Document:

Exhibit 10.4

TRADUCCIÓN PÚBLICA  

SWORN TRANSLATION

 

THIRD AGREEMENT FOR THE IMPLEMENTATION OF AMENDMENTS

TO THE CORPORATE SERVICES MASTER AGREEMENT

 

Agreement made in the City of Buenos Aires on the 27th day of November of 2009 by and between:

 

(i) CRESUD S.A.C.I.F. y A., domiciled at Moreno 877, Piso 23 in the Autonomous City of Buenos Aires, represented hereat by Messrs Eduardo Sergio ELSZTAIN and Saúl ZANG in their capacities as Attorneys-in-fact (hereinafter “CRESUD”) as party of the one part;

 

(ii) Alto Palermo S.A. (APSA), domiciled at Moreno 877, Piso 22 in the Autonomous City of Buenos Aires, represented hereat by Messrs Alejandro Gustavo ELSZTAIN and David Alberto PEREDNIK in their capacities as Attorneys-in-fact (hereinafter “APSA”), as party of the second part, and

 

(iii) IRSA Inversiones y Representaciones Sociedad Anónima, domiciled at Bolívar 108, Piso 1o in the Autonomous City of Buenos Aires and having established domicile for purposes hereof at Moreno 877, Piso 22 in the Autonomous City of Buenos Aires, represented hereat by Messrs Oscar Pedro BERGOTTO and Gastón Armando LERNOUD in their capacities as Attorneys-in-fact, as party of the third part (hereinafter “IRSA” and collectively with CRESUD and APSA designated as “THE PARTIES”).

 

WHEREAS:

 

(i) On June 30, 2004 THE PARTIES executed a Master Agreement for the Exchange of Corporate Services (hereinafter “the Master Agreement”);

 

(ii) On August 23, 2007 THE PARTIES executed the first Agreement for the Implementation of Amendments to the Corporate Services Master Agreement (hereinafter the “First Agreement”), whereby certain amendments were introduced to the Areas of Exchange of Corporate Services and the Cost Distribution Bases, and new Individual In-charges were appointed;

 

(iii) On August 14, 2008 THE PARTIES executed the Second Agreement for the Implementation of Amendments to the Corporate Services Master Agreement (hereinafter the “Second Agreement” and, together with the First Agreement, the “Addenda”) whereby new amendments were introduced to the Areas of Exchange of Corporate Services and the Cost Distribution Bases;

 

(iv) THE PARTIES have implemented the Master Agreement based on an Implementation Manual updated by Deloitte & Co. S.R.L., (hereinafter “Deloitte”) on February 11, 2008;

 

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(v) In accordance with the recommendations made by Deloitte on its semi-annual reports, new operational changes have been implemented in the Areas of Exchange of Corporate Services and the Cost Distribution Bases starting in July 2008, which THE PARTIES wish to acknowledge in writing;

 

(vi) The Board of Directors of THE PARTIES have approved the THIRD AGREEMENT FOR THE IMPLEMENTATION OF AMENDMENTS TO THE CORPORATE SERVICES MASTER AGREEMENT (hereinafter the “Third Agreement”) on November 26, 2009;

 

(vii) Additionally, THE PARTIES consider that the Third Agreement does not match the provisions under Section 73 of Decree 677/01 and they represent that they have notified the Audit Committee of the execution of the Agreement.

 

NOW IN CONSIDERATION OF THE FOREGOING, THE PARTIES hereby agree to execute this Third Agreement subject to the following terms and conditions:

 

ONE: THE PARTIES ratify that the Areas (as defined in the Master Agreement) and the calculation method applicable to the Exchange of Operational Services (also as defined in the Master Agreement) have been changed as from the dates listed below, amending therefore Exhibits I and II, as amended by the Addenda, to the Master Agreement as per the following detail:

 

(i)                  Starting in July 2008, a decision was made to modify the distribution method applicable to the Human Resources Area of Exhibit II such that as from that date it should be made up as detailed in the new Exhibit II. 

