Document:

Exhibit 10.2

 

TAX MATTERS AGREEMENT

 

by and between

 

General Growth Properties, Inc.

 

and

 

The Howard Hughes
Corporation

 

Dated as of []

 

 

TAX MATTERS AGREEMENT

 

THIS
TAX MATTERS AGREEMENT (this “Agreement”), dated as of [], is by and
between General Growth Properties, Inc., a Delaware corporation (“GGP”)
and The Howard Hughes Corporation, a Delaware corporation (“Spinco”).  Each of GGP and Spinco is sometimes referred
to herein as a “Party” and, collectively, as the “Parties.”

 

WHEREAS,
the board of directors of GGP has determined that it is in the best interests
of GGP and its shareholders to create a new publicly traded company which shall
operate the Spinco Business;

 

WHEREAS,
the board of directors of GGP and the board of directors of Spinco have approved
(i) the Restructuring, and (ii) the Distribution, all as more fully
described in the Separation Agreement and the other Transaction Documents;

 

WHEREAS,
for U.S. federal income tax purposes, certain steps of the Restructuring and
the Distribution are intended to qualify for tax-free treatment under Sections
351, 355, 368(a) and related provisions of the Code;

 

WHEREAS,
GGP has received the Private Letter Ruling from the IRS to the effect that,
among other things, (i) certain steps of the Restructuring and the
Distribution, taken together, qualify as a transaction (a) that is
described in Sections 355(a) and 368(a)(1)(G) of the Code, (b) in
which the Spinco Common Stock distributed is “qualified property” under Section 361(c) of
the Code and (c) in which the holders of GGP Common Shares recognize no
income or gain for U.S. federal income tax purposes under Section 355 of
the Code, and (ii) certain other steps of the Spinoff Plan qualify as
transactions that are described in Sections 355(a) and 368(a)(1)(G) of
the Code;

 

WHEREAS,
as a result of the Restructuring and Distribution, the Parties desire to enter
into this Agreement to provide for certain Tax matters, including the
assignment of responsibility for the preparation and filing of Tax Returns, the
payment of and indemnification for Taxes (including any Taxes incurred in
connection with the Restructuring and Distribution), entitlement to refunds of
Taxes, and the prosecution and defense of any Tax controversies;

 

NOW,
THEREFORE, in consideration of the foregoing and the terms, conditions,
covenants and provisions of this Agreement, each of the Parties mutually
covenants and agrees as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.        General.  As used in this Agreement, the following
terms shall have the following meanings:

 

 

“Accounting
Firm” has the meaning set forth in Section 9.01.

 

“Adjusted
CDND” has the meaning ascribed to it in the Investment Agreements.

 

“Adjustment”
means any proposed or final change in the Tax liability of a taxpayer.

 

“Agreement”
has the meaning set forth in the preamble to this Agreement.

 

“Common
Parent” means (i) for U.S. federal income tax purposes, the “common
parent corporation” of an “affiliated group” (in each case, within the meaning
of Section 1504 of the Code) filing a U.S. federal consolidated income Tax
Return, or (ii) for state, local or foreign Tax purposes, the common
parent (or the equivalent thereof) of a Tax Group.

 

“Consolidated
Return” means, with respect to the GGP Group and Spinco Group,
respectively, the U.S. federal income Tax Return required to be filed by (i) a
GGP Entity as the Common Parent or (ii) a Spinco Entity as the Common
Parent.

 

“Cornerstone
Investment Agreement” means that certain Cornerstone Investment Agreement
effective as of March 31, 2010 between REP Investments LLC and GGP, as
amended to the date hereof.

 

“Disqualifying
Action” means a GGP Disqualifying Action or a Spinco Disqualifying Action.

 

“Due
Date” means (i) with respect to a Tax Return, the date (taking into
account all valid extensions) on which such Tax Return is required to be filed
under applicable Law and (ii) with respect to a payment of Taxes, the date
on which such payment is required to be made to avoid the incurrence of
interest, penalties and/or additions to Tax.

 

“Effective
Date” means the date of the Distribution.

 

“Excess
Surplus Amount” has the meaning ascribed to it in the Investment
Agreements.

 

“Final
Determination” means the final resolution of liability for any Tax for any
taxable period, by or as a result of (i) a final decision, judgment,
decree or other order by any court of competent jurisdiction that can no longer
be appealed; (ii) a final settlement with the IRS, a closing agreement or
accepted offer in compromise under Sections 7121 or 7122 of the Code, or a
comparable agreement under the Laws of other jurisdictions, which resolves the
entire Tax liability for any taxable period; (iii) any allowance of a
refund or credit in respect of an overpayment of Tax, but only after the
expiration of all periods during which such refund or credit may be recovered
by the jurisdiction imposing the Tax; or (iv) any other final resolution,
including by reason of the expiration of the applicable statute of limitations
or the execution of a pre-filing agreement with the IRS or other Taxing
Authority.

 

“GGP”
has the meaning set forth in the preamble to this Agreement.

 

2

 

“GGP
Disqualifying Action” means (i) any action (or the failure to take any
action) within its control by any GGP Entity (including entering into any
agreement, understanding or arrangement or any negotiations with respect to any
transaction or series of transactions) that, (ii) any event (or series of
events) involving the capital stock of GGP or any assets of any GGP Entity
that, or (iii) any breach by any GGP Entity of any representation,
warranty or covenant made by them in the Transaction Documents that, in each
case, would reasonably be expected to negate the Tax-Free Status of the
Transactions; provided, however, the term “GGP Disqualifying
Action” shall not include any action required by the Separation Agreement
or any other Transaction Document or that is undertaken pursuant to the
Restructuring or the Distribution.

 

“GGP
Entity” means any member of the GGP Group.

 

“GGP
Liability Percentage” means the quotient, expressed as a percentage and
rounded to two (2) decimal points, of (i) the GGP Market
Capitalization, divided by (ii) the sum of the GGP Market Capitalization
plus the Spinco Market Capitalization.

 

“GGP
Market Capitalization” means the product of (i) the volume-weighted
average trading price per share of GGP Common Shares for the twenty (20)
consecutive trading days beginning on and following the thirty-first (31st)
trading day following the Effective Time, as quoted by Bloomberg Financial
Services through its “Volume at Price” function, rounded to the nearest whole
cent, multiplied by (ii) the arithmetic average of the number of GGP
Common Shares outstanding, on a fully-diluted basis, on each of such twenty
(20) trading days, rounded to two (2) decimal points.

 

“GGP
Taxes” means any Taxes allocated to GGP pursuant to Article II.

 

“Income
Taxes” means any Taxes based upon, measured by, or calculated with respect
to net income, profits, or gains (including, but not limited to, any capital
gains, minimum Tax or any Tax on items of Tax preference, but not including
sales, use, real or personal property, excise, or transfer or similar Taxes).

 

“Indemnity
Cap” has the meaning ascribed to it in Section 2.01(b).

 

“Indemnifying
Party” means the Party from which the other Party is entitled to seek
indemnification pursuant to the provisions of Article IV.

 

“Indemnified
Party” means the Party which is entitled to seek indemnification from the
other Party pursuant to the provisions of Article IV.

 

“Independent
Firm” has the meaning set forth in Section 8.01(b).

 

“Information”
has the meaning set forth in Section 8.01(a).

 

“Information
Request” has the meaning set forth in Section 8.01(a).

 

“IRS”
means the U.S. Internal Revenue Service or any successor thereto, including,
but not limited to its agents, representatives, and attorneys.

 

3

 

“MPC
Assets” means residential and commercial lots in the “master planned
communities” owned, for federal income tax purposes, by Howard Hughes
Properties, Inc. or The Hughes Corporation or related to the Emerson
Master Planned Community.

 

“MPC
Taxes” means all liability for Income Taxes in respect of sales of MPC
assets sold prior to March 31, 2010.

 

“New
GGPI” means, after the Distribution, the publicly held corporation that
will indirectly acquire 100% of the outstanding common stock of GGP.

 

“Notified
Action” has the meaning set forth in Section 7.02(a).

 

“Party”
has the meaning set forth in the preamble to this Agreement.

 

“Past
Practice” has the meaning set forth in Section 3.03(a)(i).

 

“Pre-Closing
Period” means any taxable period ending on or before the Effective Date.

 

“Post-Closing
Period” means any taxable period beginning after the Effective Date.

 

“Refund”
means any refund (or credit in lieu thereof) of Taxes (including any
overpayment of Taxes that can be refunded or, alternatively, applied to other
Taxes payable), including any interest paid on or with respect to such refund
of Taxes.

 

“Restructuring/Distribution
Taxes” means any Taxes incurred in or by reason of the Restructuring or the
Distribution, other than Spin-Off Taxes. 
For the avoidance of doubt, Restructuring/Distribution Taxes include
Taxes by reason of deferred intercompany transactions triggered by the
Restructuring or the Distribution.

 

“Representative”
has the meaning set forth in Section 8.01(b).

 

“Response
Deadline” has the meaning set forth in Section 8.01(b).

 

“Separate
Return” means (i) in the case of the GGP Group, a Tax Return of any
GGP Entity (including any Consolidated, combined, affiliated, or unitary Tax
Return) that does not include, for any portion of the relevant taxable period,
any Spinco Entity that is a regarded entity for U.S. federal income tax
purposes and (ii) in the case of the Spinco Group, a Tax Return of any
Spinco Entity (including any Consolidated, combined, affiliated, or unitary Tax
Return) and that does not include, for any portion of the relevant taxable
period, any GGP Entity that is a regarded entity for U.S. federal income tax
purposes.

 

“Separation
Agreement” means the Separation Agreement by and between the Parties dated
as of [].

 

“Spin-off
Taxes” means any Taxes or other Liabilities incurred solely as a result of
the failure of the Tax-Free Status of the Transactions.

 

4

 

“Spinco”
has the meaning set forth in the preamble to this Agreement.

 

“Spinco
Disqualifying Action” means (i) any action (or the failure to take any
action) within its control by any Spinco Entity (including entering into any
agreement, understanding or arrangement or any negotiations with respect to any
transaction or series of transactions) that, (ii) any event (or series of
events) involving the capital stock of Spinco or any assets of any Spinco
Entity that, or (iii) any breach by any Spinco Entity of any
representation, warranty or covenant made by them in the Transaction Documents
that, in each case, would reasonably be expected to negate the Tax-Free Status
of the Transactions; provided, however, the term “Spinco
Disqualifying Action” shall not include any action required by the
Separation Agreement or any other Transaction Document or that is undertaken
pursuant to the Restructuring or the Distribution.

 

“Spinco
Entity” means any member of the Spinco Group.

 

“Spinco
Liability Percentage” means the difference, expressed as a percentage, of (i) one
hundred percent (100%) minus (ii) the GGP Liability Percentage.

 

“Spinco
Market Capitalization” means the product of (i) the volume-weighted
average trading price per share of shares of Spinco Common Stock for the twenty
(20) consecutive trading days beginning on and following the thirty-first
(31st) trading day following the Effective Time, as quoted by Bloomberg Financial
Services through its “Volume at Price” function, rounded to the nearest whole
cent, multiplied by (ii) the arithmetic average of the number of shares of
Spinco Common Stock outstanding, on a fully-diluted basis, on each of such
twenty (20) trading days, rounded to two (2) decimal points.

 

“Spinco
Taxes” means any Taxes allocated to Spinco pursuant to Article II.

 

“Straddle
Period” means any taxable period that begins on or before and ends after
the Effective Date.

 

“Supplemental
Ruling” means a private letter ruling, without substantive qualifications,
of the IRS, to the effect that a transaction will not affect the Tax-Free
Status of the Transactions.

 

“Suspended
Deductions” means the interest deductions of The Hughes Corporation
suspended by Section 163(j) of the Code and available for use as of
the Effective Date.  Such deductions were
estimated to be approximately $406,000,000 as of December 31, 2009.  The amount of Suspended Deductions available
for use as of the Effective Date will be calculated based on an interim closing
of the books and records of The Hughes Corporation as of the close of business
on the Effective Date.

