Exhibit 10.1

 

Execution Version

 

THE HOWARD HUGHES CORPORATION
WARRANT GRANT AGREEMENT

 

Purchaser:  David R. Weinreb

 

Date of Grant:  June 16, 2017

 

Purchase Price:  $50,000,000

 

Number of Shares Underlying Warrant:  1,965,409

 

Exercise Price Per Share:  $124.64

 

THE HOWARD HUGHES CORPORATION, a Delaware corporation (the “Corporation”), is
pleased to award and grant you the opportunity to purchase a Warrant (the
“Warrant”) to purchase shares of the Corporation’s authorized common stock, par
value $0.01 per share, subject to the terms and conditions set forth in this
Warrant Grant Agreement (this “Agreement”).  The grant of the Warrant is
specifically conditioned upon the execution by you of this Agreement.  The Date
of Grant of the Warrant, the number of shares issuable upon exercise of the
Warrant (the “Warrant Shares”), and the Exercise Price per share are stated
above.  The Purchase Price shall be paid to the Corporation no later than
seventy-five (75) calendar days following the Date of Grant and if not so paid
this Agreement shall terminate without further action.  This Agreement is not
governed by The Howard Hughes Corporation Amended and Restated 2010 Incentive
Plan.

 

This Agreement sets forth the terms of the agreement between you and the
Corporation with respect to the Warrant.  By accepting this Agreement, you agree
to be bound by all of the terms hereof.

 

1.             Definitions.  As used in this Agreement, the following terms have
the meanings set forth below:

 

(a)           “Board of Directors” means the board of directors of the
Corporation.

 

(b)           “Business Day” means any day other than a Saturday, a Sunday or a
day on which banking institutions in the State of Delaware are authorized or
obligated by law or executive order to close.

 

(c)           “Cause” shall mean, as determined in good faith by a unanimous
vote of the Board of Directors (excluding you) at a meeting of the Board of
Directors held for such purpose, and where you and your counsel had an
opportunity (on at least 15 days prior notice) to be heard before the Board of
Directors, your:

 

(i)            conviction, plea of guilty or no contest to any felony;

 

(ii)           gross negligence or willful misconduct in the performance of your
duties;

 

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(iii)          drug addiction or habitual intoxication;

 

(iv)          commission of fraud, embezzlement, misappropriation of funds,
breach of fiduciary duty, violation of law, or a material act of dishonesty
against the Corporation, in each case that the Board of Directors determines was
willful;

 

(v)           material and continued breach of the Employment Agreement, after
notice for substantial performance is delivered by the Corporation in writing
that identifies in reasonable detail the manner in which the Corporation
believes you are in breach of this Employment Agreement;

 

(vi)          willful material breach of Corporation policy or code of conduct;
or

 

(vii)         willful and continued failure to substantially perform your duties
under the Employment Agreement (other than such failure resulting from your
incapacity due to physical or mental illness);

 

unless, in each case, the event constituting Cause is curable and has been cured
by you within 30 days of your receipt of notice from the Corporation that an
event constituting Cause has occurred and specifying the details of such event. 
If you cure an event during such period that would otherwise constitute Cause,
then the Corporation will have no right to terminate your employment for Cause. 
For purposes of this provision, no act or omission on your part shall be
considered “willful” unless it is done or omitted not in good faith or without
reasonable belief that the act or omission was in the best interests of the
Corporation.  Any act or omission based upon a resolution duly adopted by the
Board of Directors or advice of counsel for the Corporation shall be
conclusively presumed to have been done or omitted in good faith and in the best
interests of the Corporation.

 

(d)           “Change in Control” means the occurrence of any of the following
events:

 

(i)            A “change in the ownership of the Corporation” which shall occur
on the date that any one person, or more than one person acting as a group,
excluding Pershing Square Management, L.P. and its Affiliates (as defined under
the Securities Act of 1933), acquires ownership of stock in the Corporation
that, together with stock held by such person or group, constitutes more than
50% of the total fair market value or total voting power of the stock of the
Corporation; however, if any one person or more than one person acting as a
group, is considered to own more than 50% of the total fair market value or
total voting power of the stock of the Corporation, the acquisition of
additional stock by the same person or persons will not be considered a “change
in the ownership of the Corporation” (or to cause a “change in the effective
control of the Corporation” within the meaning of Section 1(d)(ii) below) and an
increase of the effective percentage of stock owned by any one person, or
persons acting as a group, as a result of a transaction in which the Corporation
acquires its stock in exchange for property will be treated as an acquisition of
stock for purposes of this paragraph; provided further, however, that for
purposes of this Section 1(d)(i), the following acquisitions shall not
constitute a Change in Control:  (A) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Corporation or any entity
controlled by the Corporation, or (B) any acquisition by investors

