exv10w6







Exhibit 10.6




EXECUTION COPY




2011 SHAREHOLDERS’ AGREEMENT




THIS AGREEMENT is made as of January 9, 2011 by and among:




	 	 	 

	ALONY-HETZ PROPERTIES
	 	 
	& INVESTMENTS LTD.
	 	 
	a corporation incorporated
	 	 
	under the laws of the State of Israel,
	 	 
	(hereinafter called “Alony-Hetz”)
	 	 
	 

	 	OF THE FIRST PART;
	- and -
	 	 
	 
	 	 
	A.H. CANADA HOLDINGS LTD.;
	 	 
	a corporation incorporated
	 	 
	under the laws of Alberta,
	 	 
	(hereinafter called “Holdings”)
	 	 
	 

	 	OF THE SECOND PART;
	- and -
	 	 
	 
	 	 
	GAZIT-GLOBE LTD.,
	 	 
	a corporation incorporated under the
laws of the State of Israel,
	 	 
	(hereinafter called “Gazit-Globe”)
	 	 
	 

	 	OF THE THIRD PART;
	- and -
	 	 
	 
	 	 
	GAZIT CANADA INC.,
	 	 
	a corporation
incorporated under the laws of Ontario,
	 	 
	(hereinafter called “Gazit Canada”)
	 	 
	 

	 	OF THE FOURTH PART;
	- and -
	 	 
	 
	 	 
	GAZIT 2003 INC.,
	 	 
	a corporation incorporated under the
	 	 
	laws of Ontario,
	 	 
	(hereinafter called “Gazit 2003”)
	 	 
	 

	 	OF THE FIFTH PART.





          WHEREAS First Capital Realty Inc. (“FCR” or the “Corporation”) is a
corporation incorporated under the laws of the Province of Ontario, whose
common shares are listed and posted for trading on the Toronto Stock Exchange;



 









 







          AND WHEREAS Alony-Hetz, Holdings, Gazit-Globe, Gazit Canada and Gazit Acquisition,
Inc. entered into a Shareholders’ Agreement, dated as of October 5, 2000, as amended to
date (the “Original Shareholders’ Agreement”);


          AND WHEREAS the Original Stockholders Agreement, following extensions of the
original term thereof as agreed upon by the parties, will terminate as of the date
hereof and the parties hereto desire to enter into this Shareholders’ Agreement such
that Alony-Hetz, Holdings, Gazit-Globe, Gazit Canada and Gazit 2003 will have certain
rights and obligations relating to their interests in common shares of the Corporation
as set forth herein.



          THIS AGREEMENT WITNESSES THAT the parties herein agree as follows:



ARTICLE 1




DIRECTORS OF THE CORPORATION





	1.01.	 	Directors.






	 	(1)	 	So long as Alony-Hetz or any affiliate thereof and Gazit-Globe or any affiliate
thereof hold Shares carrying votes exercisable in the election of directors of FCR:






	 	(a)	 	each of Alony-Hetz and Gazit-Globe agrees to vote, or cause to be voted,
all Shares from time to time held by it and its affiliates as follows:






	 	(i)	 	subject to Article 1.01(4) below, in favour of the election as
directors of FCR of two nominees of Alony-Hetz, so long as the
aggregate number of Shares held by Alony-Hetz and its affiliates
represents at least 7% of the total number of Shares issued and
outstanding; or
	 
	 	(ii)	 	in favour of the election as a director of FCR of one nominee
of Alony-Hetz, so long as the aggregate number of Shares held by
Alony-Hetz and its affiliates represents less than 7% of the total
number of Shares issued and outstanding but represents at least 3%
of the total number of Shares issued and outstanding; and
	 
	 	(iii)	 	to ensure that the number of directors of FCR shall at no
time exceed fifteen (15) without the express approval of Holdings;
and






	 	(b)	 	Alony-Hetz agrees to vote, or cause to be voted, all Shares from time to
time held by Alony-Hetz and its affiliates, in favour of the election of
Gazit-Globe’s nominees as the remaining directors of FCR.