 

“Tax”
means (i) all taxes, charges, fees, duties, levies, imposts, or other
similar assessments, imposed by any U.S. federal, state or local or foreign
governmental authority, including, but not limited to, income, gross receipts,
excise, property, sales, use, license, capital stock, transfer, franchise,
payroll, withholding, social security, value added and other taxes, (ii) any
interest, penalties or additions attributable thereto and (iii) all
liabilities in respect of any 

 

5

 

items
described in clauses (i) or (ii) payable by reason of assumption,
transferee or successor liability, operation of Law or Treasury Regulation Section 1.1502-6(a) (or
any predecessor or successor thereof or any analogous or similar provision
under Law).

 

“Tax
Attributes” means net operating losses, capital losses, earnings and
profits, overall foreign losses, previously taxed income, separate limitation
losses, deferred or suspended losses or deductions, foreign tax credits or
other tax credits and all other Tax attributes.

 

“Tax Detriment” shall
mean an increase in the Tax liability of a Person for any Taxable Period.  Except as otherwise provided in this
Agreement, a Tax Detriment shall be deemed to have been realized or suffered
from a Tax Item or Items in a taxable period only if and to the extent that the
Tax liability of such Person for such period is greater than it would have been
if such Tax liability were determined without regard to such Tax Item.

 

“Tax-Free
Status of the Transactions” means the tax-free treatment accorded to
certain of the transactions taken in connection with the Restructuring and the
Distribution as set forth in the Private Letter Ruling.

 

“Tax
Group” means any U.S. federal, state, local or foreign affiliated,
consolidated, combined, unitary or similar group or fiscal unity that joins in
the filing of a single Tax Return.

 

“Taxing
Authority” means any governmental authority or any subdivision, agency,
commission or entity thereof or any quasi-governmental or private body having
jurisdiction over the assessment, determination, collection or imposition of
any Tax (including the IRS).

 

“Tax
Item” shall mean any item of income, gain, loss, deduction, credit,
recapture of credit, Tax Attribute, or any other item which may have the effect
of increasing or decreasing Taxes paid or payable.

 

“Tax
Matter” has the meaning set forth in Section 8.01(a).

 

“Tax
Package” means all relevant Tax-related information relating to the
operations of the GGP Business or the Spinco Business, as applicable, that is
reasonably necessary to prepare and file the applicable Tax Return.

 

“Tax
Proceeding” means any audit, assessment of Taxes, pre-filing agreement,
other examination by any Taxing Authority, proceeding, appeal of a proceeding
or litigation relating to Taxes, whether administrative or judicial, including
proceedings relating to competent authority determinations.

 

“Tax
Return” means any return, report, certificate, form or similar statement or
document (including any related or supporting information or schedule attached
thereto and any information return, or declaration of estimated Tax) supplied
to, or filed with, or required to be supplied to, or filed with, a Taxing
Authority with respect to Taxes.

 

6

 

“Treasury
Regulations” means the final and temporary (but not proposed) income Tax
regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

 

“Unqualified
Tax Opinion” means a “will” opinion, without substantive qualifications, of
a nationally recognized law firm, which law firm is reasonably acceptable to
GGP and Spinco, to the effect that a transaction will not affect the Tax-Free
Status of the Transactions.

 

Section 1.02.        Additional Definitions.

 

(a)           Capitalized terms not defined in this Agreement shall have
the meaning ascribed to them in the Separation Agreement.

 

ARTICLE II

 

ALLOCATION OF TAX LIABILITIES AND
REFUNDS

 

Section 2.01.        Allocation of Tax
Liabilities.

 

(a)           Income and Other Taxes.

 

(i)            Except as provided in Section 2.01 (d), GGP shall be
liable for all Taxes of GGP Entities for all taxable periods; provided,
that Spinco shall be liable for and shall indemnify GGP from and against all
Taxes imposed on a GGP Entity pursuant to Treasury Regulation Section 1.1502-6(a) (or
any predecessor or successor thereof or any analogous or similar provision
under Law) resulting from operations of a Spinco Entity.

 

(ii)           Except as provided in Section 2.01(b), (c) and
(d), Spinco shall be liable for all Taxes of Spinco Entities for all taxable
periods; provided that (A), notwithstanding any provision of any of the
Investment Agreements to the contrary, if Spinco is obligated to pay in cash
(after utilization of any available Tax Attributes), in the period ending 36
months after the Effective Date, any MPC Taxes and GGP is not liable for its
allocable share of such MPC Taxes pursuant to Section 2.01(b) below
as a consequence of the Indemnity Cap, then GGP shall loan to Spinco the amount
of such MPC Taxes not payable by GGP as a consequence of the Indemnity Cap (any
such loan shall have the terms and conditions described in Section 5.17(g) of
the Cornerstone Investment Agreement); and (B) GGP shall be liable for and
shall indemnify Spinco from and against Taxes imposed on a Spinco Entity
pursuant to Treasury Regulation Section 1.1502-6(a) (or any
predecessor or successor thereof or any analogous or similar provision under
Law) resulting from operations of a GGP Entity.

 

(b)           MPC Taxes. 
Notwithstanding any provision of any of the Investment Agreements or any
provision of this Agreement or any of the other Transaction Documents to the
contrary, GGP shall be liable for 93.75% of any MPC Taxes payable in cash by
Spinco or any of its Subsidiaries; provided, however, that,
except as provided herein with respect to interest or penalties, GGP’s
liability pursuant to this Section 2.01(b) shall be capped at
the lesser of (i) $303,750,000 and (ii) the then effective Excess
Surplus Amount (if any) (the applicable amount described in clause (i) or
clause (ii) is referred to herein as the “Indemnity Cap”).  In the event

 

7

 

 

 

that any Suspended Deductions are utilized by Spinco
or any of its Subsidiaries to offset taxable income or gain realized by Spinco
or any of its Subsidiaries other than taxable income attributable to sales of
MPC Assets sold prior to March 31, 2010, GGP’s current and future
liability, if any, pursuant to this Section 2.01(b) shall be
reduced by an amount equal to 93.75% of the incremental Taxes that would have
been payable in cash by Spinco or any of its Subsidiaries had such Suspended
Deductions not been so utilized.  In the
event that any Tax Attributes other than Suspended Deductions are utilized by
Spinco or any of its Subsidiaries to offset and reduce taxable income or gain
generated with respect to sales of MPC Assets sold prior to March 31,
2010, GGP shall be liable for 93.75% of any Income Taxes payable in cash by
Spinco or any of its Subsidiaries that would not have been so payable had such
Tax Attributes not been so utilized.  In
addition, notwithstanding any provision of the Investment Agreements or any
provision of this Agreement or any of the other Transaction Documents to the
contrary, GGP shall also be liable for one hundred percent (100%) of any
interest or penalties attributable to any MPC Taxes which interest or penalties
accrue with respect to periods ending on or before the date that Spinco assumes
control of all Tax Proceedings relating to MPC Taxes pursuant to Section 6.03
(it being understood and agreed by the parties hereto that, for purposes of
this Agreement, all penalties are deemed to accrue as of the date that the
applicable penalty has been asserted or claimed by the IRS) and GGP’s liability
for such interest or penalties shall not be limited by or subject to the
Indemnity Cap.  Spinco shall use
commercially reasonable efforts to utilize the Suspended Deductions as
expeditiously as possible and will not take any action, the principal purpose
of which is, to cause GGP’s aggregate liability pursuant to this Section 2.01(b) to
be materially greater than it would have been had such action not been taken.

 

In
order to place Spinco and GGP in the same economic position as they would have
been had certain post-Effective Date determinations been made as of the
Effective Date, the Indemnity Cap shall be re-calculated and adjusted to
reflect any such determination using the Adjusted CDND as provided in the
Investment Agreements.  Additionally, to the extent any promissory
note was issued by Spinco in favor of GGP pursuant to Section 2.01(a)(ii),
then, in order to place Spinco and GGP in the same economic position as they
would have been had the recalculated Indemnity Cap been used for purposes of
calculating such note, (i) the principal amount of such note will be
reduced based on the new calculation using the Adjusted CDND, and (ii) to
the extent applicable, any interest payments made by Spinco to GGP on such note
prior to such re-calculation shall be refunded in respect of such reductions
and accrued but unpaid interest in respect of such reductions shall be
eliminated.  Consistent with the foregoing,
this Section 2.01(b) shall be retroactively applied using the
recalculated Indemnity Cap and any resulting amounts payable thereunder shall
be promptly paid by GGP.

 

(c)           Restructuring/Distribution Taxes.

 

(i)            GGP shall be liable for all Restructuring/Distribution
Taxes.

 

(d)           Spin-Off Taxes.

 

(i)            GGP shall be liable for any Spin-Off Taxes attributable
to a GGP Disqualifying Action.

 

8

 

(ii)           Spinco shall be liable for any Spin-Off Taxes attributable
to a Spinco Disqualifying Action.

 

(iii)          Any Spin-Off Taxes that are not the result of a
Disqualifying Action shall be allocated between GGP and Spinco according to the
GGP Liability Percentage and the Spinco Liability Percentage, respectively.

 

Section 2.02.        Allocation of Refunds.

 

(a)           Except as provided in Section 2.02(b), GGP shall be
entitled to all Refunds with respect to Taxes for which GGP is or may be liable
pursuant to Article II, and Spinco shall be entitled to all Refunds of
Taxes for which Spinco is or may be liable pursuant to Article II.  A Party receiving a Refund to which the other
Party is entitled pursuant to this Agreement shall pay the amount to which such
other Party is entitled (less any costs or Taxes incurred with respect to the
receipt thereof) within ten (10) days after the receipt of such Refund.

 

(b)           To the extent that the amount of any Refund under this Section 2.02
is later reduced by a Taxing Authority or a Tax Proceeding, such reduction
shall be allocated to the Party to which such Refund was allocated pursuant to
this Section 2.02 and an appropriate adjusting payment shall be made.

 

ARTICLE III

 

PREPARATION, FILING AND
PAYMENT OF TAXES SHOWN DUE ON TAX RETURNS

 

Section 3.01.        Preparation and Filing of
Tax Returns.  GGP shall
prepare and file all Tax Returns of the GGP Group (including Consolidated
Returns of the GGP Group) relating to any taxable period and shall pay all
Taxes shown to be due and payable on such Tax Returns.  Spinco shall prepare and file all Tax Returns
of the Spinco Group (including Consolidated Returns of the Spinco Group)
relating to any taxable period and shall pay all Taxes shown to be due and
payable on such Tax Returns.

 

Section 3.02.        Amended Tax Returns.

 

(a)           Returns Filed by GGP.  GGP shall, in its sole discretion, be
permitted to amend any Tax Return that a GGP Entity is responsible for filing
pursuant to Section 3.01; provided, however, that,
unless otherwise required by Law or a Final Determination, GGP shall not amend
any such Tax Return to the extent that any such amendment would reasonably be
expected to cause a Spinco Entity to experience any Tax Detriment (including
through an increase in Taxes or a loss or reduction of a Tax Attribute
regardless of whether or when such Tax Attribute otherwise would have been
used), without the prior written consent of Spinco, which consent shall not be
unreasonably withheld or delayed.

 

(b)           Returns Filed by Spinco.  Spinco shall, in its sole discretion, be
permitted to amend any Tax Return that a Spinco Entity is responsible for
filing pursuant to Section 3.01; provided, however,
that, unless otherwise required by Law or a Final Determination, Spinco shall
not amend any such Tax Return to the extent that any such amendment would
reasonably 

 

9

 

be expected to cause a GGP Entity to experience any
Tax Detriment (including through an increase in Taxes or a loss or reduction of
a Tax Attribute regardless of whether or when such Tax Attribute otherwise
would have been used) without the prior written consent of GGP, which consent
shall not be unreasonably withheld or delayed.