 

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(immediately prior to such acquisition) in the Corporation for financing
purposes, as determined by the Board of Directors in its sole discretion.  This
Section 1(d)(i) applies only when there is a transfer of the stock of the
Corporation (or issuance of stock) and stock in the Corporation remains
outstanding after the transaction.

 

(ii)           A “change in the effective control of the Corporation” which
shall occur on the date that either (A) any one person, or more than one person
acting as a group, excluding Pershing Square Management, L.P. and its
Affiliates, acquires (or has acquired during the twelve month period ending on
the date of the most recent acquisition by such person or persons) ownership of
stock of the Corporation possessing 35% or more of the total voting power of the
stock of the Corporation, except for (1) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Corporation or any entity
controlled by the Corporation, or (2) any acquisition by investors (immediately
prior to such acquisition) in the Corporation for financing purposes, as
determined by the Board of Directors in its sole discretion; or (B) a majority
of the members of the Board of Directors are replaced during any twelve-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Board of Directors prior to the date of the appointment or
election.  For purposes of a “change in the effective control of the
Corporation,” if any one person, or more than one person acting as a group, is
considered to effectively control the Corporation within the meaning of this
Section 1(d)(ii), the acquisition of additional control of the Corporation by
the same person or persons is not considered a “change in the effective control
of the Corporation,” or to cause a “change in the ownership of the Corporation”
within the meaning of Section 1(d)(i) above.

 

(iii)          The occurrence of any of the transactions contemplated by Section
1(d)(i) or 1(d)(ii) above (including any acquisition by Pershing Square
Management, L.P. or its Affiliates), in connection with which the stock of the
Corporation ceases to be publicly traded on a national securities exchange.

 

(iv)          A “change in the ownership of a substantial portion of the
Corporation’s assets” which shall occur on the date that any one person, or more
than one person acting as a group, excluding Pershing Square Management, L.P.
and its Affiliates, acquires (or has acquired during the twelve month period
ending on the date of the most recent acquisition by such person or persons)
assets of the Corporation that have a total gross fair market value equal to or
more than 60% of the total gross fair market value of all the assets of the
Corporation immediately prior to such acquisition or acquisitions; provided that
the proceeds of such acquisition or acquisitions are distributed to the
shareholders of the Corporation in connection with such acquisition or
acquisitions.  For this purpose, gross fair market value means the value of the
assets of the Corporation, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.  Any
transfer of assets to an entity that is controlled by the shareholders of the
Corporation immediately after the transfer, as provided in guidance issued
pursuant to Section 409A of the Code, shall not constitute a Change in Control.

 

For purposes of this Section 1(d), the provisions of Section 318(a) of the Code
regarding the constructive ownership of stock will apply to determine stock
ownership; provided, that stock

 

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underlying unvested options (including options exercisable for stock that is not
substantially vested) will not be treated as owned by the individual who holds
the option.  In addition, for purposes of this Section 1(d), “Corporation”
includes (A) the Corporation and (B) an entity that is a stockholder owning more
than 50% of the total fair market value and total voting power (a “Majority
Shareholder”) of the Corporation, or any entity in a chain of entities in which
each entity is a Majority Shareholder of another entity in the chain, ending in
the Corporation.

 

(e)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(f)            “Common Stock” means the authorized common stock, par value $0.01
per share, as described in the Corporation’s Certificate of Incorporation.

 

(g)           “Date of Grant” means the date designated as such in the first
paragraph of this Agreement.

 

(h)           “Disability” means the good faith determination by the Board of
Directors that you are permanently disabled.

 

(i)            “Employment Agreement” means the employment agreement, if any,
between the Corporation and David R. Weinreb that is in effect on the date in
question.

 

(j)            “Exchange Act” means the Securities Exchange Act of 1934.