	 	(2)	 	One of such nominees, if Alony-Hetz has two nominees, shall be a resident
Canadian (within the meaning of the Business Corporations Act (Ontario)) and




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	 	 	 	shall be independent of FCR as determined in accordance with National
Instrument 52-110 Audit Committees of the Canadian Securities
Administrators.






	 	(3)	 	If at any time Alony-Hetz and its affiliates cease to have any rights pursuant to
(1) above, Alony-Hetz shall cause its and its affiliates’ nominees to forthwith
resign as directors of FCR.






	 	(4)	 	In the event that a change in Control (as defined below) of Alony-Hetz occurs as
provided for in Section 3.04(2) and Nathan Hetz beneficially owns less than 15% of
the outstanding equity interests in Alony-Hetz and this agreement is not terminated
during the time period provided therefor, Article 1.01(1)(a)(i) shall be deemed to be
amended by replacing the words “two nominees” with the words “one nominee.”






	 	(5)	 	Any nominee of Alony-Hetz shall be reasonably acceptable to Gazit-Globe. In the
event that Gazit-Globe determines that any such nominee is not acceptable to it,
Gazit-Globe shall notify Alony-Hetz in writing of such determination, including the
basis for the determination that such nominee is not reasonably acceptable, and
Alony-Hetz shall be entitled to designate a replacement nominee who shall be subject
to approval by Gazit-Globe as provided in this Article 1.01(5). Notwithstanding the
foregoing, Nathan Hetz and the General Manager, the Chief Financial Officer and the
Vice President of Business Development of Alony-Hetz shall be deemed acceptable for
purposes of this Article 1.01(5).





1.02. Termination of Director Rights. The provisions of Article 1.01(1)(a)(i) shall terminate and
be of no further force or effect if at any time Alony-Hetz and its affiliates cease to own for a
period of 60 consecutive days at least a number of Shares in the aggregate representing at least
7% of the total number of Shares issued and outstanding.




1.03. Other Voting. Except as provided in Article 1.01(1) and subject to applicable law, the
parties and their respective affiliates shall be entitled to vote their respective Shares in
their sole and absolute discretion.




ARTICLE 2




PURCHASES AND SALES OF SECURITIES




2.01. Tag-Along Rights. If at any time Gazit-Globe or any affiliate thereof agrees to sell any of
its Shares of any class to any third party, Gazit-Globe shall not complete, or permit such
affiliate thereof to complete, such sale unless such third party offers, which offer shall remain
irrevocable for a period of at least five business days (subject to the last paragraph of this
Article 2.01), to purchase from Alony-Hetz and its affiliates, upon the same terms and conditions
applicable to the sale by Gazit-Globe or such affiliate thereof, the same proportion, (rounded to
the nearest whole number of Shares) of Alony-Hetz’s and its affiliates’ Shares of that class
which the number of Shares of that class agreed to be sold by Gazit-Globe or such affiliate
thereof to such third party is of the aggregate number of Shares of that class held by
Gazit-Globe and its affiliates at the date of such agreement. The foregoing provision shall not
apply to (i) any sale of Shares of any class (“Sale”) through the facilities of The Toronto Stock
Exchange which, when added to the aggregate number of Shares of that class sold by Gazit-Globe
and its affiliates through the facilities of the Exchange during the preceding 12-month period,
does not exceed 5% of the total number of Shares of that class issued and outstanding at the date
of such Sale, (ii) any Sale pursuant to any formal take-over bid as such term is defined in the
the




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Securities Act (Ontario), or (iii) any Shares pledged by Gazit-Globe or any affiliate thereof as
security for a bona fide loan that are foreclosed upon or sold by the lender with respect to such
loan.




A change in control of an affiliate of Gazit-Globe that holds Shares will be considered a sale of
such Shares (a “Deemed Gazit-Globe Sale”) that is subject to this Article 2.01, such that
Alony-Hetz shall be entitled to sell Shares as if Gazit-Globe had sold the Shares held by the
affiliate the control over which is to be changed. If such affiliate has assets and/or
liabilities in addition to Shares (such that the sale price of the interests in such affiliate
may not be determinative of the sale price of the Shares held by such affiliate), then the price
per Share applicable to the Deemed Sale for purposes of this Article 2.01 shall be as mutually
agreed by the parties hereto in good faith; provided, that if the parties hereto are unable to
agree on such price per Share within the five business day period during which the third party
offers to purchase such Shares, the price per Share shall be determined by an independent
investment bank mutually agreed upon by the parties hereto in good faith.




