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 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (Numbers ____________ and ____________)
into which there shall be deposited all cash
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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 00-0000000.
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 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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.
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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) Xxxxx Xxxxxx, (ii) Xxxxx Xxxxxxxxx, 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 Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx &
Kuh, LLP, and shall have full
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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
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Ms. Shirly Yechilevich
Fascimile: 000-000-0000
with a copy to:
Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Fascimile: 000-000-0000
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If to the Bank:
Bank Leumi le-Israel B.M.
Construction and Real Estate Division
00 Xxxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx 00000
Facsimile No.: (000)-0-000-0000
If to MGN:
MGN America, Inc.
0000 X.X. Xxxxx Xxxxxxx Xxxxx
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx, President
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxxx, Esq.
White & Case LLP
000 X. Xxxxxxxx Xxxx.
Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
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.
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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]
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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/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: President
BANK LEUMI LE-ISRAEL, B.M.
By: /s/
_______________________________
Name:______________________________
Title:_____________________________
By: /s/
_______________________________
Name:______________________________
Title:_____________________________
BANK LEUMI USA
By: /s/ Xxxxxx Yecilevich
-------------------------------
Name: Xxxxxx Yechilevich
Title: Assistant Vice President
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
