purporting to give any notice or advice on behalf of any part in accordance with the provisions hereof has been duly authorized to do so. If (i) BLUSA shall receive instructions or any other notice with respect to the Cash Collateral which, in its sole and absolute judgment, are in conflict with this Cash Collateral Agreement or any order, ruling or decree of any Court of other tribunal or administrative agency, or (ii) in the sole and absolute judgment of BLUSA the release conditions specified in Sections 4 and 6 of this Cash Collateral Agreement have not been satisfied, BLUSA, in its sole and absolute discretion, may refrain from taking any action with respect thereto unless it is otherwise specifically directed by a final order of a Court of competent jurisdiction as to which the time for appeal has expired without an appeal having been taken. If any dispute or difference shall arise between MGN and the Bank with respect to the Cash Collateral or this Cash Collateral Agreement, or if any conflicting demand shall be made upon BLUSA, BLUSA also shall have the right, in its sole and absolute discretion, to retain the Cash Collateral, or any part of it, and await the outcome of such dispute, difference, demand or other controversy by final legal proceedings or otherwise, as BLUSA may deem appropriate. 8. Exculpation. BLUSA shall be liable only for its own willful misconduct or gross negligence and not for any act done or omitted by it in good faith. BLUSA may rely, and shall be protected in acting or refraining from acting, upon any notice, instruction or request, furnished to it hereunder and believed in good faith by it to be genuine. If BLUSA receives any notice under which some action is to be taken by it, it shall not be required to act thereon until it has had an opportunity, if it so desires, to investigate the authenticity of such notice. 9. Annual Fee. MGN shall pay BLUSA an annual fee of US$15,000 (the "Fee") for each calendar year in consideration of its maintenance of the Cash Collateral Account. The Fee shall be paid concurrently with the execution of this Cash Collateral Agreement, and on the anniversary date hereof. If the Fee is not paid within ten (10) days of its due date, BLUSA may debit the Cash Collateral Account therefore. 10. Advice of Counsel and Expenses. BLUSA may consult with counsel of its own choice, including Warshaw Burstein Cohen Schlesinger & Kuh, LLP, and shall have full 3 and complete authorization and protection for any action taken, omitted or suffered based on the advice or opinion of such counsel. BLUSA shall be reimbursed by MGN for any otherwise unreimbursed out-of-pocket cost and expenses (including, without limitation, reasonable counsel fees and disbursements) incurred by it in connection with its duties under this Cash Collateral Agreement, and shall have a lien on the Cash Collateral to pay any such costs and expenses. 11. Indemnification. MGN will indemnify BLUSA, its directors, officers and employees and each legal entity, if any, who controls BLUSA (the "Indemnified Parties"), and hold each of the Indemnified Parties harmless from and against, any and all claims, damages, losses, liabilities, costs and expenses (including, without limitation, all legal fees and expenses of internal or external counsel with whom any Indemnified Party may consult and all expenses of litigation or preparation therefor), which any Indemnified Party may incur or which may be asserted against any Indemnified Party as a result of the execution, delivery or enforcement of, or performance under, this Cash Collateral Agreement; provided that the foregoing indemnity agreement shall not apply to claims, damages, losses, liabilities and expenses solely attributable to an Indemnified Party's gross negligence or willful misconduct. The indemnify agreement contained in this Section 11 shall survive the termination of this Cash Collateral Agreement. 12. Notices. All notices, instructions (except instructions to BLUSA from the Bank to transfer Cash Collateral), consents, claims, designations, directions and other communications (each a "Notice") required or permitted to be given under this Cash Collateral Agreement shall be in writing and shall be deemed to have been duly given and received if given personally with receipt acknowledged or sent by first class registered or certified mail, return receipt requested, postage prepaid, or sent via a recognized overnight courier, addressed to the parties at the following addresses, unless Notice is given of a change of address in the manner set forth herein, in which case all future Notices shall be sent to the new address so designated: If to BLUSA: Bank Leumi USA 564 Fifth Avenue New York, New York 10036 Attn: Ms. Shirly Yechilevich Fascimile: 212-626-1072 with a copy to: Warshaw Burstein Cohen Schlesinger & Kuh, LLP 555 Fifth Avenue New York, New York 10017 Attn: Allen N. Ross, Esq. Fascimile: 212-984-7792 4 If to the Bank: Bank Leumi le-Israel B.M. Construction and Real Estate Division 32 Yehuda Halevy Street Tel Aviv, Israel 65121 Facsimile No.: (972)-3-514-8980 If to MGN: MGN America, Inc. 1660 N.E. Miami Gardens Drive North Miami Beach, Florida 33179 Attn: Chaim Katzman, President Facsimile No.: (305) 947-1734 With a copy to: Jeffrey Oshinsky, Esq. White & Case LLP 200 S. Biscayne Blvd. Miami, FL 33180 Facsimile No.: (305) 358-5744 A copy of each Notice shall also be sent by facsimile. Notices shall be deemed to have been given and received on the earlier of (i) when given personally with receipt acknowledged, (ii) three days after being sent by overnight courier, or (iii) on the fifth business day after the mailing thereof as aforesaid, and provided, however, that notices of change of address shall not be effective until actually received or offered to the addressee by the Postal Service, if refused. Each party hereto shall be sent a copy of any Notice. 13. Miscellaneous 13.1 This Cash Collateral Agreement, the Guarantee, the Pledge and Security Agreement, and the other Credit Documents (as defined in the Pledge and Security Agreement) constitute the entire agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter thereof. In the event of any conflict between this Cash Collateral Agreement (or any portion thereof), the Pledge and Security Agreement or any other agreement now existing or hereafter entered into, the terms of this Cash Collateral Agreement shall prevail. 5 13.2 This Cash Collateral Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors and assigns. Nothing in this Cash Collateral Agreement, expressed or implied, is intended to or shall confer on any person other than the parties hereto, or their respective successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Cash Collateral Agreement. No party hereto may assign this Cash Collateral Agreement or its rights hereunder without the prior consent of all of the other parties, and any such attempted assignment shall be null and void. 13.3 This Cash Collateral Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to its conflict of laws provisions. 13.4 MGN shall do and perform, or cause to be done and performed, all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments and documents as the other parties to this Cash Collateral Agreement may reasonably request in order to carry out the intent and accomplish the purposes of this Cash Collateral Agreement and the consummation of the transactions contemplated hereby. 13.5 Each party hereto (i) consents and submits to the jurisdiction of the Courts of the State of New York and of the Courts of the United States for the Southern District of New York for all purposes of this Cash Collateral Agreement, including, without limitation, any action or proceeding instituted for the enforcement of any right, remedy, obligation and liability arising under or by reason of this Cash Collateral Agreement, (ii) consents and submits to the venue of such action or proceeding in the City and County of New York (or such judicial district of a Court of the United States as shall include the same), and (iii) to service of process in any such action by mailing a copy thereof by certified mail, return receipt requested, postage prepaid, to such party at his or its address specified in Section 12. 13.6 This Cash Collateral Agreement may not be modified or amended, except by an instrument or instruments in writing, signed by the party against whom enforcement of any such modification or amendment is sought. Any party hereto may, by an instrument in writing, waive compliance by another party hereto with any term or provisions of this Cash Collateral Agreement on the part of such other party to be performed or complied with. The waiver by either party of a breach of any term or provisions of this Cash Collateral Agreement shall not be construed as a waiver of any subsequent breach. 13.7 The section headings contained in this Cash Collateral Agreement are for reference purposes only, and shall not be deemed to be part of this Cash Collateral Agreement or affect the meaning or interpretation of this Cash Collateral Agreement. 13.8 This Cash Collateral Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same agreement. [SIGNATURE PAGE TO FOLLOW] 6 IN WITNESS WHEREOF, the parties have caused this Cash Collateral Agreement to be duly executed as of the date first above written. MGN AMERICA, INC. By: /s/ Chaim Katzman -------------------------------- Name: Chaim Katzman Title: President BANK LEUMI LE-ISRAEL, B.M. By: /s/ _______________________________ Name:______________________________ Title:_____________________________ By: /s/ _______________________________ Name:______________________________ Title:_____________________________ BANK LEUMI USA By: /s/ Shirly Yecilevich ------------------------------- Name: Shirly Yechilevich Title: Assistant Vice President By: /s/ Raphael Sisso ------------------------------- Name: Raphael Sisso Title: Vice President EX-6 8 g80918exv6.txt GUARANTEE DATED 2/11/03 EXHIBIT 6 GUARANTEE GUARANTEE dated as of February 11, 2003 (this "Guarantee"), made by MGN AMERICA, INC., a Nevada corporation (the "Guarantor"), in favor of BANK LEUMI LE-ISRAEL B.M. (the "Lender"). W I T N E S S E T H: WHEREAS, the Lender has agreed to extend credit up to an aggregate amount of US$30,000,000 (the "Credit") to GAZIT GLOBE (1982) LTD., a company incorporated under the laws of Israel (the "Borrower"), upon the terms and subject to the conditions set forth in that certain (i) commitment letter dated October 28, 2002, between the Lender and the Borrower (as amended, supplemented or otherwise modified from time to time, the "Commitment Letter"), (ii) General Conditions for Opening an Account and Receiving Credits in Foreign Currency and in Israeli Currency dated November 25, 1994, between the Lender and the Borrower (as amended, supplemented or otherwise modified from time to time, the "General Terms"), (iii) Letter of Undertaking (re: compliance with margin regulations) dated February 11, 2003, from the Borrower in favor of Lender (as amended, supplemented or otherwise modified from time to time, the "Letter of Undertaking"), and (iv) Deed of Pledge (Pledge and assignment of rights by way of charge) dated February 11, 2003, between the Borrower and the Lender (as amended, supplemented or otherwise modified from time to time, the "Deed of Pledge," and together with the Commitment Letter, the General Terms and the Letter of Undertaking, and any other documents or agreements entered into by the Borrower in favor of Lender in connection with the Credit, the "Credit Documents"); and WHEREAS, the Borrower intends to loan or contribute the proceeds of the Credit to the Guarantor, its subsidiary, in order that the Guarantor may purchase of up to 4,284,820 shares of the capital stock of Equity One, Inc., a Maryland corporation ("EOI"); and WHEREAS, it is a condition precedent to the obligation of the Lender to grant the Credit that, among other things, the Guarantor, guarantee the payment and performance of the Credit and all other obligations of the Borrower under the Credit Documents pursuant to this Guarantee; NOW, THEREFORE, in consideration of the premises, the Guarantor hereby agrees with the Lender as follows: 1. Defined terms. (a) The following capitalized terms shall have the following meanings: "Cash Collateral Agreement": means that certain Cash Collateral Agreement dated as of the date hereof, among the Lender, the Guarantor and Bank Leumi USA, as amended, supplemented or modified from time to time. "Contractual Obligation" means as to any Person, any term or provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "Event of Default" shall mean any event of default occurring and continuing under any document or instrument that evidences or secures the Secured Obligations. "Governmental Authority" means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government. "Lien" means any mortgage, deed of trust, pledge, hypothecation, security interest, assignment, encumbrance, claim, lien, lease or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, affecting any assets or property, including any agreement to give or grant any of the foregoing, any conditional sale or other title retention agreement and the filing of or agreement to give any financing statement with respect to any assets or property under the Uniform Commercial Code or comparable law of any jurisdiction. "Material Adverse Effect" means (X) a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of the Guarantor or the Borrower, (b) the validity or enforceability of this or any of the other documents made, delivered or given in connection with this Guarantee or any other document or instrument that evidences or secures the Secured Obligations, (c) the rights or remedies of the Lender hereunder, or under any document or instrument that evidences or secures the Secured Obligations, or any of the other agreements or documents made, delivered or given in connection therewith, (Y) any impairment to the validity, perfection or priority of the security interest of the Lender in the Pledged Collateral (as defined in the Pledge and Security Agreement) in any manner whatsoever, and/or (Z) an Event of Default. "Person" means an individual, partnership, limited liability company, corporation, business trust, joint stock company, trust, estate, unincorporated organization or association, joint venture, Governmental Authority, or other entity of whatever nature. "Pledge and Security Agreement" means that certain Pledge and Security Agreement dated as of the date hereof from the Guarantor in favor of the Lender, as amended, supplemented or modified from time to time. "Requirement of Law" means as to any Person, the articles or certificate of incorporation, certificate of formation, operating agreement, and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Secured Obligations" means all obligations, liabilities and indebtedness of the Borrower now or hereafter owing to the Lender under or in connection with the - 2 - Credit or the Credit Documents or any other loan, extension of credit or accommodation now or hereafter made or granted by the Lender (each such other loan, extension of credit or accommodation, an "Other Credit"), including, without limitation, (i) all unpaid principal of, and accrued interest (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of the Borrower, whether or not allowed or allowable as a claim in any such proceeding) on, any loan or other credit granted under or in connection with the Credit Documents or any Other Credit, (ii) all expenses, costs of collection and any other amounts payable to the Lender by the Borrower under any Credit Document (including, without limitation, all fees and disbursements of counsel to the Lender that are required to be paid by the Borrower to the Lender pursuant to any Credit Document or any Other Credit), and (iii) any renewals or extensions of the Credit or Credit Documents or any Other Credit. "Termination Date" shall mean the date on which all commitments, if any, of the Lender to make any loans, extensions of credit or other accommodations to the Borrower have been terminated and the Secured Obligations have been paid in full, subject to reinstatement pursuant to paragraph 7 hereof, other than any indemnification obligations not then due and payable. (b) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this Guarantee, and section and paragraph references are to this Guarantee unless otherwise specified. (c) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 2. Guarantee. (a) Subject to the provisions of paragraph 2(b) hereof, the Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Lender and for its respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations. (b) Notwithstanding anything herein to the contrary, the maximum liability of the Guarantor hereunder shall in no event exceed the amount which can be guaranteed by the Guarantor under applicable federal and state laws relating to the insolvency of debtors. (c) The Guarantor further agrees to pay any and all expenses (including, without limitation, all reasonable fees and disbursements of counsel) which may be paid or incurred by the Lender in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Secured Obligations and/or enforcing any rights with - 3 - respect to, or collecting against, the Guarantor under this Guarantee. Without limiting the generality of the foregoing, the Guarantor's liability shall extend to all amounts that constitute part of the Secured Obligations and would be owed by the Borrower but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Borrower. This Guarantee shall remain in full force and effect until, and shall terminate on, the Termination Date. The provisions of the first and second sentences of this paragraph shall survive the termination of this Guarantee and the payment in full of the Secured Obligations. The Guarantor agrees that the Secured Obligations may at any time and from time to time exceed the amount of the liability of the Guarantor hereunder without impairing this Guarantee or affecting the rights and remedies of the Lender. (d) No payment made by the Borrower, the Guarantor, or any other guarantor or Person and no payment or amount received or collected by the Lender from the Borrower, the Guarantor, or any other guarantor or Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of, or in payment of, the Secured Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of the Guarantor hereunder, and the Guarantor shall, notwithstanding any such payment (other than any payment made by the Guarantor in respect of the Secured Obligations or any payment or amount received or collected from the Guarantor in respect of the Secured Obligations), remain liable for the Secured Obligations up to the maximum liability of the Guarantor hereunder until the Termination Date. (e) The Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to the Lender on account of its liability hereunder, it will notify the Lender in writing that such payment is made under this Guarantee for such purpose. 3. Right of Set-off. At any time when an Event of Default has occurred and is continuing, the Guarantor hereby irrevocably authorizes the Lender at any time and from time to time without notice to the Guarantor, any such notice being expressly waived by the Guarantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Lender to or for the credit or the account of the Guarantor, or any part thereof in such amounts as the Lender may elect, against and on account of the obligations and liabilities of the Guarantor to such holder hereunder and claims of every nature and description of such holder against the Guarantor, in any currency, whether arising hereunder, under the Credit Documents, or otherwise, as the Lender may elect, whether or not the Lender has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The Lender shall notify the Guarantor promptly of any such set-off, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Lender under this paragraph are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Lender may have. 4. No Subrogation. Notwithstanding any payment made by the Guarantor hereunder or any set-off or application of funds of the Guarantor by the Lender, the Guarantor shall not be - 4 - entitled to be subrogated to any of the rights of the Lender against the Borrower or any collateral security or guarantee or right of offset held by the Lender for the payment of the Secured Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower in respect of payments made by the Guarantor hereunder, until all amounts owing by the Borrower to the Lender on account of the Secured Obligations are indefeasibly paid in full. If any amount shall be paid to the Guarantor on account of such subrogation rights at any time when all of the Secured Obligations shall not have been indefeasibly paid in full, such amount shall be held the Guarantor in trust for the Lender, segregated from other funds of the Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over to the Lender in the exact form received by the Guarantor (duly indorsed by the Guarantor to the Lender, if required), to be applied against the Secured Obligations, whether matured or unmatured. 5. Amendments, etc. with respect to the Secured Obligations; Waiver of Rights. The Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Guarantor and without notice to or further assent by the Guarantor, any demand for payment of any of the Secured Obligations made by the Lender may be rescinded by the Lender and any of the Secured Obligations continued, and the Secured Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Lender, and the agreements and instruments giving rise to the Secured Obligations and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Lender may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Lender for the payment of the Secured Obligations may be sold, exchanged, waived, surrendered or released. The Lender shall have no obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Secured Obligations or for this Guarantee or any property subject thereto. When making any demand hereunder against the Guarantor, the Lender may, but shall be under no obligation to, make any similar demand on any other Person, and (i) any failure by the Lender to make any demand or to collect any payments from the Borrower or any other guarantor or Person, or (ii) any release of any other guarantor or Person, shall not relieve or release the Guarantor of its obligations and liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied or as a matter of law, of the Lender against the Guarantor. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 6. Guarantee Absolute and Unconditional. The Guarantor waives all suretyship defenses and any and all notice of the creation, renewal, extension or accrual of any of the Secured Obligations and notice of or proof of reliance by the Lender upon this Guarantee or acceptance of this Guarantee; the Secured Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guarantee, and all dealings between the Borrower and the Guarantor, on the one hand, and the Lender, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guarantee. The Guarantor waives diligence, - 5 - presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or the Guarantor with respect to the Secured Obligations. The Guarantor understands and agrees that this Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity, regularity or enforceability of the Secured Obligations, any document, instrument, agreement or guarantee evidencing, securing or guaranteeing the Secured Obligations, or any right of offset with respect thereto at any time or from time to time held by the Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower against the Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of or the Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Secured Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against the Guarantor, the Lender may, but shall be under no obligation to, pursue such rights and remedies as it may have against the Borrower or any other Person or against any collateral security or guarantee for the Secured Obligations or any right of offset with respect thereto, and any failure by the Lender to pursue such other rights or remedies or to collect any payments from the Borrower or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve the Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Lender against the Guarantor. 7. Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by the Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or the Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or the Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made. 8. Payments. The Guarantor hereby guarantees that payments hereunder will be paid to the Lender without set-off or counterclaim in U.S. Dollars at the office of the Lender located at 32 Yehuda Halevy Street, Tel Aviv, Israel 65121, Attention: Construction and Real Estate Division, or to such other address as the Lender shall so notify the Guarantor in writing. 9. Representations and Warranties. The Guarantor hereby represents and warrants that: (a) it is a corporation duly organized, validly existing and in good standing under the laws of its organization and has the corporate power and authority and the legal right to own and operate its property, to lease the property it operates and to conduct the business in which it is currently engaged; - 6 - (b) it has the corporate power and authority and the legal right to execute and deliver, and to perform its obligations under, this Guarantee, and has taken all necessary action to authorize its execution, delivery and performance of this Guarantee; (c) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable in accordance with its terms, except as affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors' rights generally, general equitable principles and an implied covenant of good faith and fair dealing; (d) the execution, delivery and performance of this Guarantee will not violate any provision of any Requirement of Law or Contractual Obligation of the Guarantor (except to the extent that any such violation would not reasonably be expected to have a Material Adverse Effect) and will not result in or require the creation or imposition of any Lien on any of the properties or revenues of the Guarantor pursuant to any Requirement of Law or Contractual Obligation of the Guarantor; (e) no consent or authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority and no consent of any other Person (including, without limitation, any stockholder or creditor of the Guarantor) is required in connection with the execution, delivery, performance, validity or enforceability of this Guarantee, other than any which have been obtained or made prior to the date hereof and remain in full force and effect; and (f) no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Guarantor, threatened by or against the Guarantor or against any of its properties or revenues with respect to this Guarantee or any of the transactions contemplated hereby. The Guarantor agrees that the foregoing representations and warranties shall be deemed to have been made by the Guarantor on the date of each credit extension or accommodation made to the Borrower under the Credit Documents on and as of such date as though made hereunder on and as of such date. 10. Notices. All notices, requests and demands to or upon the Lender or the Guarantor to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand or overnight/international delivery, when delivered, or (b) in the case of delivery by facsimile transmission, when sent and receipt has been confirmed (with copy sent via overnight/international delivery promptly thereafter), addressed as follows: (a) if to the Lender, at: Bank Leumi le-Israel B.M., 32 Yehuda Halevy Street, Tel Aviv, Israel 65121, Attention: Construction and Real Estate Division, Fax No.: 972-3-514-8980; and - 7 - (b) if to the Guarantor, at: MGN America, Inc., 1660 N.E. Miami Gardens Drive, North Miami Beach, FL 33179, Attention: Chaim Katzman, President, Fax No.: (305) 947-1734, with copy to : Jeffrey Oshinsky, White & Case LLP, 200 S. Biscayne Blvd., Miami, FL 33180, Fax No.: (305) 358-5744. The Lender and the Guarantor may change its address and facsimile numbers for notices by notice in the manner provided in this paragraph 10. 11. Severability. Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 12. Integration. This Guarantee represents the agreement of the Guarantor with respect to the subject matter hereof and there are no promises or representations by the Lender relative to the subject matter hereof not reflected herein, the Credit Documents, the Pledge and Security Agreement, and the Cash Collateral Agreement. 13. Amendments in Writing, No Waiver, Cumulative Remedies. (a) None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Guarantor and the Lender, provided that any provision of this Guarantee may be waived by the Lender in a letter or agreement executed by the Lender or by facsimile transmission from the Lender. (b) The Lender shall not by any act (except by a written instrument pursuant to paragraph 13(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of the Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Lender would otherwise have on any future occasion, (c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 14. Paragraph Heading. The paragraph headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. - 8 - 15. Successors and Assigns. This Guarantee shall be binding upon the successors and assigns of the Guarantor and shall inure to the benefit of the Lender and its successors and assigns. 16. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 17. Submission To Jurisdiction; Waivers. The Guarantor hereby irrevocably and unconditionally: (i) submits for itself and its property in any legal action or proceeding relating to this Guarantee to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (ii) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (iii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Guarantor at its address set forth in Section 10 hereof, or at such other address of which the Lender shall have been notified pursuant thereto; (iv) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (v) waives, except in the case of bad faith, willful misconduct or gross negligence (and otherwise to the maximum extent not prohibited by law), any right it may have to claim or recover in any legal action or proceeding referred to in this paragraph 17 any special, exemplary, or consequential damages. 18. WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. - 9 - [SIGNATURE PAGE TO FOLLOW] - 10 - IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer as of the day and year first above written. MGN AMERICA, INC. By: /s/ Chaim Katzman --------------------------- Chaim Katzman President -----END PRIVACY-ENHANCED MESSAGE-----

EX-1

                                                                       EXHIBIT 1

                                 LOAN AGREEMENT

This Loan Agreement (this "Agreement") is entered into on February 11, 2003, by
and between Gazit-Globe (1982) Ltd., an Israeli corporation (the "Lender") and
MGN AMERICA, INC., a Nevada corporation (the "Borrower"); the Lender and the
Borrower shall collectively be referred to herein as the "Parties".

                              W I T N E S S E T H:

WHEREAS           MGN (USA), Inc. committed to purchase up to 4,284,820 Common
                  Stock Shares (the "Shares") of Equity One, Inc. ("EQY")
                  according to a Common Stock Purchase Agreement (the "Share
                  Purchase Agreement") between EQY and MGN (USA), Inc. and MGN
                  (USA), Inc. subsequently assigned its rights to purchase the
                  Shares to the Borrower pursuant to an Assignment Agreement
                  (the "Assignment Agreement") between MGN (USA), Inc. and the
                  Borrower; and

WHEREAS           the Borrower is a subsidiary indirectly wholly owned by
                  Lender; and

WHEREAS           the Borrower requested a loan from the Lender, and the Lender
                  has agreed to make a loan to the Borrower, for the purpose of
                  financing the purchase price of the Shares according to the
                  Share Purchase Agreement, upon the terms and conditions
                  contained below;

NOW THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

1.       The above recitals are an integral part hereof.

2.       Immediately prior to each of the Closings, as this term is defined in
         the Share Purchase Agreement, the Lender will lend the Borrower the
         purchase price of the Shares to be transferred to the Borrower at such
         Closing.

         According to the provisions of the Share Purchase Agreement and the
         Assignment Agreement, the aggregate number of Shares to be purchased
         by Borrower in all Closings shall be no less than 3,720,000 Shares and
         no more than 4,284,820 Shares, and therefore the total amount of the
         loan will be no less than US$49,476,000 and no more than US$56,988,106
         (each and all of such amounts shall be referred to as the "Loan").

3.       50% of the Loan shall bear interest at the rate of 3 months Libor +
         2.2% per year ("Part A of the Loan"), and 50% of the Loan shall bear
         interest at the rate of 3 months Libor + 2% per year ("Part B of the
         Loan"). Interest shall be calculated on the basis of a 360 day year.

4.       The repayment of principal of the Loan (or any part of the Loan) shall
         be as follows:

         4.1.     25% of the principal of Part A of the Loan, which constitutes
                  12.5% of the entire Loan, shall be paid during the first 3
                  years as of the grant of the Loan (or any part of the Loan),
                  in 12 installments each at the end of every 3-months-quarter
                  (ending on March 31, June 30, September 30 and December 31).

         4.2.     75% of the principal of Part A of the Loan, which constitutes
                  37.5% of the entire Loan, shall be paid in one installment to
                  be paid at the end of 36 months as of the grant of the Loan
                  (or any part of the Loan).

         4.3.     The principal of the entire Part B of the Loan, which
                  constitutes 50% of the entire Loan, shall be paid in one
                  installment to be paid at the end of 60 months as of the grant
                  of the Loan (or any part of the Loan).



5.       Payment of interest shall be made at the end of every 3-months-quarter
         (ending on March 31, June 30, September 30 and December 31) as of the
         grant of the Loan (or any part of the Loan).

6.       As a security for the repayment of the Loan, the Borrower shall pledge
         the Shares to Bank. The Borrower shall provide and sign any documents
         and instruments as required for the pledge of the Shares.

IN WITHNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed on their behalf, by their respective officers, thereunto duly
authorized, on the date first written above.

                                           GAZIT-GLOBE (1982) LTD.

                                           By: /s/ Dori Segal
                                               --------------------------------
                                           Name: Dori Segal
                                           Title: President

                                           By: /s/ Gil Kotler
                                               --------------------------------
                                           Name: Gil Kotler
                                           Title: CFO

                                           MGN AMERICA, INC.

                                           By: /s/ Dori Segal
                                               ---------------------------------
                                           Name:
                                           Title:

                                      - 2 -

EX-2

                                                                       EXHIBIT 2

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT dated as of February 12, 2003, between SILVER MAPLE
(2001), INC., a Nevada corporation (the "Borrower"), and [Commercial Bank] (the
"Lender").

                              W I T N E S S E T H:

         WHEREAS, the Borrower has requested that the Lender make available to
it a term loan credit of up to $7,000,000 in the aggregate upon the terms, and
subject to the conditions, set forth herein to partially finance the purchase by
Pledgor of up to 1,036,650 shares of the common stock of Equity One, Inc.; and

         WHEREAS, the Lender is willing to provide such financing to the
Borrower only upon the terms and subject to the conditions set forth herein;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:

SECTION 1.        DEFINITIONS.

         1.1.     Certain General Definitions. For all purposes of this
                  Agreement and the other Loan Documents, unless the context
                  otherwise requires:

                  "Agreement" means this Loan Agreement, as the same may be
         amended or otherwise modified from time to time, and the terms
         "herein," "hereof," "hereunder" and like terms shall be taken as
         referring to this Agreement in its entirety and shall not be limited to
         any particular section or provision thereof.

                  "Affiliate" means as to any Person, any other Person which,
         directly or indirectly, is in control of, is controlled by, or is under
         common control with, such Person. For purposes of this definition,
         "control" of a Person means the power, directly or indirectly, either
         to (a) vote 5% or more of the securities having ordinary voting power
         for the election of directors of such Person or (b) direct or cause the
         direction of the management and policies of such Person, whether by
         contract or otherwise.

                  "Agreement and Plan of Merger" means that certain Agreement
         and Plan of Merger dated October 28, 2002, between IRT and EOI, as
         amended, supplemented and modified from time to time.

                  "Business Day" means a day on which (i) dealings in Dollar
         deposits are carried on in the London Interbank Eurodollar market and
         (if payment is required to be made on such day) on which banks are open
         for business in London and in New York, and (ii) the Lender shall be
         open for ordinary business in New York. In the Lender's discretion, its
         office in New York may be closed on any Saturday, Sunday, legal holiday
         or other day on which it is lawfully permitted to close.



                  "Calculation Date" shall have the meaning provided therefor in
         Section 5.7(a).

                  "Change in Control" means (i) an event whereby any "person" or
         "group" (as such terms are used in Sections 12(d) and 13(d) of the
         Exchange Act, other than the Parent Shareholder of the Borrower on the
         Closing Date, shall become, or obtain rights (whether by means or
         warrants, options or otherwise) to become, the "beneficial owner" (as
         defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly
         or indirectly, of more than 20% of the outstanding common stock of the
         Borrower; (ii) the board of directors of the Borrower shall cease to
         consist of a majority of Continuing Directors; (iii) an event whereby
         any "person" or "group" (as such terms are used in Sections 12(d) and
         13(d) of the Exchange Act, other than the shareholders of the Parent
         Shareholder on the Closing Date, shall become, or obtain rights
         (whether by means or warrants, options or otherwise) to become, the
         "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the
         Exchange Act), directly or indirectly, of more than 20% of the
         outstanding common stock of the Parent Shareholder, or (ii) the board
         of directors of each Parent Shareholder shall cease to consist of a
         majority of Continuing Directors.

                  "Closing Date" means the date on which all of the conditions
         specified in Section 4.1 have been satisfied.

                  "Code" means the Internal Revenue Code of 1986, as amended
         from time to time.

                  "Collateral" means the Pledged Collateral (as defined in the
         Pledge and Security Agreement).

                  "Collateral Account" shall have the meaning provided therefor
         in the Pledge and Security Agreement.

                  "Commonly Controlled Entity" means an entity, whether or not
         incorporated, which is under common control with the Borrower within
         the meaning of Section 4001 of ERISA or is part of a group which
         includes the Borrower and which is treated as a single employer under
         Section 414 of the Code.

                  "Continuing Directors" means the directors of the Borrower or
         each Parent Shareholder, as the case may be, on the Closing Date, and
         each other director, if, in each case, such other director's nomination
         for election to the board of directors of the Borrower or such Parent
         Shareholder, as the case may be, is recommended by a majority of the
         then Continuing Directors or by a nominations committee thereof.

                  "Control" means the power to direct or cause the direction of
         the management and policies of a Person, either alone or in conjunction
         with others and whether through the ownership of voting securities, by
         contract or otherwise.

                  "Debt" means, as to any Person, the aggregate of such Person's
         liabilities as reflected in such Person's most recent financial
         statements, but not including subordinated debt.

                                       2



                  "Default" means any condition, event or act which, with notice
         or lapse of time, or both, would constitute an Event of Default.

                  "Dollars" and "$" means dollars in lawful currency of the
         United States.

                  "EOI" means Equity One, Inc., a Maryland corporation.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time, including the rules and regulations
         promulgated thereunder.

                  "Equity One, Inc. Common Stock Purchase Agreement": means that
         certain Equity One, Inc. Common Stock Purchase Agreement dated as of
         October 28, 2002, between EOI and each of the purchasers party thereto
         (including, without limitation, Pledgor), as amended, supplemented or
         modified from time to time.

