Exhibit 10.2
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Execution Copy
CLARIFICATION AGREEMENT AND PROTOCAL
THIS CLARIFICATION AGREEMENT AND PROTOCAL ("Agreement") is effective as of
January 1, 2004 (the "Effective Date"), between EQUITY ONE, INC., a Maryland
corporation (the "Company"), and Gazit-Globe (1982), Ltd., a company formed
under the laws of Israel and principal stockholder of the Company (the
"Stockholder").
W I T N E S S E T H:
WHEREAS, the Company and the Stockholder, and/or the Stockholder's
affiliates, have previously entered into an Agreement dated January 1, 1996 (the
"Use Agreement") with respect to the use by Chaim Katzman or any of the
Stockholder's employees of the Company's facilities, equipment, supplies and
personnel necessary to conduct the Stockholder's business and affairs, for which
uses the Stockholder agreed to pay the Company an annual sum of $10,000 (the
"Use Payment");
WHEREAS, the Company and the Stockholder, or the Stockholder's affiliates,
have previously entered into an Investment Contract dated May 21, 1996 (the
"Investment Contract"), which provided in pertinent part that the Company would
prepare and furnish to the Stockholder or its affiliates certain financial
statements of the Company required by the Stockholder for purposes of
consolidating the financial results of the Company with those of the Stockholder
as required by Israeli generally accepted accounting principals and the Tel Aviv
Stock Exchange Ltd., on which the shares of capital stock of the Stockholder are
currently traded;
WHEREAS, the Company and the Stockholder desire to clarify the prior
arrangements memorialized in the Use Agreement and Investment Contract, as more
fully set forth in this Agreement, effective as of the Effective Date;
NOW, THEREFORE, in consideration of the provisions herein contained, the
receipt and sufficiency of which are hereby acknowledged, the parties (the
"parties") hereto agree as follows:
SECTION 1. Term. The term of this Agreement shall commence effective as of
the Effective Date and shall continue until December 31, 2008 and shall be
automatically renewed annually thereafter, unless either party gives the other
party prior written notice at least 90 days prior to the termination date of the
party's intent not to renew this Agreement.
SECTION 2. Use of Company's Facilities.
(a) The Company and the Stockholder hereby agree, in order to clarify
the Use Agreement and subject to Section 3 below, that the "use" specified
by the Use Agreement entitles Chaim Katzman and/or any of the Stockholder's
employees reasonable access to the Company's facilities, equipment and
supplies and to the Company's Chief Financial Officer, General Counsel,
Chief Accounting Officer and Chief Information Officer in order in each
case to conduct its business and affairs; provided that such use does not
significantly interfere with the business operations of the Company and its
employees.
(b) Subject to subsection 2(c) and Section 3 below, it is hereby
clarified that the Use Payment is the total and exclusive consideration to
which the Company is entitled with respect to its obligations under the Use
Agreement.
(c) Notwithstanding anything herein or the Use Agreement to the
contrary, the Stockholder agrees to pay any identifiable and verifiable
third-party costs incurred by the Company as a result of such use under the
Use Agreement (if, for any reason, the actual payment for such invoice is
made by the Company and not by the Stockholder, such payment will be
reimbursed by the Stockholder within 10 days written request therefor).
SECTION 3. Information Technology Services.
(a) Without derogating from the generality of Section 2 above, the
Company agrees to make available for the reasonable use at reasonable times
by the Stockholder certain information technology services, including,
without limitation, the services of certain information technology
personnel of the Company, desktop working stations for those employees of
Stockholder located in Miami, Florida, partial T1 connectivity, daily
tape/memory backups, server maintenance, periodic updates and cleanups,
minor tech support, remote connectivity to Stockholder's server, email,
access to the Company's printers, print presentations, and firewall, VPN
and antivirus updates. These services shall be in a manner which is
consistent with the provision of such services by the Company and its
employees prior to the date hereof.
(b) In consideration for the provision of the services by the Company
described in subsection 3(a), the parties agree that, as of the Effective
Date, the Company shall charge to the Stockholder, and the Stockholder
agrees to pay and reimburse to the Company, a monthly fee equal to $1,500.
The Company shall invoice the Stockholder as it incurs such costs and fees,
but no more frequently than monthly. The Stockholder agrees to pay such
invoices within 10 days of its receipt thereof.
(c) Notwithstanding Section 1 above or anything else herein to the
contrary, either of the parties may terminate this Section 3 and thereby
the provision of the information technology services (but not any other
section of this agreement) by providing the other party written notice at
least 180 days prior to the requested termination date. Such termination of
Section 3, shall not affect the other sections of this Agreement, which
shall continue in full force and effect.
SECTION 4. Israeli Financial Statements. Notwithstanding anything in the
Investment Contract to the contrary, the Company agrees that for so long as the
Stockholder's ownership of the Company is required, according to accounting
principals generally accepted in Israel ("Israeli GAAP"), to be presented in the
Stockholder's financial statements on a consolidated basis or on an equity
method basis, it will provide
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to the Stockholder (i) consolidated quarterly unaudited financial statements of
the Company prepared in accordance with Israel GAAP (subject to normal year-end
adjustments), (ii) consolidated annual audited financial statements of the
Company prepared in accordance with Israeli GAAP, together with the notes
thereto and (iii) supporting schedules and documentation for (i) and (ii) ((i),
(ii) and (iii) are collectively referred to herein as the "Israeli Financial
Statements"). The Stockholder hereby agrees that it shall pay any identifiable
and verifiable third-party costs incurred by the Company as a result of
preparing the Israeli Financial Statements (including, without, limitation the
costs and fees of the Company's independent auditors incurred therefor) (if, for
any reason, the actual payment for such invoice is made by the Company and not
by the Stockholder, such payment will be reimbursed by the Stockholder within 10
days written request therefor).