 

Section 3.03.        Tax Return Procedures.

 

(a)           Procedures Relating to the Manner of Preparing Tax
Returns.

 

(i)            All Tax Returns prepared by GGP that include a member of
the Spinco Group or by Spinco that include a member of the GGP Group shall be
prepared in accordance with past practices, accounting methods, elections and
conventions (“Past Practice”), unless otherwise required by Law or
agreed to in writing by Spinco or GGP, as applicable.

 

(ii)           In the event that Past Practice is not applicable to a
particular item or matter arising in a Tax Return described in Section 3.03(a)(i),
GGP or Spinco, as applicable, shall determine the reporting of such item or matter
provided that such reporting is more likely than not to be sustained and
provided further that the other Party shall agree as to the reporting of any
such item or matter which is not more likely than not to be sustained.  The Parties shall attempt in good faith to
mutually resolve any disagreements, including by appointing an Accounting Firm
pursuant to Section 9.01, regarding such items or matters prior to the Due
Date for filing the applicable Tax Return; provided, that the failure to
resolve all disagreements prior to such date shall not relieve the Indemnified
Party of its obligation to file (or cause to be filed) such Tax Return.

 

(b)           Timing of Tax Return Filing and Payments.  All Taxes or Tax Returns required to be paid
or filed pursuant to this Article III by either GGP or Spinco to or with
an applicable Taxing Authority shall be paid or filed on or before the Due Date
for the payment or filing of such Taxes or Tax Returns.

 

(c)           Review of Tax Returns.  With respect to any Tax Return including
Taxes subject to indemnification pursuant to Article IV, the Indemnified
Party preparing such Tax Return shall, at least 10 days prior to the Due Date
applicable to such Tax Return, prepare and deliver to the Indemnifying Party a
schedule showing in reasonable detail the Indemnified Party’s good faith
calculation of any indemnification payments to be made by the Indemnifying
Party.  The Indemnifying Party shall have
the right to review and approve (such approval shall not be unreasonably
withheld) such schedule.  The Parties
shall attempt in good faith to mutually resolve any disagreements, including by
appointing an Accounting Firm pursuant to Section 9.01, regarding such
schedule prior to the Due Date for filing the applicable Tax Return; provided,
however, that the failure to resolve all disagreements prior to such
date shall not relieve the Indemnified Party of its obligation to file (or
cause to be filed) such Tax Return.

 

Section 3.04.        Expenses.  Except as otherwise provided in this
Agreement, each Party shall bear its own expenses incurred in connection with
this Article III.

 

10

 

ARTICLE IV

 

INDEMNIFICATION

 

Section 4.01.        Indemnification by GGP.  GGP shall pay, and shall indemnify and hold
the Spinco Indemnified Parties harmless from and against, without duplication, (i) all
GGP Taxes, (ii) all Taxes incurred by Spinco or any Spinco Entity by
reason of the breach by GGP of any of its representations, warranties or
covenants hereunder, and (iii) any costs and expenses related to the
foregoing (including reasonable attorneys’ fees and expenses).

 

Section 4.02.        Indemnification by Spinco.  Spinco shall pay, and shall indemnify and
hold the GGP Indemnified Parties harmless from and against, without
duplication, (i) all Spinco Taxes, (ii) all Taxes incurred by GGP or
any GGP Entity by reason of the breach by Spinco of any of its representations,
warranties or covenants hereunder, and (iii) any costs and expenses
related to the foregoing (including reasonable attorneys’ fees and expenses).

 

Section 4.03.        Characterization of and
Adjustments to Payments.  For
all Tax purposes, GGP and Spinco agree to treat (i) any payment required
by this Article IV (other than payments with respect to interest accruing
after the Effective Date) as either a contribution by GGP to Spinco or a
distribution by Spinco to GGP, as the case may be, occurring immediately prior
to the Effective Date or as a payment of an assumed or retained liability and (ii) any
payment of non-federal Taxes by or to a Taxing Authority or any payment of
interest as taxable or deductible, as the case may be, to the Party entitled
under this Agreement to retain such payment or required under this Agreement to
make such payment, in either case except as otherwise required by applicable
Law.

 

Section 4.04.        Timing of Indemnification
Payments. 
Indemnification payments in respect of any Liabilities for which an
Indemnified Party is entitled to indemnification pursuant to this
Article IV shall be paid by the Indemnifying Party to the Indemnified
Party (i) with respect to Liabilities requiring a payment to a Taxing
Authority, not later than one business day prior to the Due Date of such
Liability, and (ii) with respect to any other Liabilities, as such
Liabilities are incurred upon demand by the Indemnified Party, including
reasonably satisfactory documentation setting forth the basis for the amount of
such indemnification payment.

 

ARTICLE V

 

CARRYBACKS, AMENDMENTS AND
TAX ITEMS

 

Section 5.01.        Carrybacks.

 

(a)           The carryback of any loss, credit or other Tax Attribute
from any Post-Closing Period shall be in accordance with the provisions of the
Code and Treasury Regulations (and any applicable state, local or foreign
Laws).

 

(b)           To the extent permitted by applicable Law, GGP and Spinco
shall waive the right to carryback any Tax Attribute of a member of their
respective Groups arising in a Post-Closing Period to a Pre-Closing or Straddle
Period; provided, however, 
that (i) GGP and Spinco may carryback any Tax Attribute if such carryback
claim is reported on a Separate Return or is 

 

11

 

utilized to offset and reduce the liability for MPC
Taxes, (ii) GGP may carryback any Tax Attribute if such carryback claim is
reported on a Consolidated Return of the GGP Group, and (iii) Spinco may
carryback any Tax Attribute if such carryback claim is reported on a
Consolidated Return of the Spinco Group.

 

(c)           In the event that, notwithstanding Section 5.01(b),
GGP or Spinco is required to carryback Tax Attributes in order to avoid losing
the benefit of such Tax Attributes, the Party responsible for filing the Tax
Return on which such carryback claim is reported will cooperate with the other
Party in seeking from the appropriate Taxing Authority any Refund that would be
allocated to the other Party pursuant to Section 2.02 and that reasonably
would result from such carryback (including by filing an amended Tax Return) at
the other Party’s cost and expense; provided, however, that no
Party shall be required or permitted to seek such Refund to the extent that
such Refund would reasonably be expected to result in a Tax Detriment to a GGP
Entity or a Spinco Entity, as the case may be, (including through an increase
in Taxes or a loss or reduction of a Tax Attribute regardless of whether or
when such Tax Attribute otherwise would have been used), in each case, without
the prior written consent of GGP or Spinco, as applicable, which consent shall
not be unreasonably withheld or delayed.

 

Section 5.02.        Tax Items.

 

(a)           Tax Items arising in a Pre-Closing Period shall be
allocated to the GGP Group and the Spinco Group in accordance with the Code and
Treasury Regulations (and any applicable state, local and foreign Laws) and in
accordance with the allocation of Tax Liabilities in Article II.  GGP and Spinco shall jointly determine the
allocation of such Tax Items arising in Pre-Closing Periods as soon as
reasonably practicable following the Effective Date, and hereby agree to
compute all Taxes for all Straddle Periods and Post-Closing Periods
consistently with that determination unless otherwise required by Law or a
Final Determination.

 

(b)           To the extent that the amount of any Tax Item is later
reduced or increased by a Taxing Authority or Tax Proceeding, such reduction or
increase shall be allocated to or borne by the Party to which such Tax Item was
allocated pursuant to Section 5.02(a).

 

Section 5.03.        Treatment of Deductions
Associated with Equity-Related Compensation.

 

(a)           To the extent permitted by Law, solely GGP, New GGPI, or a
GGP Entity, as the case may be, shall be entitled to claim any Tax deduction
associated with the following items:

 

(i)            The exercise of any Spinco stock options or stock
appreciation rights by any GGP Employee (as defined below) and the vesting of
Spinco restricted stock or the vesting or settlement of Spinco restricted stock
units held by any GGP Employee and the payment of any dividends with respect to
such Spinco restricted stock.

 

(ii)           The exercise of any GGP or New GGPI stock options or stock
appreciation rights by any GGP Employee and the vesting of GGP or New GGPI
restricted stock or the vesting or settlement of GGP or New GGPI restricted
stock units held by any GGP Employee (and payment of any dividends on such GGP
restricted stock).

 

12

 

(b)           To the extent permitted by Law, solely Spinco or a Spinco
Entity, as the case may be, shall be entitled to claim any Tax deduction
associated with the following items:

 

(i)            The exercise of any GGP or New GGPI stock options or
stock appreciation rights by any Spinco Employee (as defined below) and the
vesting of GGP or New GGPI restricted stock or the vesting or settlement of GGP
or New GGPI restricted stock units held by any Spinco Employee and the payment
of any dividends on such restricted stock at any time on or after the first
date any Spinco Entity employed such Spinco Employee.

 

(ii)           The exercise of any Spinco stock options or stock
appreciation rights by any Spinco Employee and the vesting of Spinco restricted
stock or the vesting or settlement of Spinco restricted stock units held by any
Spinco Employee and the payment of any dividends with respect to such Spinco
restricted stock.

 

(c)           The following terms shall have the following meanings:

 

(i)            “Spinco Employee”
means any person employed or formerly employed by any Spinco Entity at the time
of the exercise, vesting, settlement, disqualifying disposition or payment, as
appropriate, unless, at such time, such person is employed by a member of the
GGP Group or was more recently employed by a GGP Entity than by a Spinco
Entity;

 

(ii)           “GGP Employee”
means any person employed or formerly employed by any GGP Entity at the time of
the exercise, vesting, settlement, disqualifying disposition or payment, as
appropriate, unless, at such time, such person is a Spinco Employee.

 

ARTICLE VI

 

TAX PROCEEDINGS

 

Section 6.01.        Notification of Tax
Proceedings.  Within ten (10) days
after an Indemnified Party becomes aware of the commencement of a Tax
Proceeding that may give rise to Taxes for which an Indemnifying Party is
responsible pursuant to Article II, such Indemnified Party shall notify
the Indemnifying Party of such Tax Proceeding, and thereafter shall promptly
forward or make available to the Indemnifying Party copies of notices and
communications relating to such Tax Proceeding. 
The failure of the Indemnified Party to notify the Indemnifying Party of
the commencement of any such Tax Proceeding within such ten (10) day
period or promptly forward any further notices or communications shall not
relieve the Indemnifying Party of any obligation which it may have to the
Indemnified Party under this Agreement except to the extent that the
Indemnifying Party is actually prejudiced by such failure.

 

Section 6.02.        Statute of Limitations.  Any extension of the statute of limitations
for any Taxes or a Tax Return for any Pre-Closing Period or a Straddle Period
shall be made by the Party required to file such Tax Return or pay such Taxes
to a Taxing Authority; provided that to the extent such Taxes or Tax
Return may result in an indemnity payment pursuant to this Agreement by the
Party other than the filing Party, the Indemnifying Party may, in its
reasonable discretion, require that the filing Party extend the applicable statute
of limitations for such period as determined by the Indemnifying Party.

 

13

 

Section 6.03.        Tax Proceeding Procedures
Generally.  Except as
provided herein or in Section 6.04, each Party shall be entitled to
contest, compromise and settle any Adjustment proposed, asserted or assessed
pursuant to any Tax Proceeding involving a Tax reported (or that, it is
asserted, should have been reported) on a Tax Return that such Party is
responsible for preparing and filing (or causing to be prepared and filed)
pursuant to Article III; provided, however, that (A) GGP
shall retain exclusive control over all Tax Proceedings relating to MPC Taxes
(whether ongoing as of the date of this Agreement or not) for so long as GGP
may be liable under Section 2.01(b) for more than 50% of the total
MPC Taxes at issue in the relevant Tax Proceeding, (B) GGP may not enter
into any closing, settlement or other similar agreement with any Taxing
Authority with respect to Tax Proceedings described in the preceding clause (A) without
the prior written consent of Spinco, which consent shall not be unreasonably
withheld, (C) GGP shall keep Spinco informed in a timely manner of all
actions proposed to be taken by GGP and shall permit Spinco to observe (at its
own cost) all proceedings with respect to such Tax Proceedings, (D) GGP
shall provide Spinco with written notice reasonably in advance of, and Spinco
shall have the right to attend and participate in (at its own cost), any
scheduled meetings with any Taxing Authority with respect to such Tax
Proceedings and (E) notwithstanding the foregoing, Spinco shall have the
right (but not the obligation) to immediately assume control of any and all Tax
Proceedings relating to MPC Taxes, at its own cost and expense, if, at any time
prior to the conclusion of such Tax Proceeding, the potential liability of GGP
for MPC Taxes under the provisions set forth in Section 2.01(b) is
less than fifty percent (50%) of the total liability for MPC Taxes at issue in
the relevant Tax Proceeding.