 

(ii)               Starting in July 2008, a decision was made to include the Special Projects and Control Department within the Administration and Control Area of Exhibit I of the Master Agreement and further modify the divisions comprising such Area and their distribution method such that as from that date Exhibit II should be made up as detailed in the new Exhibit II.             

 

(iii)            Starting in July 2008, a decision was made to modify the departments included within the Risks and Processes Area mentioned in Exhibit I of the Master Agreement and the distribution method applicable to such Area in a manner such that as from that date Exhibit II should be made up as detailed in the new Exhibit II. 

 

(iv)           Starting in July 2008, a decision was made to modify the distribution method applicable to the Technical, Infrastructure and Services Area. 

 

(v)              Starting in July 2008, a decision was made to include the Architecture and Design Department within the Areas of Exchange. 

 

(vi)           Starting in September 2008, a decision was made to include the Technical, Infrastructure and Services, Purchases, Architecture and Design, and Development and Works Department within the Areas mentioned in Exhibit 

 

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I of the Master Agreement and therefore, also in Exhibit II. Furthermore, starting in September 2008, the Technical, Infrastructure and Services, Purchases, Architecture and Design, and Development and Works Department has included the Architecture and Design, Purchases and Hirings, Development and Works, and Technical, Infrastructure and Services Department. Therefore, they were excluded from the Areas of Exchange, and it was further decided to modify Exhibit I and Exhibit II such that as from that date they should be made up as detailed in the new Exhibit I and Exhibit II. 

 

(vii)        Starting in January 2009, a decision was made to modify the distribution method applicable to the Finance Area of Exhibit II such that as from that date it should be made up as detailed in the new Exhibit II. 

 

(viii)     Starting in July 2008 and until June 2009, a decision was made to include the Project Management Department within the Planning and Development Area, using the time allocated to the projects of each of THE PARTIES as distribution method. 

 

(ix)           Starting in July 2009, a decision was made to exclude the Planning and Development Area, and as from such same date and until September 2009, a decision was made to include the Business Analysis Area, excluding such Area from the Areas of Exchange in October 2009 and being included as a Department within the Finance Area, thus modifying Exhibit I and Exhibit II such that as from October 2009 they should be made up as detailed in the new Exhibit I and Exhibit II. 

 

In consideration of the foregoing, the PARTIES hereby put on record that, subject to the clarifications detailed in the preceding sub-sections and for purposes of updating Exhibits I and II, they shall read as hereto attached.

 

TWO: THE PARTIES confirm that the Individually Responsible Person on behalf of CRESUD is Daniel E. Mellicovsky.

 

THE PARTIES further confirm that Cedric Bridger AND Abraham Perelman continue to be the Individually Responsible Persons on behalf of IRSA and APSA, respectively.

 

THREE: THE PARTIES represent that all the sections of the Master Agreement and the Addenda that have not been amended pursuant to this Third Agreement continue to be fully in force.

 

In witness whereof, this Agreement is executed in three (3) copies of the same tenor and to a single effect in the place and on the date first written.

 

CRESUD S.A.C.I.F.y A.

 

/signatures in original/

Attorneys-in-fact

 

3

 

IRSA Inversiones y Representaciones Sociedad Anónima

 

/signatures in original/

Attorneys-in-fact

 

Alto Palermo S.A. (APSA)

 

/signatures in original/

Attorneys-in-fact

 

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Exhibit I

 

Description of Corporate Services Exchange Areas

 

Human Resources

 

The Human Resources sector renders to THE PARTIES the service consisting in Human Resources Administration and Management. Human Resources Administration spans payroll calculation activities, personnel administration, solidarity issues, benefits and labor relationships.

 

Human Resources Management includes personnel recruitment, selection, training, job rotation and related activities.

 

Finance

 

The Finance sector renders to THE PARTIES the service consisting in Investor Relations, Capital Markets, Financial Risk, Business Analysis and Management of Financial Transactions.

 

Institutional Relations

 

The Institutional Relations sector renders to THE PARTIES the service consisting in the development and control of advertising, broadcasting and marketing actions, relations with the media, preparation of articles, brochures and related activities.