 

(k)           “Exercise Notice” means the written exercise notice in the form
provided by the Board of Directors.

 

(l)            “Exercise Price” means the exercise price per share designated as
such in the first paragraph of this Agreement.

 

(m)          “Expiration Date” means June 15, 2023.

 

(n)           “Fair Market Value” per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

 

(i)            If the Common Stock is at the time traded on NYSE, then the Fair
Market Value shall be the closing selling price per share of Common Stock on the
date in question, as the price is reported by the National Association of
Securities Dealers on NYSE.  If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation exists.

 

(ii)           If the Common Stock is at the time listed on any stock exchange,
then the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question on the stock exchange determined by the
Board of Directors to be the primary market for the Common Stock, as such price
is officially quoted in the composite tape of transactions on such exchange.  If
there is no closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

 

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(iii)          If the Common Stock is at the time neither listed on any stock
exchange nor traded on NYSE, then the Fair Market Value shall be determined in
good faith by the Board of Directors after taking into account such factors as
the Board of Directors shall deem appropriate.

 

(o)           “Good Reason” shall mean the occurrence of any of the following
events without your written consent:

 

(i)            a material diminution in your base compensation;

 

(ii)           a material diminution in your authority, duties or
responsibilities;

 

(iii)          you no longer report directly to the Board of Directors; or

 

(iv)          any other action or inaction that constitutes a material breach by
the Corporation of the Employment Agreement;

 

provided that, in each case, you must provide a notice of termination to the
Corporation within 60 days of the initial occurrence of the event constituting
Good Reason, and the Corporation shall have the opportunity to cure such event
within 30 days of receiving such notice.  If the Corporation cures an event
during such period that would otherwise constitute Good Reason, then you will
have no right to terminate your employment for Good Reason.  Following the
occurrence of a Change in Control, any claim by you that Good Reason exists
shall be presumed to be correct unless a court of competent jurisdiction
determines that the Corporation has established by clear and convincing evidence
that Good Reason does not exist.

 

(p)           “Immediate Family” means your child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships.

 

(q)           “NYSE” means The New York Stock Exchange.

 

2.             Vesting and Exercisability.  This Warrant will be fully vested at
the time of purchase.  Except as provided in Section 3, you may only exercise
your Warrant after the fifth (5th) year anniversary of the Date of Grant (June
15, 2022) and before the Expiration Date.  To the extent it has not already been
exercised, the Warrant shall terminate on the Expiration Date.

 

3.             Special Lifting of Restrictions and Change in Control.

 

(a)           Immediately prior to the effective date of a Change in Control or
upon the date of a termination of your employment by the Company without Cause
or by you for Good Reason, the Warrant shall be immediately exercisable and
transferable, notwithstanding the restrictions enumerated in Section 2.

 

(b)           Notwithstanding the provisions of Section 6, in the event of a
termination of your employment by reason of your death or Disability, you or
your estate (as the case may be) may sell the Warrant to a third party;
provided, however, that all terms and restrictions applicable to the Warrant
prior to the sale shall continue to apply to the Warrant after the sale to a
third party purchaser.

 

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(c)           In the event of a Change in Control, this Warrant shall become
exercisable immediately prior to the Change in Control and, if not exercised by
you prior to the Change in Control, this Warrant must be assumed by the
successor entity in connection with a Change in Control, and appropriately
adjusted, immediately after such Change in Control, to apply to the number and
class of securities which would have been issuable to you upon the consummation
of such Change in Control had the Warrant been exercised immediately prior to
such Change in Control, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same.

 

(d)           Subject to Section 5, this Agreement shall not in any way affect
the right of the Corporation to adjust, reclassify, reorganize, otherwise change
its capital or business structure, to merge, consolidate, dissolve, liquidate,
or sell or transfer all or any part of its business or assets, and in any such
transaction involving only cash consideration you shall be deemed to have
elected to receive cash pursuant to Section 3(c)(ii) if so provided in the
agreement providing for such transaction.

 

4.             Exercise of Warrant.

 

(a)           In order to exercise this Warrant with respect to all or any part
of the Warrant Shares for which this Warrant is exercisable, you (or any other
person or persons exercising the Warrant in accordance with the terms hereof)
must take the following actions:

 

(i)            Execute and deliver to the Corporation an Exercise Notice for the
Warrant Shares for which the Warrant is exercised (the “Purchased Shares”) which
Exercise Notice (1) states the number of Purchased Shares (which must be a whole
number of shares) and (2) is signed or otherwise given by you (or any other
authorized person exercising the Warrant).