                  "Event of Default" means any of the events specified in
         Section 7.1, provided that any requirement for the giving of notice,
         the lapse of time, or both, or any other condition, has been satisfied.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended from time to time, and any successor statute.

                  "GAAP" means generally accepted accounting principles in the
         United States of America as in effect from time to time.

                  "Governmental Authority" means any nation or government, any
         state or other political subdivision thereof and any entity exercising
         executive, legislative, judicial, regulatory or administrative
         functions of or pertaining to government, including, without
         limitation, the Federal Deposit Insurance Corporation, any central bank
         or any comparable authority.

                  "Indebtedness" of any Person means indebtedness incurred by
         that Person to banks or financial institutions.

                  "Initial Funding Loan(s)" means, if expressly requested and
         designated by the Borrower in its Notice of Borrowing delivered to the
         Lender, the initial Loan made to the Borrower hereunder on the Closing
         Date, and each subsequent Loan, if any, made to the Borrower hereunder
         on the Business Day immediately preceding each "Subsequent Closing" (as
         such term is defined in the Equity One, Inc. Common Stock Purchase
         Agreement so requested and designated by the Borrower in its Notice of
         Borrowing delivered to the Lender in connection therewith.

                  "Insolvency" means with respect to any Multiemployer Plan, the
         condition that such Plan is insolvent within the meaning of Section
         4245 of ERISA.

                  "Insolvent" means pertaining to a condition of Insolvency.

                  "Interest Payment Date" means the last day of each Interest
         Period.

                                       3



                  "Interest Period" means,

                  (i) with respect to any Loan (other than an Initial Funding
         Loan) bearing interest at the Libor Rate, (A) initially, the period
         commencing on the date of borrowing (or date of interest rate
         conversion) and ending three (3) months thereafter, and (B) thereafter,
         each period commencing on the last day of the preceding Interest Period
         and ending three (3) months thereafter; provided, however, that (aa) if
         any Interest Period would otherwise end on a day which is not a
         Business Day, the termination thereof shall be postponed to the next
         succeeding Business Day, unless such Business Day falls in the next
         calendar month, in which case such Interest Period shall end on the
         immediately preceding day which is a Business Day, (bb) if any Interest
         Period that begins on the last Business Day of a calendar month (or on
         a day for which there is no numerically corresponding day in the
         calendar month at the end of such Interest Period), then such Interest
         Period shall end on the last Business Day of a calendar month, (cc) any
         Interest Period that would otherwise extend beyond the Maturity Date
         shall end on the Maturity Date, and (dd) the initial Interest Period
         with respect to the Loan made on the Closing Date shall commence on the
         Closing Date and end on March 31, 2003;

                  (ii) with respect to an Initial Funding Loan bearing interest
         at the Libor Rate, the period commencing on the date of borrowing and
         ending one (1) Business Day thereafter, and

                  (iii) with respect to any Loan bearing interest at the
         Reference Rate, (A) initially, the period commencing on the date of
         borrowing (or date of interest rate conversion) and ending on the last
         Business Day of the next succeeding calendar quarter of March, June,
         September or December, as the case may be, and (B) thereafter, each
         period commencing on the last day of the preceding Interest Period and
         ending on the last Business Day of the next succeeding calendar quarter
         of March, June, September or December, as the case may; provided,
         however, any Interest Period that would otherwise extend beyond the
         Maturity Date shall end on the Maturity Date.

                  "IRT" means IRT Property Company, a Georgia corporation.

                  "Libor Base Rate" means, relative to any Interest Period for
         any Loan (i) the rate quoted by the British Bankers Association in
         London as its "LIBOR" rate for U.S. dollar deposits at or about 11:00
         a.m., London time, on the second Business Day prior to the commencement
         of the Interest Period; provided, however, that if the Lender adopts
         generally in its business a different rate quoting system or service
         for obtaining the rate of interest commonly known as "LIBOR" for U.S.
         dollar deposits, then upon giving prompt notice to the Borrower such
         alternative rate quoting system or service shall be utilized for
         determining "LIBOR" in lieu of the rate quoted by the British Bankers
         Association, and (ii) if the rate may not be determined by the Lender
         as provided in the preceding clause (i) for any reason, as determined
         by the Lender in its reasonable judgment, then the rate equal to the
         rate of interest per annum at which U.S. dollar deposits in the
         approximate amount of the amount of the Loan to be made or continued
         hereunder by the Lender and having a maturity comparable to such
         Interest Period would be offered to the Lender in

                                       4



         the London Interbank market at its request at approximately 11:00 a.m.
         (London time) two Business Days prior to the commencement of such
         Interest Period.

                  "Libor Reserve Percentage" means, relative to any Interest
         Period for loans hereunder, the percentage (expressed as a decimal,
         rounded upward to the next 1/100th of 1%) in effect on such day
         (whether or not applicable to the Lender) under regulations issued from
         time to time by the Federal Reserve System Board for determining the
         maximum reserve requirement (including any emergency, supplemental or
         other marginal reserve requirement) with respect to Eurocurrency
         funding (currently referred to as "Eurocurrency Liabilities" in
         Regulation D of the Federal Reserve System Board).

                  "Libor Rate" means, relative to any Loan to be made or
         continued hereunder for any Interest Period, the rate of interest per
         annum (rounded upwards to the next 1/32nd of 1%) determined by the
         Lender as follows:

                                       Libor Base Rate
                 Libor Rate = ---------------------------------
                               1.00 - Libor Reserve Percentage

                  "Lien" means any floating or fixed charge, lien, mortgage,
         pledge, security interest or other encumbrance of any nature whatsoever
         upon, of or in property or other assets of a Person, whether absolute
         or conditional, voluntary or involuntary, whether created pursuant to
         agreement, arising by force of statute, by judicial proceedings or
         otherwise.

                  "Loan" shall have the meaning provided therefor in Section
         2.1.

                  "Loan Documents" means this Agreement and the Pledge and
         Security Agreement.

                  "Margin" means 2.2 % per annum.

                  "Material Adverse Effect" means (X) a material adverse effect
         on (a) the business, operations, property, condition (financial or
         otherwise) or prospects of the Borrower, (b) the validity or
         enforceability of this Agreement or any other Loan Document in any
         manner that prevents the practical realization by Lender of the
         benefits intended by this Agreement and/or any other Loan Document, or
         (c) the rights or remedies of Lender hereunder or under any other Loan
         Document in any manner that prevents the practical realization of the
         benefits purported to be provided by such rights and remedies with
         respect to Lender's ability to realize upon the principal benefits or
         security intended to be provided by this Agreement and/or any other
         Loan Document, (Y) any impairment to the validity, perfection or
         priority of the security interest of Lender in the Collateral in any
         manner whatsoever, and/or (Z) an Event of Default.

                  "Maturity Date" means, with respect to a Loan other than an
         Initial Funding Loan, March 31, 2006, and with respect to an Initial
         Funding Loan, the day which is one (1) Business Day after the date such
         Initial Funding Loan is made.

                                       5



                  "Multiemployer Plan" means a Plan which is a multiemployer
         plan as defined in Section 4001(a)(3) of ERISA.

                  "Non-Excluded Taxes" shall have the meaning provided therefor
         in Section 2.13(a).

                  "Non-U.S. Lender" shall have the meaning provided therefor in
         Section 2.13(b).

                  "100% Participant" means any Participant who has acquired a
         100% participating interest in any Loan.

                  "Parent Shareholder" means, each and all shareholders of the
         Borrower's direct parent company shareholder on the Closing Date.

                  "Participant" shall have the meaning therefor in Section 8.15.

                  "PBGC" means the Pension Benefit Guaranty Corporation and any
         entity succeeding to any or all of its functions under ERISA.

                  "Person" means any individual, partnership, limited liability
         company, joint venture, corporation (including, without limitation, the
         Borrower), trust, estate, unincorporated organization or association or
         Governmental Authority. If any Person is a corporation, unless
         otherwise provided, the use of the term "Person" to refer to that
         corporation means that corporation as a single entity and not as
         consolidated with its Subsidiaries.

                  "Plan" means at a particular time, any employee benefit plan
         which is covered by ERISA and in respect of which the Borrower or a
         Commonly Controlled Entity is (or, if such plan were terminated at such
         time, would under Section 4069 of ERISA be deemed to be) an "employer"
         as defined in Section 3(5) of ERISA.

                  "Pledge and Security Agreement" means the Pledge and Security
         Agreement dated as of the date of this Agreement between the Borrower
         and the Lender, as the same may be amended, supplemented or otherwise
         modified from time to time.

                  "Pledged Shares" shall have the meaning provided therefor in
         the Pledge and Security Agreement.

                  "Reference Rate" means the rate of interest designated by the
         Lender, and in effect from time to time, as the Lender's "Reference
         Rate" on a particular day for commercial loans; such rate is not
         necessarily intended to be the lowest rate of interest charged by the
         Lender in connection with loans and other extensions of credit. Each
         change in the Reference Rate shall be effective on the date such change
         is determined by the Lender.

                  "Registration Rights Agreement" means that certain
         Registration Rights Agreement dated as of October 28, 2002, among EOI
         and the purchasers party thereto,

                                       6



         including, without limitation, Pledgor, as may be amended, supplemented
         or modified from time to time.

                  "Reorganization" means with respect to any Multiemployer Plan,
         the condition that such plan is in reorganization within the meaning of
         Section 4241 of ERISA.

                  "Reportable Event" means any of the events set forth in
         Section 4043(c) of ERISA, other than those events as to which the
         thirty day notice period is waived under subsections .22, .25, .27 or
         .28 of PBGC Reg. Section 4043.

                  "Requirement of Law" means as to any Person, the certificate
         of incorporation, certificate of formation, limited liability company
         agreement, and by-laws or other organizational or governing documents
         of such Person, and any law, treaty, rule or regulation or
         determination of an arbitrator or a court or other Governmental
         Authority, in each case applicable to or binding upon such Person or
         any of its property or to which such Person or any of its property is
         subject.

                  "Shareholders' Loans" shall have the meaning provided therefor
         in Section 6.3.

                  "Single Employer Plan" means any Plan which is covered by
         Title IV of ERISA, but which is not a Multiemployer Plan.

                  "Subsidiary" means, when used with reference to any
         corporation, any corporation of which at least a majority of the
         outstanding stock, having by the terms thereof ordinary voting power to
         elect a majority of the Board of Directors of such corporation, is at
         the time directly or indirectly owned by such first-mentioned
         corporation.

                  "Tangible Equity" means, with respect to the Borrower, the
         share capital, undistributed profits, funds and reserves, shareholders'
         loans which have been subordinated in favor of the Lender; less
         deferred expenses, intangible assets such as goodwill, patents trade
         marks, business names copyrights and the like, treasury shares, debts
         owed by interested parties, subsidiaries or Affiliates; and less
         guarantees given by the Borrower to secure the debts of interested
         parties, subsidiaries or Affiliates; as the same appear in the
         quarterly and annual financial reports of the Borrower.

                  "Term Loan Commitment Period" means the period from and
         including the Closing Date to, and including, April 15, 2004 or the
         next Business Day thereafter if such day is not a Business Day.

                  "Total Outstanding Credit" shall have the meaning provided
         therefor in Section 5.7(a).

                  "Transaction" means the purchase by the Borrower of up to
         1,036,650 shares of the common stock, par value $0.01 per share, of EOI
         pursuant to the terms and conditions of the Equity One, Inc. Common
         Stock Purchase Agreement.

                                       7



                  "Transferee" means any Participant or any assignee of the
         interests of the Lender under this Agreement or any other Loan
         Documents.

                  "Uniform Commercial Code" means the Uniform Commercial Code in
         effect from time to time in any state to the extent the same is
         applicable by law to any portion of the Collateral.

         1.2.     Use of Accounting Terms. Accounting terms used herein shall be
                  construed, calculations hereunder shall be made and financial
                  data required hereunder shall be prepared, both as to
                  classification of items and as to amounts, in accordance with
                  GAAP as of the date thereof consistently applied, which
                  principles shall be consistent with those used in the
                  preparation of the most recent reviewed financial statements
                  of such Person delivered to the Lender. All statements
                  relating to earnings and expenses shall set forth separately
                  or otherwise identify all extraordinary and nonrecurring
                  items.

SECTION 2.        AMOUNT AND TERMS OF TERM LOAN COMMITMENT

         2.1.     Term Loan Commitment. The Lender agrees, subject to and upon
                  the terms and conditions herein set forth, to make one or more
                  term loans (each a "Loan") immediately available to the
                  Borrower from time to time during the Term Loan Commitment
                  Period in an aggregate principal amount not to exceed Seven
                  Million Dollars ($7,000,000), or such lesser amount as is in
                  effect from time to time pursuant to Section 2.7 (the "Term
                  Loan Commitment"). Loans (other than Initial Funding Loans)
                  borrowed under this Section 2.1 and repaid or prepaid may not
                  be reborrowed. Each Initial Funding Loan may be repaid and
                  reborrowed once, in whole or in part, in order to consummate
                  the Transaction, provided that amount of such reborrowing,
                  together with the aggregate principal amount of all other
                  Loans then outstanding, does not exceed the outstanding Term
                  Loan Commitment.

         2.2.     Procedure for Borrowing.

                  (a)      The Borrower may borrow under the Term Loan
                           Commitment during the Term Loan Commitment Period on
                           any Business Day, provided that, unless the Lender
                           otherwise agrees, the Borrower shall deliver to the
                           Lender irrevocable written notice of borrowing in
                           form and substance acceptable to the Lender (each a
                           "Notice of Borrowing") not later than 10:00 a.m., New
                           York, New York time, two (2) Business Days prior to
                           the requested borrowing date. Unless the Borrower and
                           the Lender (and any 100% Participant) otherwise
                           mutually agree, the Lender will make each Loan
                           (including any Initial Funding Loan) to the Borrower
                           by automatically crediting the loan proceeds thereof
                           to the Collateral Account. Thereafter, and subject to
                           the other terms and conditions of this Agreement, the
                           Lender will disburse the proceeds of each Loan (other
                           than an Initial Funding Loan) credited to the
                           Collateral Account in accordance with the wiring
                           instructions specified in the Borrower's Notice of

                                       8



                           Borrowing. The Borrower must expressly specify in its
                           Notice of Borrowing if the requested borrowing is to
                           be made as an Initial Funding Loan.

                  (b)      Unless otherwise agreed by the Lender (and any 100%
                           Participant), all borrowings shall be in minimum
                           amounts of $1,000,000 or a whole multiple of $20,000
                           in excess thereof, or, the remaining amount under the
                           Term Loan Commitment, if such amount is less than
                           $1,000,000, provided that, the Loan or the Initial
                           Funding Loan made to the Borrower on the Closing Date
                           shall each be in an amount not less than $1,750,000.

         2.3.     Use of Proceeds of Loans. The proceeds of the Loans shall be
                  utilized by the Borrower in accordance with Section 3.12.

         2.4.     Repayment of the Loans; Evidence of Debt. The aggregate unpaid
                  principal amount of the Loans shall be repaid to the Lender as
                  follows:

                  (a)      The Borrower shall repay the first $1,750,000 of
                           Loans made to the Borrower hereunder (other than any
                           Initial Funding Loan made to the Borrower on the
                           Closing Date, which Initial Funding Loan shall be
                           repaid on the Maturity Date thereof) in twelve
                           consecutive equal quarterly installments on the last
                           day of each March, June, September and December (or,
                           if such day is not a Business Day, then on the
                           immediately preceding Business Day), commencing on
                           June 30, 2003.

                  (b)      The Borrower shall repay to the Lender the
                           outstanding balance of all Loans, together with all
                           accrued interest thereon and any unpaid fees and
                           other amounts due to the Lender under this Agreement,
                           on the Maturity Date; it being understood that the
                           Borrower hereby authorizes the Lender to repay each
                           Initial Funding Loan, if any, on its Maturity Date by
                           debiting the Collateral Account for all such sums
                           then due and payable.

                  (c)      The Lender shall maintain on its books and records in
                           accordance with its usual practice an account or
                           accounts evidencing the indebtedness of the Borrower
                           under this Agreement resulting from each Loan made
                           from time to time, including (i) the amount of each
                           Loan made hereunder, (ii) the amount of any principal
                           or interest due and payable or to become due and
                           payable from the Borrower to the Lender hereunder,
                           and (iii) the amount of any sum received by the
                           Lender hereunder from the Borrower.

                  (d)      The entries recorded by the Lender in its books and
                           records shall, to the extent permitted by applicable
                           law, be prima facie evidence of the existence and
                           amounts of the obligations of the Borrower therein
                           recorded; provided, however, the failure of the
                           Lender to record any entry, or any error in any
                           record, shall not in any manner affect the obligation
                           of the Borrower to repay (with applicable interest)
                           the Loans made to the Borrower by the Lender in
                           accordance with the terms of this Agreement.

                                       9



                  (e)      The Borrower agrees that, upon the request of the
                           Lender, the Borrower will execute and deliver to the
                           Lender a promissory note of the Borrower evidencing
                           the Loans, in form and substance satisfactory to the
                           Lender.

         2.5.     Fees.

                  (a)      The Borrower agrees to pay to the Lender a
                           non-refundable up-front fee of $7,000.00 on the
                           Closing Date.

                  (b)      The Borrower agrees to pay to the Lender a commitment
                           fee of 0.125% per annum (based on a 360-day year) of
                           the average daily unused portion of the Term Loan
                           Commitment, payable monthly in arrears on the last
                           Business Day of each month and on the Maturity Date
                           (other than the Maturity Date of an Initial Funding
                           Loan) or such earlier date as the Term Loan
                           Commitment shall terminate, commencing on the first
                           such date to occur after the date hereof.

                  (c)      The Borrower agrees to pay the Lender any other usual
                           and standard fees customarily charged by the Lender
                           for services relating to the making of Loans, the
                           establishment and maintenance of the Collateral
                           Account (as defined in the Pledge and Security
                           Agreement), and the administration of the Loans, the
                           Term Loan Commitment and the Collateral.

         2.6.     Optional Prepayment of Loans.

                  (a)      The Borrower may at any time and from time to time
                           prepay a Loan, in whole or in part, without premium
                           or penalty, except as expressly set forth in this
                           Agreement upon at least five (5) Business Days'
                           irrevocable notice to the Lender (which notice must
                           be received by the Lender prior to 10:00 a.m., New
                           York time, on the date upon which such notice is
                           due), specifying the date and amount of prepayment.
                           If any such notice is given, the amount specified in
                           such notice shall be due and payable on the date
                           specified therein, together with any amounts payable
                           pursuant to Section 2.14 and accrued interest to such
                           date on the amount prepaid. If any prepayment of a
                           Loan shall be made other than on the last day of an
                           Interest Period thereof, the Borrower shall also pay
                           to the Lender any amount required to compensate the
                           Lender for any losses, costs or expenses that it may
                           reasonably incur as a result of such prepayment. Each
                           partial prepayment shall be in an aggregate principal
                           amount of $1,000,000, or a whole multiple of $100,000
                           in excess thereof.

                  (b)      Any repayment of a Loan made pursuant to Section
                           2.6(a) shall be applied first, to any accrued
                           interest, and second, to the then outstanding
                           principal installments thereof in the inverse order
                           of maturity.

         2.7.     Optional and Mandatory Termination or Reduction of Term Loan
                  Commitment

                                       10



                  (a)      The Borrower shall have the right, upon not less than
                           five (5) Business Days' notice to the Lender, to
                           terminate the Term Loan Commitment or, from time to
                           time, to reduce the amount of the Term Loan
                           Commitment. Any such reduction shall be in an amount
                           equal to $1,000,000, or a whole multiple of $100,000
                           in excess thereof, and shall reduce permanently the
                           Term Loan Commitment then in effect. If any such
                           commitment termination or reduction involves the
                           repayment of Loans, and if such repayment is made
                           other than on the last day of an Interest Period
                           thereof, the Borrower shall also pay to the Lender
                           any amount required to compensate the Lender for any
                           losses, costs or expenses that it may reasonably
                           incur as a result of such prepayment.

                  (b)      Each principal installment repayment pursuant to
                           Section 2.4(a) shall reduce permanently the Term Loan
                           Commitment then in effect by the amount of each such
                           principal installment repayment.

         2.8.     Interest.

                  (a)      Each Loan shall bear interest for each day during
                           each Interest Period with respect thereto at a rate
                           per annum equal to the Libor Rate determined for such
                           day plus the Margin.

                  (b)      If all or a portion of (i) any principal of any Loan,
                           (ii) any interest payable thereon, or (iii) any fee
                           or other amount payable hereunder shall not be paid
                           when due (whether at the stated maturity, by
                           acceleration or otherwise), then the principal of
                           such Loan and any such overdue interest, fee or other
                           amount shall bear interest at a rate per annum which
                           is (x) in the case of principal, the rate that would
                           otherwise be applicable thereto pursuant to Section
                           2.8(a) plus 2%, or (y) in the case of any such
                           overdue interest, fee or other amount, the rate
                           described in paragraph (a) of this subsection plus
                           2%, in each case from the date of such non-payment
                           until such overdue principal, interest, fee or other
                           amount is paid in full (as well before or after
                           judgment).

                  (c)      Interest shall be payable in arrears on each Interest
                           Payment Date, provided that interest accruing
                           pursuant to paragraph (b) of this Section shall be
                           payable from time to time on demand.

                  (d)      Notwithstanding anything to the contrary contained
                           herein, in no event shall the Borrower be obligated
                           to pay interest in excess of the maximum amount which
                           is chargeable under applicable law.

         2.9.     Computation of Interest and Fees.

                  (a)      Interest and commitment fees shall be calculated on
                           the basis of a 360-day year for the actual days
                           elapsed.

                                       11



                  (b)      Each determination of the Libor Rate by the Lender
                           pursuant to any provision of this Agreement shall be
                           conclusive and binding on the Borrower in the absence
                           of manifest error.

         2.10.    Inability to Determine Libor Rate. If prior to the first day
                  of any Interest Period:

                  (a)      the Lender shall have determined (which determination
                           shall be conclusive and binding upon the Borrower)
                           that, by reason of circumstances affecting the
                           relevant market, adequate and reasonable means do not
                           exist for ascertaining the Libor Rate for such
                           Interest Period, or

                  (b)      the Lender shall have determined that the Libor Rate
                           determined (which determination shall be conclusive
                           and binding upon the Borrower) for such Interest
                           Period will not adequately and fairly reflect the
                           cost to the Lender of making or maintaining its
                           affected Loans during such Interest Period,

                  then the Lender shall give telecopy or telephonic notice
                  thereof to the Borrower as soon as practicable thereafter. If
                  such notice is given and until such notice has been withdrawn
                  by the Lender, (X) any Loan requested to be made on the first
                  day of such Interest Period shall bear interest at the
                  Reference Rate, and (Y) all outstanding Loans will bear
                  interest at the Reference Rate, commencing on the first day of
                  next Interest Period applicable thereto.

         2.11.    Illegality. Notwithstanding any other provision herein, if the
                  adoption of or any change in any Requirement of Law or in the
                  interpretation or application thereof shall make it unlawful
                  for the Lender to make or maintain Loans as contemplated by
                  this Agreement, (a) the commitment of the Lender hereunder to
                  make Loans or continue Loans shall forthwith be canceled, and
                  (b) the Loans then outstanding shall automatically bear
                  interest at the Reference Rate on the first day of the next
                  succeeding Interest Period applicable thereto, or at such
                  earlier time as required by law. If any such interest rate
                  conversion for a Loan occurs on a day which is not the last
                  day of the then current Interest Period with respect thereto,
                  then the Borrower shall pay to the Lender such amounts, if
                  any, as may be required pursuant to Section 2.14.

         2.12.    Requirements of Law.

                  (a)      If the adoption of or any change in any Requirement
                           of Law or in the interpretation or application
                           thereof or compliance by the Lender with any request
                           or directive (whether or not having the force of law)
                           from any central bank or other Governmental Authority
                           made subsequent to the date hereof:

                           (1)      shall subject the Lender to any tax of any
                                    kind whatsoever with respect to this
                                    Agreement, or any Loan made by it, or change
                                    the basis of taxation of payments to the
                                    Lender in respect thereof

                                       12



                                    (except for Non-Excluded Taxes covered by
                                    Section 2.13 and changes in the rate of net
                                    income taxes or franchise taxes (imposed in
                                    lieu of net income taxes) of the Lender);

                           (2)      shall impose, modify or hold applicable any
                                    reserve, special deposit, compulsory loan or
                                    similar requirement against assets held by,
                                    deposits or other liabilities in or for the
                                    account of, advances, loans or other
                                    extensions of credit by, or any other
                                    acquisition of funds by, any office of the
                                    Lender which is not otherwise included in
                                    the determination of the Libor Rate
                                    hereunder; or

                           (3)      shall impose on the Lender any other
                                    condition;

                  and the result of any of the foregoing is to increase the cost
                  to the Lender, by an amount which the Lender deems to be
                  material, of making, continuing or maintaining Loans bearing
                  interest at the Libor Rate, or to reduce any amount receivable
                  hereunder in respect thereof, then, in any such case, the
                  Borrower shall promptly pay the Lender such additional amount
                  or amounts as will compensate the Lender for such increased
                  cost or reduced amount receivable.

                  (b)      If the Lender shall have determined that the adoption
                           of or any change in any Requirement of Law regarding
                           capital adequacy or in the interpretation or
                           application thereof or compliance by the Lender or
                           any corporation controlling the Lender with any
                           request or directive regarding capital adequacy
                           (whether or not having the force of law, if
                           compliance therewith is a customary banking practice)
                           from any Governmental Authority made subsequent to
                           the date hereof shall have the effect of reducing the
                           rate of return on the Lender's or such corporation's
                           capital as a consequence of its obligations hereunder
                           to a level below that which such corporation would
                           have achieved but for such adoption, change or
                           compliance by the Lender or such corporation (taking
                           into consideration the Lender's or such corporation's
                           policies with respect to capital adequacy) by an
                           amount deemed by the Lender to be material, then from
                           time to time, the Borrower shall promptly pay to the
                           Lender such additional amount or amounts as will
                           compensate the Lender for such reduction.

                  (c)      If the Lender becomes entitled to claim any
                           additional amounts pursuant to this Section 2.12, it
                           shall promptly notify the Borrower of the event by
                           reason of which it has become so entitled. In
                           determining such amounts, the Lender may use any
                           reasonable averaging and attribution methods, applied
                           in a non-discriminatory manner with respect to the
                           Borrower. A certificate as to any additional amounts
                           payable pursuant to this Section 2.12 submitted by
                           the Lender to the Borrower, together with the
                           calculations used by the Lender in determining such
                           additional amounts, shall be conclusive in the
                           absence of manifest error. The agreements in

                                       13



                           this Section 2.12 shall survive the termination of
                           this Agreement and the payment of the Loans and all
                           other amounts payable hereunder.

         2.13.    Taxes.

                  (a)      All payments made by the Borrower under this
                           Agreement shall be made free and clear of, and
                           without deduction or withholding for or on account
                           of, any present or future income, stamp or other
                           taxes, levies, imposts, duties, charges, fees,
                           deductions or withholdings, now or hereafter imposed,
                           levied, collected, withheld or assessed by any
                           Governmental Authority, excluding net income taxes
                           and franchise taxes (imposed in lieu of net income
                           taxes) imposed on the Lender as a result of a present
                           or former connection between the Lender and the
                           jurisdiction of the Governmental Authority imposing
                           such tax or any political subdivision or taxing
                           authority thereof or therein (other than any such
                           connection arising solely from the Lender having
                           executed, delivered or performed its obligations or
                           received a payment under, or enforced, this
                           Agreement). If any such non-excluded taxes, levies,
                           imposts, duties, charges, fees, deductions or
                           withholdings ("Non-Excluded Taxes") are required to
                           be withheld from any amounts payable to the Lender
                           hereunder or under any Note, the amounts so payable
                           to the Lender shall be increased to the extent
                           necessary to yield to the Lender (after payment of
                           all Non-Excluded Taxes) interest or any such other
                           amounts payable hereunder at the rates or in the
                           amounts specified in this Agreement. Whenever any
                           Non-Excluded Taxes are payable by the Borrower, as
                           promptly as possible thereafter the Borrower shall
                           send to the Lender for its own account, a certified
                           copy of an original official receipt received by the
                           Borrower showing payment thereof. If the Borrower
                           fails to pay any Non-Excluded Taxes when due to the
                           appropriate taxing authority or fails to remit to the
                           Lender the required receipts or other required
                           documentary evidence, the Borrower shall indemnify
                           the Lender for any incremental taxes, interest or
                           penalties that may become payable by the Lender as a
                           result of any such failure.

                  (b)      Each Transferee that is not a "U.S. Person" as
                           defined in Section 7701(a)(30) of the Code of 1986,
                           as amended (a "Non-U.S. Lender") shall deliver to the
                           Borrower (or, in the case of a Participant, to the
                           Lender) two duly completed copies of U.S. Internal
                           Revenue Service Form W-8BEN or Form W-8ECI, or
                           applicable successor forms as the case may be,
                           properly completed and duly executed by such Non-U.S.
                           Lender claiming complete exemption from U.S. federal
                           withholding tax on all payments by the Borrower under
                           this Agreement and the other Loan Documents. Such
                           forms shall be delivered by each Non-U.S. Lender on
                           or before the date it becomes a party to this
                           Agreement (or, in the case of any Participant, on or
                           before the date such Participant purchases the
                           related participation). In addition, each Non-U.S.
                           Lender shall deliver such forms promptly upon the
                           obsolescence or invalidity of any form previously
                           delivered by such Non-U.S. Lender. Each Non-U.S.
                           Lender shall promptly notify the

                                       14



                           Borrower at any time it determines that it is no
                           longer in a position to provide any previously
                           delivered certificate to the Borrower (or any other
                           form of certification adopted by the U.S. taxing
                           authorities for such purpose). Notwithstanding any
                           other provision of this paragraph, a Non-U.S. Lender
                           shall not be required to deliver any form pursuant to
                           this paragraph that such Non-U.S. Lender is not
                           legally able to deliver.

         2.14.    Indemnity. The Borrower agrees to indemnify the Lender and to
                  hold the Lender harmless from any loss or expense which the
                  Lender may sustain or incur as a consequence of (a) default by
                  the Borrower in making a borrowing of a Loan after the
                  Borrower has given a notice requesting the same in accordance
                  with the provisions of this Agreement, (b) default by the
                  Borrower in making any prepayment or payment after the
                  Borrower has given a notice thereof in accordance with the
                  provisions of this Agreement, or (c) the making of a
                  prepayment or payment of a Loans bearing interest at the Libor
                  Rate on a day which is not the last day of an Interest Period
                  with respect thereto. Such indemnification may include an
                  amount equal to the excess, if any, of (i) the amount of
                  interest which would have accrued on the amount so prepaid, or
                  not so borrowed, for the period from the date of such
                  prepayment or of such failure to borrow to the last day of
                  such Interest Period (or in the case of the failure to borrow,
                  the Interest Period that would have commenced on the date of
                  such failure) in each case at the applicable rate of interest
                  for such Loans provided for herein (excluding, however, the
                  Margin included therein, if any) over (ii) the amount of
                  interest (as reasonably determined by the Lender) which would
                  have accrued to the Lender on such amount by placing such
                  amount on deposit for a comparable period with leading banks
                  in the interbank eurodollar market. This covenant shall
                  survive the termination of this Agreement and the payment of
                  the Loans and all other amounts payable hereunder.

         2.15.    Security for the Loans. The Loans and other indebtedness of
                  the Borrower owing to the Lender under this Agreement and the
                  other Loan Documents shall be secured by a first priority Lien
                  on the Collateral pursuant to the Pledge and Security
                  Agreement.