 

Administration and Control

 

The Administration and Control sector controls all the accounting transactions of THE PARTIES. It is responsible for the companies’ management control and budget, and its main activities consist in the preparation of the financial statements, tax management, supervision of accounts payable and collections.

 

Systems and Technology

 

The Systems and Technology sector renders to THE PARTIES the service consisting in maintaining, supporting and updating the IT structure.

 

Support and maintenance at the user level, help desk, back-up and security issues as well as all related activities.

 

Updates, control and follow-up of software licenses.

 

Maintenance, updates and support for infrastructure and communications aspects.

 

Insurance

 

The Insurance sector is in charge of managing THE PARTIES’ assets’ coverage by negotiating, acquiring and monitoring insurance policies, dealing with claims in terms of coverage, collection, etc.

 

Errand Running Service

 

The Errand Running Service renders to THE PARTIES the service consisting in sending and distributing internal and external documentation, menial procurements, going on errands, etc.

 

Contracts

 

The Contracts sector renders to THE PARTIES the service consisting in aid to the preparation, analysis and response to legal briefs, agreements, official letters, etc.

 

Technical, Infrastructure and Services, Purchases, Architecture and Design, and Development and Works

 

The Technical, Infrastructure and Services, Purchases, Architecture and Design, and Development and Works sector renders to THE PARTIES the services consisting in operational coordination of the following sectors: Architecture and Design; Works Development; Purchases and Hirings; and Technical, Infrastructure and Services.

 

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Internal Audit

 

The Internal Audit sector renders to THE PARTIES the services consisting in operational review and control.

 

Real Estate

 

The Real Estate sector renders to THE PARTIES the services consisting in sales and acquisitions of real estate, except for real estate assigned to the agricultural business.

 

It monitors the properties considered to be “land reserves” and takes part in the businesses arising from governmental grants (exploitation concessions and private initiatives).

 

Hotels and Tourism

 

The Hotels and Tourism sector renders to THE PARTIES the services consisting in the integration of the different areas of hotels along with their business relations.

 

It carries out activities to optimize and control hotels’ management and organization.

 

It carries out activities aimed at leading tourists to visit and consume in shopping centers.

 

Risks and Processes

 

The Risks and Processes sector renders to THE PARTIES the services consisting in the administration and management of standards and processes, including the determination, development and publication of internal regulations.

 

Administration and management of information security, including the protection of THE PARTIES’ data.

 

Administration and management of master data, including loading such data to THE PARTIES’ systems.

 

Administration and management of risks and statutory compliance, including the identification and supervision of the main risks and duties of compliance towards regulatory agencies.

 

Quality management, including the implementation of quality models in the business units.

 

Prevention of corporate fraud.

 

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Exhibit II

Cost Distribution Bases

 

	
Corporate Departments
    	
 
    	
Department
    	
 
    	
Division
    	
 
    	
Distribution Method
    
	
Human Resources
    	
 
    	
Human Resources
    	
 
    	
 
    	
 
    	
By headcount (non-corporate personnel) and weighting   the percentages of other areas (corporate personnel).
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Finance

Each one of the sectors is weighted at 20%.
    	
 
    	
Capital Markets
    	
 
    	
 
    	
 
    	
Financial transactions outstanding as of the closing   date weighted at 40% and the amount of transactions conducted over the last   180/360 days weighted at 60%. In the latter case, if applicable, the   transactions handled during the period and which because of unfavorable   market conditions were not released will be weighted at 10%.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Relations with Investors
    	
 
    	
 
    	
 
    	
Number of shareholders as registered with the   Nasdaq, plus the volume of shares traded in US$as well as market   capitalization (the price of the shares as quoted by the number of   outstanding shares) with the price diluted as of the closing date. The three   variables are weighted in equal shares (33%).
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Financial Risk
    	
 
    	
 
    	
 
    	
Number of transactions analyzed, valued and   consummated and their amount in US$. Both variables are weighted in equal   shares (50%).
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Financial Administration
    	
 
    	
 
    	
 
    	
Total assets weighted at 40% and total liabilities   weighted at 60%.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Business Analysis
    	
 
    	
 
    	
 
    	
Salaries are weighted according to the position and   tasks performed (per company and in equal shares). The salaries of analysts   shall be allocated to each company, and the one relating to supervision shall   be distributed among the companies.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Institutional Relations
    	
 
    	
Institutional Relations
    	
 
    	
 
    	
 
    	
Tasks performed and the time spent in each.
    