 

(ii)           Pay the aggregate Exercise Price for the Purchased Shares, at the
time of delivery of the Exercise Notice, (1) in cash or an equivalent means
acceptable to the Corporation, or (2) with shares of Common Stock owned by you
(including shares received upon exercise of the Warrant or restricted shares, if
any, already held by you) and having a Fair Market Value at least equal to the
aggregate Exercise Price for the shares of Common Stock to which the Warrant is
being exercised, or (3) by any combination of clauses (1) and (2), or (4) by net
issue exercise, pursuant to which the Corporation will issue to you a number of
shares of Common Stock as to which the Warrant is exercised, less a number of
shares with a Fair Market Value as of the date of exercise equal to the Exercise
Price.  The number of shares to settle the transaction shall be the gross number
of shares (subject to the transaction, e.g., 1,965,409 in the case of a full
exercise), multiplied by the Exercise Price, and divided by the SA (as defined
below).  If shares of Common Stock are used for payment of all or any portion of
the Exercise Price, then (for purposes of payment of the Exercise Price) those
shares of Common Stock shall be deemed to have a cash value equal to their
aggregate Fair Market Value determined as of the date of the delivery of the
Exercise Notice, giving effect to all purchases of Warrant Shares.

 

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(iii)          Certify in a writing reasonably acceptable to the Corporation
that you have complied with the provisions of Section 6 hereof at all times
since the Date of Grant and, if the Warrant is exercised in respect of fewer
than the total Warrant Shares to which this Warrant then relates, that you will
continue to comply with such covenants in respect of the Warrant Shares which
remain subject to this Warrant.

 

(b)           Notwithstanding any other provision hereof, the number of shares
of Common Stock that you shall receive upon a full or partial exercise of the
Warrant shall be adjusted upward or downward, as the case may be, based upon the
following formula:

 

QA = (SA – K) x Q / ST

 

Where:

 

·

 

QA is the adjusted number of shares of Common Stock to be received, rounded to
the nearest whole number.

 

 

 

·

 

SA is the average reported closing sales price for the Common Stock over the 22
most recent days of trading on a stock exchange, if so traded, ending on the
last trading day prior to the date of the Corporation’s receipt of a Notice of
Exercise (the “Exercise Date”). If the Warrant Shares are not traded on a
national securities exchange on the Exercise Date, then the value of such
Warrant Shares for the purposes of this Section 4(b) shall be deemed to be the
Fair Market Value.

 

 

 

·

 

K is the Exercise Price.

 

 

 

·

 

Q is the unadjusted number of shares of Common Stock.

 

 

 

·

 

ST is the Fair Market Value of the Warrant Shares on the last trading day prior
to the Exercise Date.

 

For purposes of clarity, if QA calculated as above results in a negative number,
it shall be set to zero.

 

For example, if you held a warrant to purchase 100 Warrant Shares with an
exercise price of $5, the Fair Market Value of the Warrant Shares on the
Exercise Date was $10, and the average trading price over the last 22 trading
days was $11, then you would receive $600 worth of Common Stock or 60 shares of
Common Stock; conversely, if the average trading price over the last 22 trading
days was $9, you would receive $400 worth of Common Stock or 40 shares of Common
Stock.

 

(c)           As soon as practicable after the Exercise Date, the Corporation
shall issue the Warrant Shares to or on behalf of the Warrant holder (or any
other person or persons exercising this Warrant in accordance with the terms
hereof).  The Warrant Shares shall be issued in book entry form.

 

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(d)           In no event may this Warrant be exercised for any fractional
shares.  Fractional shares shall be satisfied in cash.

 

The Warrant shall not be deemed to have been exercised unless all of these
requirements are satisfied.