2.02. Drag-Along Rights. If at any time Gazit-Globe or any affiliate thereof agrees to
sell any of its Shares of any class to any third party at a price per Share of $20.00 (Can.)(the
“Minimum Price”) or more, Gazit-Globe may, by written notice given to Alony-Hetz, require
Alony-Hetz and its affiliates to sell to such third party, upon the same terms and conditions
applicable to the sale by Gazit-Globe or such affiliate thereof, the same proportion (rounded to
the nearest whole number of Shares) of Alony-Hetz’s and its affiliates’ Shares of that class
which the number of Shares of that class agreed to be sold by Gazit-Globe or such affiliate
thereof to such third party is of the aggregate number of Shares of that class held, by
Gazit-Globe and its affiliates at the date of such agreement.




2.03. Participation Rights. If at any time Alony-Hetz, Gazit-Globe or any of their
respective affiliates (the “Offeror”) acquires any additional securities (whether debt or equity)
of FCR, or securities of any issuer (within the current meaning of the Securities Act (Ontario))
which, or any affiliate of which, holds any securities of FCR (“Additional Securities”), the
following provisions shall apply:





	 	(1)	 	Alony-Hetz or Gazit-Globe, as the case may be, shall offer, or cause such
affiliate thereof to offer, to the other (the “Offeree’’), by written notice given to
the Offeree within three business days following the effective date of such
acquisition, to sell to the Offeree that proportion (rounded in the case of equity
securities to the nearest whole number, or in the case of debt securities to the
nearest whole multiple of the smallest denomination in which such securities are
transferable) of the Additional Securities which the aggregate number of Shares held
by the Offeree and its affiliates was of the aggregate number of Shares held by
Alony-Hetz, Gazit-Globe and their respective affiliates immediately prior to such
effective date, at the same price per Additional Security, payable on the same basis,
as the price paid for such Additional Securities by the Offeror;






	 	(2)	 	the Offeree shall be entitled to accept such offer, in whole but not in part, by
written notice given to the Offeror within three business days following the
Offeree’s receipt of such offer, failing which the Offeree shall be deemed to have
refused such offer; and






	 	(3)	 	if the Offeree accepts the offer, completion of the transaction shall take place
on the third business day following the giving of the notice pursuant to (2) above,
on the same terms as the sale of the Additional Securities to the Offeror, mutatis
mutandis.





The provisions of this Article 2.03 shall not apply to any acquisition of securities resulting
from any conversion or exchange of any other securities of FCR or any such issuer or any dividend
or other distribution paid or made by FCR or any such issuer in securities of FCR or such issuer.




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	2.04.	 	Right of First Offer.






	 	(1)	 	If at any time Alony-Hetz or one of its affiliates desires to sell any Shares
(each a “Selling Shareholder”) other than to another affiliate of Alony-Hetz that is
or shall become a party to this agreement, the Selling Shareholder shall first
deliver a written offer to Gazit-Globe (a “Shares Sale Offer Notice”). The Shares
Sale Offer Notice shall disclose in reasonable detail the number of Shares proposed
to be sold (the “First Offered Shares”), the price per Share (the “Share Price”) and
any other material terms and conditions relating to the proposed sale. For the
avoidance of doubt, the Selling Shareholder may not submit a Shares Sale Offer Notice
unless it has a good faith intention of selling such First Offered Shares to a third
party in an arm’s length transaction. Notwithstanding the foregoing, the Selling
Shareholder shall not be obligated to sell all or any part of the First Offered
Shares to any party other than to Gazit-Globe if Gazit-Globe delivers a Shares First
Offer Election (as defined below) in accordance with Article 2.04(2).






	 	(2)	 	During the 5 Business Days following the date the Shares Sale Offer Notice is
received by Gazit-Globe (the “Shares Offer Period”), Gazit-Globe or one of its
affiliates may make an election to purchase all or a portion of the First Offered
Shares by delivering to the Selling Shareholder a written notice of election to
purchase the First Offered Shares (such election, the “Shares First Offer Election”
and the right to make such election, the “ROFO”). Such communication shall, when
taken in conjunction with the Shares Sale Offer Notice, be deemed to constitute a
valid, legally binding and enforceable agreement for the sale and purchase of such
First Offered Shares on the terms and conditions contained in the Shares Sale Offer
Notice.