 

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Administration and Control
    	
 
    	
Accounting and Administrative Operations (Weighted   from the Divisions within the Department)
    	
 
    	
Accounting and Reporting

Administrative Operations
    	
 
    	
Number of companies per group and receipts per   company.

Income receipts, expenses receipts and number of   companies per group
    	
 
    
	
Each one of the sectors comprising the Department is   weighted as described below:
    	
 
    	
 

Taxes
    	
 
    	
 
    	
 
    	
 

Salaries are weighted according to the position and   tasks performed (per company and in equal shares)
    	
 
    
	
30% Accounting and Administrative Operations; 30%   Taxes; 30% Budget and Management Control and 10% Special Projects and Control
    	
 
    	
 

Budget and Management Control (Market Capitalization   weighted at 35% and actual income (production, sales, leases) weighted at   65%.
    	
 
    	
 

Budget and Management Control - Global

Budget and Management Control - Real Estate

 
    	
 
    	
Market capitalization weighted at 35% and actual   income (production, sales, leases) weighted at 65%.

 

Revenues from sales and office developments.

 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Budget and Management Control - Agricultural
    	
 
    	
Revenues from production and sales of premises.
    	
 
    
	
 
    	
 
    	
Special Projects and Control
    	
 
    	
 
    	
 
    	
Completed projects and time spent in each.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Systems and Technology
    	
 
    	
Systems and Technology
    	
 
    	
 
    	
 
    	
Number of desktops, licenses, volume of PCs and   servers.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Insurance
    	
 
    	
Insurance
    	
 
    	
 
    	
 
    	
Insured amounts and volume of losses (in units).   Both variables weighted in equal shares (50%).
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Errand Running Service
    	
 
    	
Errand Running Service
    	
 
    	
 
    	
 
    	
Number of errands run.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Contracts
    	
 
    	
Contracts
    	
 
    	
 
    	
 
    	
Tasks performed and the time spent in each.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Technical, 
    	
 
    	
Technical, 
    	
 
    	
Planning and Control
    	
 
    	
Maintenance hours.
    	
 
    
	
Infrastructure and 
    	
 
    	
Infrastructure and 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Services, 

Purchases, 

Architecture and 
    	
 
    	
Services (Maintenance hours)
    	
 
    	
Logistics
    	
 
    	
Weighted between directly assigned personnel and   centralized personnel distributed per square meter of the real property.
    	
 
    
	
Design, and 

Development and 
    	
 
    	
 
    	
 
    	
Distributed Operations
    	
 
    	
Square meters of real property held, to which   maintenance services are provided.
    	
 
    
	
Works Department
    	
 
    	
 
    	
 
    	
Architecture
    	
 
    	
Personnel distributed per surface area and number of   stores.
    	
 
    
	
An average is obtained from the Departments   reporting to it.
    	
 
    	
 
    	
 
    	
Third parties’ services
    	
 
    	
Square meters of common areas to which services are   provided.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Traveling Personnel
    	
 
    	
Maintenance hours per center.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Engineering and Maintenance
    	
 
    	
Square meters of real property held, to which   maintenance, engineering and other services are provided.
    	
 
    

 

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Purchases and Hirings
    	
 
    	
 
    	
 
    	
Purchase orders with weighted volume and amounts   thereof.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Development and Works
    	
 
    	
 
    	
 
    	
Tasks performed and time spent in each.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Architecture and Design
    	
 
    	
 
    	
 
    	
Completed projects.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Internal Audit
    	
 
    	
Internal Audit
    	
 
    	
 
    	
 
    	
Tasks performed and the time spent in each.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Real Estate
    	
 
    	
Real Estate
    	
 
    	
 
    	
 
    	
Salaries are weighted according to the position and   tasks performed (per companies and in equal shares).
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Hotels and Tourism
    	
 
    	
Hotels and Tourism
    	
 
    	
 
    	
 
    	
Salaries are weighted according to the position and   tasks performed (per companies and in equal shares).
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Risks and Processes  
    	
 
    	
Master Data

 

OYM
    	
 
    	
 
    	
 
    	
Weighting of the time spent in each task.