 

5.             Adjustment Provisions.  The number of shares of Common Stock that
may be acquired under the Warrant, shall be subject to adjustment, from time to
time, in accordance with the following provisions:

 

(a)           If at any time or from time to time, the Corporation shall
subdivide as a whole (by reclassification, by a stock split, by the issuance of
a distribution on stock payable in stock or otherwise, including a dividend
designated as such by the Compensation Committee of the Board of Directors) the
number of shares of Common Stock then outstanding into a greater number of
shares of Common Stock, then (a) the number of shares of Common Stock that may
be acquired under the Warrant shall be increased proportionately and (b) the
Exercise Price for each share of Common Stock subject to the Warrant shall be
reduced proportionately, without changing the aggregate purchase price as to
which the Warrant remains exercisable.

 

(b)           If at any time or from time to time, the Corporation shall
consolidate as a whole (by reclassification, reverse stock split, or otherwise)
the number of shares of Common Stock then outstanding into a lesser number of
shares of Common Stock, then (a) the number of shares of Common Stock that may
be acquired under the Warrant shall be decreased proportionately, and (b) the
Exercise Price for each share of Common Stock subject to the Warrant shall be
increased proportionately, without changing the aggregate purchase price or
value as to which the Warrant remains exercisable.

 

(c)           Should any other change be made to the Common Stock by reason of
any exchange of shares or other change affecting the outstanding Common Stock as
a class without the Corporation’s receipt of consideration, appropriate
adjustments shall be made to the class of securities subject to this Warrant in
such manner and to the extent deemed appropriate by the Compensation Committee
of the Board of Directors.

 

(d)           Whenever the number of shares of Common Stock subject to the
Warrant is required to be adjusted as provided in this Section 5, the
Corporation shall, within 30 days following such adjustment, prepare and give to
you a written notice setting forth, in reasonable detail, the event requiring
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the change in price and the number of shares of Common
Stock, other securities, cash or property purchasable subject to the Warrant
after giving effect to the adjustment.

 

(e)           Adjustments under Section 5(a), (b) and (c) shall be made by the
Compensation Committee of the Board of Directors and shall be subject to Section
26, and its determination as to what adjustments shall be made and the extent
thereof shall be final, binding and conclusive.  No fractional interest shall be
issued on account of any such adjustments.

 

6.             Transferability.  This Warrant may be assigned in whole or in
part during your lifetime either as (a) a gift to one or more members of your
Immediate Family or to a trust in which

 

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you and/or one or more such family members hold more than 50% of the beneficial
interest or (b) pursuant to a domestic relations order.  The assigned portion
shall be exercisable only by the person or persons who acquire a proprietary
interest in the Warrant pursuant to such assignment.  The terms applicable to
the assigned portion shall be the same as those in effect for this Warrant
immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Board of Directors may deem appropriate. Except
for assignments to a person or an entity expressly permitted pursuant to the
first sentence of this Section 6 above (a “Permitted Transferee”), the Warrant
may not be assigned, transferred, pledged, or otherwise hypothecated by you or
any Permitted Transferee.  Additionally, you or any Permitted Transferee may not
hedge or enter into any derivative or other transaction in respect of the
Warrant Shares (the intention of the parties being that you, together with any
Permitted Transferee, shall maintain a net long position in respect of the
Warrant Shares).  You shall (i) cause any Permitted Transferee to comply with
the covenants herein and (ii) upon the written request of the Corporation
certify as to your compliance with the covenants herein from time to time. 
Notwithstanding anything to the contrary herein, the covenants and limits on
transferability in this Section 6 shall terminate on the earliest of (x) June
15, 2022, (y) your termination of employment by the Corporation without Cause,
or a termination by you for Good Reason, or (z) a Change in Control.

 

7.             Delivery of the Stock.  After the exercise of the Warrant the
Corporation shall promptly issue and deliver the number of shares of Common
Stock as to which the Warrant has been exercised after the Corporation receives
(a) the Exercise Notice, (b) payment of the Exercise Price, and (c) any tax
withholding as may be requested.  The value of the shares of Common Stock shall
not bear any interest owing to the passage of time.  The shares of Common Stock
shall be issued in book entry form.

 

8.             Rights as a Stockholder.  You shall have no right as a
stockholder with respect to any shares covered by this Agreement unless and
until the shares are issued in your name.