	 	(3)	 	In the event that Gazit-Globe or any affiliate elects to purchase all or a
portion of the First Offered Shares, sale of such First Offered Shares to be sold to
Gazit-Globe or its affiliate pursuant to this Article 2.04 shall be made at the
offices of Gazit-Globe as soon as reasonably practicable after delivery of the Shares
First Offer Election to the Selling Shareholder but in any event within 10 Business
Days thereafter or such other place or date mutually agreed upon by the Selling
Shareholder and Gazit-Globe. Such sales shall be effected by the Selling
Shareholder’s delivery to Gazit-Globe of a certificate or certificates or other
instrument evidencing the First Offered Shares to be purchased, free of encumbrances,
duly endorsed for transfer to Gazit-Globe or its affiliate against payment in cash to
the Selling Shareholder of the Share Price times the number of First Offered Shares
purchased by Gazit-Globe or its affiliate.






	 	(4)	 	If Gazit-Globe fails to deliver a Shares First Offer Election during the
applicable Shares Offer Period, then the First Offered Shares may be sold by the
Selling Shareholder at any time within 120 days after the termination of the
applicable Shares Offer Period to any other person; provided, that the purchase price
for the First Offered Shares shall equal at least 95% of the Share Price. Any First
Offered Shares not sold within such 120-day period shall continue to be subject to
the ROFO.






	 	(5)	 	The ROFO provided for in this Article 2.04 shall not apply to sales or offers to
sell by Alony-Hetz or an affiliate thereof (i) pursuant to a tender offer, exchange





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	 	 	 	offer, merger or other similar transaction approved or not opposed by the
Corporation’s board of directors (the “Board of Directors”) or (ii) a number
of Shares that, together with sales of Shares by Alony-Hetz and its
affiliates during the preceding 12 months do not exceed 1% of the
outstanding Shares, on a fully diluted basis, and no Shares Sale Offer
Notice, as applicable, need be delivered or provided to Gazit-Globe in
connection therewith. The ROFO provided for in this Article 2.04 shall not
apply to any Shares pledged by Alony-Hetz or its affiliates as security for
a bona fide loan that are foreclosed upon or sold by the lender with respect
to such loan; provided, that such Shares are not transferred by, or on
behalf of, such lender to a competitor of Gazit-Globe or any of its
affiliates and, provided further, that the lender shall have notified
Gazit-Globe of its intention to transfer, or to cause the transfer of, such
Shares to a third party and prior to such transfer used reasonable efforts
to engage in good faith discussions with Gazit-Globe for the transfer of
such Shares to Gazit-Globe during the 5 Business Days after the date on
which Gazit-Globe received such notification from the lender.






	 	(6)	 	A change in control of an affiliate of Alony-Hetz that holds Shares will be
considered a sale of such Shares (a “Deemed Alony-Hetz Sale”) that is subject to this
Article 2.04, such that Gazit-Globe shall have a ROFO with respect to the Shares held
by the affiliate the control over which is to be changed.
Notwithstanding the foregoing clauses (1) to (3), if such affiliate has
assets and/or liabilities in addition to Shares (such that the sale price of
the interests in such affiliate may not be determinative of the sale price
of the Shares held by such affiliate), then the Share Price applicable to
the Deemed Alony-Hetz Sale for purposes of subsection (4) of this Article
2.04, in the event that Gazit-Globe does not exercise the ROFO, shall be as
mutually agreed upon in good faith by the parties hereto; provided, that if
the parties hereto are unable to agree on the Share Price within 5 business
days, the Share Price shall be determined by an independent investment bank
mutually agreed upon by the parties hereto in good faith.