Weighting of the time spent in each task.
    	
 
    
	
Time spent in each 
    	
 
    	
IT Security
    	
 
    	
 
    	
 
    	
Weighting of the time spent in each task.
    	
 
    
	
task.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Fraud
    	
 
    	
 
    	
 
    	
Weighting of the time spent in each task.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Quality Management
    	
 
    	
 
    	
 
    	
Weighting of the time spent in each task.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Risk and Regulatory Compliance
    	
 
    	
 
    	
 
    	
Weighting of the time spent in each task.
    	
 
    

 

THIS DOCUMENT, CONSISTING OF 9 (nine) PAGES, IS A TRUE AND ACCURATE TRANSLATION into English of the document in Spanish I have had before me in Buenos Aires, on this 10th day of December, 2009.

 

[For authentication purposes only:]

 

ESTE DOCUMENTO, COMPUESTO DE 9 (nueve) PÁGINAS, ES TRADUCCIÓN FIEL al inglés del documento adjunto redactado en idioma castellano que he tenido ante mí y al cual me remito en Buenos Aires, a los 10 días de diciembre de 2009.

 

9Exhibit 10.5

 

TRADUCCIÓN PÚBLICA

SWORN TRANSLATION

 

ADDENDUM TO CORPORATE SERVICES MASTER AGREEMENT

 

Made in the City of Buenos Aires, on this 12th day of March, 2010, by and among:

 

(i) CRESUD S.A.C.I.F. y A., domiciled at Moreno No. 877, 23rd Floor, City of Buenos Aires, represented hereat by the undersigned attorneys-in-fact (hereinafter “CRESUD”) for the first part;

 

(ii) Alto Palermo S.A. (APSA), domiciled at Moreno No. 877, 21st Floor, City of Buenos Aires, represented hereat by the undersigned attorneys-in-fact (hereinafter “APSA”), for the second part; and

 

(iii) IRSA Inversiones y Representaciones Sociedad Anónima, domiciled at Bolívar No. 108, 1st Floor, City of Buenos Aires, and setting up domicile for purposes of this agreement at Moreno No. 877, 22nd Floor, City of Buenos Aires, represented hereat by the undersigned attorneys-in-fact, for the third part (hereinafter “IRSA”, and collectively with CRESUD and APSA hereinafter referred to as the “Parties”, and each of them individually as a “Party”).

 

WHEREAS:

 

(i) On June 30, 2004, the Parties executed a Master Agreement for the Exchange of Corporate Services (hereinafter the “Master Agreement”), whereby the administrative and financial features and guidelines for implementing the supply of Corporate Services were established, for purposes of reducing fixed costs arising from the Parties’ activities and diminishing their impact on operating results, taking advantage of the individual efficiencies of each of them in the various operating management areas;

 

(ii) The Parties engaged Deloitte & Co. S.R.L. (hereinafter “Deloitte”) for it to review and assess semi-annually the criteria used in the Corporate Services settlement process and the Cost Distribution Bases and supporting documents used in the above mentioned process and prepare a semi-annual report;

 

(iii) Due to the experience gained as a result of the implementation of the Master Agreement based on an Implementation Manual prepared by Deloitte, certain operational changes to the Areas of Exchange of Corporate Services and Cost Distribution Bases have been implemented since January 2005;

 

(iv) Such operational changes were acknowledged by the Parties through the execution of three agreements for the implementation of amendments dated August 23, 2007, August 14, 2008 and November 27, 2009, respectively (the “Agreements”);

 

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(v) As from the consolidation of the financial statements, which occurred as a result of the increase of CRESUD’s shareholding interest in IRSA, who in turn controls APSA, it has been necessary to deepen the data processing line toward CRESUD, as ultimate recipient of the scheme;