         2.16.    Manner and Place of Payment. All payments hereunder shall be
                  made without set-off, counterclaim or deduction and shall be
                  made in lawful money of the United States in immediately
                  available funds by the Borrower to the Lender, prior to 2:00
                  p.m., New York time, at its offices at ___________________
                  _____________________, or at such other place as may be
                  designated by the Lender to the Borrower in writing. Any
                  payment received after 2:00 p.m., New York time, shall be
                  deemed received on the next Business Day. If any payment of
                  principal of or interest on the Loans or any other amount
                  under this Agreement or any other Loan Document falls due on a
                  day that is not a Business Day, it shall be payable on the
                  next succeeding Business Day (unless such day would be a day
                  in the next calendar month, and in such case payment shall be
                  due on the immediately preceding Business Day), and the
                  resulting additional or decreased time (if any) shall be
                  included in or deducted from the computation of interest.

                                       15



SECTION 3.        REPRESENTATIONS AND WARRANTIES.

         To induce the Lender to enter into this Agreement and to make the Loans
hereunder, the Borrower represents, warrants and covenants to the Lender that:

         3.1.     Corporate Existence. The Borrower is a duly organized and
                  validly existing corporation in good standing under the laws
                  of the jurisdiction of its formation and has the corporate
                  power and authority to own its properties and other assets and
                  to transact the business in which it is now engaged or
                  proposes to engage. The Borrower is duly qualified to do
                  business and is in good standing in each jurisdiction in which
                  the failure to qualify could not, in the aggregate, reasonably
                  be expected to have a Material Adverse Effect.

         3.2.     Control and Holdings. All of the capital stock of the Borrower
                  is beneficially owned by the Parent Shareholder. The Borrower
                  has no Subsidiaries.

         3.3.     Authorization and Execution. The Borrower has the corporate
                  power and authority to execute, deliver and carry out the
                  terms and provisions of the Transaction and the Loan
                  Documents. The execution, delivery and performance by the
                  Borrower of the Transaction and the Loan Documents and the
                  borrowing hereunder have been duly authorized by all requisite
                  corporate action. This Agreement and the Pledge and Security
                  Agreement, when executed and delivered by the Borrower
                  pursuant hereto, will be legal, valid and binding obligations
                  of the Borrower, enforceable against the Borrower, in
                  accordance with their respective terms, except as
                  enforceability may be limited by applicable bankruptcy,
                  insolvency, reorganization, moratorium or similar laws
                  affecting the enforcement of creditors' rights generally and
                  by the application by a court of equitable principles
                  (regardless of whether such enforceability is considered in a
                  proceeding in equity or at law).

         3.4.     Compliance with Other Instruments. The Borrower is not in
                  default in the performance, observance or fulfillment of any
                  of the material obligations, covenants or conditions contained
                  in any evidence of Indebtedness of the Borrower, or contained
                  in any material instrument under or pursuant to which any such
                  evidence of Indebtedness has been issued or made and
                  delivered. Neither the execution and delivery of the Loan
                  Documents, nor the consummation of the transactions herein
                  contemplated, including but not limited to the use of the
                  proceeds of the Loan for the purposes set forth herein, will
                  conflict with or result in a breach of any of the terms,
                  conditions or provisions of the certificate of incorporation
                  or by-laws or other organizational charter and instruments of
                  the Borrower, or of any material agreement or instrument to
                  which the Borrower is now a party or otherwise bound or to
                  which the Borrower's properties or other assets are subject,
                  or of any law, statute, rule or regulation or any order or
                  decree of any court or governmental instrumentality, or of any
                  arbitration award, franchise or permit, or constitute a
                  default thereunder, or if any action was required under such
                  instrumentality, award, franchise or permit, it could not
                  reasonably be expected to have a Material Adverse Effect, or
                  result in the creation

                                       16



                  or imposition of any Lien upon any of the properties or other
                  assets of the Borrower, except as herein contemplated.

         3.5.     Consents. No consent or approval of, or exemption by, any
                  Person, and no waiver of any right by any Person is required
                  to authorize or permit, or is otherwise required in connection
                  with, the execution, delivery and performance of the Loan
                  Documents, or with respect to the required use by the Borrower
                  of the proceeds of the Loan, except those which shall have
                  been obtained on or prior to the date hereof.

         3.6.     Financial Statements.

                  (a)      The Borrower has heretofore furnished to the Lender
                           copies of the unqualified audited financial
                           statements of the Borrower as of December 31, 2001
                           and for the year then ended and such financial
                           statement presents fairly the financial position of
                           the Borrower on the date of the balance sheet
                           included therein and the results of the operations of
                           the Borrower for the period involved, and have been
                           prepared in accordance with GAAP applied on a
                           consistent basis throughout the periods involved
                           (subject to, in the case of the interim financial
                           statements, normal year-end audit adjustments not
                           material in amount).

                  (b)      No Material Changes. There has been no material
                           adverse change in the business, properties or other
                           assets or in the condition, financial or otherwise,
                           of the Borrower since the date of the Borrower's most
                           recent balance sheet delivered to the Lender.

         3.7.     Litigation. There are no actions, suits, investigations or
                  proceedings pending or, to the knowledge of the Borrower
                  threatened in writing against the Borrower at law or in equity
                  or before or by any governmental department, commission,
                  board, bureau, agency or instrumentality, domestic or foreign,
                  or before any arbitrator of any kind, which could reasonably
                  be expected to have a Material Adverse Effect, except as has
                  been disclosed in writing to the Lender prior to the date
                  hereof.

         3.8.     Compliance with Law. The Borrower is in compliance, in all
                  material respects, with all applicable Requirements of Law,
                  the noncompliance with which could reasonably be expected to
                  have a Material Adverse Effect.

         3.9.     Investment Company. The Borrower is not an "investment
                  company" or a company "controlled" by an "investment company"
                  within the meaning of the Investment Company Act of 1940, or
                  the regulations under such act.

         3.10.    Regulation U. None of the proceeds of the Loans will be used,
                  directly or indirectly, for any purpose that will violate, or
                  cause the Lender to be in violation of, Regulation U (12 CFR,
                  Part 221) of the Board of Governors of the Federal Reserve
                  System. Neither the Borrower nor any agent acting on its
                  behalf has taken or will take (or has omitted or will omit to
                  take) any action which might

                                       17



                  cause this Agreement, the Note, any borrowing, the making of
                  any Loan, or the application of the proceeds of any Loan to
                  violate Regulation U or any other regulation of the Board of
                  Governors of the Federal Reserve System or to violate the
                  Exchange Act, in each case as in effect on the date or dates
                  of such borrowing and use of proceeds. At the time of the
                  making of each Loan, the amount of such Loan will not exceed
                  fifty percent (50%) of the aggregate current market value of
                  the Pledged Shares then pledged to the Lender pursuant to the
                  Pledge and Security Agreement.

         3.11.    ERISA. Neither a Reportable Event nor an "accumulated funding
                  deficiency" (within the meaning of Section 412 of the Code or
                  Section 302 of ERISA) has occurred during the five-year period
                  prior to the date on which this representation is made or
                  deemed made with respect to any Plan, and each Plan has
                  complied in all material respects with the applicable
                  provisions of ERISA and the Code. No termination of a Single
                  Employer Plan has occurred, and no Lien in favor of the PBGC
                  or a Plan has arisen, during such five-year period. The
                  present value of all accrued benefits under each Single
                  Employer Plan (based on those assumptions used to fund such
                  Plans) did not, as of the last annual valuation date prior to
                  the date on which this representation is made or deemed made,
                  exceed the value of the assets of such Plan allocable to such
                  accrued benefits. Neither Borrower nor any Commonly Controlled
                  Entity has had a complete or partial withdrawal from any
                  Multiemployer Plan, and neither the Borrower nor any Commonly
                  Controlled Entity would become subject to any liability under
                  ERISA if the Borrower or any such Commonly Controlled Entity
                  were to withdraw completely from all Multiemployer Plans as of
                  the valuation date most closely preceding the date on which
                  this representation is made or deemed made. No such
                  Multiemployer Plan is in Reorganization or Insolvent. The
                  present value (determined using actuarial and other
                  assumptions which are reasonable in respect of the benefits
                  provided and the employees participating) of the liability of
                  the Borrower and each Commonly Controlled Entity for post
                  retirement benefits to be provided to their current and former
                  employees under Plans which are welfare benefit plans (as
                  defined in Section 3(l) of ERISA) does not, in the aggregate,
                  exceed the assets under all such Plans allocable to such
                  benefits by an amount in excess of $100,000.

         3.12.    Use of Proceeds. The proceeds of the Loans shall be utilized
                  by the Borrower to partially finance the Transaction, or in
                  the case of an Initial Funding Loan, proceeds of such Initial
                  Funding Loan held in the Collateral Account may be used to
                  repay such Initial Funding Loan on the Maturity Date thereof.

SECTION 4.        CONDITIONS PRECEDENT TO THE LOANS.

         4.1.     Conditions to Initial Funding Loan. The obligation of the
                  Lender to make the first Initial Funding Loan to the Borrower
                  hereunder is subject to the satisfaction, on or before the
                  making of such Initial Funding Loan, of each of the following
                  conditions precedent which are solely for the benefit of the
                  Lender:

                                       18



                  (a)      Loan Documents. The Lender shall have received (i)
                           this Agreement and the Pledge and Security Agreement,
                           executed and delivered by a duly authorized officer
                           of the Borrower.

                  (b)      Closing Certificate of Borrower. The Lender shall
                           have received a certificate of an officer of the
                           Borrower, dated the Closing Date; (i) attaching the
                           certified certificate of incorporation and by-laws of
                           the Borrower; (ii) attaching the resolutions of the
                           Board of Directors of the Borrower with respect to
                           the transactions contemplated hereby; (iii)
                           certifying that such resolutions have not been
                           amended, modified, revoked or rescinded as of the
                           date of such certificate; and (iv) certifying as to
                           the incumbency and signature of the officers of the
                           Borrower executing any Loan Document; such
                           certificate (and the attachments thereto) shall be in
                           form and substance satisfactory to the Lender.

                  (c)      Collateral Account. The Collateral Account shall have
                           been established by the Borrower with the Lender
                           pursuant to the Pledge and Security Agreement, and
                           all account documentation related thereto shall have
                           been executed and delivered by the Borrower and shall
                           be in form and substance satisfactory to the Lender.

                  (d)      Legal Opinion. The Lender shall have received an
                           executed legal opinion of Alan J. Marcus, Esq.,
                           special New York counsel to the Borrower, in form and
                           substance satisfactory to the Lender.

                  (e)      Lien Searches. The Lender shall have received the
                           results of a recent search by a Person reasonably
                           satisfactory to the Lender, of the Uniform Commercial
                           Code, judgment and tax lien filings which may have
                           been filed with respect to personal property of the
                           Borrower and the results of such search shall be
                           reasonably satisfactory to the Lender.

                  (f)      Actions to Perfect Liens. The Lender shall have
                           received evidence in form and substance reasonably
                           satisfactory to it that all filings, recordings,
                           registrations and other actions, including, without
                           limitation, the filing of duly executed financing
                           statements on form UCC-1, necessary or, in the
                           reasonable opinion of the Lender, desirable to
                           perfect the Liens created by the Pledge and Security
                           Agreement.

                  (g)      Notice of Borrowing. The Lender shall have received a
                           Notice of Borrowing in form and substance
                           satisfactory to the Lender.

                  (h)      Fees. The Lender shall have received payment of all
                           accrued fees due and payable from the Borrower on the
                           Closing Date pursuant to this Agreement.

                  (i)      Miscellaneous. The Lender shall have received such
                           other opinions, agreements or documents, in form and
                           substance satisfactory to the Lender, as the Lender
                           reasonably requests.

                                       19



         4.2.     Conditions to Each Loan (Other than Initial Funding Loans).
                  The obligation of the Lender to make a Loan (other than
                  Initial Funding Loans) to the Borrower hereunder is subject to
                  the satisfaction to the Lender of the following conditions:

                  (a)      Regulation U Compliance. The Lender shall have
                           received a signed and completed Form U-1 from the
                           Borrower dated as of the date of the "Initial
                           Closing" or "Subsequent Closing" (as such terms are
                           defined in the Equity One, Inc. Common Stock Purchase
                           Agreement), in form and substance satisfactory to the
                           Lender.

                  (b)      IRT and EOI Merger Effective. The Lender shall have
                           received evidence satisfactory to it that the merger
                           of IRT into EOI has been effected in accordance with
                           the Agreement and Plan of Merger.

                  (c)      Pledged Shares Purchase Price. The Lender shall have
                           received evidence satisfactory to it that the actual
                           purchase price of the Pledged Shares under the Equity
                           One, Inc. Common Stock Purchase Agreement does not
                           exceed $13.60 per share.

                  (d)      Pledged Shares and Undated Stock Powers. The Lender
                           shall have received share certificates of EOI,
                           registered in the name of the Borrower, evidencing
                           shares purchase by the Borrower in consummation of
                           the Transaction and having a then current market
                           value of not less than two times the amount of such
                           Loan, together with undated stock powers covering
                           such shares executed by the Borrower, all in form and
                           substance satisfactory to the Lender.

                  (e)      Irrevocable Proxy. The Lender shall have received an
                           Irrevocable Proxy, in the form of Exhibit A to the
                           Pledge and Security Agreement, duly executed by the
                           Borrower and dated as of the date of the "Initial
                           Closing" or "Subsequent Closing" (as such terms are
                           defined in the Equity One, Inc. Common Stock Purchase
                           Agreement.

                  (f)      Acknowledgment of Pledge by EOI. The Lender shall
                           have received an acknowledgment duly executed by EOI
                           dated as of the date of the "Initial Closing" or
                           "Subsequent Closing" (as such terms are defined in
                           the Equity One, Inc. Common Stock Purchase
                           Agreement), acknowledging the pledge by the Borrower
                           of the Pledge Shares in favor of the Lender, in form
                           and substance satisfactory to the Lender.

                  (g)      Irrevocable Instructions by Borrower to EOI. The
                           Lender shall have received an irrevocable letter of
                           instruction regarding the Pledged Shares, dated as of
                           the date of the "Initial Closing" or "Subsequent
                           Closing" (as such terms are defined in the Equity
                           One, Inc. Common Stock Purchase Agreement), executed
                           and delivered by a duly authorized officer of the
                           Borrower and EOI, all in form and substance
                           satisfactory to the Lender

                                       20



                  (h)      Officer's Certificate of EOI. The Lender shall have
                           received a certificate of an officer of EOI, dated as
                           of the date of the "Initial Closing" or "Subsequent
                           Closing" (as such terms are defined in the Equity
                           One, Inc. Common Stock Purchase Agreement); (i)
                           attaching the certified certificate of incorporation
                           and by-laws of EOI; and (ii) certifying as to the
                           incumbency and signature of the officers of the
                           Borrower executing its Acknowledgment; such
                           certificate (and the attachments thereto) shall be in
                           form and substance satisfactory to the Lender.

                  (i)      Miscellaneous. The Lender shall have received such
                           other opinions, agreements or documents, in form and
                           substance satisfactory to the Lender, as the Lender
                           reasonably requests.

         4.3.     Conditions to Each Loan (Including Initial Funding Loans). The
                  obligation of the Lender to make a Loan (including Initial
                  Funding Loans) to the Borrower hereunder is subject to the
                  satisfaction to the Lender of the following conditions:

                  (a)      Representations and Warranties. Each of the
                           representations and warranties made by the Borrower
                           in or pursuant to the Loan Documents shall be true
                           and correct in all material respects on and as of
                           such date as if made on and as of such date.

                  (b)      No Default. No Default or Event of Default shall have
                           occurred and be continuing on such date or after
                           giving effect to the Loan requested to be, or being,
                           made on such date.

                  (c)      Each Loan borrowing by the Borrower hereunder shall
                           constitute a representation and warranty by the
                           Borrower as of the date thereof that the conditions
                           contained in this subsection 4.3 have been satisfied.

SECTION 5.        AFFIRMATIVE COVENANTS.

         The Borrower hereby agrees that, so long as the Term Loan Commitment
remains in effect or any amount is owing to the Lender hereunder or under any
other Loan Document, the Borrower shall

         5.1.     Pay Principal and Interest. The Borrower will punctually pay
                  or cause to be paid the principal and interest to become due
                  in respect of the Loans according to the terms hereof.

         5.2.     Tangible Equity to Debt Ratio. The Borrower will maintain at
                  all times a Tangible Equity to Debt ratio in excess of .70 to
                  1.0 (excluding non-recourse loans and assets financed by
                  non-recourse loans).

         5.3.     Keep Books. The Borrower will keep proper books of record and
                  account in which true, correct and complete entries will be
                  made of the transactions of the Borrower in accordance with
                  GAAP.

                                       21



         5.4.     Payment of Taxes; Corporate Existence; Maintenance of
                  Properties. The Borrower will:

                  (a)      Pay and discharge promptly all taxes (including,
                           without limitation, all payroll withholdings),
                           assessments and governmental charges or levies
                           imposed upon it or upon its income or profits or upon
                           any of its property, real, personal or mixed, or upon
                           any part thereof, before the same shall become in
                           default, as well as all claims for labor, materials
                           and supplies which, if unpaid, might by law become a
                           Lien upon its property; provided, however, that it
                           shall not be required to pay any such tax,
                           assessment, charge, levy or claim or discharge any
                           such Lien if the validity thereof shall be contested
                           in good faith by appropriate proceedings and if it
                           shall have set aside on its books such reserves, if
                           any, as may be required in accordance with GAAP with
                           respect to the tax, assessment, charge, levy or claim
                           so contested;

                  (b)      Conduct its business according to good business
                           practices; keep in full force and effect its
                           corporate existence and material rights, licenses,
                           permits and franchises, and comply in all material
                           respects with all of the laws, rules and regulations
                           governing or applicable to it or its business,
                           including, without limitation, the Exchange Act, and
                           all "margin" and other rules and regulations under
                           Regulations T, U and X of the Board of Governors of
                           the Federal Reserve System; and make all such reports
                           and pay all such franchise and other taxes and
                           license fees and do all such other things as may be
                           lawfully required, to maintain the material rights,
                           licenses, powers and franchises of the Borrower under
                           the laws of the United States and of the States or
                           jurisdictions in which it is organized or does
                           business.

         5.5.     Financial Statements and Reports; Notices. The Borrower will
                  furnish to the Lender in duplicate:

                  (a)      As soon as practicable and when available, and in any
                           event within 140 days after the end of each fiscal
                           year of the Borrower, annual unqualified financial
                           reports of the Borrower, on an individual basis and
                           on a consolidated basis with the Parent Shareholder,
                           including, inter alia, a balance sheet, a profit and
                           loss statement, and statement of cash flow for such
                           fiscal year, setting forth in comparative form the
                           corresponding figures for the preceding fiscal year,
                           audited by independent certified public accountants
                           or chartered accountants of recognized standing
                           selected by the Borrower and/or the Parent
                           Shareholder, as the case may be, and acceptable to
                           the Lender;

                  (b)      As soon as practicable and when available, and in any
                           event within 60 days after the end of each fiscal
                           quarter of the Borrower (other than the 4th quarter),
                           a consolidated balance sheet, a profit and loss
                           statement, and statement of cash flow for such fiscal
                           quarter, of the Borrower and the

                                       22



                           Parent Shareholder, showing its financial condition
                           as of the last day of such fiscal quarter and the
                           results of operations for such fiscal quarter,
                           reviewed by independent certified public accountants
                           or chartered accountant of recognized standing
                           selected by the Borrower and/or the Parent
                           Shareholder, as the case may be, and acceptable to
                           the Lender, and certified by the chief financial
                           officers of the Borrower or the Parent Shareholder,
                           as the case may be, as to (i) fair presentation of
                           its financial position and the results of operations,
                           and (ii) having been prepared in accordance with GAAP
                           consistently applied;

                  (c)      Concurrently with the delivery of the financial
                           statements referred to in Sections 5.5(a) and (b), a
                           certificate of the chief financial officer of the
                           Borrower (i) stating that, to the best of such
                           officer's knowledge, during such period (A) no
                           Subsidiary has been formed or acquired, (B) the
                           Borrower has observed or performed all of its
                           material covenants and other agreements, and
                           satisfied every condition, contained in this
                           Agreement and the other Loan Documents to be
                           observed, performed or satisfied by it, and (C) such
                           officer has obtained no knowledge of any Default or
                           Event of Default except as specified in such
                           certificate, and (ii) setting forth the computations
                           used by the Borrower in determining (as of the end of
                           such fiscal period) compliance with the covenants
                           contained in Sections 5.2 and 6.1;

                  (d)      Not later than ten (10) days after the end of each
                           month, a certificate of the chief financial officer
                           of the Borrower setting forth the computations used
                           by the Borrower in determining (as of the end of such
                           preceding month) compliance with the covenants
                           contained in Section 5.7;

                  (e)      Promptly following the occurrence thereof, notice of
                           any Default or Event of Default hereunder or of any
                           default under any other Loan Document;

                  (f)      Such other information as to the financial condition,
                           operations, business, properties and other assets of
                           the Borrower and/or the Parent Shareholder as the
                           Lender may from time to time reasonably request;

                  (g)      Promptly after the filing thereof, copies of any
                           permit, notice, report or other document that the
                           Borrower is obligated to file or provide with its
                           shareholders or any Governmental Authority;

                  (h)      The Borrower shall cause all audited financial
                           statements required to be delivered to the Lender
                           pursuant to this Section 5.5 to be delivered to the
                           Lender by the independent certified public accountant
                           or chartered accountant who performed the audit; and

                  (i)      If the Borrower shall receive from its shareholders
                           and/or any third party any demand for the payment of
                           any amount whatsoever on account of or in connection
                           with any Shareholders' Loan or dividends, the
                           Borrower

                                       23



                           shall immediately notify the Lender of such
                           occurrence, and shall consult with the Lender with
                           regard to such demand.

         5.6.     EOI Cash Dividends. The Borrower undertakes and agrees that
                  all cash dividends and other cash proceeds attributable to the
                  Pledged Shares shall be deposited in the Collateral Account in
                  accordance with the terms of the Pledge and Security
                  Agreement.

         5.7.     Maintenance of Minimum Market Value of Pledged Shares.

                  (a)      Subject to Section 3.10 of this Agreement, in the
                           event that on the last business day of any month (the
                           "Calculation Date"), the amount due to the Lender
                           from the Borrower in respect of the Loans and Loan
                           Documents, by way of principal, interest,
                           commissions, bank charges and/or expenses of any kind
                           whatsoever (the "Total Outstanding Credit") is
                           greater than 55% of the then aggregate current market
                           value of the Pledged Shares, the Borrower shall, as
                           soon as practicable but within no later than seven
                           (7) days of the Lender's first request, either (i)
                           grant additional collateral, to the satisfaction of
                           the Lender, in an amount equal to the difference on
                           the Calculation Date between 55% of the then
                           aggregate current market value of the Pledged Shares
                           and the Total Outstanding Credit or, at the
                           discretion of the Lender (ii) prepay part of the
                           Total Outstanding Credit so that the remaining Total
                           Outstanding Credit shall be equal to or less than 55%
                           of the aggregate current market value of the Pledged
                           Shares on the Calculation Date.

                  (b)      In the event the aggregate current market value of
                           the Pledged Shares shall depreciate by a margin of
                           ten percent (10%) in the aggregate, over ten (10)
                           consecutive Business Days, the Borrower shall, as
                           soon as practicable but within no later than seven
                           (7) days of the Lender's first request, either (i)
                           grant additional collateral, to the satisfaction of
                           the Lender, in an amount equal to the difference
                           between the amount which is equal to 55% of the then
                           aggregate current market value of the Pledged Shares
                           and the Total Outstanding Credit at that time, or, at
                           the discretion of the Lender, (ii) prepay part of the
                           Total Outstanding Credit so that the remaining Total
                           Outstanding Credit at that time shall be equal to or
                           less than 55% of the then aggregate current market
                           value of the Pledged Shares.

                  (c)      Unless otherwise agreed to in writing by the Lender,
                           a prepayment required by the Lender in accordance
                           with the terms of Section 5.7(a) or 5.7(b) above
                           shall be effected in accordance with one of the
                           following options at the discretion of the Borrower:

                           (1)      forthwith upon, but in any event no later
                                    than within seven (7) days of, the request
                                    of the Lender and subject to any fine and
                                    breakage cost as determined by the Lender;
                                    or

                                       24



                           (2)      on the next Interest Payment Date following
                                    the request of the Lender to prepay,
                                    provided that an amount equal to the
                                    difference between 55% of the then aggregate
                                    current market value of the Pledged Shares
                                    and the Total Outstanding Credit is
                                    deposited with the Lender in a deposit in
                                    the name of the Borrower which deposit shall
                                    be pledged by the Borrower in favor of the
                                    Lender.

         5.8.     ERISA Compliance. The Borrower will comply, in all material
                  respects, and cause each Commonly Controlled Entity, to
                  comply, in all material respects, with the provisions of
                  ERISA, if applicable, with respect to each of its or their
                  respective Plans and as soon as possible after the Borrower
                  knows or has reason to know that any Reportable Event with
                  respect to any Plan has occurred, furnish to the Lender a
                  statement signed by its chief executive officer or its chief
                  financial officer setting forth details as to such Reportable
                  Event and the action, if any, which the Borrower or such
                  Commonly Controlled Entity proposes to take with respect
                  thereto, together with a copy of the notice of such Reportable
                  Event furnished to PBGC.

SECTION 6.        NEGATIVE COVENANTS.

         The Borrower hereby agrees that, as long as the Term Loan Commitment
remains in effect or any amount is owing to the Lender hereunder or under any
other Loan Document, the Borrower shall not, directly or indirectly:

         6.1.     Tangible Equity. Permit its Tangible Equity at any time to be
                  less than (i) thirty-five percent (35%) of its total assets as
                  set forth in its balance sheet on a consolidated basis
                  (excluding non recourse loans and assets financed by non
                  recourse loans), or (ii) $30,000,000; as such figures shall
                  appear in the quarterly and annual financial reports of the
                  Borrower on a consolidated and/or individual basis.

         6.2.     Limitation on Dividends, Distributions and Redemptions.
                  Declare or pay any dividend on, or make any payment on account
                  of, or set apart assets for a sinking or other analogous fund
                  for, the purchase, redemption, defeasance, retirement or other
                  acquisition of, any shares of any class of capital stock of
                  the Borrower or any warrants or options to purchase any such
                  stock, whether now or hereafter outstanding, or make any other
                  distribution in respect thereof, either directly or
                  indirectly, whether in cash or property or in obligations of
                  the Borrower.

         6.3.     Limitation on Shareholders' Loans. Pay to its shareholders
                  and/or to any of their family members and/or to any companies
                  under the Control of its shareholders and/or to any third
                  party (who shall come in their place or on their behalf), in
                  any manner whatsoever, directly or indirectly, any amount
                  whatsoever from or on account or in connection with
                  Shareholders' Loans, including, but without derogation from
                  the generality of the foregoing, payments of principal,
                  interest, linkage differentials, indemnities, damages,
                  commissions and expenses (the amounts of the loans and all
                  amounts derived or arising therefrom as aforesaid are

                                       25



                  hereinafter collectively called "Shareholders' Loans,"
                  provided that the foregoing term shall not apply to any of the
                  following: (i) related intracompany loans, management fees or
                  other fees up to an aggregate annual amount of $1,000,000,
                  (ii) any and all interest on intracompany loans, without
                  limitation as to the amount, (iii) principal repayment on
                  intracompany loans on or after September 30, 2001, based on a
                  25 year or greater amortization schedule, and (iv) any and all
                  unrelated third party fees and costs.

         6.4.     Limitation on Issuance of Bearer Securities. Issue any bearer
                  securities.

         6.5.     Use of Proceeds of Loan. Use any part of the proceeds of the
                  Loan for any purpose other than those specified in Section
                  3.12.

         6.6.     Disposal of Property. Wind up, liquidate or dissolve, sell,
                  exchange, lease, transfer or otherwise dispose of all or
                  substantially all of its properties or other assets (or agree
                  to do any of the foregoing).

         6.7.     Limitation on Fundamental Changes. Enter into any merger,
                  consolidation or amalgamation, or liquidate, wind up or
                  dissolve itself (or suffer any liquidation or dissolution), or
                  convey, sell, lease, assign, transfer or otherwise dispose of
                  all or substantially all of its property, business or assets.

SECTION 7.        DEFAULTS AND REMEDIES.