 

Section 6.04.        Tax Proceedings in Respect
of Indemnified Taxes.

 

(a)           In General. 
Notwithstanding Section 6.03, if the Party entitled to
control a Tax Proceeding is an Indemnified Party, any defense of the Tax
Proceeding shall be conducted by such Party diligently and in good faith; provided,
however, that the Indemnified Party shall keep the Indemnifying Party
informed in a timely manner of all actions proposed to be taken by the
Indemnified Party and shall permit the Indemnifying Party to observe (at its
own cost) all proceedings with respect to such Tax Proceeding; and provided
further, that, if the applicable Tax Proceeding (or any Adjustments
proposed or asserted in connection therewith) reasonably would be expected to
give rise to an indemnity obligation in excess of $1 million, in the aggregate,
then, unless waived by the Parties in writing, the Indemnified Party shall (a) prepare
all correspondence or filings to be submitted to any Taxing Authority or
judicial authority in a manner consistent with the Tax Return which is the
subject of such Adjustment as filed and timely provide the Indemnifying Party
with copies of any such correspondence or filings for the Indemnifying Party’s
prior review and consent, which consent shall not be unreasonably withheld, (b) provide
the Indemnifying Party with written notice reasonably in advance of, and the
Indemnifying Party shall have the right to attend and participate in (at its
own cost), any formally scheduled meetings with any Taxing Authority or
hearings or proceedings before any judicial authority with respect to such
Adjustment, (c) not enter into any closing, settlement or other similar
agreement with any Taxing Authority with respect to the relevant Tax Proceeding
(or any proposed Adjustment) without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld and (d) not
contest any proposed or asserted Adjustment before a judicial authority unless (A) such
Adjustment (separately or together with other proposed or asserted Adjustments)
reasonably would be expected to give rise to Taxes payable by the Indemnified
Party in an amount of $1 million or more, in the aggregate, or (B) the 

 

14

 

Indemnified Party has received an opinion of a
nationally recognized law firm that it is more likely than not to prevail on
the merits.

 

(b)           Tax Proceedings in Respect of
Restructuring/Distribution Taxes and Disqualifying Actions.  Notwithstanding Section 6.03, GGP and
Spinco shall be entitled to jointly contest, compromise and settle any
Adjustment proposed, asserted or assessed pursuant to any Tax Proceeding
relating to (i) Restructuring/Distribution Taxes and (ii) any Taxes
attributable to a Spinco Disqualifying Action. 
Notwithstanding Section 6.03, GGP shall be entitled to contest,
compromise and settle any Adjustment proposed, asserted or assessed pursuant to
any Tax Proceeding relating to any Taxes attributable to a GGP Disqualifying
Action and shall defend such Adjustment diligently and in good faith; provided,
that, unless waived by the Parties in writing, GGP shall (i) keep
Spinco informed in a timely manner of all actions taken or proposed to be taken
by GGP, (ii) provide copies of all correspondence or filings to be
submitted to any Taxing Authority or judicial authority to Spinco for its prior
review and consent, which consent shall not be unreasonably withheld and (iii) provide
Spinco with written notice reasonably in advance of, and Spinco shall have the
right to attend (at its own cost), any formally scheduled meetings with any
Taxing Authority or hearings or proceedings before any judicial authority.

 

ARTICLE VII

 

TAX-FREE STATUS OF THE
DISTRIBUTION

 

Section 7.01.        Representations and
Warranties.

 

(a)           Tax Reporting. 
Each of GGP and Spinco covenants and agrees that it will not take, and
will cause its respective Affiliates to refrain from taking, any position on
any Tax Return that is inconsistent with the Tax-Free Status of the
Transactions.

 

(b)           Restrictions Relating to the Distribution.  Neither GGP nor Spinco shall, nor shall GGP
or Spinco permit any GGP Entity or any Spinco Entity, respectively, to, take or
fail to take, as applicable, any action that constitutes a Disqualifying Action
described in the definitions of GGP Disqualifying Action and Spinco
Disqualifying Action, respectively.

 

(c)           Ordinary Course of Business.  GGP represents that neither it nor any of its
Subsidiaries altered the manner in which they satisfied their respective Tax
payment obligations as a result of the pendency of the Restructuring and
Distribution.

 

Section 7.02.        Procedures Regarding
Opinions and Rulings.

 

(a)           If Spinco notifies GGP that it desires to take one of the
actions potentially described in Section 7.01 (a “Notified Action”),
GGP shall cooperate with Spinco and use its reasonable best efforts to seek to
obtain, as expeditiously as possible, a Supplemental Ruling or an Unqualified
Tax Opinion for the purpose of permitting Spinco to take the Notified Action
unless GGP shall have waived the requirement to obtain such ruling or
opinion.  If such a ruling is to be
sought, GGP shall apply for such ruling and GGP and Spinco shall jointly
control the process of obtaining such ruling. 
In no event shall GGP be required to file any such request unless Spinco
represents that (i) it has read such request, and (ii) all
information and

 

15

 

 

representations, if any, relating to any member of
the Spinco Group, contained in such request documents are (subject to any
qualifications therein) true, correct and complete.  Spinco shall reimburse GGP for all reasonable
costs and expenses incurred by the GGP Group in obtaining a Supplemental Ruling
or Unqualified Tax Opinion requested by Spinco within ten (10) days after
receiving an invoice from GGP therefor.

 

(b)           GGP shall have the right to
obtain a Supplemental Ruling or an Unqualified Tax Opinion at any time in its
sole and absolute discretion. If GGP determines to obtain such ruling or
opinion, Spinco shall (and shall cause each Spinco Entity to) cooperate with
GGP and take any and all actions reasonably requested by GGP in connection with
obtaining such ruling or opinion (including by making any representation or
reasonable covenant or providing any materials requested by the IRS or the law
firm issuing such opinion); provided that Spinco shall not be required to make
(or cause a Spinco Entity to make) any representation or covenant that is
inconsistent with historical facts or as to future matters or events over which
it has no control. In connection with obtaining such ruling, GGP shall apply
for such ruling and shall have sole and exclusive control over the process of
obtaining such ruling.  GGP shall
reimburse Spinco for all reasonable costs and expenses incurred by the Spinco
Group in obtaining a Supplemental Ruling or Unqualified Tax Opinion requested
by GGP.

 

(c)           Except as provided in
Sections 7.02(a) and (b), no Spinco Entity shall seek any guidance from
the IRS or any other Tax Authority (whether written, verbal or otherwise) at
any time concerning the Restructuring or Distribution (including the impact of
any transaction on the Restructuring or Distribution).

 

ARTICLE VIII

 

COOPERATION

 

Section 8.01.        General Cooperation.

 

(a)           Subject to Section 8.03,
the Parties shall each cooperate fully (and each shall cause its respective
Subsidiaries to cooperate fully) with all reasonable requests in writing (“Information
Request”) from another Party hereto, or from an agent, representative or
advisor to such Party, in connection with the preparation and filing of Tax
Returns (including the preparation of Tax Packages), claims for Refunds, Tax
Proceedings, and calculations of amounts required to be paid pursuant to this
Agreement, in each case, related or attributable to or arising in connection
with Taxes of any of the Parties or their respective Subsidiaries covered by
this Agreement and the establishment of any reserve required in connection with
any financial reporting (a “Tax Matter”).  Such cooperation shall include the provision
of any information reasonably necessary or helpful in connection with a Tax
Matter (“Information”) and shall include, without limitation, at each
Party’s own cost:

 

(i)            the provision of any Tax
Returns of the Parties and their respective Subsidiaries, books, records
(including information regarding ownership and Tax basis of property),
documentation and other information relating to such Tax Returns, including
accompanying schedules, related work papers, and documents relating to rulings
or other determinations by Taxing Authorities;

 

16

 

(ii)           the execution of any
document (including any power of attorney) in connection with any Tax
Proceedings of any of the Parties or their respective Subsidiaries, or the
filing of a Tax Return or a Refund claim of the Parties or any of their
respective Subsidiaries;

 

(iii)          the use of the Party’s
reasonable best efforts to obtain any documentation in connection with a Tax
Matter; and

 

(iv)          the use of the Party’s
reasonable best efforts to obtain any Tax Returns (including accompanying
schedules, related work papers, and documents), documents, books, records or
other information in connection with the filing of any Tax Returns of any of
the Parties or their Subsidiaries.

 

Each
Party shall make its employees, advisors, and facilities available, without
charge, on a reasonable and mutually convenient basis in connection with the
foregoing matters.

 

(b)           Subject to Section 8.03,
with respect to any written request by a Party in accordance with the
provisions of Section 8.01(a) for access to Information or
Representatives of the other Party and members of such other Party’s Tax Group
in connection with any Tax Return, Tax Proceeding or otherwise in connection
with this Agreement:

 

(i)            The responding Party shall (A) make
available to the requesting Party the requested Information within the deadline
reasonably agreed upon by the Parties (the Response Deadline”), and (B) following
the Response Deadline, promptly (and no later than five (5) days following
its discovery of such Information) make available to the requesting Party any
other Information it discovers that is within its possession or control which
would reasonably be expected to be relevant to the Information Request.

 

(ii)           In the event that the
responding Party breaches its obligations under the preceding sentence by (A) failing
to respond to the Information Request by the Response Deadline without
providing a legitimate reason for such failure that is reasonably satisfactory
to the requesting Party (provided, that the provision of Information by
the responding Party after the Response Deadline pursuant to paragraph (b)(i)(B) shall
not be deemed to be a breach described in this clause (A)) or (B) withholding
Information within its possession or control that is material to the
Information Request, then the provisions of paragraph (b)(iii) shall apply.

 

(iii)          In the event of a breach
described in paragraph (b)(ii)(A) that is not cured within ten (10) days
following the Response Deadline or an alleged breach described in Paragraph
(b)(ii)(B), the requesting Party shall have the right to engage an independent
consulting, accounting or law firm selected in its sole discretion (the “Independent
Firm”) to access any and all books, records and other documents of the
responding Party and any applicable members of such responding Party’s group or
an agent, representative or advisor of the responding Party (or such members of
their relevant group) (“Representative”) for purposes of identifying and
extracting the Information requested by the requesting Party and the responding
Party shall be required to provide to the Independent Firm access to all such
books, records and other documents and Representatives; provided, that (x) the
Independent Firm shall have executed, for the benefit of both parties, a
non-disclosure and confidentiality agreement that 

 

17

 

is in form and substance customary for similar
engagements, (y) such access shall be provided by the responding Party
only upon at least two (2) days prior written notice and during reasonable
business hours, and (z) in the event of a breach described in paragraph
(b)(ii)(A) that is not cured within ten (10) days following the
Response Deadline or a breach described in paragraph (b)(ii)(B), as determined
by the Independent Firm following its extraction of Information pursuant to
this sentence, the costs and expenses of the Independent Firm shall be borne by
(i) the responding Party in the event of a breach by the responding Party
of paragraph (b)(i), or (ii) the requesting Party in the event there has
been no breach by the responding Party of paragraph (b)(i).