2.05. Limitations on Rights. Nothing contained in Articles 2.01, 2.02 and 2.04 shall apply to any
sale of Shares, or shares of any affiliate, to Gazit-Globe or any direct or indirect wholly-owned
subsidiary of Gazit-Globe or, for greater certainty, to an amalgamation of Gazit-Globe with any
of its affiliates or between any two of Gazit-Globe’s affiliates; and nothing contained in
Article 2.03 shall apply to any acquisition of Shares, or shares of any issuer, from Gazit-Globe,
Alony-Hetz or any affiliate, other than such issuer, of Alony-Hetz or Gazit-Globe, as the case
may be, or to any acquisition of shares of any direct or indirect wholly-owned subsidiary of
Alony-Hetz or Gazit-Globe, as the case may be, or to any acquisition of shares of any affiliate
of Gazit-Globe or Alony-Hetz, as applicable, so long as it remains an affiliate of Gazit-Globe or
Alony-Hetz, as the case may be.




ARTICLE 3




GENERAL PROVISIONS





	3.01.	 	Definitions; Adjustments.






	 	(1)	 	In this agreement:




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	 	(a)	 	“affiliate” means any subsidiary within the current meaning
of the Securities Act, (Ontario), but excludes FCR;






	 	(b)	 	“business day” means any day on which banks are generally open for
business in Toronto, Ontario and Tel Aviv, Israel; and






	 	(c)	 	“held” means beneficially owned, and “hold” has a
corresponding meaning.






	 	(2)	 	For the purposes of Articles 1.01 through 1.03, 2.01, 2.02, 2.04, 2.05, 3.01(4),
3.02 and 3.04, “Shares” means:






	 	(a)	 	the common shares in the capital of FCR, as now constituted, howsoever
designated, and






	 	(b)	 	the shares of any other class of FCR, into which or for which the Shares
of any class are converted or exchanged.






	 	(3)	 	For purposes of Articles 2.01, 2.04 and 3.10, a party (the “Controlled Party”) is
controlled by another party (the “Controlling Party”) if the Controlling Party has
the ability to appoint a majority of the board of directors or other governing body
of the Controlled Party.






	 	(4)	 	In case (i) the outstanding Shares shall be subdivided into a greater number of
Shares, (ii) a dividend in Shares or other distribution in Shares shall be paid in
respect of the Shares, (iii) the outstanding Shares shall be combined into a smaller
number of Shares, or (iv) any shares of FCR’s capital stock are issued by
reclassification of the Shares (including any reclassification upon a consolidation
or merger in which FCR is the continuing corporation), the Minimum Price in effect
immediately prior to such subdivision, combination or reclassification or at the
record date of such dividend or distribution shall simultaneously with the
effectiveness of such subdivision, combination or reclassification or immediately
after the record date of such dividend or distribution be proportionately adjusted to
reflect such subdivision, combination, reclassification, dividend in Shares or other
distribution in Shares.






	3.02.	 	Affiliates Bound by Agreement.






	 	(1)	 	Holdings agrees, and Alony-Hetz shall cause each other affiliate of Alony-Hetz
which from time to time holds any Shares to agree, with Gazit-Globe, to be bound by
the provisions of Articles 1.01, 2.02, 2.03, 2.04 and 3.03 so long as Holdings or
such other affiliate, as the case may be, holds any Shares.






	 	(2)	 	Each of Gazit Canada and Gazit 2003 agrees, and Gazit-Globe shall cause each
other affiliate of Gazit-Globe which from time to time holds any Shares to agree,
with Alony-Hetz, to be bound by the provisions of Articles 1.01, 2.01, 2.03 and 2.04,
so long as Gazit Canada, Gazit 2003 or such, other affiliate, as the case may be,
holds any Shares.






	 	(3)	 	Alony-Hetz agrees to give written notice to Gazit-Globe, and Gazit-Globe agrees
to give written notice to Alony-Hetz, in each case if permitted by applicable law, at
least three business days prior to any sale of Shares, or shares of any affiliate
which, or any affiliate of which, holds any Shares, by Alony-Hetz, Gazit-Globe or any
of their respective affiliates, as the case may be, in the case of Gazit-Globe or any
affiliate
thereof limited to any sale to which the provisions of Articles 2.01 and 2.04 do not
apply.