         7.1.     If any of the following events shall occur and be continuing:

                  (a)      Any representation, warranty or statement made herein
                           or in any certificate or document hereafter signed
                           and delivered by the Borrower in favor of the Lender,
                           whether pursuant to this Agreement, any other Loan
                           Document or otherwise, shall prove to have been
                           false, incorrect or misleading in any material
                           respect when made or deemed made; or

                  (b)      The Borrower shall fail to pay to the Lender any
                           principal, interest, fees or other amounts,
                           including, without limitation, any payment of
                           principal of or interest on the Loans, or any fee or
                           other amount under this Agreement or the other Loan
                           Documents, or under any other document, note or
                           agreement hereafter signed and delivered by the
                           Borrower in favor of the Lender, as and when the same
                           shall become due and payable, whether at the due date
                           thereof, by acceleration, mandatory prepayment or
                           otherwise; or

                  (c)      Any default shall occur in the due observance or
                           performance by the Borrower of any other covenant,
                           agreement or condition to be performed by it herein
                           or in any other Loan Document, or in any other
                           document, note or agreement hereafter signed and
                           delivered by the Borrower in favor of the Lender; or

                                       26



                  (d)      The Borrower shall commence any case, proceeding or
                           other action (A) under any existing or future law of
                           any jurisdiction, domestic or foreign, relating to
                           bankruptcy, insolvency, reorganization or relief of
                           debtors, seeking to have an order for relief entered
                           with respect to it, or seeking to adjudicate it a
                           bankrupt or insolvent, or seeking reorganization,
                           arrangement, adjustment, winding-up, liquidation,
                           dissolution, composition or other relief with respect
                           to it or its debts, or (B) seeking appointment of a
                           receiver, trustee, custodian, conservator or other
                           similar official for it or for all or any substantial
                           part of its assets, or the Borrower shall make a
                           general assignment for the benefit of its creditors;
                           or

                  (e)      There shall be commenced against the Borrower any
                           case, proceeding or other action of a nature referred
                           to in clause (d) above which (A) results in the entry
                           of an order for relief or any such adjudication or
                           appointment or (B) remains undismissed, undischarged
                           or unbonded for a period of sixty (60) days, or there
                           shall be commenced against the Borrower any case,
                           proceeding or other action seeking issuance of a
                           warrant of attachment, execution, distrait or similar
                           process against all or any substantial part of its
                           assets which results in the entry of an order for any
                           such relief which shall not have been vacated,
                           discharged, or stayed or bonded pending appeal within
                           sixty (60) days from the entry thereof; or

                  (f)      The Borrower shall take any action in furtherance of,
                           or indicating its consent to, approval of, or
                           acquiescence in, any of the acts set forth in clause
                           (d) or (e) above; or

                  (g)      The Borrower shall generally not, or shall be unable
                           to, or shall admit in writing its inability to, pay
                           its debts as they become due; or

                  (h)      Any Loan Document shall become invalid or
                           unenforceable, or the Borrower so asserts; or (A) the
                           Pledge and Security Agreement shall cease for any
                           reason to be in full force and effect, or the
                           Borrower shall so assert, or (B) the Lien created by
                           the Pledge and Security Agreement in the Collateral
                           shall cease to be enforceable and of the same effect
                           and priority purported to be created thereby; or

                  (i)      Any default shall occur with respect to any
                           Indebtedness (other than the Indebtedness evidenced
                           by this Agreement) of the Borrower for or relating to
                           borrowed money, or under any agreement under which
                           any evidence of Indebtedness may be issued by the
                           Borrower, and such default shall continue for more
                           than the period of grace, if any, specified therein,
                           if the effect of such default is to accelerate the
                           maturity of such Indebtedness or to permit the holder
                           thereof, or any trustee, to cause the same to become
                           due prior to its stated maturity, or if any such
                           Indebtedness shall not be paid when due (after giving
                           effect to any grace period); or

                                       27



                  (j)      Final judgment for the payment of money in excess of
                           $100,000 (to the extent not covered by insurance or
                           bond) shall be rendered by a court of record against
                           the Borrower, and the Borrower shall not discharge
                           the same or provide for its discharge in accordance
                           with its terms, or procure a stay of execution
                           thereof within twenty-one (21) days from the date of
                           entry thereof and within such period of twenty-one
                           (21) days, or such longer period during which
                           execution of such judgment shall have been stayed,
                           appeal therefrom and cause the execution thereof to
                           be stayed during such appeal; or

                  (k)      An attachment shall be levied on the assets of the
                           Borrower or any part thereof, or execution
                           proceedings shall be instituted against the Borrower
                           or its assets and such attachment or execution
                           proceedings shall not be discharged within twenty-one
                           (21) days after the commencement thereof; or

                  (l)      In the Lender's opinion, the occurrence of any
                           Material Adverse Effect; or

                  (m)      (i) Any Person shall engage in any "prohibited
                           transaction" (as defined in Section 406 of ERISA or
                           Section 4975 of the Code) involving any Plan, (ii)
                           any "accumulated funding deficiency" (as defined in
                           Section 302 of ERISA), whether or not waived, shall
                           exist with respect to any Plan or any Lien in favor
                           of the PBGC or a Plan shall arise on the assets of
                           the Borrower or any Commonly Controlled Entity, (iii)
                           a Reportable Event shall occur with respect to, or
                           proceedings shall commence to have a trustee
                           appointed, or a trustee shall be appointed, to
                           administer or to terminate, any Single Employer Plan,
                           which Reportable Event or commencement of proceedings
                           or appointment of a trustee is, in the reasonable
                           opinion of the Lender, likely to result in the
                           termination of such Plan for purposes of Title IV of
                           ERISA, (iv) any Single Employer Plan shall terminate
                           for purposes of Title IV of ERISA, (v) the Borrower
                           or any Commonly Controlled Entity shall, or in the
                           reasonable opinion of the Lender is likely to, incur
                           any liability in connection with a withdrawal from,
                           or the Insolvency or Reorganization of, a
                           Multiemployer Plan or (vi) any other adverse event or
                           condition shall occur or exist with respect to a
                           Plan; and in each case in clauses (i) through (vi)
                           above, such event or condition, together with all
                           other such events or conditions, if any, could
                           reasonably be expected to involve an aggregate amount
                           of liability to the Borrower in excess of $50,000; or

                  (n)      Any Change in Control shall occur; or

                  (o)      The Borrower shall become an "investment company" or
                           a company "controlled" by an "investment company"
                           within the meaning of the Investment Company Act of
                           1940, or the regulations under such Act; or

                                       28



                  (p)      EOI shall declare and pay dividends on its common
                           shares of less than $0.24 per share on a quarterly
                           basis or $0.96 per share on an annual basis; or

                  (q)      The cash dividends and other cash proceeds
                           attributable to the Pledged Shares are for any reason
                           not deposited into the Collateral Account pursuant to
                           the Pledge and Security Agreement;

                  then, and in any such event, (A) if such event is an Event of
                  Default specified in clause (e) above, the Term Loan
                  Commitment shall automatically and immediately terminate and
                  the Loans hereunder (with accrued interest thereon) and all
                  other amounts owing under this Agreement shall immediately
                  become due and payable, and (B) if such event is any other
                  Event of Default, either or both of the following actions may
                  be taken: (i) the Lender may by notice to the Borrower declare
                  the Term Loan Commitment to be terminated forthwith, whereupon
                  the Term Loan Commitment shall immediately terminate; and (ii)
                  the Lender may, by notice to the Borrower, declare the Loans
                  hereunder (with accrued interest thereon) and all other
                  amounts owing under this Agreement and the other Loan
                  Documents to be due and payable forthwith, whereupon the same
                  shall immediately become due and payable. Except as expressly
                  provided above in this Section 7.1, presentment, demand,
                  protest and all other notices of any kind are hereby expressly
                  waived.

         7.2.     Suits for Enforcement. If any one or more of such Events of
                  Default shall occur and be continuing, the Lender may proceed,
                  to the extent permitted by law, to protect and enforce its
                  rights either by suit in equity or by action at law, or both,
                  whether for the specific performance of any covenant,
                  condition or agreement contained in the Loan Documents or in
                  aid of the exercise of any power granted in the Loan
                  Documents, or proceed to enforce the payment of the Loans or
                  to enforce any other legal or equitable right of the Lender
                  under any Loan Document.

         7.3.     Remedies Cumulative. No right or remedy herein or in any other
                  agreement or instrument conferred upon the Lender is intended
                  to be exclusive of any other right or remedy, and each and
                  every such right or remedy shall be cumulative and shall be in
                  addition to every other right and remedy given hereunder or
                  under any Loan Document or now or hereafter existing at law or
                  in equity or by statute or otherwise. Without limiting the
                  generality of the foregoing, if the Loans or any of the other
                  obligations of the Borrower to the Lender shall not be paid
                  when due, whether at the stated maturity thereof, by
                  acceleration or otherwise, the Lender shall not be required to
                  resort to any particular security, right or remedy or to
                  proceed in any particular order of priority, and the Lender
                  shall have the right at any time and from time to time, in any
                  manner and in any order, to enforce its security interests,
                  liens, rights and remedies, or any of them, as it deems
                  appropriate in the circumstances and apply the proceeds of its
                  collateral to such obligations of the Borrower as it
                  determines in its sole discretion.

                                       29



SECTION 8.        MISCELLANEOUS.

         8.1.     Amendments and Waivers.

                  (a)      Neither this Agreement nor any other Loan Document,
                           nor any terms hereof or thereof, may be amended,
                           supplemented or modified except in accordance with
                           the provisions of this Section 8.1. The Lender may,
                           from time to time, (i) enter into with the Borrower
                           written amendments, supplements or modifications
                           hereto and to the other Loan Documents for the
                           purpose of adding any provisions to this Agreement or
                           the other Loan Documents or changing in any manner
                           the rights of the Lender or of the Borrower hereunder
                           or thereunder, or (ii) waive, on such terms and
                           conditions as the Lender may specify in such
                           instrument, any of the requirements of this Agreement
                           or the other Loan Documents or any Default or Event
                           of Default and its consequences. Any such waiver and
                           any such amendment, supplement or modification shall
                           be binding upon the Borrower and the Lender and all
                           future holders of the Loans. In the case of any
                           waiver, the Borrower and the Lender shall be restored
                           to their former positions and rights hereunder and
                           under the other Loan Documents, and any Default or
                           Event of Default waived shall be deemed to be cured
                           and not continuing; no such waiver shall extend to
                           any subsequent or other Default or Event of Default
                           or impair any right consequent thereon.

                  (b)      No modification or waiver of any provisions of this
                           Agreement or of any other agreement or instrument
                           made or issued pursuant hereto or contemplated
                           hereby, nor consent to any departure by the Borrower
                           therefrom, shall in any event be effective,
                           irrespective of any course of dealing between the
                           parties, unless the same shall be in a writing
                           executed by the Lender, and then such waiver or
                           consent shall be effective only in the specific
                           instance and for the purpose for which given. No
                           notice to or demand on the Borrower in any case shall
                           thereby entitle the Borrower to any other or further
                           notice or demand in the same, similar or other
                           circumstances. Any transaction or matter excepted
                           from the operation of any Section of this Agreement
                           shall nevertheless be subject to the prohibitions and
                           limitations contained elsewhere in this Agreement,
                           unless expressly stated otherwise.

         8.2.     Notices. Unless otherwise expressly provided herein, all
                  notices, approvals, requests, demands, consents and other
                  communications hereunder, including any notice of default, to
                  or upon the respective parties hereto to be effective shall be
                  in writing (including by facsimile transmission) and, unless
                  otherwise expressly provided herein, shall be deemed to have
                  been duly given or made (a) in the case of delivery by hand or
                  by overnight courier, when delivered, or (b) in the case of
                  delivery by facsimile transmission, when sent and receipt has
                  been confirmed,

                                       30



                  addressed as follows in the case of the Borrower and the
                  Lender, or to such other address as may be hereafter notified
                  by the respective parties hereto

                  If to the Borrower:

                  Silver Maple (2001), Inc.
                  1696 N.E. Miami Gardens Drive, 2nd Floor
                  North Miami Beach, FL 33179
                  Attention: Chaim Katzman, President
                  Facsimile: (305) 947-1734

                  with a copy to:

                  Silver Maple (2001), Inc.
                  161 Bay Street, Suite 2820
                  Box 219
                  Toronto, Ontario M5J 2S1
                  Attention: Dori Segal, Vice President
                  Facsimile: (416)941-1655

                  with a copy to:

                  Alan J. Marcus, Esq.
                  20803 Biscayne Blvd., Suite 301
                  Aventura, FL 33180
                  Facsimile: (305) 937-1857

                  If to the Lender:

                  [Commercial Bank]

                  _________________________
                  _________________________
                  Attention:  __________________
                  Facsimile: __________________

                  with copy to:

                  _________________________
                  _________________________
                  _________________________
                  Attention: ___________________
                  Facsimile: ___________________

                  and with a copy to:

                                       31



                  Shaw Pittman LLP
                  335 Madison Avenue, 26th Floor
                  New York, NY 10017-4605
                  Attention: John C. Simons, Esq.
                  Facsimile: (212) 603-6848

         8.3.     No Waiver. No failure or delay on the part of the Lender in
                  exercising any right, power or privilege hereunder or under
                  any Loan Document, nor any course of dealing between the
                  Borrower and the Lender, shall operate as a waiver thereof,
                  nor shall a single or partial exercise thereof preclude any
                  other or further exercise or the exercise of any other right,
                  power or privilege.

         8.4.     Expenses. The Borrower agrees (a) to pay or reimburse the
                  Lender for all of its out-of-pocket costs and expenses
                  incurred in connection with the development, preparation and
                  execution of this Agreement, the other Loan Documents, and any
                  other documents prepared in connection herewith or therewith,
                  and any amendment, supplement or modification thereof or
                  thereto, and the consummation and administration of the
                  transactions contemplated hereby and thereby, including,
                  without limitation, the reasonable fees and disbursements of
                  counsel to the Lender, and (b) to pay or reimburse the Lender
                  for all its out-of-pocket costs and expenses incurred in
                  connection with the enforcement or preservation of any rights
                  under this Agreement, the other Loan Documents and any such
                  other documents, including, without limitation, the reasonable
                  fees and disbursements of counsel to the Lender.

         8.5.     Set-Off. In addition to any rights and remedies of the Lender
                  provided by law, the Lender shall have the right, without
                  prior notice to the Borrower, any such notice being expressly
                  waived by the Borrower to the extent permitted by applicable
                  law, upon any amount becoming due and payable by the Borrower
                  hereunder (whether at the stated maturity, by acceleration or
                  otherwise) to set-off and appropriate and apply against such
                  amount any and all deposits (general or special, time or
                  demand, provisional or final, including, without limitation,
                  the Collateral Account), in any currency, and any other
                  credits, indebtedness or claims, in any currency, in each case
                  whether direct or indirect, absolute or contingent, matured or
                  unmatured, at any time held or owing by the Lender or any
                  branch, agency or (to the extent permitted by applicable law)
                  banking affiliate thereof to or for the credit or the account
                  of the Borrower. The Lender agrees promptly to notify the
                  Borrower after any such set-off and application made by the
                  Lender, provided that the failure to give such notice shall
                  not affect the validity of the set-off and application.

         8.6.     Counterparts. This Agreement may be executed by one or more of
                  the parties to this Agreement on any number of separate
                  counterparts (including by facsimile transmission), and all of
                  said counterparts taken together shall be deemed to constitute
                  one and the same instrument. A set of the copies of this
                  Agreement signed by all the parties shall be lodged with the
                  Borrower and the Lender.

                                       32



         8.7.     Severability. Any provision of this Agreement or any other
                  Loan Document which is prohibited or unenforceable in any
                  jurisdiction shall, as to such jurisdiction, be ineffective to
                  the extent of such prohibition or unenforceability without
                  invalidating the remaining provisions hereof or thereof, and
                  any such prohibition or unenforceability in any jurisdiction
                  shall not invalidate or render unenforceable such provision in
                  any other jurisdiction.

         8.8.     Integration. This Agreement and the other Loan Documents
                  represent the agreement of the Borrower and the Lender with
                  respect to the subject matter hereof, and there are no
                  promises, undertakings, representations or warranties by the
                  Lender relative to the subject matter hereof not expressly set
                  forth or referred to herein or in the other Loan Documents.

         8.9.     GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
                  OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
                  AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
                  NEW YORK.

         8.10.    Submission to Jurisdiction. The Borrower hereby irrevocably
                  and unconditionally:

                  (a)      submits for itself and its property in any legal
                           action or proceeding relating to this Agreement and
                           the other Loan Documents to which it is a party, or
                           for recognition and enforcement of any judgment in
                           respect thereof, to the non-exclusive general
                           jurisdiction of the Courts of the State of New York,
                           the courts of the United States of America for the
                           Southern District of New York, and appellate courts
                           from any thereof;

                  (b)      consents that any such action or proceeding may be
                           brought in such courts and waives any objection that
                           it may now or hereafter have to the venue of any such
                           action or proceeding in any such court or that such
                           action or proceeding was brought in an inconvenient
                           court and agrees not to plead or claim the same;

                  (c)      agrees that service of process in any such action or
                           proceeding may be effected by mailing a copy thereof
                           by registered or certified mail (or any substantially
                           similar form of mail), postage prepaid, to the
                           Borrower at its address set forth in Section 8.2 or
                           at such other address of which the Lender shall have
                           been notified pursuant thereto;

                  (d)      agrees that nothing herein shall affect the right to
                           effect service of process in any other manner
                           permitted by law or shall limit the right to sue in
                           any other jurisdiction; and

                  (e)      waives, except in the case of bad faith, willful
                           misconduct or gross negligence (and otherwise to the
                           maximum extent not prohibited by law), any right it
                           may have to claim or recover in any legal action or
                           proceeding

                                       33



                           referred to in this Section 8.10 any special,
                           exemplary, or consequential damages.

         8.11.    WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
                  APPLICABLE LAW, THE BORROWER AND THE LENDER HEREBY IRREVOCABLY
                  AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
                  PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
                  DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

         8.12.    Acknowledgments. The Borrower hereby acknowledges that:

                  (a)      it has been advised by counsel in the negotiation,
                           execution and delivery of this Agreement and the
                           other Loan Documents;

                  (b)      The Lender has no fiduciary relationship with or duty
                           to the Borrower arising out of or in connection with
                           this Agreement or any of the other Loan Documents,
                           and the relationship between the Lender and the
                           Borrower, in connection herewith is solely that of
                           debtor and creditor; and

                  (c)      no joint venture is created hereby or by the other
                           Loan Documents or otherwise exists by virtue of the
                           transactions contemplated hereby between the Borrower
                           and the Lender.

         8.13.    Headings. Section headings are for convenience only and shall
                  not affect the interpretation or construction of this
                  Agreement or any other Loan Document.

         8.14.    Release of Collateral. Promptly after the Borrower shall have
                  repaid the Loans in full and shall have paid and repaid to the
                  Lender any and all of the sums due to the Lender hereunder and
                  under all other Loan Documents, and provided any and all of
                  the sums due to the Lender under documents signed between the
                  Borrower and the Lender shall have been paid to the Lender in
                  full, the Lender shall release the Liens over the Collateral.

         8.15.    Successors and Assigns; Participations and Assignments.

                  (a)      This Agreement shall be binding upon and inure to the
                           benefit of the Borrower, the Lender, and their
                           respective successors and assigns, except that the
                           Borrower may not assign or transfer any of their
                           rights or obligations under this Agreement without
                           the prior written consent of the Lender.

                  (b)      The Lender may, in the ordinary course of its
                           commercial banking business and in accordance with
                           applicable law, at any time sell to one or more banks
                           or other financial institutions ("Participants")
                           participating interests in any Loan owing to the
                           Lender, the Term Loan Commitment or any other
                           interest of the Lender hereunder and under the other
                           Loan Documents. In the event of any such sale by the
                           Lender of a participating

                                       34



                           interest to a Participant, the Lender's obligations
                           under this Agreement shall remain unchanged, the
                           Lender shall remain solely responsible for the
                           performance thereof, the Lender shall remain the
                           holder of any such Loan for all purposes under this
                           Agreement and the other Loan Documents, and the
                           Borrower shall continue to deal solely and directly
                           with the Lender in connection with the Lender's
                           rights and obligations under this Agreement and the
                           other Loan Documents. The Lender shall not be
                           entitled to create in favor of any Participant, in
                           the participation agreement pursuant to which such
                           Participant's participating interest shall be created
                           or otherwise, any right to vote on, consent to or
                           approve any matter relating to this Agreement or any
                           other Loan Document except for those specified in
                           clauses (i) and (ii) of the proviso to Section 8.1 or
                           otherwise expressly set forth in this Agreement or
                           any other Loan Document. The Borrower agrees that if
                           amounts outstanding under this Agreement are due or
                           unpaid, or shall have been declared or shall have
                           become due and payable upon the occurrence of an
                           Event of Default, each Participant shall, to the
                           maximum extent permitted by applicable law, be deemed
                           to have the right of setoff in respect of its
                           participating interest in amounts owing under this
                           Agreement to the same extent as if the amount of its
                           participating interest were owing directly to it as a
                           Lender under this Agreement; provided that, in
                           purchasing such participating interest, such
                           Participant shall be deemed to have agreed to share
                           with the Lender the proceeds thereof as fully as if
                           it were a Lender hereunder. The Borrower also agrees
                           that each Participant shall be entitled to the
                           benefits of Sections 2.12, 2.13 and 2.14 with respect
                           to its participation in the Commitments and the Loans
                           outstanding from time to time as if it was a Lender;
                           provided that, in the case of Section 2.13, such
                           Participant shall have complied with the requirements
                           of said subsection, and provided, further, that no
                           Participant shall be entitled to receive any greater
                           amount pursuant to any such subsection than the
                           Lender would have been entitled to receive in respect
                           of the amount of the participation transferred by the
                           Lender to such Participant had no such transfer
                           occurred. The Lender shall provide the Borrower with
                           written notice of the identity of any such
                           Participant and the amount of any such participating
                           interest.

                  (c)      The Borrower authorizes the Lender to disclose to any
                           Participant and any prospective Participant any and
                           all financial information in the Lender's possession
                           concerning the Borrower and its Affiliates which has
                           been delivered to the Lender by or on behalf of the
                           Borrower pursuant to this Agreement or which has been
                           delivered to the Lender by or on behalf of the
                           Borrower in connection with the Lender's credit
                           evaluation of the Borrower and its Affiliates prior
                           to becoming a party to this Agreement, provided that
                           any such Participant agrees to hold such information
                           in confidence. Nothing herein shall be construed so
                           as to authorize Lender or any Participant to use any
                           such information for any improper purpose.

                                       35



                  (d)      For avoidance of doubt, the parties to this Agreement
                           acknowledge that the provisions of this Section 8.15
                           concerning assignments of Loans relate only to
                           absolute assignments and that such provisions do not
                           prohibit assignments creating security interests,
                           including, without limitation, any pledge or
                           assignment by the Lender of any Loan to any Federal
                           Reserve Bank in accordance with applicable law.

                           [SIGNATURE PAGE TO FOLLOW]

                                       36



         IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Agreement to be duly executed and delivered by their duly authorized officers,
all as of the date first above written.

                                             SILVER MAPLE (2001), INC.

                                             By: /s/ Dori Segal
                                                 -------------------------------
                                                 Dori Segal
                                                 Vice President

                                             [COMMERCIAL BANK]

                                             By: /s/
                                                 -------------------------------
                                                 Name:
                                                 Title:

                                             By: /s/
                                                 -------------------------------
                                                 Name:
                                                 Title:

EX-3

                                                                       EXHIBIT 3

                          PLEDGE AND SECURITY AGREEMENT

         THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of
February 12, 2003, made by SILVER MAPLE (2001), INC., a Nevada corporation
("Pledgor"), in favor of [Commercial Bank] ("Lender").

                              W I T N E S S E T H:

         WHEREAS, Lender has agreed to extend credit to Pledgor up to an
aggregate amount of $7,000,000 (the "Credit") to partially finance the purchase
by Pledgor of up to 1,036,650 shares of the common stock, par value $.01 per
share, of Equity One, Inc. (collectively, the "EOI Shares"), upon the terms, and
subject to the conditions, set forth in that certain Loan Agreement dated as of
the date hereof, between Pledgor and Lender (the "Loan Agreement"); and

         WHEREAS, it is a condition precedent to the obligation of Lender to
grant the Credit that, among other things, Pledgor, execute and deliver this
Agreement to Lender to secure the payment and performance of Pledgor's
obligations under the Loan Agreement;

         NOW, THEREFORE, in consideration of the premises and to induce Lender
to grant the Credit under the Loan Agreement, Pledgor and Lender hereby agree as
follows:

                  1.       Defined Terms.

                           (a)      Unless otherwise defined herein, terms
         defined in the Loan Agreement and used herein shall have the meanings
         given to them in the Loan Agreement. All terms not defined herein or in
         the Loan Agreement shall have the meanings set forth in the UCC (as
         hereinafter defined), except where the context otherwise requires,
         provided that, if a term is defined in Article 9 of the UCC differently
         than in another Article of the UCC, then such term shall have the
         meaning specified in Article 9 of the UCC.

                           (b)      The following additional terms, as used
         herein, shall have the following respective meanings:

                       "Agreement and Plan of Merger": means that certain
               Agreement and Plan of Merger dated October 28, 2002, between IRT
               and EOI, as amended, supplemented and modified from time to time.

                       "Collateral Account": shall have the meaning specified in
               Section 4 hereof.

                       "EOI": means Equity One, Inc., a Maryland corporation.

                       "Equity One, Inc. Common Stock Purchase Agreement": means
               that certain Equity One, Inc. Common Stock Purchase Agreement
               dated as of October 28, 2002, between EOI and each of the
               purchasers party thereto (including, without limitation,
               Pledgor), as amended, supplemented or modified from time to time.



                       "Equity One, Inc. Voting Agreement": means that certain
               Equity One, Inc. Voting Agreement dated October 28, 2002, among
               IRT, EOI and certain stockholders party thereto ( including,
               without limitation, Pledgor), as amended, supplemented or
               modified from time to time.

                       "IRT": means IRT Property Company, a Georgia corporation.

                       "Issuer": means EOI.

                       "Material Adverse Effect": means (X) a material adverse
               effect on (a) the business, operations, property, condition
               (financial or otherwise) or prospects of Pledgor, (b) the
               validity or enforceability of this Agreement, the Loan Agreement,
               or any other Loan Document in any manner that prevents the
               practical realization by Lender of the benefits intended by this
               Agreement, the Loan Agreement, and/or the other Loan Documents,
               or (c) the rights or remedies of Lender hereunder or under the
               Loan Agreement, or any other Loan Document in any manner that
               prevents the practical realization of the benefits purported to
               be provided by such rights and remedies with respect to Lender's
               ability to realize upon the principal benefits or security
               intended to be provided by this Agreement, the Loan Agreement,
               and/or any other Loan Document, (Y) any impairment to the
               validity, perfection or priority of the security interest of
               Lender in the Pledged Collateral in any manner whatsoever, and/or
               (Z) an Event of Default.

                       "Pledged Shares": means all EOI Shares, purchased at any
               time and from time to time by Pledgor from the Issuer pursuant to
               the Equity One, Inc. Common Stock Purchase Agreement, up to a
               maximum aggregate number of 1,036,650 shares of such stock, and
               all proceeds thereof.

                       "Registration Rights Agreement": means that certain
               Registration Rights Agreement dated as of October 28, 2002, among
               EOI and the purchasers party thereto, including, without
               limitation, Pledgor, as may be amended, supplemented or modified
               from time to time.

                       "Secured Obligations": means all obligations, liabilities
               and indebtedness of Pledgor now or hereafter owing to Lender
               under or in connection with the Loans, or any other loan,
               extension of credit or accommodation now or hereafter made or
               granted by Lender (each such other loan, extension of credit or
               accommodation, an "Other Credit"), including, without limitation,
               all obligations, liabilities and indebtedness of Pledgor under
               this Agreement and the Loan Agreement, including, without
               limitation, (i) all unpaid principal of, and accrued interest
               (including, without limitation, any interest which accrues after
               the commencement of any case, proceeding or other action relating
               to the bankruptcy, insolvency or reorganization of Pledgor,
               whether or not allowed or allowable as a claim in any such
               proceeding) on, any loan or other credit granted under or in
               connection with the Loan Agreement, or any Other Credit, (ii) all
               expenses, costs of collection and any other amounts payable to
               Lender

                                      - 2 -



                by Pledgor under this Agreement and the Loan Agreement or any
                Other Credit (including, without limitation, all fees and
                disbursements of counsel to Lender that are required to be paid
                by Pledgor to Lender pursuant to this Agreement, the Loan
                Agreement, or any Other Credit), and (iii) any renewals or
                extensions of the Loans or the Loan Agreement or any Other
                Credit.

                       "Securities Act": shall have the meaning specified in
               subsection 12(a) hereof.

                       "UCC": shall have the meaning specified in subsection
               12(a) hereof.

                           (c)      The words "hereof," "herein" and "hereunder"
         and words of similar import when used in this Agreement shall refer to
         this Agreement as a whole and not to any particular provision of this
         Agreement, and section and paragraph references are to this Agreement
         unless otherwise specified.

                           (d)      The meanings given to terms defined herein
         shall be equally applicable to both the singular and plural forms of
         such terms.

                  2.       Pledge; Grant of Security Interest. As collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Secured
Obligations, Pledgor hereby assigns, pledges and hypothecates to the Lender, and
grants to Lender a security interest in (all being collectively referred to as
the "Pledged Collateral"), all of its right, title and interest in and to:

                           (a)      the Pledged Shares and the certificates
         representing the Pledged Shares, and all stock dividends, cash
         dividends, payments, securities and property from time to time
         received, receivable or otherwise distributed in respect of, or in
         exchange for, any or all of the Pledged Shares;

                           (b)      all contract and other rights related to the
         foregoing, including without limitation, all registration rights under
         the Registration Rights Agreement; provided, however, the foregoing
         described rights shall cover only one (1) "Demand Registration" (as
         such term is defined in Section 2.1 of the Registration Rights
         Agreement) (collectively, the "Pledged Shares Rights");

                           (c)      the Collateral Account, and all monies held
         therein or credited thereto; and

                           (d)      all proceeds of any of the foregoing.

                  3.       Delivery of Pledged Shares. All certificates or
instruments representing or evidencing the Pledged Shares shall be delivered to
and held by or on behalf of Lender pursuant hereto and shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed undated
instruments of transfer or assignment in blank, substantially in the form of
Exhibit B hereto, all in form and substance satisfactory to Lender. Lender shall
have the right, at any time in its discretion and without notice to Pledgor
following the occurrence and during the

                                      - 3 -



continuance of an Event of Default, to transfer to or to register in the name of
Lender any or all of the Pledged Shares. In addition, Lender shall have the
right to exchange certificates or instruments representing or evidencing Pledged
Shares for certificates or instruments of smaller or larger denominations.

                  4.       Collateral Account.

                           (a)      Pledgor has established, and shall hereafter
         maintain, with Lender at ________________________________________, a
         non interest-bearing cash collateral deposit account number
         ____________ and an interest bearing cash collateral deposit account
         number ____________ (collectively, the "Collateral Account"). All cash
         dividends and other cash proceeds attributable to the Pledged Shares
         shall be deposited into the Collateral Account promptly upon receipt of
         same by Pledgor or by direct wire transfer by the Issuer into the
         Collateral Account. The Collateral Account shall be deemed to be a
         "deposit account" within the meaning of Article 9 of the UCC. The
         Collateral Account shall be subject to the terms of this Agreement and
         shall be under the "control" (within the meaning of Section 9-104(a)(1)
         of the UCC) of Lender pursuant to the terms of this Agreement. The
         Collateral Account, and all monies deposited therein or credited
         thereto, including all accrued interest, if any, thereon, shall
         constitute security for the Secured Obligations.

                           (b)      The current record dates of the Issuer for
         the payment of dividends are March 31, June 30, September 30 and
         December 31. Pledgor shall give Lender notice of each (i) anticipated
         dividend payment when declared, which notice will include the payment
         date and amount, and (ii) any change in the record dates. Payments by
         check shall be sent to [Commercial Bank], ____________, New York, New
         York 10036, Attention: Ms. _____________, and wire transfers shall be
         sent pursuant to wire transfer instructions supplied by Lender to the
         Issuer from time to time.

                           (c)      Lender shall not make or permit the
         withdrawal or other disposition of any funds in the Cash Collateral
         Account without Lender's and, in the event that Lender at any time
         sells a 100% participation in the Secured Obligations to another
         financial institution (a "100% Participant"), the 100% Participant's,
         prior written consent.

                           (d)      Except as otherwise expressly provided in
         this Agreement, no interest in the Collateral Account, or any
         beneficial interest therein, may be (i) pledged, sold, assigned or
         transferred, (X) by any party hereto, or (Y) other than by operation of
         law, or (ii) taken or reached by any legal or equitable process in
         satisfaction of any debt or other liability of any party hereto other
         than Pledgor.

                           (e)      Pledgor shall pay Lender an annual fee of
         $15,000 (the "Fee") for each calendar year in consideration of its
         maintenance of the Collateral Account. The Fee shall be paid
         concurrently with the execution of this Agreement, and on the
         anniversary date hereof. If the Fee is not paid within ten (10) days of
         its due date, Lender may debit the Collateral Account for such amount.

                                      - 4 -



                  5.       Representations and Warranties. Pledgor hereby
represents and warrants that the following statements are true, correct and
complete in all material respects:

                           (a)      Each of the representations and warranties
         made by Pledgor in the Loan Agreement is true and correct on and as of
         the date hereof as though made on and as of the date hereof.

                           (b)      On the date of each "Initial Closing" or
         "Subsequent Closing" (as such terms are defined in the Equity One, Inc.
         Common Stock Purchase Agreement, hereinafter a "Purchase Closing
         Date"), (i) Pledgor will be the record, legal and beneficial owner of
         that number of EOI Shares so purchased in accordance with the Equity
         One, Inc. Common Stock Purchase Agreement and will promptly so notify
         Lender in writing, (ii) such EOI Shares, to Pledgor's knowledge, will
         have been duly authorized and validly issued and will be fully paid and
         nonassessable, and (iii) there will be no outstanding warrants,
         options, subscriptions or other contractual arrangements for the
         purchase or sale of such EOI Shares or any outstanding securities
         convertible into such EOI Shares, and there will be no preemptive
         rights of Issuer or any other Person with respect to such EOI Shares,
         other than in connection with the Agreement and Plan of Merger.

                           (c)      Pledgor is not and will not become a party
         to or otherwise bound by any agreement, other than this Agreement, the
         Equity One, Inc. Common Stock Purchase Agreement, the Registration
         Rights Agreement and the Equity One, Inc. Voting Agreement, which
         restricts in any manner the rights of Lender or any other present or
         future holder of any of the Pledged Shares with respect thereto.

                           (d)      Upon each purchase by Pledgor of EOI Shares
         in accordance with the Equity One, Inc. Common Stock Purchase
         Agreement, and the making of the Loan by Lender in connection
         therewith, this Agreement will create in favor of Lender a valid
         security interest in such EOI Shares, and such EOI Shares shall
         constitute Pledged Shares securing the payment and performance of the
         Secured Obligations. Upon delivery to Lender of the stock
         certificate(s) evidencing such Pledged Shares endorsed to Lender or in
         blank by an effective endorsement, Lender shall have a duly perfected
         security interest in such Pledged Shares, free of any adverse claim.

                           (e)      This Agreement is effective to create in
         favor of Lender a valid security interest in the Collateral Account
         securing the payment and performance of the Secured Obligations. Upon
         execution and delivery of this Agreement by Pledgor, Lender will have a
         first priority duly perfected security interest in the Collateral
         Account and such security interest shall remain perfected so long as
         Lender retains "control" (as defined in Section 9-104 of the UCC) of
         the Collateral Account.