 

(vi) From such perspective, the Parties have deemed it suitable to unify in CRESUD as single provider, within the scope of the Master Agreement and the Agreements, the services related to the following areas: Human Resources, Finance, Institutional Relations, Administration and Control, Systems and Technology, Insurance, Errand Running/General Services, Contracts, Technical, Infrastructure and Services, Purchases, Architecture and Design, Development of Works, Internal Audit, Real Estate and Risks and Processes, to which end the employment agreements of the employees rendering such services shall be transferred;

 

(vii) The unification mentioned in recital (vi) above shall: (a) imply a partial reduction in the Parties’ administrative expenses; (b) result in a significant reduction in the cost centers, thus optimizing the management of information and available resources; and (c) strengthen the employees’ corporate identity, all of which shall result in significant advantages to the Parties’ partners;

 

(viii) The Parties deem it suitable to enter into this Addendum to the Corporate Services Master Agreement (the “ADDENDUM”) so as to allocate the expenses related to the hypothetical labor costs that could arise from the termination of employees or other costs whose origin or accrual shall have occurred or shall occur before or after the centralization;

 

(ix) Notwithstanding the foregoing, APSA maintains unaltered the following areas: Shopping Center Commercial Real Estate; Shopping Center Marketing; Shopping Center Security; Shopping Center Technical, Infrastructure and Services; Shopping Center Systems and Technology; and Shopping Center Sales Management, and IRSA maintains unaltered the following areas: Office Rental; Office Security; and Office Technical, Infrastructure and Services, as these are the core areas that group together the know-how of the business of each of them;

 

(x) Each of the Parties has submitted the contents of the ADDENDUM to their respective Audit Committees for review, which have raised no objections to it; and

 

(xi) In addition, the Board of Directors of each of the Parties has approved this ADDENDUM, as per the following detail:

 

·                                          IRSA on March 9, 2010; 

 

·                                          APSA on March 12, 2010; and 

 

·                                          CRESUD on March 11, 2010. 

 

NOW, THEREFORE, the Parties agree to enter into this ADDENDUM, to be governed by the following clauses:

 

ONE: The Exhibit attached to this ADDENDUM includes a list of the personnel serving in the corporate sectors, who shall continue to render services in IRSA, APSA and CRESUD, distinguished by those who are subject to the transfer mentioned in the recitals hereto and those who shall remain in their original payroll. The allocation of their salaries and labor costs shall continue to be distributed as set forth in the Master Agreement. The Exhibit sets forth the length of service of corporate employees, their original employers, their employers as of the date of execution of this ADDENDUM, the corporate sector where they serve and the date such sectors joined the Master Agreement.

 

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TWO: The Parties agree to perform the following obligations as an immediate consequence of the execution of this ADDENDUM:

 

(a)                   In the event of termination or if a claim is filed, the Parties shall identify its origin or subject matter; 

 

(b)              The Parties shall identify the origin or accrual of the termination or hypothetical right, so as to determine the financial liability of each Party; 

 

(c)               IRSA and APSA promise to indemnify CRESUD, to such extent as appropriate, for the expenses and disbursements arising from claims made by the transferred employees listed in the Exhibit. 

 

THREE: The expenses mentioned in paragraph (c) above include:

 

(a)              Any salary and/or indemnification and/or social security item, claim or hypothetical concept, including: outstanding wages, if any, salary differences, statutory annual benefit, vacation pay, any kind of commissions, overtime, as well as any bonuses, rewards and/or reimbursements and any indemnification amounts that could arise from Section 212 of the Employment Contract Law, Section 1113 of the Civil Code, damages and/or pain and suffering or damages under Occupational Accidents Laws No. 24,028 and 24,557, as applicable, for which IRSA or APSA could be liable, as well as any other amount originated in the employment relationship that is being terminated, whatever its origin may be, as well as any other mechanism or institute related to the employee’s performance during their relationship with IRSA or APSA, irrespective of the regulatory source that created them; and 

 

(b)              professional fees and expenses incurred in the defense of the interests of the Party(ies), whether originated in claims filed by employees or third parties. 