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3.03. Restrictions on Certain Actions. During the term of this agreement, Alony-Hetz
shall not, without the prior written consent of the board of directors of the Corporation:





	 	(1)	 	directly or indirectly seek, or permit any affiliate thereof or other person over
whom or of which Alony-Hetz has control (a “Controlled Person”) to seek or encourage
or assist any associate or partner of Alony-Hetz to seek, representation on the board
of directors of the Corporation, except as provided in Article 1.01, or otherwise to
participate in or influence the Corporation’s management, management decisions,
operating policies, or governing corporate instruments;
	 
	 	(2)	 	instigate or join in any attempt to change the Corporation’s management,
management decisions, operating policies, governing corporate instruments or conduct
of its business and affairs;
	 
	 	(3)	 	solicit or permit any Controlled Person to solicit, or encourage or assist any
associate or partner of Alony-Hetz to solicit, proxies with respect to any shares of
common stock or other securities of the Corporation entitled to vote generally for
the election of directors or otherwise (“Voting Securities”) under any circumstance,
or become a “participant”, or permit any Controlled Person or encourage or assist any
associate or partner of Alony-Hetz to become a “participant”, in any “election
contest” relating to the election of directors of the Corporation, changes in
governing corporate instruments or otherwise (as such terms are used in Rule 14a-11
of Regulation 14A under the United States Securities Exchange Act of 1934, as
amended);
	 
	 	(4)	 	deposit, or permit any Controlled Person or encourage or assist any associate or
partner of Alony-Hetz to deposit, any Voting Securities in a voting trust or similar
arrangement, or subject or permit any Controlled Person or encourage or assist any
associate or partner of Alony-Hetz to subject any Voting Securities to a voting or
similar agreement, except as provided by this agreement;
	 
	 	(5)	 	take any action, alone or in concert with any other person to acquire or affect
the control of the Corporation or, directly or indirectly, participate in, or
encourage the formation of, any group seeking to obtain or take control of the
Corporation; or directly or indirectly seek to influence any of the Corporation’s
contractual relationships, whether orally, in writing or otherwise (including,
without limitation, the Corporation’s contractual relationships with its auditors,
its investment bankers and its lenders).





For the avoidance of doubt, this Article 3.03 shall not restrict actions by a director of FCR
designated by Alony-Hetz taken solely in his or her capacity as a director.





	3.04.	 	Termination.






	 	(1)	 	This agreement shall terminate automatically (i) upon the tenth anniversary of
the date of this agreement or (ii) if at any time Alony-Hetz and its affiliates cease
to hold Shares in the aggregate representing at least 3% of the total number of
Shares issued and outstanding for more than 90 consecutive days or (iii) if at any
time, Gazit-Globe and its affiliates (or, for the avoidance of doubt, any of their
permitted assignees pursuant to Article 3.10 below) cease to hold Shares in the
aggregate representing at least 20% of the total number of Shares issued and
outstanding for more than 90 consecutive days.




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	 	(2)	 	Gazit-Globe, Gazit Canada and Gazit 2003 may terminate this agreement by written
notice to Alony-Hetz within 60 days after both of the following (a) and (b) have
occurred:






	 	(a)	 	a change in “Control” (which, when used in this agreement, shall mean
Control as defined in Section 1 of The Securities Law, 1968, of the State of
Israel) of Alony-Hetz ; and






	 	(b)	 	either (A) Nathan Hetz ceases to be a member of the board of directors
of FCR or (B) Nathan Hetz beneficially owns less than 5% of the outstanding
equity interests in Alony-Hetz, on a fully diluted basis.






	 	(3)	 	Gazit-Globe agrees that, if it is notified in advance of a proposed change in
Control of Alony-Hetz, which notice will include the name of the new person to
possess Control over Alony-Hetz (the “Alony-Hetz Control Notice”), it will provide
Alony-Hetz, within 10 business days of receipt of the Alony-Hetz Control Notice, with
an irrevocable notice as to whether or not it, Gazit Canada and Gazit America would
terminate this agreement pursuant to Article 3.04(2).






	 	(4)	 	Alony-Hetz and Holdings may terminate this agreement by written notice to
Gazit-Globe within 60 days after a change in Control of Gazit-Globe.