                           (f)      Upon (i) filing a financing statement in
         recordable form with the Office of the Secretary of State of Nevada
         naming Pledgor as debtor and Lender as secured party, describing the
         Pledged Shares Rights, and (ii) each purchase by Pledgor of EOI Shares
         in accordance with the Equity One, Inc. Common Stock Purchase
         Agreement,

                                      - 5 -



         Lender will have a duly perfected security interest in all right, title
         and interest of Pledgor in the Pledged Shares Rights with respect to
         such EOI Shares.

                           (g)      Subject to the restrictions contained in the
         Agreement and Plan of Merger, the Equity One, Inc. Voting Agreement,
         the Equity One, Inc. Common Stock Purchase Agreement and the
         Registration Rights Agreement, no consent, authorization, approval or
         other action by, and no notice to or filing with, any governmental
         authority or regulatory body or any other Person is required for (i)
         the pledge by Pledgor of, or the grant by Pledgor of a security
         interest in, the Pledged Collateral pursuant to this Agreement, (ii)
         the execution, delivery or performance of this Agreement by Pledgor, or
         (iii) the exercise by Lender of any rights (including without
         limitation, voting rights) or remedies provided for in this Agreement
         in respect of the Pledged Collateral (except for the filing of the
         financing statement as described in Section 5(f) above, or as has
         already been obtained or taken, or as may be required in connection
         with the disposition of the Pledged Shares by laws affecting the
         offering and sale of securities generally).

                           (h)      The execution, delivery and performance of
         this Agreement and the transactions contemplated hereby, including,
         without limitation, the purchase and delivery of the EOI Shares to
         Lender on each Purchase Closing Date, (A) do not and will not conflict
         with or result in any breach or contravention of any applicable law,
         regulation, judicial order or decree to which Pledgor is subject,
         including, without limitation, Regulations T, U or X of the Board of
         Governors of the Federal Reserve System, and (B) do not and will not
         violate, conflict with, constitute a default or event of default under,
         or result in any rights to accelerate or modify any obligations under
         any agreement, instrument, lease, mortgage or indenture to which
         Pledgor is a party or subject, or to which any of its assets is
         subject, other than as set forth in the Equity One, Inc. Voting
         Agreement and the Registration Rights Agreement.

                           (i)      Pledgor has the corporate power and
         authority to enter into this Agreement and to grant to Lender a
         security interest in the Pledged Collateral hereunder. This Agreement
         has been duly executed and delivered by Pledgor and is the legal, valid
         and binding obligation of Pledgor enforceable against it in accordance
         with the terms hereof, except as enforceability is limited by
         bankruptcy, insolvency, reorganization, moratorium, or other laws
         relating to or affecting generally the enforcement of creditors'
         rights, and except to the extent that availability of the remedy of
         specific performance or injunctive relief is subject to the discretion
         of the court before which any case or proceeding therefore may be
         brought.

                           (j)      Pledgor (i) is the sole owner of, and has
         rights in, and good and marketable title to, the Collateral Account,
         free and clear of any and all liens, charges, encumbrances, security
         interests or claims thereon of any Person (other than Lender), and (ii)
         on each Purchase Closing Date, will be the sole owner of, and will have
         rights in, and good and marketable title to, the EOI Shares so
         purchased and the related Pledged Shares Rights, free and clear of any
         and all liens, charges, encumbrances, security interests or claims
         thereon of any Person (other than Lender and as set forth in the Equity
         One, Inc. Voting Agreement). No financing statement or other public
         notice with respect to all or

                                      - 6 -



         any part of the Pledged Collateral is on file or of record in any
         public office, except such as have been filed in favor of Lender
         pursuant to this Agreement. There are no liens, security interests,
         charges or other encumbrances of any kind on, in or against the Pledged
         Collateral, except those in favor of Lender, other than in connection
         with the Equity One, Inc. Voting Agreement.

                           (k)      The name of Pledgor set forth on the first
         page of this Agreement is Pledgor's correct and complete legal name.
         Pledgor's chief executive office and principal place of business since
         its inception has been located at Pledgor's address(es) specified in
         Section 18 of this Agreement. Pledgor is a Nevada corporation and its
         federal tax identification number is 65-1117277.

                           (l)      All information heretofore, herein or
         hereafter supplied to Lender by or on behalf of Pledgor with respect to
         the Pledged Collateral is and will be accurate and complete in all
         material respects.

                           (m)      There are no agreements, understandings or
         other contractual arrangements of any kind (written or oral) between
         Pledgor and any other Person (including any affiliate of Pledgor),
         regarding the exercise of the registration rights with respect to the
         Pledged Shares, other than as expressly set forth in this Agreement and
         the Registration Rights Agreement.

                  6.       Covenants Relating to the Pledged Collateral. Pledgor
covenants and agrees with Lender that, from and after the date of this Agreement
until the Secured Obligations are indefeasibly paid in full and this Agreement
is terminated and the security interests created hereby are released:

                           (a)      On each Purchase Closing Date, Pledgor will
         deliver, or cause to be delivered, to Lender to hold as Pledged
         Collateral pursuant to this Agreement, one or more share certificates,
         duly issued and registered in the name of Pledgor, evidencing the EOI
         Shares purchased by Pledgor from EOI on such Purchase Closing Date,
         together with an undated stock power covering each such share
         certificate, duly executed by Pledgor. Pledgor will, from time to time,
         at Pledgor's expense, and upon Lender's request, promptly execute
         and/or deliver all further instruments and documents and take all
         further action that may be necessary or desirable, or that Lender may
         reasonably request, in order to perfect and protect any security
         interest granted or purported to be granted hereby, to enable Lender to
         exercise and enforce the rights and remedies of Lender hereunder with
         respect to any Pledged Collateral or to carry out the provisions and
         purposes hereof. Without limiting the generality of the foregoing,
         Pledgor will at its sole expense: (i) upon Lender's request,
         authenticate, in recordable form, and deliver to Lender any financing
         or continuation statements, or amendments thereto, and such other
         instruments, assurances, documents or notices and take such further
         actions, as may be necessary or desirable, or as Lender may reasonably
         request, in order to vest in and assure to Lender its rights hereunder
         and in the Pledged Collateral, and otherwise to perfect and preserve
         the security interests and full benefits granted or purported to be
         granted hereby under the laws of any applicable jurisdiction; and (ii)
         upon Lender's request, appear in and defend

                                      - 7 -



         any action or proceeding that may affect Pledgor's title to or the
         security interest of Lender in the Pledged Collateral.

                           (b)      Pledgor will, promptly upon request, provide
         to Lender all information and evidence it may reasonably request
         concerning the Pledged Collateral to enable Lender to enforce the
         provisions of this Agreement.

                           (c)      Pledgor will, immediately upon receipt of
         same as registered owner of the Pledged Shares, deliver to Lender
         copies of all notices, letters and other written communications and
         information received from time to time from Issuer.

                           (d)      Promptly upon its purchase or acquisition of
         any additional non-registered shares of stock of the Issuer, Pledgor
         will make a good-faith effort to give Lender written notice of each
         such purchase or acquisition and the details thereof (including,
         without limitation, whether or not Pledgor was granted or otherwise
         received registration rights in respect of such additional shares).

                           (e)      Pledgor will comply with all Requirements of
         Law applicable to it and the Pledged Collateral or any portion thereof,
         except to the extent that the failure to comply would not reasonably be
         expected to have a Material Adverse Effect.

                           (f)      Pledgor will pay promptly when due any
         taxes, assessments and governmental charges or levies imposed upon the
         Pledged Collateral or in respect of its income or profits therefrom, as
         well as all claims of any kind, unless any of the foregoing are have
         been effectively stayed within 10 days of the occurrence or imposition
         thereof, or are being contested in good faith by Pledgor and as to
         which adequate reserves have been set aside on its books.

                           (g)      Pledgor will advise Lender promptly in
         writing, in reasonable detail, of (A) any lien, charge, claim or other
         encumbrance made or asserted against Pledgor or any of the Pledged
         Collateral, (B) any material change in the composition of the Pledged
         Collateral, (C) the occurrence of any event or condition which to its
         knowledge is likely to have a Material Adverse Effect, and (D) any
         bankruptcy or litigation case or proceeding relating to Pledgor or any
         of the Pledged Collateral.

                           (h)      Pledgor will not amend or modify, or waive
         compliance with, any term, condition or provision of the Equity One,
         Inc. Voting Agreement, Equity One, Inc. Common Stock Purchase
         Agreement, the Registration Rights Agreement or its Articles of
         Incorporation without the prior written consent of Lender, which
         consent shall not be unreasonably withheld.

                           (i)      Pledgor will not create, incur, assume or
         suffer to exist any lien, security interest, encumbrance or charge of
         any kind upon the Pledged Collateral, except liens, security interests,
         encumbrances or charges in favor of Lender or as set forth in the
         Equity One, Inc. Voting Agreement.

                                      - 8 -



                           (j)      Pledgor will not sell, transfer or otherwise
         dispose of any Pledged Collateral, or attempt, offer or contract to do
         so, except as expressly permitted by this Agreement.

                           (k)      Pledgor will not, without giving Lender at
         least forty-five (45) days prior written notice thereof, change its
         name, identity or organizational structure to such an extent that any
         financing statement filed by Lender in connection with this Agreement
         would become seriously misleading.

                           (l)      Pledgor will indemnify Lender, its
         directors, officers and employees and each legal entity, if any, who
         controls Lender (the "Indemnified Parties"), and hold each Indemnified
         Party harmless from and against, any and all claims, damages, losses,
         liabilities, costs and expenses (including, without limitation, all
         legal fees and expenses of internal or external counsel with whom any
         Indemnified Party may consult and all expenses of litigation or
         preparation therefor), which any Indemnified Party may incur or which
         may be asserted against any Indemnified Party as a result of the
         execution, delivery or enforcement of, or performance under, this
         Agreement, provided that the foregoing indemnity agreement shall not
         apply to claims, damages, losses, liabilities and expenses solely
         attributable to an Indemnified Party's gross negligence or willful
         misconduct. The indemnity agreement contained in this subsection shall
         survive the termination of this Agreement and the repayment of the
         Secured Obligations. Pledgor may participate at its expense in the
         defense of any such claim.

                           (m)      Pledgor will give Lender not less than
         thirty (30) days prior written notice of its intention to exercise its
         right to one (1) "Demand Registration" pursuant to Section 2.1 of the
         Registration Rights Agreement. Except as expressly set forth in the
         preceding sentence, Pledgor will not exercise any of Pledgor's
         registration rights (including, without limitation, the other right to
         a "Demand Registration") under the Registration Rights Agreement,
         without the prior written consent of Lender; it being understood and
         agreed that such other right to a "Demand Registration" and all other
         rights under the Registration Rights Agreement constitute Pledged
         Collateral subject to Lender's security interest pursuant to this
         Agreement.

                           (n)      Pledgor will not enter into, or suffer to
         exist, any agreement, understanding or other contractual arrangement of
         any kind (written or oral) between Pledgor and any other Person
         (including any affiliate of Pledgor), regarding the exercise of the
         Pledged Shares Rights with respect to the Pledged Shares, other than as
         expressly set forth in this Agreement and the Registration Rights
         Agreement.

                  7.       Voting Rights; Dividends; Etc.

                           (a)      So long as no Event of Default shall have
         occurred and is continuing and Lender shall not have delivered to
         Pledgor notice of its election to exercise the rights set forth in
         subsection (b) below, Pledgor shall be entitled, subject to the Equity
         One, Inc. Voting Agreement, to exercise any and all voting and other
         consensual rights pertaining to the Pledged Shares or any part thereof
         for any purpose not

                                      - 9 -



         inconsistent with the terms of this Agreement or the Loan Agreement;
         provided, however, that Pledgor shall not exercise or refrain from
         exercising any such right if, in Lender's reasonable judgment, such
         action or inaction would have a Material Adverse Effect or a material
         adverse effect on the value of the Pledged Collateral or any part
         thereof; and provided further, that Pledgor shall not exercise any such
         right to amend or modify Article VII of Issuer's Articles of Amendment
         and Restatement without the prior written consent of Lender.
         Notwithstanding the foregoing to the contrary, Pledgor may exercise
         such voting rights in any way that may dilute its percentage interest
         in the Issuer evidenced by the Pledged Shares from the percentage
         interest in effect immediately prior to such action or inaction with
         the prior written consent of Lender (which consent shall not be
         unreasonably withheld so long as (i) no Default or Event of Default has
         occurred and is continuing, and (ii) Lender is reasonably satisfied
         that the Issuer has or will receive fair consideration for the issuance
         of any new shares or other action causing such dilution).

                           (b)      Upon the occurrence and during the
         continuance of an Event of Default, all rights of Pledgor to exercise
         the voting and other consensual rights which Pledgor would otherwise be
         entitled to exercise pursuant to subsection 7(a) shall cease to be
         effective upon notice by Lender to Pledgor of Lender's intent to
         exercise its rights hereunder, and upon delivery of such notice, all
         such rights shall become vested in Lender, who shall thereupon have the
         sole right to exercise such voting and other consensual rights so long
         as such voting and other consensual rights are not exercised in a
         manner inconsistent with Section 1.2 of the Equity One, Inc. Voting
         Agreement. In order to effect such transfer of rights, Lender shall
         have the right, upon such notice, to date and present to Issuer the
         irrevocable proxy executed by Pledgor substantially in the form
         attached hereto as Exhibit A. It is understood and agreed by the
         parties hereto that upon termination of the Equity One, Inc. Voting
         Agreement in accordance with its terms, (i) the foregoing irrevocable
         proxy and voting and other consensual rights granted to Lender pursuant
         to this subsection shall no longer be subject to, or limited in any way
         by, the Equity One, Inc. Voting Agreement, and/or (ii) Pledgor shall,
         upon the request of Lender, promptly execute and deliver to Lender such
         additional and/or replacement irrevocable proxies as may be required by
         Lender in order to effect_under applicable law the voting and other
         consensual rights intended to be transferred by Pledgor to Lender
         pursuant to this subsection.

                           (c)      Any and all (i) cash dividends and other
         cash distributions received, receivable or otherwise paid or payable in
         respect of any of the Pledged Shares (including without limitation any
         sums paid upon or in respect of the Pledged Shares pursuant to the
         recapitalization or reclassification of the capital of the Issuer or
         pursuant to the reorganization, liquidation or dissolution of the
         Issuer) shall be received in trust for the benefit of Lender as
         additional Pledged Collateral, shall be segregated from other funds of
         Pledgor, and shall be deposited forthwith into the Collateral Account
         in the same form as so received (with any necessary endorsement), and
         (ii) any and all stock dividends, securities, instruments and other
         rights, property or proceeds (other than cash or checks) received,
         receivable or otherwise distributed in respect of, or in exchange for,
         any Pledged Shares (including without limitation any distribution upon
         or in respect of

                                     - 10 -



         the Pledged Shares pursuant to the recapitalization or reclassification
         of the capital of the Issuer or pursuant to the reorganization,
         liquidation or dissolution of the Issuer), shall be received in trust
         for the benefit of Lender, and shall be delivered forthwith to Lender
         in the same form as so received (with any necessary endorsement) to be
         held as Pledged Collateral under this Agreement.

                  8.       Transfers and Other Liens; Additional Shares.

                           (a)      Except as otherwise permitted by this
         Agreement, Pledgor agrees that it will not (i) sell, assign (by
         operation of law or otherwise), transfer, exchange or otherwise dispose
         of, or grant any option with respect to, any of the Pledged Collateral,
         (ii) create, incur or permit to exist any Lien or option in favor of,
         or any claim of any Person with respect to, any of the Pledged
         Collateral, or any interest therein, except for the security interests
         created by this Agreement, or (iii) enter into any other contractual
         obligations (other than the Equity One, Inc. Voting Agreement, the
         Equity One, Inc. Common Stock Purchase Agreement and the Registration
         Rights Agreement) which could reasonably be expected to restrict or
         inhibit Lender's rights or ability to sell or otherwise dispose of the
         Pledged Collateral or any part thereof after the occurrence of an Event
         of Default.

                           (b)      Pledgor agrees that, except as set forth in
         the Agreement and Plan of Merger and the Equity One, Inc. Voting
         Agreement, it will (i) not cause, approve or vote to permit Issuer to
         issue any stock or other securities (including any warrants, options,
         subscriptions or other contractual arrangements for the purchase of
         stock or securities convertible into stock) in substitution for the
         Pledged Shares without the prior written consent of Lender, and (ii)
         deliver hereunder, immediately upon its acquisition (directly or
         indirectly) thereof, any and all writings evidencing any additional
         Pledged Collateral. Pledgor hereby authorizes Lender to modify this
         Agreement by unilaterally amending the description of the Pledged
         Collateral to include such shares of stock or other securities.

                  9.       Lender Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Lender as Pledgor's attorney-in-fact, with full power of
substitution and with full authority in the place and stead of Pledgor and in
the name of Pledgor, Lender or otherwise, from time to time in Lender's sole
discretion to take any action (including completion and presentation of any
proxy) and to execute and deliver any instrument, assignment, mortgage, notice,
pledge, document or agreement that Lender may deem necessary or advisable to
accomplish the purposes of the creation, attachment, perfection, maintenance or
continuance of Lender's security interest in the Pledged Collateral under any
applicable law, in each instance, so long as such power of attorney is not
exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc.
Voting Agreement, including, without limitation, but subject to the foregoing
qualification, to (i) receive, endorse and collect all instruments made payable
to Pledgor representing any dividend or other distribution in respect of the
Pledged Collateral or any part thereof, (ii) exercise the voting and other
consensual rights pertaining to the Pledged Collateral in accordance with
subsection 7(b), so long as such voting and other consensual rights are not
exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc.
Voting Agreement; (iii) exercise on and

                                     - 11 -



after the occurrence of any Event of Default any demand, piggyback or other
registration rights provided in the Registration Rights Agreement constituting
Pledged Shares Rights, and (iv) sell, transfer, pledge, make any agreement with
respect to, or otherwise deal with, any of the Pledged Collateral as fully and
completely as though Lender was the absolute owner thereof for all purposes, and
to do, at Lender's option and Pledgor's expense, at any time or from time to
time, all acts and things that Lender deems necessary to protect, preserve or
realize upon the Pledged Collateral in accordance with the provisions hereof.
Pledgor hereby ratifies and approves all acts of Lender made or taken pursuant
to this Section 9. Except as specifically set forth in Section 11 hereof,
neither Lender nor any person designated by Lender shall be liable for any acts
or omissions or for any error of judgment or mistake of fact or law. This power
of attorney, being coupled with an interest, shall be irrevocable until all
Secured Obligations (other than indemnity obligations) shall have been paid in
full and the Loan Agreement shall have been terminated. It is understood and
agreed by the parties hereto that upon termination of the Equity One, Inc.
Voting Agreement in accordance with its terms, (i) the foregoing irrevocable
power of attorney granted to Lender pursuant to this section shall no longer be
subject to, or limited in any way by, the Equity One, Inc. Voting Agreement,
and/or (ii) Pledgor shall, upon the request of Lender, promptly execute and
deliver to Lender such additional and/or replacement irrevocable powers of
attorney as may be required by Lender in order to effect under applicable law
the power of attorney intended to be granted by Pledgor to Lender pursuant to
this section.

                  10.      Lender May Perform. If Pledgor fails to perform any
agreement contained herein, then Lender may itself perform, or cause performance
of, such agreement, and the expenses of Lender incurred in connection therewith
shall be payable by Pledgor under Section 15 hereof, and shall be a part of the
Secured Obligations.

                  11.      Limitation on Duty of Lender with Respect to the
Pledged Collateral. The powers conferred on Lender hereunder are solely to
protect its interest in the Pledged Collateral and shall not impose any duty on
it to exercise any such powers. Except for the safe custody of any Pledged
Collateral in its possession and the accounting for monies actually received by
it hereunder and other collection and enforcement rights of a secured party
under the UCC requiring the exercise in a commercially reasonable manner, Lender
shall have no other duty with respect to any Pledged Collateral. Lender shall be
deemed to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if the Pledged Collateral is accorded
treatment that is substantially equivalent to that which Lender accords its own
property, it being expressly agreed that Lender shall have no responsibility
(other than to exercise certain collection and enforcement rights in a
commercially reasonable manner as specifically required by the UCC) for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral, whether
or not Lender has or is deemed to have knowledge of such matters, or (ii) taking
any necessary steps to preserve rights against any parties with respect to any
Pledged Collateral, but Lender may do so and all expenses incurred in connection
therewith shall be payable by and for the sole account of Pledgor.

                  12.      Remedies upon Event of Default. If any Event of
Default shall have occurred and is continuing:

                                     - 12 -



                           (a)      Lender may exercise in respect of the
         Pledged Collateral, in addition to other rights and remedies provided
         for herein or otherwise available to it, all the rights and remedies of
         a secured party under the Uniform Commercial Code (the "UCC") in effect
         in the State of New York at that time, whether or not the UCC applies
         to the affected Pledged Collateral, and Lender may also, without demand
         of performance or other demand, presentment, protest, advertisement or
         notice of any kind (except any notice required by law referred to
         below), to or upon Pledgor or any other Person (all and each of which
         demands, defenses, advertisements and notices are hereby waived),
         forthwith sell, assign, give option or options to purchase, or
         otherwise dispose of and deliver the Pledged Collateral or any part
         thereof (or contract to do any of the foregoing), in one or more
         parcels at public or private sale, at any exchange, broker's board or
         office, or at any of Lender's offices or elsewhere, for cash, on
         credit, or for future delivery, without assumption of any credit risk,
         at such price or prices and upon such other terms and conditions as
         Lender deems commercially reasonable. Pledgor acknowledges and agrees
         that such a private sale may result in prices and other terms that may
         be less favorable to the seller than if such sale were a public sale.
         Pledgor agrees that, to the extent notice of sale shall be required by
         law, at least fourteen (14) days' notice to Pledgor of the time and
         place of any public sale or the time after which any private sale is to
         be made shall constitute reasonable notification, and to the extent
         that notice of sale shall not be required by law, Lender agrees to use
         its commercially reasonable best efforts to give to Pledgor at least
         fourteen (14) days' prior written notice of the time and place of any
         public or private sale of the Pledged Collateral. At any sale of the
         Pledged Collateral, if permitted by law, Lender may bid (which bid may
         be, in whole or in part, in the form of cancellation of indebtedness)
         for the purchase of the Pledged Collateral or any portion thereof.
         Lender shall not be obligated to make any sale of Pledged Collateral
         regardless of notice of sale having been given. Lender may adjourn any
         public or private sale from time to time by announcement at the time
         and place fixed therefor, and such sale may, without further notice, be
         made at the time and place to which it was so adjourned. Lender shall
         be under no obligation to delay a sale of any of the Pledged Collateral
         for the period of time necessary to permit Issuer to register such
         securities for public sale under the Securities Act of 1933, as from
         time to time amended (the "Securities Act"), or under applicable state
         securities laws, even if Issuer would agree to do so. To the extent
         permitted by law, Pledgor hereby specifically waives (i) all rights of
         redemption, stay or appraisal which Pledgor has or may have under any
         law now existing or hereafter enacted, and (ii) all claims, damages and
         demands it may acquire against Lender arising out of the exercise by
         Lender of any rights hereunder or at law, except for bad faith, willful
         misconduct and gross negligence. To the extent that applicable law
         imposes duties on Lender to exercise remedies in a commercially
         reasonable manner, Pledgor acknowledges and agrees that it is not
         commercially unreasonable for Lender (i) to fail to exercise collection
         remedies against Issuer, or (ii) to disclaim disposition warranties on
         sale of any Pledged Collateral.

                           (b)      Any cash held by Lender as Pledged
         Collateral and all cash proceeds received by Lender in respect of any
         sale of, collection from, or other realization upon all or any part of
         the Pledged Collateral may, in the discretion of Lender, be held by

                                     - 13 -



         Lender as collateral for, and/or then or at any time thereafter applied
         (after payment of any amounts payable to Lender pursuant to Section
         15), in whole or in part, by Lender against all or any part of the
         Secured Obligations in the manner provided in Section 14 hereof. Any
         surplus of such cash or cash proceeds held by Lender and remaining
         after payment in full of all the Secured Obligations shall be paid over
         to Pledgor or to whomsoever may be lawfully entitled to receive such
         surplus or as a court of competent jurisdiction may direct; provided,
         that in the event that all of the conditions to the termination of this
         Agreement pursuant to Section 16 shall not have been fulfilled, such
         balance shall be held during the continuance of an Event of Default and
         applied from time to time as provided in this subsection 12(b) until
         all such conditions shall have been fulfilled.

                           (c)      Pledgor recognizes that Lender may be unable
         to effect a public sale of all or part of the Pledged Collateral and
         may be compelled to resort to one or more private sales to a restricted
         group of purchasers who will be obligated to agree, among other things,
         to acquire such Pledged Collateral for their own account, for
         investment and not with a view to the distribution or resale thereof.
         Pledgor acknowledges that any such private sales may be at prices and
         on terms less favorable to the seller than if sold at public sales
         through exercise of any registration rights, and agrees that Lender has
         no obligation to delay sale of any such Pledged Collateral for the
         period of time necessary to permit Issuer to register such Pledged
         Collateral for public sale under the Securities Act. Pledgor agrees to
         use its best efforts to do or cause to be done all such other acts as
         may be necessary to make such sale or sales of all or any portion of
         the Pledged Collateral pursuant to this Section valid and binding and
         in compliance with any and all other applicable Requirements of Law.
         Pledgor further agrees that a breach of any of the covenants contained
         in this Section will cause irreparable injury to Lender, and that
         Lender has no adequate remedy at law in respect of such breach and, as
         a consequence, that each and every covenant contained in this Section
         12 shall be specifically enforceable against Pledgor, and Pledgor
         hereby waives and agrees not to assert any defenses against an action
         for specific performance of such covenants, except for a defense that
         no Event of Default had occurred and was continuing at the time that
         Lender exercised any of its remedies pursuant to this Agreement.

                  13.      Remedies Cumulative.

                           (a)      No failure on the part of Lender to
         exercise, and no delay in exercising and no course of dealing with
         respect to, any power, privilege or right under the Loan Agreement or
         this Agreement shall operate as a waiver thereof, nor shall any single
         or partial exercise by Lender of any power, privilege or right under
         the Loan Agreement or this Agreement preclude any other or further
         exercise thereof or the exercise of any other such power, privilege or
         right. Lender shall not be required to make any demand upon or pursue
         or exhaust any of its rights or remedies against Pledgor or others with
         respect to the payment of the Secured Obligations, and shall not be
         required to marshal the Pledged Collateral or to resort to the Pledged
         Collateral in any particular order. The powers, privileges and rights
         in this Agreement and the Loan Agreement are cumulative and are not
         exclusive of any other remedies provided by law.

                                     - 14 -



                           (b)      Lender shall have, in addition to any other
         rights and remedies contained in this Agreement, the Loan Agreement,
         and any other agreements, guaranties, notes, instruments and documents
         heretofore, now, or at any time or times hereafter executed by Pledgor
         or any other Person and delivered to Lender, all of the rights and
         remedies of a secured party under the UCC in force in any state in
         which the Pledged Collateral is located at any time, all of which
         rights and remedies shall be cumulative and nonexclusive to the extent
         permitted by law.

                  14.      Application of Proceeds. Upon the occurrence and
during the continuance of an Event of Default, the proceeds of any sale of, or
other realization upon, all or any part of the Pledged Collateral shall be
applied: first to all reasonable fees, costs and expenses incurred by Lender
with respect to this Agreement, the Loan Agreement and the Pledged Collateral,
including, without limitation, those described in Section 15 herein; second, to
all fees, costs and expenses incurred by any Lender in connection with any
action to enforce the Loan Agreement, this Agreement or to collect any payments
due from Pledgor; third, to accrued and unpaid interest on the Secured
Obligations (including any interest which but for the provisions of the
Bankruptcy Code (Title 11 U.S.C.), would have accrued on such amounts); fourth,
to the principal amounts of the Secured Obligations outstanding; fifth, to any
other Secured Obligations, Any proceeds remaining after application of the
foregoing will be paid to Pledgor.

                  15.      Expenses. Pledgor shall promptly pay to Lender all
reasonable costs and expenses of Lender (both before and after the execution
hereof) in connection with protecting or perfecting Lender's security interest
in the Pledged Collateral, in connection with any realization or collection of
the Pledged Collateral or Lender's enforcement or defense of any of its rights
or remedies under this Agreement or at law, or in connection with any matters
contemplated by or arising out of this Agreement or the Loan Agreement.

                  16.      Termination of Security Interests; Release of Pledged
Collateral. Upon payment and performance in full of all Secured Obligations
(other than indemnity obligations) and termination of the Loan Agreement, the
security interests granted herein shall terminate and all rights to the Pledged
Collateral shall revert to Pledgor. Upon the sale of any Pledged Collateral, to
the extent permitted by this Agreement or the Loan Agreement, Lender's security
interests in such Pledged Collateral shall terminate and the rights in such
Pledged Collateral shall revert to Pledgor or such purchaser. Upon such
termination of the security interests or release of any Pledged Collateral,
Lender will, at the expense of Pledgor, execute and/or file and deliver such
documents as Pledgor shall reasonably request to evidence the termination of the
security interests or the release of such Pledged Collateral which has not yet
theretofore been sold or otherwise applied or released. Such release shall be
without recourse or warranty to Lender.

                  17.      Amendments, Waivers and Consents. No amendment,
modification, termination or waiver of any provision of this Agreement, or
consent to any departure by Pledgor therefrom, shall in any event be effective
without the written concurrence of Lender and Pledgor.

                  18.      Notices. Unless otherwise expressly provided herein,
all notices, approvals, requests, demands, consents and other communications
hereunder, including any notice of default or notice of sale, to or upon the
respective parties hereto to be effective shall be

                                     - 15 -



in writing (including by facsimile transmission) and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (a) in the case
of delivery by hand or by overnight courier, when delivered, or (b) in the case
of delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows in the case of Pledgor and Lender, or to such other address
as may be hereafter notified by the respective parties hereto:

If to Pledgor:

         Silver Maple (2001), Inc.
         1660 N.E. Miami Gardens Drive
         North Miami Beach, FL 33179
         Attention: Chaim Katzman, President
         Facsimile: (305) 947-1734

with a copy to:

         Alan Marcus, Esq.
         20803 Biscayne Blvd.
         Aventura, FL 33180
         Facsimile: (305) 937-1857

If to Lender:

         [Commercial Bank]
         _______ Avenue
         _________________________
         Attention: ______________
         Facsimile: ______________

with a copy to:

         Shaw Pittman
         335 Madison Avenue, 26th Floor
         New York, NY 10017-4605
         Attention: John C. Simons, Esq.
         Facsimile: (212) 603-6848

                  19.      Continuing Security Interest; Successors and Assigns.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until termination of
the security interests in the Pledged Collateral pursuant to Section 16 hereof,
(ii) be binding upon Pledgor, its successors and assigns, and (iii) inure,
together with the rights and remedies of Lender hereunder and its successors and
assigns. Without limiting the generality of the foregoing clause (iii), Lender
may assign or otherwise transfer all or any portion of the Credit to any other
Person as permitted in the Loan Agreement, and such other Person shall thereupon
become vested with all the benefits in respect thereof

                                     - 16 -



granted to Lender herein or otherwise. Pledgor may not assign or transfer any of
its interests or obligations hereunder without the prior consent of Lender.

                  20.      Irrevocable Authorization and Instruction to Issuer.
Pledgor hereby authorizes and instructs Issuer to comply with any instruction
received by it from Lender in writing that (a) states that an Event of Default
has occurred and is continuing, and (b) is otherwise in accordance with the
terms of this Agreement, without any other or further instructions from Pledgor,
and Pledgor agrees that Issuer shall be fully protected in so complying.