 

Section 8.02.        Retention of Records.  GGP and Spinco shall retain or cause to be
retained all Tax Returns, schedules and workpapers, and all material records or
other documents relating thereto in their possession, until sixty (60) days
after the expiration of the applicable statute of limitations (including any
waivers or extensions thereof) of the taxable periods to which such Tax Returns
and other documents relate or until the expiration of any additional period
that any Party reasonably requests, in writing, with respect to specific
material records or documents.  A Party
intending to destroy any material records or documents shall provide the other
Party with reasonable advance notice and the opportunity to copy or take
possession of such records and documents. 
The Parties hereto will notify each other in writing of any waivers or
extensions of the applicable statute of limitations that may affect the period
for which the foregoing records or other documents must be retained.

 

Section 8.03.        Confidentiality.  Notwithstanding any other provision of this
Agreement or any other Transaction Document, any information obtained by either
Party under this Agreement shall be kept confidential, except as may be
necessary in connection with the filing of Tax Returns or claims for Refunds or
in connection with any Tax Proceeding or any dispute, proceeding, suit or
action concerning any issues or matters addressed in this Agreement, or unless
a Party is compelled to disclose information by judicial or administrative
process, or, in the opinion of its counsel, by other requirements of Law.  Spinco shall not be required to make
available to GGP or its representatives any books, records, documents or other
information that Spinco reasonably determines to be subject to attorney-client
privilege; provided, however, that Spinco shall be required to
make available to GGP any information reasonably requested by GGP pursuant to Section 8.01
in connection with the preparation of any Tax Return required to be prepared by
GGP pursuant to this Agreement or any Tax Proceeding in connection with such
Tax Returns.  GGP shall not be required
to make available to Spinco or its representatives any books, records,
documents or other information that GGP reasonably determines to be subject to
attorney-client privilege; provided, however, that GGP shall be
required to make available to Spinco any information reasonably requested by
Spinco pursuant to Section 8.01 in connection with the preparation of any
Tax Return required to be prepared by Spinco pursuant to this Agreement or any
Tax Proceeding in connection with such Tax Returns.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.01.        Dispute Resolution.  Other than as set forth in Section 8.01(b)(iii),
with respect to any dispute between the Parties as to any matter covered by
this Agreement, the 

 

18

 

Parties shall appoint a nationally recognized
independent public accounting firm (the “Accounting Firm”) to resolve
such dispute.  In this regard, the
Accounting Firm shall make determinations with respect to the disputed items
based solely on representations made by GGP and Spinco and their respective
representatives, and not by independent review, and shall function only as an
expert and not as an arbitrator and shall be required to make a determination
in favor of one Party only.  The Parties
shall require the Accounting Firm to resolve all disputes no later than thirty
(30) days after the submission of such dispute to the Accounting Firm, but in
no event later than the Due Date for the payment of Taxes or the filing of the
applicable Tax Return, if applicable, and agree that all decisions by the
Accounting Firm with respect thereto shall be final and conclusive and binding
on the Parties.  The Accounting Firm
shall resolve all disputes in a manner consistent with this Agreement and, to
the extent not inconsistent with this Agreement, in a manner consistent with
the Past Practices of GGP and its Subsidiaries, except as otherwise required by
applicable Law.  The Parties shall
require the Accounting Firm to render all determinations in writing and to set
forth, in reasonable detail, the basis for such determination.  The fees and expenses of the Accounting Firm
shall be paid by the non-prevailing Party.

 

Section 9.02.        Tax Sharing Agreements.  All Tax sharing, indemnification and similar
agreements, written or unwritten, as between a GGP Entity, on the one hand, and
a Spinco Entity, on the other (other than this Agreement or any other
Transaction Document), shall be or shall have been terminated on or before the
Effective Date and, after the Effective Date, no GGP Entity, on the one hand,
or Spinco Entity, on the other, shall have any further rights or obligations
with respect to each other under any such Tax sharing, indemnification or
similar agreement.

 

Section 9.03.        Interest on Late Payments.  With respect to any payment between the
Parties pursuant to this Agreement not made by the due date set forth in this
Agreement for such payment, the outstanding amount will accrue interest at a
rate per annum equal to the rate in effect for underpayments under Section 6621
of the Code from such due date to and including the earlier of the ninetieth
(90th) day or the payment date and thereafter will accrue interest at a rate
per annum equal to 9%.

 

Section 9.04.        Survival of Covenants.  Except as otherwise contemplated by this
Agreement, all covenants and agreements of the Parties contained in this
Agreement shall survive the Effective Date and remain in full force and effect
in accordance with their applicable terms, provided, however, that the
representations and warranties and all indemnification for Taxes shall survive
until sixty (60) days following the expiration of the applicable statute of
limitations (taking into account all extensions thereof), if any, of the Tax
that gave rise to the indemnification, provided, further, that, in the event
that notice for indemnification has been given within the applicable survival
period, such indemnification shall survive until such time as such claim is
finally resolved.

 

Section 9.05.        Termination.  This Agreement may not be terminated except
by an agreement in writing signed by each of the Parties to this Agreement.

 

Section 9.06.        Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any Law or
as a matter of public policy, all 

 

19

 

other conditions and provisions of this Agreement
shall remain in full force and effect. 
Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties to this Agreement shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in a mutually acceptable manner.

 

Section 9.07.        Entire Agreement.  Except as otherwise expressly provided in
this Agreement, this Agreement constitutes the entire agreement of the Parties
hereto with respect to the subject matter of this Agreement and supersedes all
prior agreements and undertakings, both written and oral, between or on behalf
of the Parties hereto with respect to the subject matter of this Agreement.

 

Section 9.08.        Assignment; No Third-Party
Beneficiaries.  This
Agreement shall not be assigned by any Party without the prior written consent
of the other Party hereto, except that GGP may assign (i) any or all of
its rights and obligations under this Agreement to any of its Affiliates and (ii) any
or all of its rights and obligations under this Agreement in connection with a
sale or disposition of any assets or entities or lines of business of GGP; provided,
however, that, in each case, no such assignment shall release GGP from
any liability or obligation under this Agreement nor change any of the steps in
the Spinoff Plan.  Except as provided in Article IV
with respect to indemnified Parties, this Agreement is for the sole benefit of
the Parties to this Agreement and their respective Subsidiaries and their
permitted successors and assigns and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

 

Section 9.09.        Specific Performance.  In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the Party who is or is to be thereby aggrieved shall have the right
to specific performance and injunctive or other equitable relief of its rights
under this Agreement, in addition to any and all other rights and remedies at
law or in equity, and all such rights and remedies shall be cumulative.  The Parties agree that the remedies at law
for any breach or threatened breach, including monetary damages, may be
inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived.  Any requirements for the securing or posting
of any bond with such remedy are waived by the Parties to this Agreement.

 

Section 9.10.        Amendment.  No provision of this Agreement may be amended
or modified except by a written instrument signed by the Parties to this
Agreement.  No waiver by any Party of any
provision of this Agreement shall be effective unless explicitly set forth in
writing and executed by the Party so waiving. 
The waiver by any Party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any other subsequent breach.

 

Section 9.11.        Rules of Construction.  Interpretation of this Agreement shall be
governed by the following rules of construction:  (i) words in the singular shall be held
to include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires; (ii) references to the
terms Article, Section, paragraph, clause, Exhibit and 

 

20

 

Schedule are references to the Articles, Sections,
paragraphs, clauses, exhibits and schedules of this Agreement unless otherwise
specified; (iii) the terms “hereof,” “herein,” “hereby,” “hereto,” and
derivative or similar words refer to this entire Agreement, including the
Schedules and Exhibits hereto; (iv) references to “$” shall mean U.S.
dollars; (v) the word “including” and words of similar import when used in
this Agreement shall mean “including without limitation,” unless otherwise
specified; (vi) the word “or” shall not be exclusive; (vii) references
to “written” or “in writing” include in electronic form; (viii) provisions
shall apply, when appropriate, to successive events and transactions; (ix) the
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement; (x) GGP and Spinco have each participated in the
negotiation and drafting of this Agreement and if an ambiguity or question of
interpretation should arise, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or burdening either Party by virtue of the authorship of any of the
provisions in this Agreement or any interim drafts of this Agreement; and (xi) a
reference to any Person includes such Person’s successors and permitted
assigns.

 

Section 9.12.        Counterparts.  This Agreement may be executed in one or more
counterparts each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Agreement by facsimile or portable document format
(PDF) shall be as effective as delivery of a manually executed counterpart of
any such Agreement.

 

Section 9.13.        Coordination with the
Employee Matters Agreement.  To the extent any covenants or agreements
between the Parties with respect to employee withholding Taxes are set forth in
the Employee Matters Agreement, such Taxes shall be governed exclusively by the
Employee Matters Agreement and not by this Agreement.

 

Section 9.14.        Coordination with the
Separation Agreement.  To the
extent any representations, warranties, covenants or agreements between the
parties with respect to Taxes or other Tax matters are set forth in this
Agreement, such Taxes and other Tax matters shall be governed exclusively by
this Agreement and not by the Separation Agreement.

 

Section 9.15.        Effective Date.  This Agreement shall become effective only upon
the occurrence of the Distribution.

 

[The remainder of this page is intentionally
left blank.]

 

21

 

IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as
of the day and year first above written.

 

	
   

  	
  GGP, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  [name]

  
	
   

  	
   

  	
  [title]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The
  Howard Hughes Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  [name]

  
	
   

  	
   

  	
  [title]

  

 

Signature page – Tax
Matters AgreementExhibit
10.5

 

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION
AGREEMENT (the “Agreement”) is made as of the [·] day of [    ], 2010 by and
between The Howard Hughes Corporation, a Delaware corporation (the “Company”),
and [·] (the “Indemnitee”).

 

WHEREAS, directors,
officers, and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the Company or business enterprise itself;

 

WHEREAS, highly competent
persons have become more reluctant to serve corporations as directors, officers
or in other capacities unless they are provided with adequate protection
through insurance or adequate indemnification against risks of claims and
actions against them arising out of their service to and activities on behalf
of the corporation;

 

WHEREAS, the Board of
Directors of the Company (the “Board of Directors”) has determined that
the increased difficulty in attracting and retaining such persons is
detrimental to the best interests of the Company’s stockholders and that the
Company should act to assure such persons that there will be increased
certainty of such protection in the future;

 

WHEREAS, it is reasonable,
prudent and necessary for the Company contractually to obligate itself to
indemnify, and to advance expenses on behalf of, such persons to the fullest
extent permitted by applicable law so that they will serve or continue to serve
the Company free from undue concern that they will not be so indemnified;

 

WHEREAS, although the
[Amended and Restated] Certificate of Incorporation of the Company (the “Certificate”)
and the [Amended and Restated] Bylaws of the Company (the “Bylaws”)
require indemnification of the officers and directors of the Company under the
circumstances specified therein, and Indemnitee may also be entitled to
indemnification pursuant to the General Corporation Law of the State of
Delaware (“DGCL”), the Certificate, the Bylaws and the DGCL expressly
provide that the indemnification provisions set forth therein are not
exclusive, and authorize the Company to enter into contracts between the
Company and members of the board of directors, officers and other persons with
respect to indemnification; and

 

WHEREAS, this Agreement is a
supplement to and in furtherance of the Certificate and the Bylaws and any
resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

NOW, THEREFORE, in
consideration of Indemnitee’s agreement to serve or continue serving as a
director or officer, or both, of the Company after the date hereof, the parties
hereto agree as follows:

 

 

1.                                      Definitions.  For purposes of this Agreement:

 

(a)                                 “Change in
Control” shall mean a change in control of the Company occurring after the
date hereof of a nature that would be required to be reported in response to
Item 6(e) on Schedule 14A of Regulation 14A (or in response to any similar
item on any similar schedule or form) promulgated under the Securities Exchange
Act of 1934, as amended (the “Act”), whether or not the Company is then
subject to such reporting requirement; provided, however, that,
without limitation, a Change in Control shall include: (i) the acquisition
(other than acquisition by or from the Company) after the date hereof by any
person, entity or “group,” within the meaning of Section 13(d)(3) or
14(d)(2) of the Act (excluding, for this purpose, the Company or its
subsidiaries, any employee benefit plan of the Company or its subsidiaries that
acquires beneficial ownership of voting securities of the Company, and any
qualified institutional investor that meets the requirements of Rule 13d-1(b)(1) promulgated
under the Act) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Act), of 50% or more of either the then-outstanding
shares of common stock or the combined voting power of the Company’s
then-outstanding capital stock entitled to vote generally in the election of
directors; (ii) individuals who, as of the date hereof, constitute the
Board of Directors (the “Incumbent Board”) ceasing for any reason to
constitute at least a majority of the Board of Directors, provided that any
person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s stockholders was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or (iii) approval by the stockholders of the Company of (A) a
reorganization, merger or consolidation, in each case, with respect to which
persons who were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
more than 50% of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged, consolidated or other
surviving corporation’s then-outstanding voting securities, (B) a
liquidation or dissolution of the Company, or (C) the sale of all or
substantially all of the assets of the Company.