	 	(5)	 	Alony-Hetz and Holdings agree that, if it is notified in advance of a proposed
change in Control of Gazit-Globe, which notice will include the name of the new
person to possess Control over Gazit-Globe (the “Gazit-Globe Control Notice”), they
will provide Gazit-Globe, within 10 business days of its receipt of the Gazit-Globe
Control Notice, with an irrevocable notice as to whether or not they would terminate
this agreement pursuant to Article 3.04(4).






	 	(6)	 	Termination of this agreement shall not affect the provisions of Article 1.01(3),
any right or obligation pursuant to Article 2.01, 2.02 or 2.04 arising out of or in
respect of any agreement to sell Shares, or shares of any affiliate, made by
Gazit-Globe or any affiliate thereof prior to such termination, any right or
obligation pursuant to Article 2.03 arising out of or in respect of any acquisition
of Additional Securities made prior to such termination, or any liability for any
breach of this agreement.





3.05. Notices. Any notice or other communication contemplated by this agreement shall be
in writing delivered or sent by telecopier:





	 	(1)	 	in the case Alony-Hetz, Holdings or any other affiliate of Alony-Hetz, to:






	 	 	 	Alony-Hetz Properties & Investments Ltd.


Moshe Aviv Tower


7 Jabotinsky Street


Ramat Gan 52520 Israel


Telecopier No.: (972)(3) 751-4730






	 	 	 	or to such other address or telecopier of which Alony-Hetz, Holdings or
such other affiliate shall have last given notice to the party giving
such notice; and






	 	(2)	 	in the case of Gazit-Globe or any affiliate of Gazit-Globe, to:




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	 	 	 	Gazit Canada Inc. 
c/o

University Avenue 
Suite

910 
Toronto, Ontario M5J 2H7
	 
	 	 	 	Telecopier No.: (416) 941-1655 Attention: Dori Segal






	 	 	 	or to such other address or telecopier of which Gazit-Globe or an
affiliate thereof shall have last given notice to the party giving
such notice.





Any notice so delivered shall be deemed to have been given and received on the date of delivery
thereof, and if so sent by telecopier shall be deemed to have been given and received on the date
following transmission thereof or if either such date is not a business day, on the next business
day following such date.





	3.06.	 	Representatives.






	 	(1)	 	Any decisions, consents, agreements, notices or communications required in
connection with this agreement by Gazit-Globe, Gazit Canada or Gazit 2003 shall be
made, written or delivered by its representative, Gazit-Globe, and Alony Hetz and
Holdings shall be entitled to rely on the decisions, consents, agreements, notices or
communications from Gazit-Globe without further action from Gazit Canada or Gazit
2003.






	 	(2)	 	Any decisions, consents, agreements, notices or communications required in
connection with this agreement by Alony-Hetz or Holdings shall be made, written or
delivered by its representative, Alony-Hetz and Globe, Gazit Canada and Gazit 2003
shall be entitled to rely on the decisions, consents, agreements, notices or
communications from Alony-Hetz without further action from Holdings.





3.07. Entire Agreement. Except as set forth in the Original Shareholders’ Agreement with
respect to periods prior to the date hereof, this agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof and all prior
agreements, discussions and understandings are merged herein. None of the parties hereto shall be
bound by any terms or conditions with respect to the subject matter hereof other than as
expressly provided for herein or as duly set forth in writing by subsequent written agreement of
the parties hereto.




3.08. Time of the Essence. Time shall be of the essence of this agreement and of every
provision hereof.




3.09. Arbitration. Any dispute between Alony-Hetz or any affiliate thereof on the one
hand, and Gazit-Globe or any affiliate thereof on the other hand, arising out of or in respect of
this agreement which cannot be resolved by agreement between such parties shall be submitted to
arbitration as herein provided by one party giving notice to the other party. The notice so given
by the party submitting the dispute to arbitration shall appoint an arbitrator on behalf of such
party, and the other party shall appoint an arbitrator within fifteen (15) days of receipt of the
said notice. The two arbitrators shall then appoint a third arbitrator within a further period of
thirty (30) days, failing which either party may apply to a court to appoint such arbitrator. In
the event that the party to whom notice is given, as aforesaid fails to appoint an arbitrator
then the arbitrator appointed by the party so giving notice shall act as a sole arbitrator.