                  21.      Waiver.

                           (a)      In addition to any other waivers herein,
         Pledgor waives to the greatest extent it may lawfully do so, and agrees
         that it shall not at any time insist upon, plead or in any manner
         whatever claim or take the benefit or advantage of, any appraisal,
         valuation, stay, extension, marshalling of assets, redemption or
         similar law, or exemption, whether now or at any time hereafter in
         force, which may delay, prevent or otherwise affect the performance by
         Pledgor of its obligations under, or the enforcement by Lender of, this
         Agreement. Pledgor hereby waives diligence, presentment and demand
         (whether for nonpayment or protest or of acceptance, maturity,
         extension of time, change in nature or form of the Secured Obligations,
         acceptance of further security, release of further security,
         composition or agreement arrived at as to the amount of, or the terms
         of the Secured Obligations, notice of adverse change in Pledgor's or
         any other Person's financial condition or any other fact which might
         materially increase the risk to Pledgor) with respect to any of the
         Secured Obligations or all other demands whatsoever and waives the
         benefit of all provisions of law which are or might be in conflict with
         the terms of this Agreement. To the maximum extent permitted by
         applicable law, Pledgor hereby waives any requirement on the part of
         the holder of the Credit to mitigate the damages resulting from any
         default under the Credit.

                           (b)      If Lender may, under applicable law, proceed
         to realize its benefits under this Agreement, the Loan Agreement or any
         other agreement or document giving Lender a Lien upon any collateral,
         whether owned by Pledgor or by any other Person, either by judicial
         foreclosure or by non-judicial sale or enforcement, Lender may, at its
         sole option, determine which of its remedies or rights it may pursue
         without affecting any of the rights and remedies of Lender under this
         Agreement.

                  22.      Reinstatement. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by Lender in respect of the Secured Obligations is rescinded or must
otherwise be restored or returned by Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor or upon the appointment of
any intervenor or conservator of, or trustee or similar official for, Pledgor or
any substantial part of its assets, or otherwise, all as though such payments
had not been made.

                  23.      Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,

                                     - 17 -



in such jurisdiction and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.

                  24.      Time is of Essence. Time is of the essence of each
provision of this Agreement of which time is an element.

                  25.      Survival of Provisions. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the Loan Agreement. Notwithstanding anything in
this Agreement, the Loan Agreement or implied by law to the contrary, the
agreements, representations and warranties of Pledgor set forth herein shall
terminate only upon payment of the Secured Obligations (other than indemnity
obligations) and the termination of this Agreement.

                  26.      Statute of Limitations; Suretyship Defenses. Pledgor
hereby waives the right to plead any statute of limitations as a defense to any
indebtedness or obligation hereunder or secured hereby to the full extent
permitted by law, and hereby waives all suretyship defenses.

                  27.      Headings Descriptive. The headings in this Agreement
are for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

                  28.      Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of which
shall together constitute one and the same agreement.

                  29.      GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS RULES OF THE STATE OF NEW
YORK.

                  30.      Submission To Jurisdiction; Waivers. Pledgor hereby
irrevocably and unconditionally:

                                    (i)      submits for itself and its property
         in any legal action or proceeding relating to this Agreement to which
         it is a party, or for recognition and enforcement of any judgment in
         respect thereof, to the non-exclusive general jurisdiction of the
         Courts of the State of New York, the courts of the United States of
         America for the Southern District of New York, and appellate courts
         from any thereof;

                                    (ii)     consents that any such action or
         proceeding may be brought in such courts and waives any objection that
         it may now or hereafter have to the venue of any such action or
         proceeding in any such court or that such action or proceeding was
         brought in an inconvenient court and agrees not to plead or claim the
         same;

                                    (iii)    agrees that service of process in
         any such action or proceeding may be effected by mailing a copy thereof
         by registered or certified mail (or any substantially similar form of
         mail), postage prepaid, to Pledgor at its address set forth

                                     - 18 -



         in Section 18 hereof, or at such other address of which the Lender
         shall have been notified pursuant thereto;

                                    (iv)     agrees that nothing herein shall
         affect the right to effect service of process in any other manner
         permitted by law or shall limit the right to sue in any other
         jurisdiction; and

                                    (v)      waives, except in the case of bad
         faith, willful misconduct or gross negligence (and otherwise to the
         maximum extent not prohibited by law), any right it may have to claim
         or recover in any legal action or proceeding referred to in this
         Section 30 any special, exemplary, or consequential damages.

                  31.      WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, PLEDGOR AND LENDER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                           [SIGNATURE PAGE TO FOLLOW]

                                     - 19 -



                  IN WITNESS WHEREOF, Pledgor has caused this Agreement to be
duly executed and delivered as of the day and year first above written.

                                             SILVER MAPLE (2001), INC.

                                             By /s/ Chaim Katzman
                                                --------------------------------
                                                Chaim Katzman
                                                President



By acceptance hereof as of the date first above written, Lender agrees to be
bound by the provisions hereof.

                                             [Commercial Bank], as Lender

                                             By /s/
                                                Name:
                                                Title:

                                             By /s/
                                                Name:
                                                Title:



                                    EXHIBIT A

                                Irrevocable Proxy

                  The undersigned hereby appoints [Commercial Bank] ("Lender"),
as proxy with full power of substitution, and hereby authorizes Lender to
represent and vote all of the shares of the capital stock of Equity One, Inc.
acquired by the undersigned pursuant to that certain Equity One, Inc. Common
Stock Purchase Agreement, dated as of October 28, 2002 (the "Pledged Shares")
and all shares of the capital stock of Equity One, Inc. acquired by the
undersigned in respect of or in exchange for the Pledged Shares, all held of
record by the undersigned on the date of exercise hereof or at any meeting or at
any other time chosen by Lender in its sole discretion, but only at the times
and in the circumstances provided in that certain Pledge and Security Agreement
dated as of February 12, 2003, executed by the undersigned in favor of Lender.

                                             SILVER MAPLE (2001), INC.

Date:______________________                  By:_______________________________
                                                 Chaim Katzman
                                                 President



                                    EXHIBIT B

                      Assignment Separate From Certificate

                  FOR VALUE RECEIVED, SILVER MAPLE (2001), INC. hereby sells,
assigns and transfers unto ______________________________________________
(__________) Shares of the Common Stock of Equity One, Inc., a Maryland
corporation (the "Corporation"), standing in its name on the books of the
Corporation represented by Certificate(s) No. ___________ herewith and does
hereby irrevocably constitute and appoint ______________________ attorney to
transfer the said stock on the books of the Corporation with full power of
substitution in the premises.

         Date: _______________

                                             SILVER MAPLE (2001), INC.

                                             By:_______________________________
                                                Name:
                                                Title:

EX-4

                                                                       EXHIBIT 4

                          PLEDGE AND SECURITY AGREEMENT
                               (MGN AMERICA, INC.)

         THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of
February 11, 2003, made by MGN AMERICA, INC., a Nevada corporation ("Pledgor"),
in favor of BANK LEUMI LE-ISRAEL B.M. ("Lender").

                              W I T N E S S E T H:

         WHEREAS, Lender has agreed to extend credit up to an aggregate amount
of US$30,000,000 (the "Credit") to GAZIT GLOBE (1982) LTD., a company
incorporated under the laws of Israel ("Gazit"), upon the terms and subject to
the conditions set forth in that certain (i) commitment letter dated October 28,
2002, between Lender and Gazit (as amended, supplemented or otherwise modified
from time to time, the "Commitment Letter"), (ii) General Conditions for Opening
an Account and Receiving Credits in Foreign Currency and in Israeli Currency
dated November 25, 1994, between Lender and Gazit (as amended, supplemented or
otherwise modified from time to time, the "General Terms"), (iii) Letter of
Undertaking (re: compliance with margin regulations) dated February 11, 2003,
from Gazit in favor of Lender (as amended, supplemented or otherwise modified
from time to time, the "Letter of Undertaking"), and (iv) Deed of Pledge (Pledge
and assignment of rights by way of charge) dated February 11, 2003, between
Gazit and Lender (as amended, supplemented or otherwise modified from time to
time, the "Deed of Pledge," and together with the Commitment Letter, the General
Terms and the Letter of Undertaking, and any other documents or agreements
entered into by Gazit in favor of Lender in connection with the Credit, the
"Credit Documents"); and

         WHEREAS, Gazit intends to loan or contribute the proceeds of the Credit
to Pledgor, its subsidiary, in order that Pledgor may purchase of up to
4,284,820 shares of the common stock, par value $.01 per share, of Equity One,
Inc.(collectively, the "EOI Shares"); and

         WHEREAS, pursuant to an Assignment Agreement dated February 11, 2003,
between MGN (USA), Inc. and Pledgor, MGN (USA), Inc. has assigned to Pledgor (i)
its rights to purchase the EOI Shares under the Equity One, Inc. Common Stock
Purchase Agreement (as hereinafter defined), and (ii) its registration rights
under the Registration Rights Agreement (as hereinafter defined) with respect to
the EOI Shares; and

         WHEREAS, it is a condition precedent to the obligation of Lender to
grant the Credit that, among other things, Pledgor, (i) guarantee the payment
and performance of the Credit and all other obligations of Gazit under the
Credit Documents pursuant to the Guarantee (as hereinafter defined), and (ii)
execute and deliver this Agreement to Lender to secure the payment and
performance of Pledgor's obligations under the Guarantee;

         NOW, THEREFORE, in consideration of the premises and to induce Lender
to grant the Credit under the Credit Documents, Pledgor hereby agrees as
follows:



                  1.       Defined Terms.

                           (a)      Unless otherwise defined herein, terms
         defined in the Guarantee and used herein shall have the meanings given
         to them in the Guarantee. All terms not defined herein or in the
         Guarantee shall have the meanings set forth in the UCC (as hereinafter
         defined), except where the context otherwise requires, provided that,
         if a term is defined in Article 9 of the UCC differently than in
         another Article of the UCC, then such term shall have the meaning
         specified in Article 9 of the UCC.

                           (b)      The following additional terms, as used
         herein, shall have the following respective meanings:

                           "Agreement and Plan of Merger": means that certain
                  Agreement and Plan of Merger dated October 28, 2002, between
                  IRT and EOI, as amended, supplemented and modified from time
                  to time.

                           "Cash Collateral Account Agreement": means that
                  certain Cash Collateral Account Agreement dated as of the date
                  hereof, among Lender, Pledgor and Bank Leumi USA, as amended,
                  supplemented or modified from time to time.

                           "Collateral Account": shall have the meaning
                  specified in Section 4 hereof.

                           "EOI": means Equity One, Inc., a Maryland
                  corporation.

                           "Equity One, Inc. Common Stock Purchase Agreement":
                  means that certain Equity One, Inc. Common Stock Purchase
                  Agreement dated as of October 28, 2002, between EOI and each
                  of the purchasers party thereto (including, without
                  limitation, MGN (USA), Inc.), as amended, supplemented or
                  modified from time to time.

                           "Equity One, Inc. Voting Agreement": means that
                  certain Equity One, Inc. Voting Agreement dated October 28,
                  2002, among IRT, EOI and certain stockholders party thereto
                  (including, without limitation, MGN (USA), Inc.), as amended,
                  supplemented or modified from time to time.

                           "Event of Default": means the occurrence and
                  continuance of any of the following; (i) the default by
                  Pledgor or Gazit in the observance or performance of any its
                  agreements, undertakings or obligations, now or hereafter
                  existing, (A) under and in accordance with this Agreement, the
                  Guarantee, the Cash Collateral Account Agreement, or any
                  Credit Document, or (B) in connection with any other loan or
                  other extension of credit now or hereafter made available by
                  Lender to Pledgor or Gazit, as the case may be, (ii) any
                  representation or warranty given by Pledgor or Gazit (A) in
                  this Agreement, the Guarantee, the Cash Collateral Account
                  Agreement, or in any Credit Document, or (B) in connection
                  with any other loan or other extension of credit now or
                  hereafter made available by Lender to Pledgor or Gazit, as the
                  case may be, proves to have been incorrect in any material
                  respect on or as of the date made or deemed made, or (iii) any
                  event that entitles Lender in accordance with any Credit

                                      - 2 -



                  Document, or any other agreement, undertaking, instrument or
                  document now or hereafter entered into by Pledgor or Gazit, to
                  require, prior to the maturity date thereof, immediate
                  repayment of all or any outstanding amount of the Credit or
                  any other loan or other extension of credit now or hereafter
                  made available by Lender to Pledgor or Gazit, including
                  without limitation, any event deemed to be an "event of
                  default" under any Credit Document or any such other
                  agreement, undertaking, instrument or document.

                           "Guarantee": means that certain Guarantee dated as of
                  the date hereof from Pledgor in favor of Lender, pursuant to
                  which Pledgor has unconditionally guaranteed the prompt
                  payment and performance of the Credit and all other
                  obligations, liabilities and indebtedness of Gazit, now
                  existing or hereafter incurred, under or in connection with
                  the Credit Documents or any other loan, extension of credit or
                  accommodation now or hereafter made or granted by Lender, as
                  the Guarantee may be amended, supplemented or otherwise
                  modified from time to time.

                           "IRT": means IRT Property Company, a Georgia
                  corporation.

                           "Issuer": means EOI.

                           "Material Adverse Effect": means (X) a material
                  adverse effect on (a) the business, operations, property,
                  condition (financial or otherwise) or prospects of Pledgor or
                  Gazit, (b) the validity or enforceability of this Agreement,
                  the Guarantee, the Cash Collateral Account Agreement, or any
                  of the Credit Documents in any manner that prevents the
                  practical realization by Lender of the benefits intended by
                  this Agreement, the Guarantee, the Cash Collateral Account
                  Agreement, and/or the Credit Documents, or (c) the rights or
                  remedies of Lender hereunder or under the Guarantee, the Cash
                  Collateral Account Agreement, or any of the Credit Documents
                  in any manner that prevents the practical realization of the
                  benefits purported to be provided by such rights and remedies
                  with respect to Lender's ability to realize upon the principal
                  benefits or security intended to be provided by this
                  Agreement, the Guarantee, the Cash Collateral Account
                  Agreement, and/or the Credit Documents, (Y) any impairment to
                  the validity, perfection or priority of the security interest
                  of Lender in the Pledged Collateral in any manner whatsoever,
                  and/or (Z) an Event of Default.

                           "Person": means an individual, partnership, limited
                  liability company, corporation, business trust, joint stock
                  company, trust, unincorporated association, joint venture,
                  governmental authority or other entity of whatever nature.

                           "Pledged Shares": means all EOI Shares, purchased at
                  any time and from time to time by Pledgor from the Issuer
                  pursuant to the Equity One, Inc. Common Stock Purchase
                  Agreement, up to a maximum aggregate number of 4,284,820
                  shares of such stock, and all proceeds thereof.

                           "Registration Rights Agreement": means that certain
                  Registration Rights

                                      - 3 -



                  Agreement dated as of October 28, 2002, among EOI and the
                  purchasers party thereto, including, without limitation, MGN
                  (USA), Inc., as may be amended, supplemented or modified from
                  time to time.

                           "Requirement of Law" means as to any Person, the
                  certificate of incorporation, certificate of formation,
                  limited liability company agreement, and by-laws or other
                  organizational or governing documents of such Person, and any
                  law, treaty, rule, regulation, decree or determination of an
                  arbitrator or a court or other governmental authority, in each
                  case applicable to or binding upon such Person or any of its
                  property or to which such Person or any of its property is
                  subject.

                           "Secured Obligations": means all obligations,
                  liabilities and indebtedness of Pledgor and/or Gazit now or
                  hereafter owing to Lender under or in connection with the
                  Credit or any other loan, extension of credit or accommodation
                  now or hereafter made or granted by Lender (each such other
                  loan, extension of credit or accommodation, an "Other
                  Credit"), including, without limitation, all obligations,
                  liabilities and indebtedness of Pledgor and/or Gazit under
                  this Agreement, the Guarantee, the Cash Collateral Account
                  Agreement, and/or the Credit Documents, as the case may be,
                  including, without limitation, (i) all unpaid principal of,
                  and accrued interest (including, without limitation, any
                  interest which accrues after the commencement of any case,
                  proceeding or other action relating to the bankruptcy,
                  insolvency or reorganization of Pledgor or Gazit, whether or
                  not allowed or allowable as a claim in any such proceeding)
                  on, any loan or other credit granted under or in connection
                  with the Credit Documents or any Other Credit, (ii) all
                  expenses, costs of collection and any other amounts payable to
                  Lender by Pledgor or Gazit under this Agreement, the
                  Guarantee, the Cash Collateral Account Agreement, and/or any
                  Credit Document, or any Other Credit, as the case may be
                  (including, without limitation, all fees and disbursements of
                  counsel to Lender that are required to be paid by Pledgor or
                  Gazit to Lender pursuant to this Agreement, the Guarantee, the
                  Cash Collateral Account Agreement, or any Credit Document, or
                  any Other Credit, as the case may be), and (iii) any renewals
                  or extensions of the Credit or Credit Documents or any Other
                  Credit.

                           "Securities Act": shall have the meaning specified in
                  subsection 12(a) hereof.

                           "UCC": shall have the meaning specified in subsection
                  12(a) hereof.

                           (c)      The words "hereof," "herein" and "hereunder"
         and words of similar import when used in this Agreement shall refer to
         this Agreement as a whole and not to any particular provision of this
         Agreement, and section and paragraph references are to this Agreement
         unless otherwise specified.

                           (d)      The meanings given to terms defined herein
         shall be equally applicable to both the singular and plural forms of
         such terms.

                  2.       Pledge; Grant of Security Interest. As collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by

                                      - 4 -



acceleration or otherwise) of the Secured Obligations, Pledgor hereby assigns,
pledges and hypothecates to the Lender, and grants to Lender a security interest
in (all being collectively referred to as the "Pledged Collateral"), all of its
right, title and interest in and to:

                           (a)      the Pledged Shares and the certificates
         representing the Pledged Shares, and all stock dividends, cash
         dividends, payments, securities and property from time to time
         received, receivable or otherwise distributed in respect of, or in
         exchange for, any or all of the Pledged Shares;

                           (b)      all contract and other rights related to the
         foregoing, including without limitation, all registration rights under
         the Registration Rights Agreement; provided, however, the foregoing
         described rights shall cover only one (1) "Demand Registration" (as
         such term is defined in Section 2.1 of the Registration Rights
         Agreement) (collectively, the "Pledged Shares Rights");

                           (c)      the Collateral Account, and all monies held
         therein or credited thereto; and

                           (d)      all proceeds of any of the foregoing.

                  3.       Delivery of Pledged Shares. All certificates or
instruments representing or evidencing the Pledged Shares shall be delivered to
and held by or on behalf of Lender pursuant hereto and shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed undated
instruments of transfer or assignment in blank, substantially in the form of
Exhibit B hereto, all in form and substance satisfactory to Lender. Lender shall
have the right, at any time in its discretion and without notice to Pledgor
following the occurrence and during the continuance of an Event of Default, to
transfer to or to register in the name of Lender any or all of the Pledged
Shares. In addition, Lender shall have the right to exchange certificates or
instruments representing or evidencing Pledged Shares for certificates or
instruments of smaller or larger denominations.

                  4.       Collateral Account. Pledgor has established, and
shall hereafter maintain, with Bank Leumi USA in New York, New York, non
interest-bearing cash collateral deposit account number 22-005641-18 and
interest bearing cash collateral deposit account number 22-005641-02
(collectively, the "Collateral Account"). All cash dividends and other cash
proceeds attributable to the Pledged Shares shall be deposited into the
Collateral Account promptly upon receipt of same by Pledgor. The Collateral
Account shall be subject to the terms of this Agreement and shall be under the
"control" (as defined in section 9-104 of the UCC) of Lender pursuant to the
terms of the Cash Collateral Account Agreement. The Collateral Account, and all
monies deposited therein or credited thereto, shall constitute security for the
Secured Obligations.

                  5.       Representations and Warranties. Pledgor hereby
represents and warrants that the following statements are true, correct and
complete in all material respects:

                                      - 5 -



                           (a)      Each of the representations and warranties
         made by Pledgor in the Guarantee and the Cash Collateral Account
         Agreement is true and correct on and as of the date hereof as though
         made on and as of the date hereof.

                           (b)      On the date of each "Initial Closing" or
         "Subsequent Closing" (as such terms are defined in the Equity One,
         Inc. Common Stock Purchase Agreement, hereinafter a "Purchase Closing
         Date"), (i) Pledgor will be the record, legal and beneficial owner of
         that number of EOI Shares so purchased in accordance with the Equity
         One, Inc. Common Stock Purchase Agreement and promptly notified to
         Lender in writing, (ii) such EOI Shares, to Pledgor's knowledge, will
         have been duly authorized and validly issued and will be fully paid
         and nonassessable, and (iii) there will be no outstanding warrants,
         options, subscriptions or other contractual arrangements for the
         purchase or sale of such EOI Shares or any outstanding securities
         convertible into such EOI Shares, and there will be no preemptive
         rights of Issuer or any other Person with respect to such EOI Shares,
         other than in connection with the Agreement and Plan of Merger.

                           (c)      Pledgor is not and will not become a party
         to or otherwise bound by any agreement, other than this Agreement, the
         Equity One, Inc. Common Stock Purchase Agreement, the Registration
         Rights Agreement and the Equity One, Inc. Voting Agreement, which
         restricts in any manner the rights of Lender or any other present or
         future holder of any of the Pledged Shares with respect thereto.

                           (d)      Upon each purchase by Pledgor of EOI Shares
         in accordance with the Equity One, Inc. Common Stock Purchase
         Agreement, and the making of the Loan by Lender in connection
         therewith, this Agreement will create in favor of Lender a valid
         security interest in the EOI Shares, and such EOI Shares shall
         constitute Pledged Shares securing the payment and performance of the
         Secured Obligations. Upon delivery to Lender of the stock
         certificate(s) evidencing such Pledged Shares indorsed to Lender or in
         blank by an effective endorsement, Lender shall have a duly perfected
         security interest in such Pledged Shares, free of any adverse claim.

                           (e)      This Agreement is effective to create in
         favor of Lender a valid security interest in the Collateral Account
         securing the payment and performance of the Secured Obligations. Upon
         execution and delivery of the Cash Collateral Account Agreement by the
         parties thereto, Lender will have a first priority duly perfected
         security interest in the Collateral Account and such security interest
         shall remain perfected so long as Lender retains "control" (as defined
         in Section 9-104 of the UCC) of the Collateral Account.

                          (f)       Upon filing a financing statement in
         recordable form with the Office of the Secretary of State of Nevada
         naming Pledgor as debtor and Lender as secured party, describing the
         Pledged Shares Rights, and (ii) each purchase by Pledgor of EOI Shares
         in accordance with the Equity One, Inc. Common Stock Purchase
         Agreement, Lender will have a duly perfected security interest in all
         right, title and interest of Pledgor in the Pledged Shares Rights with
         respect to such EOI Shares.

                                      - 6 -



                          (g)       Subject to the restrictions contained in the
         Agreement and Plan of Merger, the Equity One, Inc. Voting Agreement,
         the Equity One, Inc. Common Stock Purchase Agreement and the
         Registration Rights Agreement, no consent, authorization, approval or
         other action by, and no notice to or filing with, any governmental
         authority or regulatory body or any other Person is required for (i)
         the pledge by Pledgor of, or the grant by Pledgor of a security
         interest in, the Pledged Collateral pursuant to this Agreement, (ii)
         the execution, delivery or performance of this Agreement by Pledgor,
         or (iii) the exercise by Lender of any rights (including without
         limitation, voting rights) or remedies provided for in this Agreement
         in respect of the Pledged Collateral (except for the filing of the
         financing statement as described in Section 5(f) above, or as has
         already been obtained or taken, or as may be required in connection
         with the disposition of the Pledged Shares by laws affecting the
         offering and sale of securities generally).

                          (h)       The execution, delivery and performance of
         this Agreement and the transactions contemplated hereby, including,
         without limitation, the purchase and delivery of the EOI Shares to
         Lender on each Purchase Closing Date, (A) do not and will not conflict
         with or result in any breach or contravention of any applicable law,
         regulation, judicial order or decree to which Pledgor is subject,
         including, without limitation, Regulations T, U or X of the Board of
         Governors of the Federal Reserve System, and (B) do not and will not
         violate, conflict with, constitute a default or event of default
         under, or result in any rights to accelerate or modify any obligations
         under any agreement, instrument, lease, mortgage or indenture to which
         Pledgor is a party or subject, or to which any of its assets is
         subject, other than as set forth in the Equity One, Inc. Voting
         Agreement and the Registration Rights Agreement.

                          (i)       Pledgor has the corporate power and
         authority to enter into this Agreement and to grant to Lender a
         security interest in the Pledged Collateral hereunder. This Agreement
         has been duly executed and delivered by Pledgor and is the legal,
         valid and binding obligation of Pledgor enforceable against it in
         accordance with the terms hereof, except as enforceability is limited
         by bankruptcy, insolvency, reorganization, moratorium, or other laws
         relating to or affecting generally the enforcement of creditors'
         rights, and except to the extent that availability of the remedy of
         specific performance or injunctive relief is subject to the discretion
         of the court before which any case or proceeding therefore may be
         brought.

                          (j)       Pledgor (i) is the sole owner of, and has
         rights in, and good and marketable title to, the Collateral Account,
         free and clear of any and all liens, charges, encumbrances, security
         interests or claims thereon of any Person (other than Lender), and
         (ii) on each Purchase Closing Date, will be the sole owner of, and
         will have rights in, and good and marketable title to, the EOI Shares
         so purchased and the related Pledged Shares Rights, free and clear of
         any and all liens, charges, encumbrances, security interests or claims
         thereon of any Person (other than Lender and as set forth in the
         Equity One, Inc. Voting Agreement). No financing statement or other
         public notice with respect to all or any part of the Pledged
         Collateral is on file or of record in any public office, except such
         as have been filed in favor of Lender pursuant to this Agreement.
         There are no liens, security interests, charges or other encumbrances
         of any kind on, in or against the Pledged

                                      - 7 -



         Collateral, except those in favor of Lender, other than in connection
         with the Equity One, Inc. Voting Agreement.

                          (k)       The name of Pledgor set forth on the first
         page of this Agreement is Pledgor's correct and complete legal name.
         Pledgor's chief executive office and principal place of business since
         its inception has been located at Pledgor's address(es) specified in
         Section 18 of this Agreement.

                          (l)       All information heretofore, herein or
         hereafter supplied to Lender by or on behalf of Pledgor with respect
         to the Pledged Collateral is and will be accurate and complete in all
         material respects.

                          (m)       There are no agreements, understandings or
         other contractual arrangements of any kind (written or oral) between
         Pledgor and any other Person (including any affiliate of Pledgor),
         regarding the exercise of the registration rights with respect to the
         Pledged Shares, other than as expressly set forth in this Agreement
         and the Registration Rights Agreement.

                  6.       Covenants Relating to the Pledged Collateral. Pledgor
covenants and agrees with Lender that, from and after the date of this Agreement
until the Secured Obligations are indefeasibly paid in full and this Agreement
is terminated and the security interests created hereby are released:

                           (a)      On each Purchase Closing Date, Pledgor will
         deliver, or cause to be delivered, to Lender to hold as Pledged
         Collateral pursuant to this Agreement, one or more share certificates,
         duly issued and registered in the name of Pledgor, evidencing the EOI
         Shares purchased by Pledgor from EOI on such Purchase Closing Date,
         together with an undated stock power covering each such share
         certificate, duly executed by Pledgor. Pledgor will, from time to time,
         at Pledgor's expense, and upon Lender's request, promptly execute
         and/or deliver all further instruments and documents and take all
         further action that may be necessary or desirable, or that Lender may
         reasonably request, in order to perfect and protect any security
         interest granted or purported to be granted hereby, to enable Lender to
         exercise and enforce the rights and remedies of Lender hereunder with
         respect to any Pledged Collateral or to carry out the provisions and
         purposes hereof. Without limiting the generality of the foregoing,
         Pledgor will at its sole expense: (i) upon Lender's request,
         authenticate, in recordable form, and deliver to Lender any financing
         or continuation statements, or amendments thereto, and such other
         instruments, assurances, documents or notices and take such further
         actions, as may be necessary or desirable, or as Lender may reasonably
         request, in order to vest in and assure to Lender its rights hereunder
         and in the Pledged Collateral, and otherwise to perfect and preserve
         the security interests and full benefits granted or purported to be
         granted hereby under the laws of any applicable jurisdiction; and (ii)
         upon Lender's request, appear in and defend any action or proceeding
         that may affect Pledgor's title to or the security interest of Lender
         in the Pledged Collateral.

                                      - 8 -



                           (b)      Pledgor will, promptly upon request, provide
         to Lender all information and evidence it may reasonably request
         concerning the Pledged Collateral to enable Lender to enforce the
         provisions of this Agreement.

                           (c)      Pledgor will, immediately upon receipt of
         same as registered owner of the Pledged Shares, deliver to Lender
         copies of all notices, letters and other written communications and
         information received from time to time from Issuer.

                           (d)      Promptly upon its purchase or acquisition of
         any additional non-registered shares of stock of the Issuer, Pledgor
         will make a good-faith effort to give Lender written notice of each
         such purchase or acquisition and the details thereof (including,
         without limitation, whether or not Pledgor was granted or otherwise
         received registration rights in respect of such additional shares).

                           (e)      Pledgor will comply with all Requirements of
         Law applicable to it and the Pledged Collateral or any portion thereof,
         except to the extent that the failure to comply would not reasonably be
         expected to have a Material Adverse Effect.

                           (f)      Pledgor will pay promptly when due any
         taxes, assessments and governmental charges or levies imposed upon the
         Pledged Collateral or in respect of its income or profits therefrom, as
         well as all claims of any kind, unless any of the foregoing are have
         been effectively stayed within 10 days of the occurrence or imposition
         thereof, or are being contested in good faith by Pledgor and as to
         which adequate reserves have been set aside on its books.

                           (g)      Pledgor will advise Lender promptly in
         writing, in reasonable detail, of (A) any lien, charge, claim or other
         encumbrance made or asserted against Pledgor or any of the Pledged
         Collateral, (B) any material change in the composition of the Pledged
         Collateral, (C) the occurrence of any event or condition which to its
         knowledge is likely to have a Material Adverse Effect, and (D) any
         bankruptcy or litigation case or proceeding relating to Pledgor or any
         of the Pledged Collateral.

                           (h)      Concurrently with the execution and delivery
         of this Agreement, Pledgor shall execute and deliver to Lender, the
         Cash Collateral Account Agreement.

                           (i)      Pledgor will not amend or modify, or waive
         compliance with, any term, condition or provision of the Equity One,
         Inc. Voting Agreement, Equity One, Inc. Common Stock Purchase
         Agreement, the Registration Rights Agreement or its Articles of
         Incorporation without the prior written consent of Lender, which
         consent shall not be unreasonably withheld.

                           (j)      Pledgor will not create, incur assume or
         suffer to exist any lien, security interest, encumbrance or charge of
         any kind upon the Pledged Collateral, except liens, security interests,
         encumbrances or charges in favor of Lender or as set forth in the
         Equity One, Inc. Voting Agreement.

                                      - 9 -



                           (k)      Pledgor will not sell, transfer or otherwise
         dispose of any Pledged Collateral, or attempt, offer or contract to do
         so, except as expressly permitted by this Agreement.

                           (l)      Pledgor will not, without giving Lender at
         least forty-five (45) days prior written notice thereof, change its
         name, identity or organizational structure to such an extent that any
         financing statement filed by Lender in connection with this Agreement
         would become seriously misleading.

                           (m)      Pledgor will indemnify Lender, its
         directors, officers and employees and each legal entity, if any, who
         controls Lender (the "Indemnified Parties"), and hold each Indemnified
         Party harmless from and against, any and all claims, damages, losses,
         liabilities, costs and expenses (including, without limitation, all
         legal fees and expenses of internal or external counsel with whom any
         Indemnified Party may consult and all expenses of litigation or
         preparation therefor), which any Indemnified Party may incur or which
         may be asserted against any Indemnified Party as a result of the
         execution, delivery or enforcement of, or performance under, this
         Agreement, provided that the foregoing indemnity agreement shall not
         apply to claims, damages, losses, liabilities and expenses solely
         attributable to an Indemnified Party's gross negligence or willful
         misconduct. The indemnity agreement contained in this subsection shall
         survive the termination of this Agreement and the repayment of the
         Secured Obligations. Pledgor may participate at its expense in the
         defense of any such claim.