 

(b)                                 “Corporate
Status” describes the status of a person who is or was a director, officer,
employee, agent or fiduciary of the Company or of any other corporation,
partnership, limited liability company, joint venture, trust, employee benefit
plan or other enterprise that such person is or was serving in a similar
capacity at the written request of the Company.

 

(c)                                  “Disinterested
Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification or advancement is sought by
Indemnitee.

 

(d)                                 “Enterprise”
shall mean the Company and any other corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other
enterprise that Indemnitee is or was serving at the written request of the
Company as a director, officer, employee, agent or fiduciary.

 

2

 

(e)                                  “Expenses”
shall include all reasonable attorneys’ fees, retainers, disbursements of
counsel, court costs, filing fees, transcript costs, fees and expenses of
experts, witness fees and expenses, travel expenses, duplicating and imaging
costs, printing and binding costs, telephone charges, facsimile transmission
charges, computer legal research costs, postage, delivery service fees and all
other disbursements or expenses of the types customarily incurred in connection
with prosecuting, defending, preparing to prosecute or defend, investigating,
participating, or being or preparing to be a witness in a Proceeding, as well
as all other “expenses” within the meaning of that term as used in Section 145
of the General Corporation Law of the State of Delaware and all other
disbursements or expenses of types customarily and reasonably incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise participating
in, actions, suits, or proceedings similar to or of the same type as the
Proceeding with respect to which such disbursements or expenses were incurred;
but, notwithstanding anything in the foregoing to the contrary, “Expenses”
shall not include amounts of judgments, penalties, or fines actually levied
against the Indemnitee in connection with any Proceeding.  Expenses also shall include the foregoing
incurred in connection with any appeal resulting from any Proceeding, including
without limitation the premium, security for, and other costs relating to any
cost bond, supersedeas bond, or other appeal bond or its equivalent.

 

(f)                                   “Independent
Counsel” means a law firm, a member of a law firm or an independent
practitioner that is experienced in matters of corporation law and
indemnification issues and neither presently is, nor in the past five years has
been, retained to represent:  (i) the
Company or Indemnitee in any matter material to either such party (other than
with respect to matters concerning Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other
party to the Proceeding giving rise to a claim for indemnification
hereunder.  Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement.

 

(g)                                  “Proceeding”
includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation (including any internal
investigation), inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought by or in the right of the Company or
otherwise and whether civil, criminal, administrative or investigative, in
which Indemnitee was, is or will be involved as a party or otherwise, by reason
of the fact that Indemnitee is or was an officer or director of the Company, by
reason of any action taken by Indemnitee or of any inaction on such Indemnitee’s
part while acting as an officer or director of the Company, or by reason of the
fact that such Indemnitee is or was serving at the request of the Company as a
director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other Enterprise; in each case whether or
not he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification can be provided under this
Agreement; including one pending on or before the date of this Agreement, but
excluding one initiated by an Indemnitee pursuant to Section 8 of
this Agreement to enforce such Indemnitee’s rights under this Agreement.

 

3

 

(h)                                 References
herein to “fines” shall not include any excise tax assessed with respect to any
employee benefit plan.

 

(i)                                     References
herein to a director of another Enterprise or a director of an other Enterprise
shall include, in the case of any entity that is not managed by a board of
directors, such other position, such as manager or trustee or member of the
governing body of such entity, that entails responsibility for the management
and direction of such entity’s affairs, including, without limitation, the
general partner of any partnership (general or limited) and the manager or
managing member of any limited liability company.

 

(j)                                    (i) References
herein to serving at the request of the Company as a director, officer,
employee, agent, or fiduciary of another Enterprise shall include any service
as a director, officer, employee, or agent of the Company that imposes duties
on, or involves services by, such director or officer with respect to an
employee benefit plan of the Company or any of its affiliates, other than
solely as a participant or beneficiary of such a plan; and (ii) if the
Indemnitee has acted in good faith and in a manner the Indemnitee reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan, the Indemnitee shall be deemed to have acted in a manner
not opposed to the best interests of the Company for purposes of this
Agreement.

 

2.                                      Indemnity of Indemnitee.  The Company hereby agrees to hold harmless
and indemnify Indemnitee to the fullest extent permitted by applicable law, as
such may be amended from time to time. 
In furtherance of the foregoing indemnification, and without limiting
the generality thereof:

 

(a)                                 Proceedings
Other Than Proceedings by or in the Right of the Company.  Except as provided in Section 10
hereof, Indemnitee shall be entitled to the rights of indemnification
provided in this Section 2(a) if, by reason of Indemnitee’s
Corporate Status, the Indemnitee is or was, or is or was threatened to be made,
a party to or is otherwise involved in any Proceeding other than a Proceeding
by or in the right of the Company to procure a judgment in its favor.  Pursuant to this Section 2(a), Indemnitee
shall be indemnified against all Expenses, judgments, penalties, fines,
liabilities and amounts paid in settlement actually and reasonably incurred by
Indemnitee, or on Indemnitee’s behalf, in connection with such Proceeding or
any claim, issue or matter therein, but only if the Indemnitee acted in good
faith and in a manner the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, and with respect to any criminal
Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was
unlawful.

 

(b)                                 Proceedings by
or in the Right of the Company.  Except as provided in Section 10
hereof,  Indemnitee shall be entitled to
the rights of indemnification provided in this Section 2(b) if,
by reason of Indemnitee’s Corporate Status, the Indemnitee is or was, or is or
was threatened to be made, a party to or is or was otherwise involved in any
Proceeding brought by or in the right of the Company to procure a judgment in
its favor.  Pursuant to this Section 2(b), Indemnitee
shall be indemnified against all Expenses actually and reasonably incurred by
the Indemnitee, or on the Indemnitee’s behalf, in connection with such
Proceeding or any claim, issue or matter therein, but only if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company; 

 

4

 

provided, however,
if applicable law so provides, no indemnification for such Expenses shall be
made in respect of any claim, issue or matter in such Proceeding as to which
the Indemnitee shall have been adjudged liable to the Company unless (and only
to the extent that) the Court of Chancery of the State of Delaware or the court
in which such Proceeding was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, the Indemnitee is fairly and reasonably entitled to indemnity for
such Expenses that the Court of Chancery or such other court shall deem proper.

 

(c)                                  Overriding
Right to Indemnification if Successful on the Merits.  Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is or was, by reason of Indemnitee’s
Corporate Status or otherwise, a party to and is or was successful, on the
merits or otherwise, in any Proceeding, he shall be indemnified to the maximum
extent permitted by applicable law, as such may be amended from time to time,
against all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith. 
If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee to the maximum extent permitted by applicable law, as such may be
amended from time to time, against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully
resolved claim, issue or matter.  For
purposes of this Section and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or
matter.

 

3.                                      Additional
Indemnity.  In addition
to, and without regard to any limitations on, the indemnification provided for
in Section 2 of this Agreement, the Company shall and hereby does,
to the fullest extent permissible under applicable law, indemnify and hold
harmless Indemnitee against all Expenses, judgments, penalties, fines,
liabilities and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf if, by reason of Indemnitee’s Corporate Status,
he is, or is threatened to be made, a party to or participant in any Proceeding
(including a Proceeding by or in the right of the Company), including, without
limitation, all liability arising out of the negligence or active or passive
wrongdoing of Indemnitee.  The only
limitation that shall exist upon the Company’s obligations pursuant to this
Agreement shall be that the Company shall not be obligated to make any payment
to Indemnitee that is finally determined (under the procedures, and subject to
the presumptions, set forth in Section 7 and Section 8
hereof) to be unlawful.

 

4.                                      Contribution.

 

(a)                                 To the fullest
extent permissible under applicable law, whether or not the indemnification
provided in Section 2 and Section 3 hereof is
available, in respect of any threatened, pending or completed action, suit or
proceeding in which the Company is jointly liable with Indemnitee (or would be
if joined in such action, suit or proceeding), the Company shall pay, in the
first instance, the entire amount of any judgment or settlement of such action,
suit or proceeding without requiring Indemnitee to contribute to such payment,
and the Company hereby waives and relinquishes any right of contribution it may
have against Indemnitee.  The Company
shall not enter into any settlement of any action, suit or proceeding in which
the Company is jointly liable with Indemnitee (or would be if joined in such
action, suit or 

 

5

 

proceeding) unless such
settlement provides for a full and final release of all claims asserted against
Indemnitee.

 

(b)                                 To the fullest
extent permissible under applicable law, without diminishing or impairing the
obligations of the Company set forth in the preceding subparagraph, if, for any
reason, Indemnitee shall elect or be required to pay all or any portion of
any judgment or settlement in any threatened, pending or completed action, suit
or proceeding in which the Company is jointly liable with Indemnitee (or would
be if joined in such action, suit or proceeding), the Company shall contribute
to the amount of Expenses, judgments, fines, liabilities and amounts paid in
settlement actually and reasonably incurred and paid or payable by Indemnitee
in proportion to the relative benefits received by the Company and all
officers, directors or employees of the Company, other than Indemnitee, who are
jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction
from which such action, suit or proceeding arose; provided, however,
that the proportion determined on the basis of relative benefit may, to the
extent necessary to conform to law, be further adjusted by reference to the
relative fault of the Company and all officers, directors or employees of the
Company, other than Indemnitee, who are jointly liable with Indemnitee (or
would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, in connection with the events that resulted in
such Expenses, judgments, fines, liabilities or settlement amounts, as well as
any other equitable considerations which the law may require to be
considered.  The relative fault of the
Company and all officers, directors or employees of the Company, other than
Indemnitee, who are jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding), on the one hand, and Indemnitee, on the other
hand, shall be determined by reference to, among other things, the degree to
which their actions were motivated by intent to gain personal profit or
advantage, the degree to which their liability is primary or secondary and the
degree to which their conduct is active or passive.

 

(c)                                  The Company
hereby agrees to fully indemnify and hold Indemnitee harmless from any claim of
contribution brought by officers, directors or employees of the Company, other
than Indemnitee, who may be jointly liable with Indemnitee.