 

9.             Rights Offerings.  Subject to Section 26, if at any time the
Corporation shall distribute rights or warrants to all or substantially all
holders of its Common Stock entitling them, for a period of not more than 45
days, to subscribe for or purchase shares of Common Stock at a price per share
less than the Fair Market Value of the Common Stock on the last trading day
preceding the date on which the Board of Directors declares such distribution of
rights or warrants, the Exercise Price in effect immediately prior to the close
of business on the record date for such distribution shall be reduced
immediately thereafter to the price determined by multiplying such Exercise
Price by the quotient of (x) the number of shares of Common Stock outstanding at
the close of business on such record date plus the number of shares of Common
Stock which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such Fair
Market Value divided by (y) the number of shares of Common Stock outstanding at
the close of business on such record date plus the number of shares of Common
Stock so offered for subscription or purchase.  In such event, the number of
shares of Common Stock issuable upon the exercise of the Warrant as in effect
immediately prior to the close of business on such record date shall be
increased immediately thereafter to the amount determined by multiplying such
number by the quotient of (x) the Exercise Price in effect immediately prior to
the adjustment contemplated by the immediately preceding sentence divided by (y)
the new Exercise Price determined in accordance with the immediately preceding
sentence.  In case any rights or warrants referred to in this Section 9 in
respect of which an adjustment shall

 

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have been made shall expire unexercised and any shares that would have been
underlying such rights or warrants shall not have been allocated pursuant to any
backstop commitment or any similar arrangement, the Exercise Price and the
number of shares of Common Stock issuable upon exercise of the Warrant then in
effect shall be readjusted at the time of such expiration to the Exercise Price
that would then be in effect and the number of Shares that would then be
issuable upon exercise of the Warrant if no adjustment had been made on account
of such expired rights or warrants.

 

10.          Tender or Exchange Offers.  Subject to Section 26, if the
Corporation or any subsidiary of the Corporation shall consummate a tender or
exchange offer for all or any portion of the Common Stock for a consideration
per share with a Fair Market Value greater than the Fair Market Value of the
Common Stock on the date such tender or exchange offer is first publicly
announced (the “Announcement Date”), the Exercise Price in effect immediately
prior to the expiration date for such tender or exchange offer shall be reduced
immediately thereafter to the price determined by multiplying such Exercise
Price by the quotient of (x) the Fair Market Value of the Common Stock on the
Announcement Date minus the Premium Per Post-Tender Share divided by (y) the
Fair Market Value of the Common Stock on the Announcement Date.  In such event,
the number of shares of Common Stock issuable upon the exercise of the Warrant
as in effect immediately prior to such expiration date shall be increased
immediately thereafter to the amount determined by multiplying such number by
the quotient of (x) the Exercise Price in effect immediately prior to the
adjustment contemplated by the immediately preceding sentence divided by (y) the
new Exercise Price determined in accordance with the immediately preceding
sentence.  As used in this Section 10 with respect to any tender or exchange
offer, “Premium Per Post-Tender Share” means the quotient of (x) the amount by
which the aggregate Fair Market Value of the consideration paid in such tender
or exchange offer exceeds the aggregate Fair Market Value on the Announcement
Date of the shares of Common Stock purchased therein divided by (y) the number
of shares of Common Stock outstanding at the close of business on the expiration
date for such tender or exchange offer (after giving pro forma effect to the
purchase of shares being purchased in the tender or exchange offer).

 

11.          Furnish Information.  You shall furnish to the Corporation all
information requested by the Corporation to enable it to comply with any
reporting or other requirement imposed upon the Corporation by or under any
applicable statute or regulation.

 

12.          Registration and Listing of Warrant Shares.  The Corporation shall
file a registration statement with the Securities and Exchange Commission to
register the sale of Warrant Shares as soon as reasonably practicable.  The
Corporation will file a listing application for listing on NYSE with respect to
the Warrant Shares as soon as practicable after the date hereof.  If the
Corporation is unable to deliver registered Warrant Shares for any reason, then,
in this instance, the Corporation shall (i) issue unregistered Warrant Shares to
you and (ii) use it best efforts to register the Warrant Shares as soon as
possible.

 

13.          Obligation to Exercise.  The purchase of the Warrant through this
Agreement shall impose no obligation upon you to exercise the same or any part
thereof.

 

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14.          Remedies.  You shall be entitled to recover from the Corporation
reasonable fees incurred in connection with the enforcement of the terms and
provisions of this Agreement, whether by an action to enforce specific
performance or for damages for its breach or otherwise.