                           (n)      Pledgor will give Lender not less than
         thirty (30) days prior written notice of its intention to exercise its
         right to one (1) "Demand Registration" pursuant to Section 2.1 of the
         Registration Rights Agreement. Except as expressly set forth in the
         preceding sentence, Pledgor will not exercise any of Pledgor's
         registration rights (including without limitation the other right to
         "Demand Registration" s) under the Registration Rights Agreement,
         without the prior written consent of Lender; it being understood and
         agreed that such other right to a "Demand Registration" and all other
         rights under the Registration Rights Agreement constitute Pledged
         Collateral subject to Lender's security interest pursuant to this
         Agreement.

                           (o)      Pledgor will not enter into, or suffer to
         exist, any agreement, understanding or other contractual arrangement of
         any kind (written or oral) between Pledgor and any other Person
         (including any affiliate of Pledgor), regarding the exercise of the
         Pledged Shares Rights with respect to the Pledged Shares, other than as
         expressly set forth in this Agreement and the Registration Rights
         Agreement.

                  7.       Voting Rights; Dividends; Etc.

                           (a)      So long as no Event of Default shall have
         occurred and is continuing and Lender shall not have delivered to
         Pledgor notice of its election to exercise the rights set forth in
         subsection (b) below, Pledgor shall be entitled, subject to the Equity
         One, Inc. Voting Agreement, to exercise any and all voting and other
         consensual rights pertaining to the Pledged Shares or any part thereof
         for any purpose not

                                     - 10 -



         inconsistent with the terms of this Agreement or the Guarantee;
         provided, however, that Pledgor shall not exercise or refrain from
         exercising any such right if, in Lender's reasonable judgment, such
         action or inaction would have a Material Adverse Effect or a material
         adverse effect on the value of the Pledged Collateral or any part
         thereof; and provided further, that Pledgor shall not exercise any such
         right to amend or modify [Article VII of Issuer's Articles of Amendment
         and Restatement] without the prior written consent of Lender.
         Notwithstanding the foregoing to the contrary, Pledgor may exercise
         such voting rights in any way that may dilute its percentage interest
         in the Issuer evidenced by the Pledged Shares from the percentage
         interest in effect immediately prior to such action or inaction with
         the prior written consent of Lender (which consent shall not be
         unreasonably withheld so long as (i) no Default or Event of Default has
         occurred and is continuing, and (ii) Lender is reasonably satisfied
         that the Issuer has or will receive fair consideration for the issuance
         of any new shares or other action causing such dilution).

                           (b)      Upon the occurrence and during the
         continuance of an Event of Default, all rights of Pledgor to exercise
         the voting and other consensual rights which Pledgor would otherwise be
         entitled to exercise pursuant to subsection 7(a) shall cease to be
         effective upon notice by Lender to Pledgor of Lender's intent to
         exercise its rights hereunder, and upon delivery of such notice, all
         such rights shall become vested in Lender, who shall thereupon have the
         sole right to exercise such voting and other consensual rights so long
         as such voting and other consensual rights are not exercised in a
         manner inconsistent with Section 1.2 of the Equity One, Inc. Voting
         Agreement. In order to effect such transfer of rights, Lender shall
         have the right, upon such notice, to date and present to Issuer the
         irrevocable proxy executed by Pledgor substantially in the form
         attached hereto as Exhibit A. It is understood and agreed by the
         parties hereto that upon termination of the Equity One, Inc. Voting
         Agreement in accordance with its terms, (i) the foregoing irrevocable
         proxy and voting and other consensual rights granted to Lender pursuant
         to this subsection shall no longer be subject to, or limited in any way
         by, the Equity One, Inc. Voting Agreement, and/or (ii) Pledgor shall,
         upon the request of Lender, promptly execute and deliver to Lender such
         additional and/or replacement irrevocable proxies as may be required by
         Lender in order to effect under applicable law - the voting and other
         consensual rights intended to be transferred by Pledgor to Lender
         pursuant to this subsection."

                           (c)      Any and all (i) cash dividends and other
         cash distributions received, receivable or otherwise paid or payable in
         respect of any of the Pledged Shares (including without limitation any
         sums paid upon or in respect of the Pledged Shares pursuant to the
         recapitalization or reclassification of the capital of the Issuer or
         pursuant to the reorganization, liquidation or dissolution of the
         Issuer) shall be received in trust for the benefit of Lender as
         additional Pledged Collateral, shall be segregated from other funds of
         Pledgor, and shall be deposited forthwith into the Collateral Account
         in the same form as so received (with any necessary endorsement), and
         (ii) any and all stock dividends, securities, instruments and other
         rights, property or proceeds (other than cash or checks) received,
         receivable or otherwise distributed in respect of, or in exchange for,
         any Pledged Shares (including without limitation any distribution upon
         or in respect of

                                     - 11 -



         the Pledged Shares pursuant to the recapitalization or reclassification
         of the capital of the Issuer or pursuant to the reorganization,
         liquidation or dissolution of the Issuer), shall be received in trust
         for the benefit of Lender, and shall be delivered forthwith to Lender
         in the same form as so received (with any necessary endorsement) to be
         held as Pledged Collateral under this Agreement.

                  8.       Transfers and Other Liens; Additional Shares.

                           (a)      Except as otherwise permitted by this
         Agreement, Pledgor agrees that it will not (i) sell, assign (by
         operation of law or otherwise), transfer, exchange or otherwise dispose
         of, or grant any option with respect to, any of the Pledged Collateral,
         (ii) create, incur or permit to exist any Lien or option in favor of,
         or any claim of any Person with respect to, any of the Pledged
         Collateral, or any interest therein, except for the security interests
         created by this Agreement, or (iii) enter into any other contractual
         obligations (other than the Equity One, Inc. Voting Agreement, the
         Equity One, Inc. Common Stock Purchase Agreement and the Registration
         Rights Agreement) which could reasonably be expected to restrict or
         inhibit Lender's rights or ability to sell or otherwise dispose of the
         Pledged Collateral or any part thereof after the occurrence of an Event
         of Default.

                           (b)      Pledgor agrees that, except as set forth in
         the Agreement and Plan of Merger and the Equity One, Inc. Voting
         Agreement, it will (i) not cause, approve or vote to permit Issuer to
         issue any stock or other securities (including any warrants, options,
         subscriptions or other contractual arrangements for the purchase of
         stock or securities convertible into stock) in substitution for the
         Pledged Shares, without the prior written consent of Lender, and (ii)
         deliver hereunder, immediately upon its acquisition (directly or
         indirectly) thereof, any and all writings evidencing any additional
         Pledged Collateral. Pledgor hereby authorizes Lender to modify this
         Agreement by unilaterally amending the description of the Pledged
         Collateral to include such shares of stock or other securities.

                  9.       Lender Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Lender as Pledgor's attorney-in-fact, with full power of
substitution and with full authority in the place and stead of Pledgor and in
the name of Pledgor, Lender or otherwise, from time to time in Lender's sole
discretion to take any action (including completion and presentation of any
proxy) and to execute and deliver any instrument, assignment, mortgage, notice,
pledge, document or agreement that Lender may deem necessary or advisable to
accomplish the purposes of the creation, attachment, perfection, maintenance or
continuance of Lender's security interest in the Pledged Collateral under any
applicable law, in each instance, so long as such power of attorney is not
exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc.
Voting Agreement, including, without limitation, but subject to the foregoing
qualification, to (i) receive, endorse and collect all instruments made payable
to Pledgor representing any dividend or other distribution in respect of the
Pledged Collateral or any part thereof, (ii) exercise the voting and other
consensual rights pertaining to the Pledged Collateral in accordance with
subsection 7(b), so long as such voting and other consensual rights are not
exercised in a manner inconsistent with Section 1.2 of the Equity One, Inc.
Voting Agreement; (iii) exercise on and

                                     - 12 -



after the occurrence of any Event of Default any demand, piggyback or other
registration rights provided in the Registration Rights Agreement constituting
Pledged Shares Rights, and (iv) sell, transfer, pledge, make any agreement with
respect to, or otherwise deal with, any of the Pledged Collateral as fully and
completely as though Lender was the absolute owner thereof for all purposes, and
to do, at Lender's option and Pledgor's expense, at any time or from time to
time, all acts and things that Lender deems necessary to protect, preserve or
realize upon the Pledged Collateral in accordance with the provisions hereof.
Pledgor hereby ratifies and approves all acts of Lender made or taken pursuant
to this Section 9. Except as specifically set forth in Section 11 hereof,
neither Lender nor any person designated by Lender shall be liable for any acts
or omissions or for any error of judgment or mistake of fact or law. This power
of attorney, being coupled with an interest, shall be irrevocable until all
Secured Obligations (other than indemnity obligations) shall have been paid in
full and the Credit Documents shall have been terminated. It is understood and
agreed by the parties hereto that upon termination of the Equity One, Inc.
Voting Agreement in accordance with its terms, (i) the foregoing irrevocable
power of attorney granted to Lender pursuant to this section shall no longer be
subject to, or limited in any way by, the Equity One, Inc. Voting Agreement,
and/or (ii) Pledgor shall, upon the request of Lender, promptly execute and
deliver to Lender such additional and/or replacement irrevocable powers of
attorney as may be required by Lender in order to effect under applicable law
the power of attorney intended to be granted by Pledgor to Lender pursuant to
this section.

                  10.      Lender May Perform. If Pledgor fails to perform any
agreement contained herein, then Lender may itself perform, or cause performance
of, such agreement, and the expenses of Lender incurred in connection therewith
shall be payable by Pledgor under Section 15 hereof, and shall be a part of the
Secured Obligations.

                  11.      Limitation on Duty of Lender with Respect to the
Pledged Collateral. The powers conferred on Lender hereunder are solely to
protect its interest in the Pledged Collateral and shall not impose any duty on
it to exercise any such powers. Except for the safe custody of any Pledged
Collateral in its possession and the accounting for monies actually received by
it hereunder and other collection and enforcement rights of a secured party
under the UCC requiring the exercise in a commercially reasonable manner, Lender
shall have no other duty with respect to any Pledged Collateral. Lender shall be
deemed to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if the Pledged Collateral is accorded
treatment that is substantially equivalent to that which Lender accords its own
property, it being expressly agreed that Lender shall have no responsibility
(other than to exercise certain collection and enforcement rights in a
commercially reasonable manner as specifically required by the UCC) for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral, whether
or not Lender has or is deemed to have knowledge of such matters, or (ii) taking
any necessary steps to preserve rights against any parties with respect to any
Pledged Collateral, but Lender may do so and all expenses incurred in connection
therewith shall be payable by and for the sole account of Pledgor.

                  12.      Remedies upon Event of Default. If any Event of
Default shall have occurred and is continuing:

                                     - 13 -



                           (a)      Lender may exercise in respect of the
         Pledged Collateral, in addition to other rights and remedies provided
         for herein or otherwise available to it, all the rights and remedies of
         a secured party under the Uniform Commercial Code (the "UCC") in effect
         in the State of New York at that time, whether or not the UCC applies
         to the affected Pledged Collateral, and Lender may also, without demand
         of performance or other demand, presentment, protest, advertisement or
         notice of any kind (except any notice required by law referred to
         below), to or upon Pledgor or any other Person (all and each of which
         demands, defenses, advertisements and notices are hereby waived),
         forthwith sell, assign, give option or options to purchase, or
         otherwise dispose of and deliver the Pledged Collateral or any part
         thereof (or contract to do any of the foregoing), in one or more
         parcels at public or private sale, at any exchange, broker's board or
         office, or at any of Lender's offices or elsewhere, for cash, on
         credit, or for future delivery, without assumption of any credit risk,
         at such price or prices and upon such other terms and conditions as
         Lender deems commercially reasonable. Pledgor acknowledges and agrees
         that such a private sale may result in prices and other terms that may
         be less favorable to the seller than if such sale were a public sale.
         Pledgor agrees that, to the extent notice of sale shall be required by
         law, at least fourteen (14) days' notice to Pledgor of the time and
         place of any public sale or the time after which any private sale is to
         be made shall constitute reasonable notification, and to the extent
         that notice of sale shall not be required by law, Lender agrees to use
         its commercially reasonable best efforts to give to Pledgor at least
         fourteen (14) days' prior written notice of the time and place of any
         public or private sale of the Pledged Collateral. At any sale of the
         Pledged Collateral, if permitted by law, Lender may bid (which bid may
         be, in whole or in part, in the form of cancellation of indebtedness)
         for the purchase of the Pledged Collateral or any portion thereof.
         Lender shall not be obligated to make any sale of Pledged Collateral
         regardless of notice of sale having been given. Lender may adjourn any
         public or private sale from time to time by announcement at the time
         and place fixed therefor, and such sale may, without further notice, be
         made at the time and place to which it was so adjourned. Lender shall
         be under no obligation to delay a sale of any of the Pledged Collateral
         for the period of time necessary to permit Issuer to register such
         securities for public sale under the Securities Act of 1933, as from
         time to time amended (the "Securities Act"), or under applicable state
         securities laws, even if Issuer would agree to do so. To the extent
         permitted by law, Pledgor hereby specifically waives (i) all rights of
         redemption, stay or appraisal which Pledgor has or may have under any
         law now existing or hereafter enacted, and (ii) all claims, damages and
         demands it may acquire against Lender arising out of the exercise by
         Lender of any rights hereunder or at law, except for bad faith, willful
         misconduct and gross negligence. To the extent that applicable law
         imposes duties on Lender to exercise remedies in a commercially
         reasonable manner, Pledgor acknowledges and agrees that it is not
         commercially unreasonable for Lender (i) to fail to exercise collection
         remedies against Issuer, or (ii) to disclaim disposition warranties on
         sale of any Pledged Collateral.

                           (b)      Any cash held by Lender as Pledged
         Collateral and all cash proceeds received by Lender in respect of any
         sale of, collection from, or other realization upon all or any part of
         the Pledged Collateral may, in the discretion of Lender, be held by

                                     - 14 -



         Lender as collateral for, and/or then or at any time thereafter applied
         (after payment of any amounts payable to Lender pursuant to Section
         15), in whole or in part, by Lender against all or any part of the
         Secured Obligations in the manner provided in Section 14 hereof. Any
         surplus of such cash or cash proceeds held by Lender and remaining
         after payment in full of all the Secured Obligations shall be paid over
         to Pledgor or to whomsoever may be lawfully entitled to receive such
         surplus or as a court of competent jurisdiction may direct; provided,
         that in the event that all of the conditions to the termination of
         this Agreement pursuant to Section 16 shall not have been fulfilled,
         such balance shall be held during the continuance of an Event of
         Default and applied from time to time as provided in this subsection
         12(b) until all such conditions shall have been fulfilled.

                           (c)      Pledgor recognizes that Lender may be unable
         to effect a public sale of all or part of the Pledged Collateral and
         may be compelled to resort to one or more private sales to a restricted
         group of purchasers who will be obligated to agree, among other things,
         to acquire such Pledged Collateral for their own account, for
         investment and not with a view to the distribution or resale thereof.
         Pledgor acknowledges that any such private sales may be at prices and
         on terms less favorable to the seller than if sold at public sales
         through exercise of any registration rights, and agrees that Lender has
         no obligation to delay sale of any such Pledged Collateral for the
         period of time necessary to permit Issuer to register such Pledged
         Collateral for public sale under the Securities Act. Pledgor agrees to
         use its best efforts to do or cause to be done all such other acts as
         may be necessary to make such sale or sales of all or any portion of
         the Pledged Collateral pursuant to this Section valid and binding and
         in compliance with any and all other applicable Requirements of Law.
         Pledgor further agrees that a breach of any of the covenants contained
         in this Section will cause irreparable injury to Lender, and that
         Lender has no adequate remedy at law in respect of such breach and, as
         a consequence, that each and every covenant contained in this Section
         12 shall be specifically enforceable against Pledgor, and Pledgor
         hereby waives and agrees not to assert any defenses against an action
         for specific performance of such covenants, except for a defense that
         no Event of Default had occurred and was continuing at the time that
         Lender exercised any of its remedies pursuant to this Agreement.

                  13.      Remedies Cumulative.

                           (a)      No failure on the part of Lender to
         exercise, and no delay in exercising and no course of dealing with
         respect to, any power, privilege or right under the Credit Documents,
         the Guarantee, the Cash Collateral Account Agreement or this Agreement
         shall operate as a waiver thereof, nor shall any single or partial
         exercise by Lender of any power, privilege or right under any of the
         Credit Documents, the Guarantee, the Cash Collateral Account Agreement
         or this Agreement preclude any other or further exercise thereof or the
         exercise of any other such power, privilege or right. Lender shall not
         be required to make any demand upon or pursue or exhaust any of its
         rights or remedies against Pledgor or others with respect to the
         payment of the Secured Obligations, and shall not be required to
         marshal the Pledged Collateral or to resort to the Pledged Collateral
         in any particular order. The powers, privileges and rights in this

                                     - 15 -



         Agreement, the Guarantee, the Cash Collateral Account Agreement and the
         Credit Documents are cumulative and are not exclusive of any other
         remedies provided by law.

                           (b)      Lender shall have, in addition to any other
         rights and remedies contained in this Agreement, the Guarantee, the
         Cash Collateral Account Agreement and the Credit Documents, and any
         other agreements, guaranties, notes, instruments and documents
         heretofore now or at any time or times hereafter executed by Pledgor or
         any other Person and delivered to Lender, all of the rights and
         remedies of a secured party under the UCC in force in any state in
         which the Pledged Collateral is located at any time, all of which
         rights and remedies shall be cumulative and nonexclusive to the extent
         permitted by law.

                  14.      Application of Proceeds. Upon the occurrence and
during the continuance of an Event of Default, the proceeds of any sale of, or
other realization upon, all or any part of the Pledged Collateral shall be
applied: first to all reasonable fees, costs and expenses incurred by Lender
with respect to this Agreement, the Guarantee, the Cash Collateral Account
Agreement, the Credit Documents and the Pledged Collateral, including, without
limitation, those described in Section 15 herein; second, to all fees, costs and
expenses incurred by any Lender in connection with any action to enforce the
Guarantee, the Cash Collateral Account Agreement, any Credit Document or to
collect any payments due from Pledgor; third, to accrued and unpaid interest on
the Secured Obligations (including any interest which but for the provisions of
the Bankruptcy Code (Title 11 U.S.C.), would have accrued on such amounts);
fourth, to the principal amounts of the Secured Obligations outstanding; fifth,
to any other Secured Obligations Any proceeds remaining after application of the
foregoing will be paid to Pledgor.

                  15.      Expenses. Pledgor shall promptly pay to Lender all
reasonable costs and expenses of Lender (both before and after the execution
hereof) in connection with protecting or perfecting Lender's security interest
in the Pledged Collateral, in connection with any realization or collection of
the Pledged Collateral or Lender's enforcement or defense of any of its rights
or remedies under this Agreement or at law, or in connection with any matters
contemplated by or arising out of this Agreement, the Guarantee, the Cash
Collateral Account Agreement or any of the Credit Documents.

                  16.      Termination of Security Interests; Release of Pledged
Collateral. Upon payment and performance in full of all Secured Obligations
(other than indemnity obligations) and termination of the Guarantee, the Cash
Collateral Account Agreement and the Credit Documents, the security interests
granted herein shall terminate and all rights to the Pledged Collateral shall
revert to Pledgor. Upon the sale of any Pledged Collateral, to the extent
permitted by this Agreement, the Guarantee, the Cash Collateral Account
Agreement, or the Credit Documents, Lender's security interests in such Pledged
Collateral shall terminate and the rights in such Pledged Collateral shall
revert to Pledgor or such purchaser. Upon such termination of the security
interests or release of any Pledged Collateral, Lender will, at the expense of
Pledgor, execute and/or file and deliver such documents as Pledgor shall
reasonably request to evidence the termination of the security interests or the
release of such Pledged Collateral which has not yet theretofore been sold or
otherwise applied or released. Such release shall be without recourse or
warranty to Lender.

                                     - 16 -



                  17.      Amendments, Waivers and Consents. No amendment,
modification. termination or waiver of any provision of this Agreement, or
consent to any departure by Pledgor therefrom, shall in any event be effective
without the written concurrence of Lender and Pledgor.

                  18.      Notices. Unless otherwise expressly provided herein,
all notices, approvals, requests, demands, consents and other communications
hereunder, including any notice of default or notice of sale, to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand or
by overnight courier, when delivered, or (b) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of Pledgor and Lender, or to such other address as may be
hereafter notified by the respective parties hereto:

If to Pledgor:

         MGN America, Inc.
         1660 N.E. Miami Gardens Drive
         North Miami Beach, FL 33179
         Attention: Chaim Katzman, President
         Facsimile: (305) 947-1734

with a copy to:

         Jeffrey Oshinsky, Esq.
         White & Case LLP
         200 S. Biscayne Blvd.
         Miami, FL 33180
         Facsimile: (305) 358-5744

If to Lender:

         Bank Leumi le-Israel B.M.
         Construction and Real Estate Division
         32 Yehuda Halevy Street
         Tel Aviv, Israel 65121
         Attention: Dafna Landau
         Facsimile: (972) 3-514-8980

                                     - 17 -



with a copy to:

         Shaw Pittman
         335 Madison Avenue, 26th Floor
         New York, NY 10017-4605
         Attention: John C. Simons, Esq.
         Facsimile: (212) 603-6848

                  19.      Continuing Security Interest; Successors and Assigns.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until termination of
the security interests in the Pledged Collateral pursuant to Section 16 hereof,
(ii) be binding upon Pledgor, its successors and assigns, and (iii) inure,
together with the rights and remedies of Lender hereunder and its successors and
assigns. Without limiting the generality of the foregoing clause (iii), Lender
may assign or otherwise transfer all or any portion of the Credit to any other
Person as permitted in the Credit Documents, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lender herein or otherwise. Pledgor may not assign or transfer any of its
interests or obligations hereunder without the prior consent of Lender.

                  20.      Irrevocable Authorization and Instruction to Issuer.
Pledgor hereby authorizes and instructs Issuer to comply with any instruction
received by it from Lender in writing that (a) states that an Event of Default
has occurred and is continuing, and (b) is otherwise in accordance with the
terms of this Agreement, without any other or further instructions from Pledgor,
and Pledgor agrees that Issuer shall be fully protected in so complying.

                  21.      Waiver.

                           (a)      In addition to any other waivers herein,
         Pledgor waives to the greatest extent it may lawfully do so, and agrees
         that it shall not at any time insist upon, plead or in any manner
         whatever claim or take the benefit or advantage of, any appraisal,
         valuation, stay, extension, marshalling of assets, redemption or
         similar law, or exemption, whether now or at any time hereafter in
         force, which may delay, prevent or otherwise affect the performance by
         Pledgor of its obligations under, or the enforcement by Lender of, this
         Agreement. Pledgor hereby waives diligence, presentment and demand
         (whether for nonpayment or protest or of acceptance, maturity,
         extension of time, change in nature or form of the Secured Obligations,
         acceptance of further security, release of further security,
         composition or agreement arrived at as to the amount of, or the terms
         of the Secured Obligations, notice of adverse change in Pledgor's or
         any other Person's financial condition or any other fact which might
         materially increase the risk to Pledgor) with respect to any of the
         Secured Obligations or all other demands whatsoever and waives the
         benefit of all provisions of law which are or might be in conflict with
         the terms of this Agreement. To the maximum extent permitted by
         applicable law, Pledgor hereby waives any requirement on the part of
         the holder of the Credit to mitigate the damages resulting from any
         default under the Credit.

                                     - 18 -



                           (b)      If Lender may, under applicable law, proceed
         to realize its benefits under the Guarantee, the Cash Collateral
         Account Agreement or any of the Credit Documents giving Lender a Lien
         upon any collateral, whether owned by Pledgor or by any other Person,
         either by judicial foreclosure or by non-judicial sale or enforcement,
         Lender may, at its sole option, determine which of its remedies or
         rights it may pursue without affecting any of the rights and remedies
         of Lender under this Agreement.

                  22.      Reinstatement. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by Lender in respect of the Secured Obligations is rescinded or must
otherwise be restored or returned by Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Pledgor or upon the appointment of
any intervenor or conservator of, or trustee or similar official for, Pledgor or
any substantial part of its assets, or otherwise, all as though such payments
had not been made.

                  23.      Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.

                  24.      Time is of Essence. Time is of the essence of each
provision of this Agreement of which time is an element.

                  25.      Survival of Provisions. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the Guarantee and the Cash Collateral Account
Agreement. Notwithstanding anything in this Agreement, the Guarantee, the Cash
Collateral Account Agreement or implied by law to the contrary, the agreements,
representations and warranties of Pledgor set forth herein shall terminate only
upon payment of the Secured Obligations (other than indemnity obligations) and
the termination of this Agreement.

                  26.      Statute of Limitations; Suretyship Defenses. Pledgor
hereby waives the right to plead any statute of limitations as a defense to any
indebtedness or obligation hereunder or secured hereby to the full extent
permitted by law, and hereby waives all suretyship defenses.

                  27.      Headings Descriptive. The headings in this Agreement
are for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

                  28.      Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of which
shall together constitute one and the same agreement.

                  29.      GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL

                                     - 19 -



LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS RULES OF THE
STATE OF NEW YORK.

                  30.      Submission To Jurisdiction; Waivers. Pledgor hereby
irrevocably and unconditionally:

                                    (i)      submits for itself and its property
         in any legal action or proceeding relating to this Agreement to which
         it is a party, or for recognition and enforcement of any judgment in
         respect thereof, to the non-exclusive general jurisdiction of the
         Courts of the State of New York, the courts of the United States of
         America for the Southern District of New York, and appellate courts
         from any thereof;

                                    (ii)     consents that any such action or
         proceeding may be brought in such courts and waives any objection that
         it may now or hereafter have to the venue of any such action or
         proceeding in any such court or that such action or proceeding was
         brought in an inconvenient court and agrees not to plead or claim the
         same;

                                    (iii)    agrees that service of process in
         any such action or proceeding may be effected by mailing a copy thereof
         by registered or certified mail (or any substantially similar form of
         mail), postage prepaid, to Pledgor at its address set forth in Section
         18 hereof, or at such other address of which the Lender shall have been
         notified pursuant thereto;

                                    (iv)     agrees that nothing herein shall
         affect the right to effect service of process in any other manner
         permitted by law or shall limit the right to sue in any other
         jurisdiction; and

                                    (v)      waives, except in the case of bad
         faith, willful misconduct or gross negligence (and otherwise to the
         maximum extent not prohibited by law), any right it may have to claim
         or recover in any legal action or proceeding referred to in this
         section 30 any special, exemplary, or consequential damages.

                  31.      WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, PLEDGOR AND LENDER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                           [SIGNATURE PAGE TO FOLLOW]

                                     - 20 -



                  IN WITNESS WHEREOF, Pledgor has caused this Agreement to be
duly executed and delivered as of the day and year first above written.

                                          MGN AMERICA, INC.

                                          By /s/ Chaim Katzman
                                             ---------------------------------
                                             Chaim Katzman
                                             President



                  By acceptance hereof as of the date first above written,
Lender agrees to be bound by the provisions hereof.

                                          BANK LEUMI LE-ISRAEL B.M., as Lender

                                          By /s/
                                             _________________________________
                                             Name:
                                             Title:

                                          By /s/
                                             _________________________________
                                             Name:
                                             Title:



                                    EXHIBIT A

                                Irrevocable Proxy

                  The undersigned hereby appoints BANK LEUMI LE-ISRAEL B.M.
("Lender"), as proxy with full power of substitution, and hereby authorizes
Lender to represent and vote all of the shares of the capital stock of Equity
One, Inc. acquired by the undersigned pursuant to that certain Equity One, Inc.
Common Stock Purchase Agreement, dated as of October 28, 2002 (the "Pledged
Shares") and all shares of the capital stock of Equity One, Inc. acquired by the
undersigned in respect of or in exchange for the Pledged Shares, all held of
record by the undersigned on the date of exercise hereof or at any meeting or at
any other time chosen by Lender in its sole discretion, but only at the times
and in the circumstances provided in that certain Pledge and Security Agreement
dated as of February 11, 2003, executed by the undersigned in favor of Lender.

                                          MGN AMERICA, INC.

Date: _____________                       By:_________________________________
                                             Chaim Katzman
                                             President



                                    EXHIBIT B

                      Assignment Separate From Certificate

                  FOR VALUE RECEIVED, MGN AMERICA, INC. hereby sells, assigns
and transfers unto _______________________________ _______________________
(__________) Shares of the Common Stock of Equity One, Inc., a Maryland
corporation (the "Corporation"), standing in its name on the books of the
Corporation represented by Certificate(s) No. ___________ herewith and does
hereby irrevocably constitute and appoint ______________________ attorney to
transfer the said stock on the books of the Corporation with full power of
substitution in the premises.

         Date: _______________

                                          MGN AMERICA, INC.

                                          By:_________________________________
                                             Name:
                                             Title:

EX-5

                                                                       EXHIBIT 5
                            CASH COLLATERAL AGREEMENT

                  Cash Collateral Agreement made as of February 11, 2003, by and
among MGN America, Inc. ("MGN"), Bank Leumi Le-Israel B.M. (the "Bank"), and
Bank Leumi USA ("BLUSA").

                  WHEREAS, the Bank has agreed to extend credit up to an
aggregate amount of US$30,000,000 (the "Credit") to Gazit Globe (1982) Ltd.
("Gazit"), upon the terms and conditions set forth in that certain (i)
commitment letter dated October 28, 2002, between the Bank and Gazit, and (ii)
General Conditions for Opening an Account and Receiving Credits in Foreign
Currency and in Israeli Currency dated November 25, 1994, between the Bank and
Gazit (the principal with accrued interest and fees thereon, the "Loan
Obligations"); and

                  WHEREAS, Gazit has loaned the proceeds of the Credit to MGN,
its subsidiary, to finance the purchase by MGN of up to 4,284,820 shares of
common stock (the "Common Shares") of Equity One, Inc., a Maryland corporation
(the "Company"); and

                  WHEREAS, MGN has guaranteed the prompt and full payment and
performance of the Loan Obligations pursuant to that certain Guarantee dated as
of February 11, 2003 (the "Guarantee"), executed by MGN in favor of the Bank;
and

                  WHEREAS, MGN and the Bank have entered into a Pledge and
Security Agreement, dated as of February 11, 2003 (the "Pledge and Security
Agreement") wherein and whereby MGN, as Pledgor, has pledged to the Bank, among
other things, the Common Shares and all dividends or other cash paid on or by
reason of MGN's ownership of the Common Shares (together with interest thereon,
the "Cash Collateral") as security for the full and faithful performance by MGN
of its obligations under the Guarantee; and

                  WHEREAS, the Pledge and Security Agreement provides, among
other things, that (i) MGN shall establish a cash collateral bank account with
BLUSA (the "Cash Collateral Account"), to be pledged in favor of the Bank as
security for the performance by MGN of its obligations under the Guarantee, (ii)
all dividends or other cash paid by the Company on or by reason of the Common
Shares shall be deposited into the Cash Collateral Account, and (iii) that the
Bank's Pledged Collateral (as defined in the Pledge and Security Agreement)
shall include the Cash Collateral Account; and

                  WHEREAS, the parties are entering into this Cash Collateral
Agreement in order to implement the provisions of the Pledge and Security
Agreement with respect to the Cash Collateral Account, including perfection of
the security interest of the Bank in the Cash Collateral Account.