SECTION 2. Termination. Either party may immediately terminate this
Agreement in the event that:
(a) the other party shall have materially breached any duty, covenant
or obligation under the terms of this Agreement and such breach shall have
continued for a period of ten (10) days after notice thereof by the party
seeking to terminate this Agreement to the other party (or, if such breach
is not reasonably subject to cure within ten (10) days, such longer period
as may be required to effect a cure, provided breaching party initiates
curative action within such ten (10) day period and thereafter is
diligently, continuously and in good faith pursuing a cure); or
(b) the other party files a voluntary petition in bankruptcy, makes a
general assignment for the benefit of creditors, files a petition or other
documents seeking reorganization or arrangement with creditors or to take
advantage of any insolvency law, or if an order, judgment or decree shall
be entered by any court of competent jurisdiction, on the application of a
creditor, adjudicating such other party as bankrupt or insolvent or
approving a petition seeking reorganization of such other party or
appointing a receiver, trustee, or liquidator for such other party or all
or a substantial part of its assets, and such order, judgment or decree
shall continue unstayed and in effect for any period of sixty (60)
consecutive days.
SECTION 6. Effect of Termination. Upon the expiration of the term of this
Agreement or the termination of this Agreement under Section 5 hereof, the
rights and obligations of the parties shall terminate, with the exception of
rights and obligations accruing prior to the termination hereof, and the
obligations of the parties to make the payments that may be required with
respect to months prior to such termination shall survive until satisfied in
full.
SECTION 7. Notices. Any notice required or permitted to be given hereunder
shall be deemed given when actually delivered by overnight courier, facsimile,
hand or United States mail, by registered or certified mail, return receipt
requested, postage prepaid, to the parties at the following addresses (or such
other address as may be given to the other party in writing):
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Equity One, Inc.
To the Company: 1696 NE Miami Gardens Drive
Miami, Florida 33179
Attention: Chief Financial Officer
General Counsel
(305) 947-1734 (facsimile)
Gazit-Globe (1982), Ltd.
To the Stockholder: 1 Derech Hashalom
Tel Aviv, ISRAEL, 67892
Attention: Chief Financial Officer
972-3-6961910 (facsimile)
SECTION 8. Assignment. Neither party shall not assign this Agreement or any
of its rights or obligations hereunder with the prior written consent of the
other party. Any attempted assignment in violation of this Section shall be void
ab initio.
SECTION 9. Attorneys' Fees. In the event either party is required to seek
legal counsel to enforce the terms and provisions of this Agreement, the
prevailing party in any action shall be entitled to recover attorneys' fees and
costs (including on appeal).
SECTION 10. Entire Agreement. This Agreement, together with the Use
Agreement and the Investment Contract, contain the entire agreement of the
parties and supersedes all prior agreements, understandings and arrangements,
both oral and written, between the Company and the Stockholder with respect to
the matters discussed herein. This Agreement may be changed only by agreement in
writing signed by both parties. For the avoidance of doubt, it is hereby
clarified that if this Agreement shall be terminated for any reason, such
termination shall not effect the validity of the Use Agreement and the
Investment Contract, which shall continue to be in full force and effect in
accordance with their terms.
SECTION 11. No Third Party Beneficiary. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or give any
person other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or
remedies under or by reason of this Agreement.
SECTION 12. Governing Law. This Agreement and all transactions contemplated
by this Agreement shall be governed by, and construed and enforced in accordance
with, the internal laws of the State of Florida without regard to principles of
conflicts of law. Each of the parties (i) agrees that any suit, action or legal
proceeding relating to this Agreement shall be brought in the courts of the
State of Florida in Miami-Dade County; (ii) consents to the jurisdiction of each
such court in any suit, action or proceeding; (iii) waives any objection which
it may have to the laying of venue of any such suit, action or proceeding in any
such court; and (iv) agrees that service of any court paper may be effected on
such party by mail, as provided in this Agreement, or in such other manner as
may be provided under applicable laws or court rules of the State of
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Florida. The parties, to the full extent permitted by law, hereby knowingly,
intentionally and voluntarily, with and upon the advice of competent counsel,
waives, relinquishes and forever forgoes that right to a trial by jury in any
action or proceeding based upon, arising out of, or in any way relating to this
Agreement or any conduct, act or omission of the parties, or any of their
director, officers, partners, members, employees, agents or attorneys, or any
other persons affiliated with the parties, in each of the foregoing cases
whether sounding in contract, tort or otherwise.
SECTION 13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed and original but all of which
together shall constitute one and the same Agreement.
SECTION 14. Headings. The Section headings herein are for reference
purposes only and are not intended in any way to describe, interpret, define, or
limit the extent or intent of the Agreement or of any part hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE COMPANY:
EQUITY ONE, INC., a Maryland corporation
By: /s/ Howard M. Sipzner
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Howard M. Sipzner
Chief Financial Officer
THE STOCKHOLDER:
GAZIT-GLOBE (1982), LTD., an Israeli corporation
By: /s/ Gil Kotler
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Gil Kotler
Chief Financial Officer
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