 

(d)                                 To the fullest
extent permissible under applicable law, if the indemnification provided for in
this Agreement is unavailable to Indemnitee for any reason whatsoever, the
Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, liabilities, penalties,
excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in
connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as the Board of Directors deems fair and
reasonable in light of all of the circumstances of such Proceeding in order to
reflect (i) the relative benefits received by the Company (together with
its directors, officers, employees and agents) and Indemnitee as a result of
the event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

 

5.                                      Indemnification
for Expenses of a Witness. 
Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is or was, by reason of Indemnitee’s Corporate Status or
otherwise, a witness, or is or was made (or asked) to respond to discovery
requests, in 

 

6

 

any Proceeding to which
Indemnitee is not a party, he shall be indemnified to the fullest extent
permissible under applicable law against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

6.                                      Advancement of
Expenses. 
Notwithstanding any other provision of this Agreement, but subject to Section 9(e) hereof,
the Company shall advance all Expenses incurred by or on behalf of Indemnitee
in connection with any Proceeding by reason of Indemnitee’s Corporate Status or
otherwise within thirty (30) calendar days after the receipt by the Company of
a statement or statements from Indemnitee requesting such advance or advances
from time to time, whether prior to or after final disposition of such
Proceeding.  Such statement or statements
shall reasonably evidence the Expenses incurred by or on behalf of Indemnitee
and for which advancement is requested, and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall finally be determined (under the procedures, and
subject to the presumptions, set forth in Section 7 and Section 8
hereof) that Indemnitee is not entitled to be indemnified against such
Expenses.  Such undertaking shall be sufficient
for purposes of this Section 6 if it is substantially in the form
attached hereto as Exhibit A. 
Any advances and undertakings to repay pursuant to this Section 6
shall be unsecured and interest-free.  The Indemnitee shall be entitled to
advancement of Expenses as provided in this Section 6 regardless of
any determination by or on behalf of the Company that the Indemnitee has not
met the standards of conduct set forth in Sections 2(a) and 2(b) hereof.

 

7.                                      Procedures and
Presumptions for Determination of Entitlement to Indemnification.  It is the intent of this Agreement to secure
for Indemnitee rights of indemnity that are as favorable as may be permitted
under the DGCL and public policy of the State of Delaware.  Accordingly, the parties agree that the
following procedures and presumptions shall apply in the event of any question
as to whether Indemnitee is entitled to indemnification under this Agreement:

 

(a)                                 Indemnitee
shall give the Company notice in writing as soon as practicable of any claim made
against Indemnitee for which indemnification will or could be sought under this
Agreement.  To obtain indemnification
under this Agreement, the Indemnitee shall submit to the Company a written
request for indemnification, including therein or therewith, except to the
extent previously provided to the Company in connection with a request or
requests for advancement pursuant to Section 6 hereof, a statement
or statements reasonably evidencing all Expenses incurred or paid by or on
behalf of the Indemnitee and for which indemnification is requested, together
with such documentation and information as is reasonably available to
Indemnitee and as is reasonably necessary for the Company to determine whether
and to what extent Indemnitee is entitled to indemnification.  The Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested indemnification.  Failure to provide any notice required hereby
shall not impair Indemnitee’s rights of indemnification and contribution under
this Agreement except to the extent that such failure to provide notice
actually and materially prejudices the rights of the Company to defend any
action or proceeding which is the basis of the claimed indemnification.

 

7

 

(b)                                 Upon written request by Indemnitee for
indemnification pursuant to the second sentence of Section 7(a) hereof,
a determination with respect to Indemnitee’s entitlement thereto shall be made
by the following person or persons, who shall be empowered to make such
determination: (i) if a Change in Control shall have occurred, by
Independent Counsel (unless Indemnitee shall request in writing that such
determination be made by the Board of Directors (or a committee thereof) in the
manner provided for in clause (ii) of this Section 7(b)) in a
written opinion to the Board of Directors, a copy of which shall be delivered
to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A)(1) by
Independent Counsel, if Indemnitee shall request in writing that such
determination be made by Independent Counsel upon making Indemnitee’s request
for indemnification pursuant to the second sentence of Section 7(a),
(2) by the Board
of Directors of the Company, by a majority vote of Disinterested Directors even
though less than a quorum, or (3) by a committee of Disinterested
Directors designated by majority vote of Disinterested Directors, even though
less than a quorum, or (B) if there are no such Disinterested Directors
or, even if there are such Disinterested Directors, if the Board of Directors,
by the majority vote of Disinterested Directors, so directs, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall
be delivered to Indemnitee.

 

(c)                                  If the
determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) hereof, the Independent
Counsel shall be selected by the Board of Directors and approved by
Indemnitee.  Upon failure of the Board of
Directors to so select, or upon the failure of Indemnitee to so approve, such
Independent Counsel within 20 days after submission by Indemnitee of a written
request for indemnification pursuant to Section 7(a) hereof,
the Independent Counsel shall be selected by the Court of Chancery of the State
of Delaware or such other person or body as the Indemnitee and the Company may
agree in writing.  Such determination of
entitlement to indemnification shall be made not later than forty-five (45)
days after receipt by the Company of a written request for
indemnification.  If the person making
such determination shall determine that Indemnitee is entitled to
indemnification as to part (but not all) of the application for indemnification,
such person shall reasonably pro-rate such part of indemnification among such
claims, issues or matters.  If it is so
determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such
determination.  The Company shall pay any
and all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Section 7(b) hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 7(c), regardless of the manner in which
such Independent Counsel was selected or appointed.

 

(d)                                 In connection
with any determination (including a determination by the Court of Chancery of
the State of Delaware (or other court of competent jurisdiction)) with respect
to entitlement to indemnification hereunder, the burden of proof shall be on
the Company to establish that Indemnitee is not entitled to indemnification and
any decision that Indemnitee is not entitled to indemnification must be
supported by clear and convincing evidence. 
The failure of the Company (including by its directors or Independent
Counsel) to have made a determination prior to the commencement of any action
pursuant to this Agreement that indemnification is proper in the circumstances
because Indemnitee has met the applicable standard of conduct, or an actual
determination by the Company (including by its directors or Independent
Counsel) that Indemnitee has not met such applicable standard of conduct, shall
not 

 

8

 

be a defense to the action
or create a presumption that Indemnitee has not met the applicable standard of
conduct.

 

(e)                                  In making a
determination with respect to whether Indemnitee acted in good faith and in a
manner that Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, the person or persons or entity making such
determination shall presume that Indemnitee acted in good faith and in a manner
that Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company.  Anyone seeking
to overcome this presumption shall have the burden of proof and any decision
that Indemnitee is not entitled to indemnification must be supported by clear
and convincing evidence.  In addition,
and in no way limiting the provisions of this Section 7, Indemnitee
shall be deemed to have acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Enterprise, or with respect to any criminal action or proceeding to have had no
reasonable cause to believe Indemnitee’s conduct was unlawful, if Indemnitee’s
action is based on (i) the records or books of account of the Enterprise, (ii) information
supplied to Indemnitee by the officers of the Enterprise in the course of their
duties, (iii) the advice of legal counsel for the Enterprise or (iv) information
or records given or reports made to the Enterprise by an independent certified
public accountant or by an appraiser or other expert selected with reasonable
care by the Enterprise; provided, however, that any failure by
Indemnitee to act on the advice of legal counsel for the Enterprise shall not,
in and of itself, constitute grounds for an adverse determination with respect
to whether Indemnitee acted in good faith and in a manner that Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  In addition, the knowledge
and/or actions, or failure to act, of any director, officer, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.

 

(f)                                   If the person,
persons or entity empowered or selected under this Section 7 to determine
whether Indemnitee is entitled to indemnification shall not have made a
determination within sixty (60) days after receipt by the Company of the
request therefor, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such sixty (60) day
period may be extended for a reasonable time, not to exceed an additional
thirty (30) days, if the person, persons or entity making such determination
with respect to entitlement to indemnification in good faith requires such
additional time to obtain or evaluate documentation and/or information relating
thereto and so notifies the Indemnitee.

 

(g)                                  Indemnitee
shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination.  Any
Independent Counsel or member of the Board of Directors shall act reasonably
and in good faith in making a determination regarding the Indemnitee’s
entitlement to indemnification under this Agreement.  Any costs or expenses (including attorneys’
fees and disbursements) incurred by 

 

9

 

Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by
the Company (irrespective of the determination as to Indemnitee’s entitlement
to indemnification) and the Company hereby agrees to indemnify and hold
Indemnitee harmless therefrom.

 

(h)                                 The Company
acknowledges that a settlement or other disposition short of final judgment may
be successful if it permits a party to avoid expense, delay, distraction,
disruption and uncertainty.  In the event
that any Proceeding to which Indemnitee is or becomes a party is resolved in
any manner other than by adverse judgment against Indemnitee (including,
without limitation, settlement of such action, claim or proceeding with or
without payment of money or other consideration) it shall be presumed that
Indemnitee has been successful on the merits or otherwise in such
Proceeding.  Anyone seeking to overcome
this presumption shall have the burden of proof and the burden of persuasion by
clear and convincing evidence.

 

(i)                                     The termination
of any Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification under this
Agreement or create a presumption that Indemnitee did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.

 

8.                                      Remedies of
Indemnitee.

 

(a)                                 In the event
that (i) a determination is made pursuant to Section 7 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement, (iii) no determination of entitlement to
indemnification is made pursuant to Section 7(b) of this
Agreement within ninety (90) days after receipt by the Company of the request
for indemnification, (iv) payment of indemnification is not made pursuant
to this Agreement within fifty-five (55) days after receipt by the Company of a
written request therefor or (v) payment of indemnification is not made
within ten (10) days after a determination has been made that Indemnitee
is entitled to indemnification or such determination is deemed to have been
made pursuant to Section 7 of this Agreement, Indemnitee shall
be entitled to an adjudication in an appropriate court of the State of
Delaware, or in any other court of competent jurisdiction, of Indemnitee’s
entitlement to such indemnification and/or advancement of Expenses.  The Company shall not oppose Indemnitee’s
right to seek any such adjudication.

 

(b)                                 In the event
that a determination shall have been made pursuant to Section 7(b) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding commenced pursuant to this Section 8 shall be conducted
in all respects as a de novo trial on the merits, and Indemnitee shall not be
prejudiced by reason of the adverse determination under Section 7(b).

 

(c)                                  If a
determination shall have been made pursuant to Section 7(b) of
this Agreement that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding commenced
pursuant to this Section 8, absent (i) a 

 

10

 

misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee’s misstatement not materially misleading in connection with the
application for indemnification, or (ii) a prohibition of such
indemnification under applicable law.

 

(d)                                 In the event that (a) the Indemnitee
commences a proceeding seeking (1) to establish or enforce the Indemnitee’s
entitlement to indemnification or advancement pursuant to this Agreement, (2) to
otherwise enforce Indemnitee’s rights under or to interpret the terms of this
Agreement, (3) to recover damages for breach of this Agreement, (4) to
establish or enforce Indemnitee’s entitlement to indemnification or advancement
pursuant to the Certificate or the Bylaws, or (5) to enforce or interpret
the terms of any liability insurance policy maintained by the Company (each
such proceeding an “Indemnitee Enforcement Proceeding”), or (b) the
Company commences a proceeding against the Indemnitee seeking (1) to
recover, pursuant to an undertaking or otherwise, amounts previously advanced
to Indemnitee, (2) to enforce the Company’s rights under or to interpret
the terms of this Agreement, or (3) to recover damages for breach of this
Agreement (each such proceeding a “Company Enforcement Proceeding” and
together with each form of Indemnitee Enforcement Proceeding, an “Enforcement
Proceeding”), then the Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company against, any and all Expenses
actually and reasonably incurred by or on behalf of such Indemnitee in connection
with such Enforcement Proceeding, provided, however, if
applicable law so provides, no indemnification against such Expenses shall be
made in respect of any claim, issue or matter in such Proceeding on which
Indemnitee does not prevail, unless (and only to the extent that) the Court of
Chancery of the State of Delaware or the court in which such Proceeding was
brought shall determine upon application that, despite the adjudication in
respect of such claim, issue or matter but in view of all the circumstances of
the case, the Indemnitee is fairly and reasonably entitled to indemnity for
such Expenses that the Court of Chancery or such other court shall deem
proper.  The Company also shall be
required to advance all Expenses actually and reasonably incurred by or on
behalf of the Indemnitee in connection with any Enforcement Proceeding in
advance of the final disposition of such Enforcement Proceeding within thirty
(30) days after the receipt by the Company of a written request for such
advance or advances from time to time, which request shall include or be
accompanied by a statement or statements reasonably evidencing the Expenses
incurred by or on behalf of the Indemnitee and for which advancement is
requested; provided, however, that any such advancement shall be
made only after the Company receives an undertaking by or on behalf of the
Indemnitee to repay any Expenses so advanced if it shall be finally determined
that Indemnitee is not entitled to be indemnified against such Expenses.