 

15.          Right of the Corporation and Subsidiaries to Terminate Employment. 
Nothing contained in this Agreement shall confer upon you the right to continue
in the employ of the Corporation or any subsidiary, or interfere in any way with
the rights of the Corporation or any subsidiary to terminate your employment at
any time.

 

16.          Exchange Act Compliance.  The Board of Directors shall take all
steps necessary to ensure that the purchase and exercise of the Warrant are
exempt from Section 16(b) of the Exchange Act.

 

17.          No Guarantee of Interests.  The Board of Directors and the
Corporation do not guarantee the Common Stock of the Corporation from loss or
depreciation.

 

18.          Corporation Action.  Any action required of the Corporation shall
be by resolution of its Board of Directors or by a person or committee
authorized to act by resolution of the Board of Directors.

 

19.          Severability.  If any provision of this Agreement is for any reason
held to be illegal, invalid, or to violate any law or listing requirement
applicable to the Corporation, the illegality, invalidity, or violation shall
not affect the remaining provisions hereof, but such provision shall be fully
severable and this Agreement shall be construed and enforced as if the illegal
or invalid provision had never been included herein and you and the Corporation
shall amend this Agreement, preserving, to the maximum extent reasonably
possible, the intended economic effects of this Agreement as executed by the
parties hereto.

 

20.          Notices.  Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by electronic
facsimile transmission.  Any such notice required or permitted to be delivered
hereunder shall be deemed to be delivered on the next Business Day after which
it is personally delivered or transmitted by electronic facsimile to the person
who is to receive it at the address which such person has theretofore specified
by written notice delivered in accordance herewith.

 

The Corporation and you agree that any notices shall be given to the Corporation
or to you at the following addresses; provided that the Corporation or you may
change, at any time and from time to time, by written notice to the other, the
address which it or he had previously specified for receiving notices.

 

Corporation:

The Howard Hughes Corporation

One Galleria Tower

13355 Noel Road, Suite 950

Dallas, Texas 75240

Attn: Office of the General Counsel

 

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with a copy to:

William A. Ackman, Chairman of the Board

888 Seventh Avenue, 42nd Floor

New York, NY 10019

 

 

Holder:

At your current address as shown in the Corporation’s records.

 

21.          Waiver of Notice.  Any person entitled to notice hereunder may
waive such notice.

 

22.          Successors.  This Agreement shall be binding upon you, your legal
representatives, heirs, legatees and distributees, and upon the Corporation, its
successors and assigns.

 

23.          Headings.  The titles and headings of Sections are included for
convenience of reference only and are not to be considered in construction of
the provisions hereof.

 

24.          Governing Law.  All questions arising with respect to the
provisions of this Agreement shall be determined by application of the laws of
the State of Delaware except to the extent Delaware law is preempted by federal
law.

 

25.          Word Usage.  Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of this Agreement dictates,
the plural shall be read as the singular and the singular as the plural.

 

26.          Code Sections 162(m) and 409A.  It is the intent of the Corporation
that:  (a) the Warrant shall constitute “qualified performance-based
compensation” within the meaning of section 162(m) of the Code and regulations
thereunder (“Code Section 162(m)”) and shall be at all times exempt from Code
Section 409A; (b) each provision of this Agreement shall be construed
accordingly; and (c) any provisions of the Agreement that cannot be so construed
shall be disregarded.  In furtherance thereof, notwithstanding any contrary
provision of Sections 3, 5, 9 and 10, any adjustment to the terms of this
Agreement, including an adjustment to the number of shares subject to the
Warrant or the Exercise Price, shall be permissible only to the extent such
adjustment would not cause the Warrant to fail to constitute “qualified
performance based compensation” under Code Section 162(m) or to fail to remain
exempt from Code Section 409A.

 

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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by
its duly authorized officer as of the Date of Grant first above written.

 

 

 

THE HOWARD HUGHES CORPORATION

 

 

 

 

 

 

 

 

 

 

By:

/s/ R. Scot Sellers

 

 

 

R. Scot Sellers,

 

 

 

Chairman of the Compensation

 

 

 

Committee

 

 

 

 

 

 

 

 

ACKNOWLEDGED AND AGREED:

 

 

 

 

 

 

 

 

 

 

 

/s/ David R. Weinreb

 

 

 

David R. Weinreb

 

 

 

 

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