 

FOUR: The Parties agree that all costs associated to the employees who join the corporate Areas or who are assigned by any of the Parties in the future shall be governed by the method contemplated herein.

 

FIVE: The Corporate Human Resources Department shall be responsible for determining the amounts or percentages to be borne by each Party, based on each employee’s periods of service and taking into account the origin of each termination or the cause of each claim. At the closing of each year the above mentioned Department shall submit a report to an assessment committee (the “Assessment Committee”) containing a detail of all cases of termination that involve the employees listed in the Exhibit. The Assessment Committee shall be composed of the Individual In-charges of each of the Parties previously appointed and shall validate the adequate allocation of expenses made by the Corporate Human Resources Department. Any decisions taken by the Assessment Committee shall be adopted by simple majority and shall not be subject to appeal.

 

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SIX: CRESUD hereby promises to compensate IRSA and APSA for the higher costs that could be incurred by such companies as a result of the increase in the rate of social security contributions and the occupational risk manager’s rate that will arise from the transfer of the employees listed in the Exhibit to CRESUD.

 

SEVEN: The Parties agree that for purposes of facilitating the implementation of this ADDENDUM among them, within five days before the closing of each calendar month CRESUD shall make a pro-forma settlement of the costs to be paid by each of the Parties at the end of the month. Based on such settlement, CRESUD shall invoice to IRSA and APSA a sum of money calculated on the basis of the costs paid in such month. CRESUD promises to render a monthly account by delivering: (i) a detail of the differences between the pro-forma settlement and the final account resulting from the payments made; and (ii) a detail of the use of proceeds to each of the Parties, for purposes of computing the payments to be made pursuant to Section 5 of the Master Agreement.

 

EIGHT: The Parties agree that all the clauses and exhibits of the Master Agreement and the Agreements are in force, and that this ADDENDUM does not amend any of their clauses.

 

NINE: The Parties agree that all capitalized terms not defined in this ADDENDUM shall have the meanings assigned to them in the Master Agreement and the Agreements.

 

TEN: All the counterparts of this ADDENDUM and its Exhibit, once signed by the Parties, shall be regarded as original counterparts to all effects.

 

ELEVEN: If any of the clauses or provisions of this ADDENDUM were invalid, unenforceable, ineffective or illegal, such invalidity, unenforceability, ineffectiveness or illegality shall not affect the validity of this ADDENDUM, and its remaining provisions shall remain in force.

 

TWELVE: This ADDENDUM shall be governed by and interpreted in accordance with the laws of the Republic of Argentina.

 

THIRTEEN: Any disputes arising from or related to the execution, interpretation or enforcement of this ADDENDUM shall be negotiated by the Parties in good faith. The negotiation stage having been exhausted, at the request of any of the Parties the dispute shall be settled by the Arbitration Court of the Buenos Aires Stock Exchange, which shall act in accordance with the rules of arbitration of law, and whose decision shall be final and not subject to appeal.

 

FOURTEEN: The Parties have drafted this ADDENDUM jointly; therefore, in case of ambiguity or any other circumstance that requires an interpretation of its terms, no presumption arising from the authorship of this ADDENDUM shall favor or prejudice any of the Parties.

 

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FIFTEEN: Except as otherwise clearly arising from the text of this ADDENDUM, it shall be understood that: (i) any references to the singular form include the plural, and vice versa; (ii) any references to the masculine gender include the feminine gender, and vice versa; (iii) any references to a given legislation include the regulations or

 

supplementary statutes issued under the referred legislation; and (iv) the word “including” or similar terms imply a mere explicatory or illustrative enumeration.

 

In witness whereof, three (3) identical counterparts are signed to a single effect in the place and on the date first above written.

 

5

 

CRESUD S.A.C.I.F.y A.

 

/

 

Attorneys-at-law

 

IRSA Inversiones y Representaciones Sociedad Anónima

 

/

 

Attorneys-at-law

 

Alto Palermo S.A. (APSA)

 

/

 

Attorneys-at-law

 

6

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