                  NOW THEREFORE, the parties agree:

                  1.       The Account. BLUSA hereby is establishing a Cash
Collateral Account, in the name of MGN, at BLUSA's office located at 564
Fifth Avenue, New York, New York (Numbers ____________ and ____________)
into which there shall be deposited all cash

                                       1



dividends paid by the Company on account of the Common Shares, and all other
cash payments made by the Company on or by reason of the Common Shares. The Cash
Collateral Account is a "deposit account" within the meaning of Article 9 of the
Uniform Commercial Code of the State of New York (the "UCC"). BLUSA will not
agree with any third party to comply with instructions or other directions
concerning the Cash Collateral or the disposition of funds in the Cash
Collateral Account originated by such third party without the prior written
consent of the Bank and MGN. The Cash Collateral Account shall be of such type
as is mutually agreeable to MGN and the Bank; provided, however, that
withdrawals therefrom may only be made in accordance with the terms of this Cash
Collateral Agreement. Notwithstanding the foregoing, MGN may require that the
Cash Collateral be deposited in an interest bearing money market account.
Interest earned on the Cash Collateral shall be part of, and included in, the
Cash Collateral, and shall remain in the Cash Collateral Account subject to the
terms of this Cash Collateral Agreement and the Pledge and Security Agreement.
Dividends and any other deposits in the Cash Collateral Account, and any
interest earned thereon, shall be deemed for the benefit of MGN which shall be
responsible for payment of all taxes thereon. MGN represents that it is a Nevada
corporation and that its federal tax identification number is 02-0533433.

                  2.       Condition Precedent. This Cash Collateral Agreement
shall be effective upon the receipt by BLUSA of a fully executed counterpart of
a letter of direction to the Company, in form and substance like Exhibit A
annexed hereto.

                  3.       Deposits. MGN agrees that until such time as it shall
have received notice from the Bank that this Cash Collateral Agreement has been
terminated, and that the Cash Collateral Account has been closed, all cash
dividends and other cash proceeds attributable to the Common Shares shall be
deposited directly into the Cash Collateral Account either by check payable to
MGN (duly endorsed and which BLUSA is hereby authorized and directed to deposit
into the Cash Collateral Account) or by direct wire transfer into the Cash
Collateral Account. The current record dates of the Company for the payment of
dividends are March 31, June 30, September 30 and December 31. MGN shall give
BLUSA notice of each (i) anticipated dividend payment when declared, which
notice will include the payment date and amount, and (ii) any change in the
record dates. Payments by check shall be sent to Bank Leumi USA 564 Fifth
Avenue, New York, New York 10036, Attention: Ms. Shirly Yechilevich, and wire
transfers shall be sent pursuant to wire transfer instructions supplied by BLUSA
to the Company from time to time.

                  4        Withdrawals. BLUSA shall not make or permit the
withdrawal or other disposition of any Cash Collateral in the Cash Collateral
Account without the Bank's prior written direction.

                  5.       No Liens. Except as is otherwise provided in Section
9, no interest in the Cash Collateral, or any beneficial interest therein, may
be (i) pledged, sold, assigned or transferred, (a) by any party hereto, except
as is expressly provided herein and in the Pledge and Security Agreement, or (b)
other than by operation of law, or (ii) taken or reached by any legal or
equitable process in satisfaction of any debt or other liability of any party
hereto other than MGN.

                                       2



                  6.       Final Disbursement. When the Bank, in its sole
discretion, is satisfied that each of MGN and Gazit has indefeasibly satisfied
all of its obligations to the Bank, and has given BLUSA notice thereof, the
balance of the Cash Collateral, if any, shall be remitted to MGN by BLUSA, and
BLUSA shall be fully relieved and discharged from any further duties hereunder,
and released from all further responsibility and liability hereunder with
respect to the Cash Collateral.

                  7.       Conflicts. BLUSA's obligations hereunder shall be as
a depository only, and BLUSA shall not be responsible or liable in any manner
whatever for the sufficiency, correctness, genuineness or validity of any
notice, instructions or instrument furnished to it or deposited with it, or for
the form of execution of any thereof, or for the identity, authority or rights
of any person executing, furnishing or depositing the same except to the extent
of its gross negligence or willful misconduct. BLUSA shall not have any duties
or responsibilities except those set forth in this Cash Collateral Agreement,
and shall not incur any liability in acting upon any signature, notice, request,
waiver, consent, receipt or other paper or document reasonably believed by it to
be genuine, and unless BLUSA has received Notice to the contrary, BLUSA may
presume that any of (i) Dafna Landau, (ii) Tomer Grinshpon, and (iii) Avi Flumin
purporting to give any notice or advice on behalf of any part in accordance with
the provisions hereof has been duly authorized to do so. If (i) BLUSA shall
receive instructions or any other notice with respect to the Cash Collateral
which, in its sole and absolute judgment, are in conflict with this Cash
Collateral Agreement or any order, ruling or decree of any Court of other
tribunal or administrative agency, or (ii) in the sole and absolute judgment of
BLUSA the release conditions specified in Sections 4 and 6 of this Cash
Collateral Agreement have not been satisfied, BLUSA, in its sole and absolute
discretion, may refrain from taking any action with respect thereto unless it is
otherwise specifically directed by a final order of a Court of competent
jurisdiction as to which the time for appeal has expired without an appeal
having been taken. If any dispute or difference shall arise between MGN and the
Bank with respect to the Cash Collateral or this Cash Collateral Agreement, or
if any conflicting demand shall be made upon BLUSA, BLUSA also shall have the
right, in its sole and absolute discretion, to retain the Cash Collateral, or
any part of it, and await the outcome of such dispute, difference, demand or
other controversy by final legal proceedings or otherwise, as BLUSA may deem
appropriate.

                  8.       Exculpation. BLUSA shall be liable only for its own
willful misconduct or gross negligence and not for any act done or omitted by it
in good faith. BLUSA may rely, and shall be protected in acting or refraining
from acting, upon any notice, instruction or request, furnished to it hereunder
and believed in good faith by it to be genuine. If BLUSA receives any notice
under which some action is to be taken by it, it shall not be required to act
thereon until it has had an opportunity, if it so desires, to investigate the
authenticity of such notice.

                  9.       Annual Fee. MGN shall pay BLUSA an annual fee of
US$15,000 (the "Fee") for each calendar year in consideration of its maintenance
of the Cash Collateral Account. The Fee shall be paid concurrently with the
execution of this Cash Collateral Agreement, and on the anniversary date hereof.
If the Fee is not paid within ten (10) days of its due date, BLUSA may debit the
Cash Collateral Account therefore.

                  10.      Advice of Counsel and Expenses. BLUSA may consult
with counsel of its own choice, including Warshaw Burstein Cohen Schlesinger &
Kuh, LLP, and shall have full

                                       3



and complete authorization and protection for any action taken, omitted or
suffered based on the advice or opinion of such counsel. BLUSA shall be
reimbursed by MGN for any otherwise unreimbursed out-of-pocket cost and expenses
(including, without limitation, reasonable counsel fees and disbursements)
incurred by it in connection with its duties under this Cash Collateral
Agreement, and shall have a lien on the Cash Collateral to pay any such costs
and expenses.

                  11.      Indemnification. MGN will indemnify BLUSA, its
directors, officers and employees and each legal entity, if any, who controls
BLUSA (the "Indemnified Parties"), and hold each of the Indemnified Parties
harmless from and against, any and all claims, damages, losses, liabilities,
costs and expenses (including, without limitation, all legal fees and expenses
of internal or external counsel with whom any Indemnified Party may consult and
all expenses of litigation or preparation therefor), which any Indemnified Party
may incur or which may be asserted against any Indemnified Party as a result of
the execution, delivery or enforcement of, or performance under, this Cash
Collateral Agreement; provided that the foregoing indemnity agreement shall not
apply to claims, damages, losses, liabilities and expenses solely attributable
to an Indemnified Party's gross negligence or willful misconduct. The indemnify
agreement contained in this Section 11 shall survive the termination of this
Cash Collateral Agreement.

                  12.      Notices. All notices, instructions (except
instructions to BLUSA from the Bank to transfer Cash Collateral), consents,
claims, designations, directions and other communications (each a "Notice")
required or permitted to be given under this Cash Collateral Agreement shall be
in writing and shall be deemed to have been duly given and received if given
personally with receipt acknowledged or sent by first class registered or
certified mail, return receipt requested, postage prepaid, or sent via a
recognized overnight courier, addressed to the parties at the following
addresses, unless Notice is given of a change of address in the manner set forth
herein, in which case all future Notices shall be sent to the new address so
designated:

                  If to BLUSA:

                  Bank Leumi USA
                  564 Fifth Avenue
                  New York, New York 10036
                  Attn: Ms. Shirly Yechilevich
                  Fascimile: 212-626-1072

                  with a copy to:

                  Warshaw Burstein Cohen Schlesinger & Kuh, LLP
                  555 Fifth Avenue
                  New York, New York 10017
                  Attn:  Allen N. Ross, Esq.
                  Fascimile: 212-984-7792

                                       4



                  If to the Bank:

                  Bank Leumi le-Israel B.M.
                  Construction and Real Estate Division
                  32 Yehuda Halevy Street
                  Tel Aviv, Israel 65121
                  Facsimile No.: (972)-3-514-8980

                  If to MGN:

                  MGN America, Inc.
                  1660 N.E. Miami Gardens Drive
                  North Miami Beach, Florida 33179
                  Attn: Chaim Katzman, President
                  Facsimile No.: (305) 947-1734

                  With a copy to:

                  Jeffrey Oshinsky, Esq.
                  White & Case LLP
                  200 S. Biscayne Blvd.
                  Miami, FL 33180
                  Facsimile No.: (305) 358-5744

A copy of each Notice shall also be sent by facsimile. Notices shall be deemed
to have been given and received on the earlier of (i) when given personally with
receipt acknowledged, (ii) three days after being sent by overnight courier, or
(iii) on the fifth business day after the mailing thereof as aforesaid, and
provided, however, that notices of change of address shall not be effective
until actually received or offered to the addressee by the Postal Service, if
refused. Each party hereto shall be sent a copy of any Notice.

                  13.      Miscellaneous

                           13.1 This Cash Collateral Agreement, the Guarantee,
the Pledge and Security Agreement, and the other Credit Documents (as defined in
the Pledge and Security Agreement) constitute the entire agreement between the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements, understandings and arrangements, oral or written, between the
parties hereto with respect to the subject matter thereof. In the event of any
conflict between this Cash Collateral Agreement (or any portion thereof), the
Pledge and Security Agreement or any other agreement now existing or hereafter
entered into, the terms of this Cash Collateral Agreement shall prevail.

                                       5



                           13.2 This Cash Collateral Agreement shall inure to
the benefit of, and shall be binding upon, the parties hereto and their
respective successors and assigns. Nothing in this Cash Collateral Agreement,
expressed or implied, is intended to or shall confer on any person other than
the parties hereto, or their respective successors or assigns, any rights,
remedies, obligations or liabilities under or by reason of this Cash Collateral
Agreement. No party hereto may assign this Cash Collateral Agreement or its
rights hereunder without the prior consent of all of the other parties, and any
such attempted assignment shall be null and void.

                           13.3 This Cash Collateral Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to its conflict of laws provisions.

                           13.4 MGN shall do and perform, or cause to be done
and performed, all such further acts and things and shall execute and deliver
all such other agreements, certificates, instruments and documents as the other
parties to this Cash Collateral Agreement may reasonably request in order to
carry out the intent and accomplish the purposes of this Cash Collateral
Agreement and the consummation of the transactions contemplated hereby.

                           13.5 Each party hereto (i) consents and submits to
the jurisdiction of the Courts of the State of New York and of the Courts of the
United States for the Southern District of New York for all purposes of this
Cash Collateral Agreement, including, without limitation, any action or
proceeding instituted for the enforcement of any right, remedy, obligation and
liability arising under or by reason of this Cash Collateral Agreement, (ii)
consents and submits to the venue of such action or proceeding in the City and
County of New York (or such judicial district of a Court of the United States as
shall include the same), and (iii) to service of process in any such action by
mailing a copy thereof by certified mail, return receipt requested, postage
prepaid, to such party at his or its address specified in Section 12.

                           13.6 This Cash Collateral Agreement may not be
modified or amended, except by an instrument or instruments in writing, signed
by the party against whom enforcement of any such modification or amendment is
sought. Any party hereto may, by an instrument in writing, waive compliance by
another party hereto with any term or provisions of this Cash Collateral
Agreement on the part of such other party to be performed or complied with. The
waiver by either party of a breach of any term or provisions of this Cash
Collateral Agreement shall not be construed as a waiver of any subsequent
breach.

                           13.7 The section headings contained in this Cash
Collateral Agreement are for reference purposes only, and shall not be deemed to
be part of this Cash Collateral Agreement or affect the meaning or
interpretation of this Cash Collateral Agreement.

                           13.8 This Cash Collateral Agreement may be executed
in one or more counterparts, each of which shall be deemed an original but all
of which shall together constitute one and the same agreement.

                           [SIGNATURE PAGE TO FOLLOW]

                                       6



                  IN WITNESS WHEREOF, the parties have caused this Cash
Collateral Agreement to be duly executed as of the date first above written.

                                             MGN AMERICA, INC.

                                             By: /s/ Chaim Katzman
                                                --------------------------------
                                             Name: Chaim Katzman
                                             Title: President

                                             BANK LEUMI LE-ISRAEL, B.M.

                                             By: /s/
                                                 _______________________________
                                             Name:______________________________
                                             Title:_____________________________

                                             By: /s/
                                                 _______________________________
                                             Name:______________________________
                                             Title:_____________________________

                                             BANK LEUMI USA

                                             By: /s/ Shirly Yecilevich
                                                 -------------------------------
                                             Name:  Shirly Yechilevich
                                             Title: Assistant Vice President

                                             By: /s/ Raphael Sisso
                                                 -------------------------------
                                             Name:  Raphael Sisso
                                             Title: Vice President

EX-6

                                                                       EXHIBIT 6
                                    GUARANTEE

         GUARANTEE dated as of February 11, 2003 (this "Guarantee"), made by MGN
AMERICA, INC., a Nevada corporation (the "Guarantor"), in favor of BANK LEUMI
LE-ISRAEL B.M. (the "Lender").

                              W I T N E S S E T H:

         WHEREAS, the Lender has agreed to extend credit up to an aggregate
amount of US$30,000,000 (the "Credit") to GAZIT GLOBE (1982) LTD., a company
incorporated under the laws of Israel (the "Borrower"), upon the terms and
subject to the conditions set forth in that certain (i) commitment letter dated
October 28, 2002, between the Lender and the Borrower (as amended, supplemented
or otherwise modified from time to time, the "Commitment Letter"), (ii) General
Conditions for Opening an Account and Receiving Credits in Foreign Currency and
in Israeli Currency dated November 25, 1994, between the Lender and the Borrower
(as amended, supplemented or otherwise modified from time to time, the "General
Terms"), (iii) Letter of Undertaking (re: compliance with margin regulations)
dated February 11, 2003, from the Borrower in favor of Lender (as amended,
supplemented or otherwise modified from time to time, the "Letter of
Undertaking"), and (iv) Deed of Pledge (Pledge and assignment of rights by way
of charge) dated February 11, 2003, between the Borrower and the Lender (as
amended, supplemented or otherwise modified from time to time, the "Deed of
Pledge," and together with the Commitment Letter, the General Terms and the
Letter of Undertaking, and any other documents or agreements entered into by the
Borrower in favor of Lender in connection with the Credit, the "Credit
Documents"); and

         WHEREAS, the Borrower intends to loan or contribute the proceeds of the
Credit to the Guarantor, its subsidiary, in order that the Guarantor may
purchase of up to 4,284,820 shares of the capital stock of Equity One, Inc., a
Maryland corporation ("EOI"); and

         WHEREAS, it is a condition precedent to the obligation of the Lender to
grant the Credit that, among other things, the Guarantor, guarantee the payment
and performance of the Credit and all other obligations of the Borrower under
the Credit Documents pursuant to this Guarantee;

        NOW, THEREFORE, in consideration of the premises, the Guarantor hereby
agrees with the Lender as follows:

         1.       Defined terms.

                  (a)      The following capitalized terms shall have the
following meanings:

                    "Cash Collateral Agreement": means that certain Cash
              Collateral Agreement dated as of the date hereof, among the
              Lender, the Guarantor and Bank Leumi USA, as amended, supplemented
              or modified from time to time.

                    "Contractual Obligation" means as to any Person, any term or
              provision of any security issued by such Person or of any
              agreement, instrument or other undertaking to which such Person is
              a party or by which it or any of its property is bound.



                    "Event of Default" shall mean any event of default occurring
              and continuing under any document or instrument that evidences or
              secures the Secured Obligations.

                    "Governmental Authority" means any nation or government, any
              state or other political subdivision thereof and any entity
              exercising executive, legislative, judicial, regulatory or
              administrative functions of, or pertaining to, government.

                    "Lien" means any mortgage, deed of trust, pledge,
              hypothecation, security interest, assignment, encumbrance, claim,
              lien, lease or charge of any kind, whether voluntarily incurred or
              arising by operation of law or otherwise, affecting any assets or
              property, including any agreement to give or grant any of the
              foregoing, any conditional sale or other title retention agreement
              and the filing of or agreement to give any financing statement
              with respect to any assets or property under the Uniform
              Commercial Code or comparable law of any jurisdiction.

                    "Material Adverse Effect" means (X) a material adverse
              effect on (a) the business, operations, property, condition
              (financial or otherwise) or prospects of the Guarantor or the
              Borrower, (b) the validity or enforceability of this or any of the
              other documents made, delivered or given in connection with this
              Guarantee or any other document or instrument that evidences or
              secures the Secured Obligations, (c) the rights or remedies of the
              Lender hereunder, or under any document or instrument that
              evidences or secures the Secured Obligations, or any of the other
              agreements or documents made, delivered or given in connection
              therewith, (Y) any impairment to the validity, perfection or
              priority of the security interest of the Lender in the Pledged
              Collateral (as defined in the Pledge and Security Agreement) in
              any manner whatsoever, and/or (Z) an Event of Default.

                      "Person" means an individual, partnership, limited
              liability company, corporation, business trust, joint stock
              company, trust, estate, unincorporated organization or
              association, joint venture, Governmental Authority, or other
              entity of whatever nature.

                      "Pledge and Security Agreement" means that certain Pledge
              and Security Agreement dated as of the date hereof from the
              Guarantor in favor of the Lender, as amended, supplemented or
              modified from time to time.

                      "Requirement of Law" means as to any Person, the articles
              or certificate of incorporation, certificate of formation,
              operating agreement, and by-laws or other organizational or
              governing documents of such Person, and any law, treaty, rule or
              regulation or determination of an arbitrator or a court or other
              Governmental Authority, in each case applicable to or binding upon
              such Person or any of its property or to which such Person or any
              of its property is subject.

                    "Secured Obligations" means all obligations, liabilities and
              indebtedness of the Borrower now or hereafter owing to the Lender
              under or in connection with the

                                      - 2 -



              Credit or the Credit Documents or any other loan, extension of
              credit or accommodation now or hereafter made or granted by the
              Lender (each such other loan, extension of credit or
              accommodation, an "Other Credit"), including, without limitation,
              (i) all unpaid principal of, and accrued interest (including,
              without limitation, any interest which accrues after the
              commencement of any case, proceeding or other action relating to
              the bankruptcy, insolvency or reorganization of the Borrower,
              whether or not allowed or allowable as a claim in any such
              proceeding) on, any loan or other credit granted under or in
              connection with the Credit Documents or any Other Credit, (ii)
              all expenses, costs of collection and any other amounts payable
              to the Lender by the Borrower under any Credit Document
              (including, without limitation, all fees and disbursements of
              counsel to the Lender that are required to be paid by the
              Borrower to the Lender pursuant to any Credit Document or any
              Other Credit), and (iii) any renewals or extensions of the Credit
              or Credit Documents or any Other Credit.

                    "Termination Date" shall mean the date on which all
              commitments, if any, of the Lender to make any loans, extensions
              of credit or other accommodations to the Borrower have been
              terminated and the Secured Obligations have been paid in full,
              subject to reinstatement pursuant to paragraph 7 hereof, other
              than any indemnification obligations not then due and payable.

                  (b)      The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Guarantee shall refer to this
Guarantee as a whole and not to any particular provision of this Guarantee, and
section and paragraph references are to this Guarantee unless otherwise
specified.

                  (c)      The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

         2.       Guarantee.

                  (a)      Subject to the provisions of paragraph 2(b) hereof,
the Guarantor hereby absolutely, unconditionally and irrevocably guarantees to
the Lender and for its respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Borrower when
due (whether at the stated maturity, by acceleration or otherwise) of the
Secured Obligations.

                  (b)      Notwithstanding anything herein to the contrary, the
maximum liability of the Guarantor hereunder shall in no event exceed the amount
which can be guaranteed by the Guarantor under applicable federal and state laws
relating to the insolvency of debtors.

                  (c)      The Guarantor further agrees to pay any and all
expenses (including, without limitation, all reasonable fees and disbursements
of counsel) which may be paid or incurred by the Lender in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Secured Obligations and/or enforcing any rights
with

                                      - 3 -



respect to, or collecting against, the Guarantor under this Guarantee. Without
limiting the generality of the foregoing, the Guarantor's liability shall extend
to all amounts that constitute part of the Secured Obligations and would be owed
by the Borrower but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving the Borrower. This Guarantee shall remain in full force and effect
until, and shall terminate on, the Termination Date. The provisions of the first
and second sentences of this paragraph shall survive the termination of this
Guarantee and the payment in full of the Secured Obligations. The Guarantor
agrees that the Secured Obligations may at any time and from time to time exceed
the amount of the liability of the Guarantor hereunder without impairing this
Guarantee or affecting the rights and remedies of the Lender.

                  (d)      No payment made by the Borrower, the Guarantor, or
any other guarantor or Person and no payment or amount received or collected by
the Lender from the Borrower, the Guarantor, or any other guarantor or Person by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of, or in payment of,
the Secured Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of the Guarantor hereunder, and the Guarantor shall,
notwithstanding any such payment (other than any payment made by the Guarantor
in respect of the Secured Obligations or any payment or amount received or
collected from the Guarantor in respect of the Secured Obligations), remain
liable for the Secured Obligations up to the maximum liability of the Guarantor
hereunder until the Termination Date.

                  (e)      The Guarantor agrees that whenever, at any time, or
from time to time, it shall make any payment to the Lender on account of its
liability hereunder, it will notify the Lender in writing that such payment is
made under this Guarantee for such purpose.

         3.       Right of Set-off. At any time when an Event of Default has
occurred and is continuing, the Guarantor hereby irrevocably authorizes the
Lender at any time and from time to time without notice to the Guarantor, any
such notice being expressly waived by the Guarantor, to set-off and appropriate
and apply any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Lender to or for the
credit or the account of the Guarantor, or any part thereof in such amounts as
the Lender may elect, against and on account of the obligations and liabilities
of the Guarantor to such holder hereunder and claims of every nature and
description of such holder against the Guarantor, in any currency, whether
arising hereunder, under the Credit Documents, or otherwise, as the Lender may
elect, whether or not the Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured. The
Lender shall notify the Guarantor promptly of any such set-off, provided that
the failure to give such notice shall not affect the validity of such set-off
and application. The rights of the Lender under this paragraph are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which the Lender may have.

         4.       No Subrogation. Notwithstanding any payment made by the
Guarantor hereunder or any set-off or application of funds of the Guarantor by
the Lender, the Guarantor shall not be

                                      - 4 -



entitled to be subrogated to any of the rights of the Lender against the
Borrower or any collateral security or guarantee or right of offset held by the
Lender for the payment of the Secured Obligations, nor shall the Guarantor seek
or be entitled to seek any contribution or reimbursement from the Borrower in
respect of payments made by the Guarantor hereunder, until all amounts owing by
the Borrower to the Lender on account of the Secured Obligations are
indefeasibly paid in full. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Secured
Obligations shall not have been indefeasibly paid in full, such amount shall be
held the Guarantor in trust for the Lender, segregated from other funds of the
Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over to
the Lender in the exact form received by the Guarantor (duly indorsed by the
Guarantor to the Lender, if required), to be applied against the Secured
Obligations, whether matured or unmatured.

         5.       Amendments, etc. with respect to the Secured Obligations;
Waiver of Rights. The Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Guarantor and without notice
to or further assent by the Guarantor, any demand for payment of any of the
Secured Obligations made by the Lender may be rescinded by the Lender and any of
the Secured Obligations continued, and the Secured Obligations, or the liability
of any other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Lender, and the agreements
and instruments giving rise to the Secured Obligations and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Lender may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Lender for the payment of the Secured Obligations
may be sold, exchanged, waived, surrendered or released. The Lender shall have
no obligation to protect, secure, perfect or insure any Lien at any time held by
it as security for the Secured Obligations or for this Guarantee or any property
subject thereto. When making any demand hereunder against the Guarantor, the
Lender may, but shall be under no obligation to, make any similar demand on any
other Person, and (i) any failure by the Lender to make any demand or to collect
any payments from the Borrower or any other guarantor or Person, or (ii) any
release of any other guarantor or Person, shall not relieve or release the
Guarantor of its obligations and liabilities hereunder, and shall not impair or
affect the rights and remedies, express or implied or as a matter of law, of the
Lender against the Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.

         6.       Guarantee Absolute and Unconditional. The Guarantor waives all
suretyship defenses and any and all notice of the creation, renewal, extension
or accrual of any of the Secured Obligations and notice of or proof of reliance
by the Lender upon this Guarantee or acceptance of this Guarantee; the Secured
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee, and all dealings between the Borrower and the Guarantor, on
the one hand, and the Lender, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guarantee. The
Guarantor waives diligence,

                                      - 5 -



presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or the Guarantor with respect to the Secured Obligations.
The Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Secured Obligations, any
document, instrument, agreement or guarantee evidencing, securing or
guaranteeing the Secured Obligations, or any right of offset with respect
thereto at any time or from time to time held by the Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by the Borrower against the
Lender, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of or the Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Secured
Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the
Guarantor, the Lender may, but shall be under no obligation to, pursue such
rights and remedies as it may have against the Borrower or any other Person or
against any collateral security or guarantee for the Secured Obligations or any
right of offset with respect thereto, and any failure by the Lender to pursue
such other rights or remedies or to collect any payments from the Borrower or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower or any such other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Guarantor of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Lender against the Guarantor.

         7.       Reinstatement. This Guarantee shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by the Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or the Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or the Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.

         8.       Payments. The Guarantor hereby guarantees that payments
hereunder will be paid to the Lender without set-off or counterclaim in U.S.
Dollars at the office of the Lender located at 32 Yehuda Halevy Street, Tel
Aviv, Israel 65121, Attention: Construction and Real Estate Division, or to such
other address as the Lender shall so notify the Guarantor in writing.

         9.       Representations and Warranties. The Guarantor hereby
represents and warrants that:

                  (a)      it is a corporation duly organized, validly existing
and in good standing under the laws of its organization and has the corporate
power and authority and the legal right to own and operate its property, to
lease the property it operates and to conduct the business in which it is
currently engaged;

                                      - 6 -



                  (b)      it has the corporate power and authority and the
legal right to execute and deliver, and to perform its obligations under, this
Guarantee, and has taken all necessary action to authorize its execution,
delivery and performance of this Guarantee;

                  (c)      this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting the enforcement of
creditors' rights generally, general equitable principles and an implied
covenant of good faith and fair dealing;

                  (d)      the execution, delivery and performance of this
Guarantee will not violate any provision of any Requirement of Law or
Contractual Obligation of the Guarantor (except to the extent that any such
violation would not reasonably be expected to have a Material Adverse Effect)
and will not result in or require the creation or imposition of any Lien on any
of the properties or revenues of the Guarantor pursuant to any Requirement of
Law or Contractual Obligation of the Guarantor;

                  (e)      no consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or Governmental Authority and no consent
of any other Person (including, without limitation, any stockholder or creditor
of the Guarantor) is required in connection with the execution, delivery,
performance, validity or enforceability of this Guarantee, other than any which
have been obtained or made prior to the date hereof and remain in full force and
effect; and

                  (f)      no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Guarantor, threatened by or against the Guarantor or against any of its
properties or revenues with respect to this Guarantee or any of the transactions
contemplated hereby.

         The Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by the Guarantor on the date of each credit
extension or accommodation made to the Borrower under the Credit Documents on
and as of such date as though made hereunder on and as of such date.

         10.      Notices. All notices, requests and demands to or upon the
Lender or the Guarantor to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand or
overnight/international delivery, when delivered, or (b) in the case of delivery
by facsimile transmission, when sent and receipt has been confirmed (with copy
sent via overnight/international delivery promptly thereafter), addressed as
follows:

                  (a)      if to the Lender, at: Bank Leumi le-Israel B.M., 32
Yehuda Halevy Street, Tel Aviv, Israel 65121, Attention: Construction and Real
Estate Division, Fax No.: 972-3-514-8980; and

                                      - 7 -



                  (b)      if to the Guarantor, at: MGN America, Inc., 1660 N.E.
Miami Gardens Drive, North Miami Beach, FL 33179, Attention: Chaim Katzman,
President, Fax No.: (305) 947-1734, with copy to : Jeffrey Oshinsky, White &
Case LLP, 200 S. Biscayne Blvd., Miami, FL 33180, Fax No.: (305) 358-5744.

         The Lender and the Guarantor may change its address and facsimile
numbers for notices by notice in the manner provided in this paragraph 10.

         11.      Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         12.      Integration. This Guarantee represents the agreement of the
Guarantor with respect to the subject matter hereof and there are no
promises or representations by the Lender relative to the subject matter hereof
not reflected herein, the Credit Documents, the Pledge and Security Agreement,
and the Cash Collateral Agreement.

         13.      Amendments in Writing, No Waiver, Cumulative Remedies.

                  (a)      None of the terms or provisions of this Guarantee may
be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the Guarantor and the Lender, provided that any provision
of this Guarantee may be waived by the Lender in a letter or agreement executed
by the Lender or by facsimile transmission from the Lender.

                  (b)      The Lender shall not by any act (except by a written
instrument pursuant to paragraph 13(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Lender would otherwise have
on any future occasion,

                  (c)      The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.

         14.      Paragraph Heading. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

                                      - 8 -



         15.      Successors and Assigns. This Guarantee shall be binding upon
the successors and assigns of the Guarantor and shall inure to
the benefit of the Lender and its successors and assigns.

         16.      GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK.

         17.      Submission To Jurisdiction; Waivers. The Guarantor hereby
irrevocably and unconditionally:

                  (i)      submits for itself and its property in any legal
                           action or proceeding relating to this Guarantee to
                           which it is a party, or for recognition and
                           enforcement of any judgment in respect thereof, to
                           the non-exclusive general jurisdiction of the Courts
                           of the State of New York, the courts of the United
                           States of America for the Southern District of New
                           York, and appellate courts from any thereof;

                  (ii)     consents that any such action or proceeding may be
                           brought in such courts and waives any objection that
                           it may now or hereafter have to the venue of any such
                           action or proceeding in any such court or that such
                           action or proceeding was brought in an inconvenient
                           court and agrees not to plead or claim the same;

                  (iii)    agrees that service of process in any such action or
                           proceeding may be effected by mailing a copy thereof
                           by registered or certified mail (or any substantially
                           similar form of mail), postage prepaid, to the
                           Guarantor at its address set forth in Section 10
                           hereof, or at such other address of which the Lender
                           shall have been notified pursuant thereto;

                  (iv)     agrees that nothing herein shall affect the right to
                           effect service of process in any other manner
                           permitted by law or shall limit the right to sue in
                           any other jurisdiction; and

                  (v)      waives, except in the case of bad faith, willful
                           misconduct or gross negligence (and otherwise to the
                           maximum extent not prohibited by law), any right it
                           may have to claim or recover in any legal action or
                           proceeding referred to in this paragraph 17 any
                           special, exemplary, or consequential damages.

         18.      WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, THE GUARANTOR AND THE LENDER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTEE OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                                      - 9 -



                           [SIGNATURE PAGE TO FOLLOW]

                                     - 10 -


         IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.

                                                 MGN AMERICA, INC.

                                                 By: /s/ Chaim Katzman
                                                     ---------------------------
                                                     Chaim Katzman
                                                     President