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The arbitration shall be governed by fee provisions of the Arbitration Act (Ontario) or the
International Commercial Arbitration Act (Ontario), whichever is applicable. The arbitrator or
arbitrators, as the case may be, shall reach a determination and render an opinion in writing
explaining such determination, which shall be final and binding upon the parties hereto.





	3.10.	 	Assignment; Amendments.






	 	(1)	 	Any party hereto (an “Assignor”) may assign its rights and obligations hereunder
to another party (an “Assignee”) that is controlled by or under common control with
the Assignor; provided, that the Assignee that agree in writing to be subject to the
terms and conditions of this agreement to which the Assignor was subject.






	 	(2)	 	Gazit-Globe or any affiliate of Gazit-Globe referred to in the preceding sentence
or being a party to this agreement may assign any of its rights pursuant to this
agreement (including the rights of assignment pursuant to this Article) (i) by way of
security to any bank or financial institution extending loans or providing credit to
it or any affiliate of it in connection with the pledge to such bank or financial
institution or the acquisition by such bank or financial institution of Shares
(“Pledged Shares”) that represent (as of the date of such assignment) 20% or more of
the outstanding Shares (a “Control Block”) or (ii) upon any subsequent sale of the
Pledged Shares following a foreclosure to any entity or group that acquires a
“Control Block”; provided, further, that in the event that this agreement is assigned
in accordance with this sentence, Article 2.02 hereof shall be deemed to be amended
by adding the words “the higher of: (i) the average closing price of the five (5)
trading days preceding the date on which Gazit-Globe provides the notice to
Alony-Hetz as stated below and (ii)” immediately prior to the words “$20.00 or more.”






	 	(3)	 	Except as provided in the preceding clauses (1) and (2), neither this agreement
nor any rights or benefits hereunder shall be assignable by any of the parties hereto
without the prior written consent of the other parties, but subject thereto this
agreement shall enure to the benefit of and be binding upon the parties’ respective
legal, personal representatives successors and permitted assigns.






	 	(4)	 	Except in the case of an assignment pursuant to clause (2) of this Article 3.10,
in the event that any party hereto shall cease to be controlled by either Gazit-Globe
or Alony-Hetz, as applicable, the rights and obligations of such party under this
agreement shall terminate and the Shares owned by such party shall no longer be
considered owned by Gazit-Globe or Alony-Hetz, as applicable, for purposes of this
agreement.





3.11. Dividends. Alony-Hetz and Gazit-Globe believe that it is in the best interests of
FCR’s shareholders to have regular dividend payments and for such dividends to increase subject
to and in tandem with growth in FCR’s earnings and funds from operations. The foregoing statement
is an expression of belief only and shall not have any legal force or effect whatsoever.




3.12. Counterparts. This agreement may be executed and delivered in two or more
counterparts, and shall constitute a valid and binding agreement between the parties upon
executed and delivery to each party of a counterpart or counterparts executed by each other
party. Delivery of an executed counterpart of this agreement by telecopier shall have the same
effect as delivery of an original of such counterpart.




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3.13. Governing Law. This agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein, and shall be
treated in all respects as an Ontario contract.





	 	 	IN WITNESS WHEREOF the parties have duly executed this Agreement.





	 	 	 	 	 	 	 	 	 

	SIGNED, SEALED AND DELIVERED 

in the presence of	 	



	)

)
)

)	



	 	ALONY HETZ PROPERTIES AND

INVESTMENTS LIMITED
	 	 	

	)	

	 	Per:	 	 
	 
	 	
	)	
	 	 	 	 
	 	 	



	)

)
)	



	 	A.H. CANADA HOLDINGS LTD.
	 	 	

	)	

	 	Per:	 	 
	 
	 	
	)	
	 	 	 	 
	 	 	

	)

)
)	

	 	GAZIT-GLOBE LTD.
	 	 	

	)	

	 	Per:	 	 
	 
	 	
	)	
	 	 	 	 
	 	 	



	)

)

)	



	 	GAZIT CANADA INC.
	 	 	 	)	 	 	Per:	 	 
	 
	 	
	)
)	
	 	 	 	 
	 	 	

	)

)

)	

	 	GAZIT 2003 INC.
	 	 	 	)	 	 	Per:	 	 






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