 

(e)                                  The Company
shall be precluded from asserting in any judicial proceeding commenced pursuant
to this Section 8 that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any
such court that the Company is bound by all the provisions of this Agreement.

 

(f)                                   Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement
to indemnification under this Agreement shall be required to be made prior to
the final disposition of the Proceeding.

 

11

 

9.                                      Non-Exclusivity;
Survival of Rights; Insurance; Subrogation.

 

(a)                                 The rights of
indemnification as provided by this Agreement shall not be deemed exclusive of
any other rights to which Indemnitee may at any time be entitled under
applicable law, the Certificate, the Bylaws, any agreement, a vote of
stockholders, a resolution of directors or otherwise.  No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in Indemnitee’s Corporate Status or otherwise prior to such
amendment, alteration or repeal.  To the
extent that a change in the DGCL or applicable law, whether by statute or
judicial decision, permits greater indemnification or advancement than would be
afforded currently under the Certificate, the Bylaws and this Agreement, it is
the intent of the parties hereto that Indemnitee shall enjoy by this Agreement
the greater benefits so afforded by such change.  No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.  Notwithstanding anything in this Agreement to
the contrary, the indemnification and contribution provided for in this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of Indemnitee or any of Indemnitee’s agents.

 

(b)                                 To the extent
that the Company maintains an insurance policy or policies providing liability
insurance for directors, officers, employees, or agents or fiduciaries of the
Company or of any other corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other Enterprise that such
person serves at the request of the Company, Indemnitee shall be covered
by such policy or policies in accordance with its or their terms to the maximum
extent of the coverage available for any director, officer, employee, agent or
fiduciary under such policy or policies. 
If, at the time of the receipt of a notice of a claim pursuant to the
terms hereof, the Company has director and officer liability or other
applicable insurance in effect, the Company shall give prompt notice of the
commencement of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies.  The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such Proceeding in accordance
with the terms of such policies.

 

(c)                                  Subject to Section 9(f),
except as otherwise agreed between the Company, on the one hand, and Indemnitee
or another indemnitor of Indemnitee, on the other, in the event of any payment
to or on behalf of the Indemnitee under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers reasonably required and take all
action reasonably necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights.

 

(d)                                 Subject to Section 9(f),
except as otherwise agreed between the Company, on the one hand, and Indemnitee
or another indemnitor of Indemnitee, on the other, the Company shall not be
liable under this Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that Indemnitee has otherwise actually received
such 

 

12

 

payment under any Company
insurance policy, Company contract, Company agreement or otherwise (except to
the extent that Indemnitee is required (by court order or otherwise) to return
such payment or to surrender it to the Company).

 

(e)                                  Subject to Section 9(f),
except as otherwise agreed between the Company, on the one hand, and Indemnitee
or another indemnitor of Indemnitee, on the other, the Company’s obligation to
indemnify or advance Expenses hereunder to Indemnitee who is or was serving at
the request of the Company as a director, officer, employee or agent of any
other corporation, partnership, limited liability company, joint venture,
trust, employee benefit plan or other Enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from such other corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise (except to the extent
that Indemnitee is required (by court order or otherwise) to return such
payment or to surrender it to the Company).

 

(f)                                   The Company
hereby acknowledges that Indemnitee is serving as a director or officer of the
Company at the request of the Company or its Board of Directors.  The Company hereby further acknowledges that
Indemnitee might have certain rights to indemnification, advancement of
Expenses and/or insurance coverage provided by one or more third parties other
than the Company and its insurers (collectively, the “Third Party
Indemnitors”).  The Company hereby
agrees that: (i) as between the Company and any Third Party Indemnitor,
the Company is the indemnitor of first resort (i.e., its obligations to
Indemnitee are primary and any obligation of any Third Party Indemnitor to
advance Expenses or to provide indemnification or insurance coverage for the
same Expenses or liabilities incurred by Indemnitee are secondary); (ii) it
shall be required to advance the full amount of Expenses incurred by or on
behalf of Indemnitee and shall be liable for the full amount of all judgments
or amounts paid in settlement to the extent legally permitted and as required
by the terms of this Agreement, the Certificate or the Bylaws (or any other
agreement between the Company and Indemnitee), without regard to any rights
Indemnitee may have against any Third Party Indemnitor; and (iii) it
hereby irrevocably and unconditionally waives, relinquishes and releases any
and all Third Party Indemnitors from any and all claims against the Third Party
Indemnitors (or any of them) for contribution, subrogation or any other
recovery of any kind in respect thereof. 
The Company further agrees that no advancement or payment by any Third
Party Indemnitor on behalf of Indemnitee with respect to any claim for which
Indemnitee has sought indemnification from the Company shall affect the
foregoing in any respect and the Third Party Indemnitors shall have a right of
contribution and/or be subrogated to the extent of such advancement or payment
to all of the rights of recovery of Indemnitee against the Company.  The Company and Indemnitee agree that the
Third Party Indemnitors are express third party beneficiaries of the terms of
this Section 9.

 

10.                               Exception to
Right of Indemnification. 
Notwithstanding any provision in this Agreement, the Company shall not
be obligated under this Agreement to make any indemnity in connection with any
claim made against Indemnitee:

 

(a)                                 for which
payment has actually been made to or on behalf of Indemnitee under any insurance
policy, or other indemnity provision or otherwise, except with respect to any 

 

13

 

excess beyond the amount so
paid, and except as may otherwise be agreed between the Company, on the one
hand, and Indemnitee or another indemnitor of Indemnitee, on the other;

 

(b)                                 for an
accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of
the Act, as amended, or similar provisions of state statutory law or common
law; or

 

(c)                                  in connection
with any Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated by
Indemnitee against the Company or any of its direct or indirect subsidiaries or
the directors, officers, employees or other indemnitees of the Company or its
direct or indirect subsidiaries (other than any Proceeding initiated by
Indemnitee pursuant to Section 8(d),  which shall be governed by the terms of such
section), unless (i) the Board of Directors of the Company authorized the
Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the
Company provides the indemnification, in its sole discretion, pursuant to the
powers vested in the Company under applicable law.

 

11.                               Successors.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company), assigns, spouses, heirs, executors and personal and
legal representatives.

 

12.                               Security.  To the extent requested by Indemnitee and
approved by the Board of Directors of the Company, the Company may at any time
and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust
or other collateral.  Any such security,
once provided to Indemnitee, may not be revoked or released without the prior
written consent of the Indemnitee.

 

13.                               Enforcement.

 

(a)                                 The Company
expressly confirms and agrees that it has entered into this Agreement and
assumes the obligations imposed on it hereby in order to induce Indemnitee to
serve or continue serving as an officer or director of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as an officer or director of the Company.

 

(b)                                 This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral, written and implied, between the parties hereto with respect to the
subject matter hereof.

 

(c)                                  The Company
represents that this Agreement has been approved by the Company’s Board of
Directors.

 

14.                               Severability.  The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof.  Without limiting
the generality of the foregoing, this Agreement is intended to confer upon
Indemnitee 

 

14

 

indemnification rights to
the fullest extent permitted by applicable laws.  In the event any provision hereof conflicts
with any applicable law, such provision shall be deemed modified, consistent
with the aforementioned intent, to the extent necessary to resolve such
conflict.

 

15.                               Modification
and Waiver.  No
supplement, modification, termination or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

 

16.                               Notice By
Indemnitee.  Indemnitee
agrees to promptly notify the Company in writing upon being served with or
otherwise receiving any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or matter which may be
subject to indemnification covered hereunder. 
The failure to so notify the Company shall not relieve the Company of
any obligation which it may have to Indemnitee under this Agreement or
otherwise unless and only to the extent that such failure or delay materially
prejudices the Company.

 

17.                               Disclosure of
Payments.  Except as
expressly required by any law, neither party shall publicly disclose any
payments under this Agreement unless prior approval of the other party is
obtained.

 

18.                               Notices.  Unless otherwise provided herein, any notice
required or permitted under this Agreement shall be deemed effective upon the
earlier of (a) actual receipt, or (b) (i) one (1) business
day after the date of delivery by confirmed facsimile transmission, (ii) one
(1) business day after the business day of deposit with a nationally
recognized overnight courier service for next day delivery, freight prepaid, or
(iii) three (3) business days after deposit with the United States
Post Office for delivery by registered or certified mail, postage prepaid.  Any such notice shall be in writing and shall
be addressed to the party to be notified at the address indicated for such
party indicated on the signature pages or exhibits hereto, as otherwise
set forth in this Section 18, or at such other address as such
party may designate by ten (10) days’ advance written notice to the other
parties.  All communications shall be
sent:

 

(a)                                 To Indemnitee
at the address set forth below Indemnitee’s signature hereto;

 

(b)                                 To the Company
at:

 

The
Howard Hughes Corporation

13355
Noel Road, Suite 950

Dallas,
TX 75240

Attention:  General Counsel

Facsimile:  (214) 741-3021

 

or to such other address as
may have been furnished to Indemnitee by the Company or to the Company by
Indemnitee, as the case may be.

 

15

 

19.                               Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.  This Agreement may also be executed and
delivered by facsimile or electronic signature.

 

20.                               Headings.  The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.

 

21.                               Governing Law
and Consent to Jurisdiction.  This Agreement and the legal relations among
the parties shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, without regard to its conflict of laws
rules.  The Company and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding
arising out of or in connection with this Agreement shall be brought only in
the Chancery Court of the State of Delaware (the “Delaware Court”), and
not in any other state or federal court in the United States of America or any
court in any other country, (ii) consent to submit to the exclusive
jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) consent to
service of any summons and complaint and any other process that may be served
in any action, suit, or proceeding arising out of or relating to this Agreement
by mailing by certified or registered mail, with postage prepaid, copies of
such process to such party at its address for receiving notice pursuant to Section 18
hereof, (iv) waive any objection to the laying of venue of any such action
or proceeding in the Delaware Court, and (v) waive, and agree not to plead
or to make, any claim that any such action or proceeding brought in the
Delaware Court has been brought in an improper or inconvenient forum.  Nothing herein shall preclude service of
process by any other means permitted by applicable law.

 

22.                               Assignment.  Neither party hereto may assign this
Agreement without the prior written consent of the other party; provided,
however, that the Company may assign this Agreement upon a Change in
Control.

 

23.                               Construction.  The parties acknowledge that both parties
have contributed to the drafting of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document.

 

[signature page follows]

 

16

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above written.

 

 

	
  INDEMNITEE:

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  [·]

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  [·]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  
	
   

  	
   

  
	
  THE
  HOWARD HUGHES CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Authorized Officer

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

[Signature Page to Holdings Indemnification Agreement]

 

 

Exhibit A

 

UNDERTAKING

 

Reference is hereby made to
that certain Indemnification Agreement, by and between The Howard Hughes Corporation,
a Delaware corporation (the “Company”), and the undersigned, dated as of
[·] (the “Indemnification
Agreement”).  All initially
capitalized terms used herein and not otherwise defined herein shall have the
meanings set forth in the Indemnification Agreement.

 

Pursuant to the
Indemnification Agreement, I,
                                                                                                      ,
agree to reimburse the Company for all Expenses paid to me or on my behalf by
the Company in connection with my involvement in [name or
description of proceeding or proceedings], in the event, and to the
extent, that it shall ultimately be determined (pursuant to the terms of the
Indemnification Agreement) that I am not entitled to be indemnified by the
Company for such Expenses.

 

 

	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Typed Name

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ) ss:

  	
   

  	
   

  	
   

  
					

 

Before me                                             ,
on this day personally appeared                                       ,
known to me to be the person whose name is subscribed to the foregoing
instrument, and who, after being duly sworn, stated that the contents of said
instrument is to the best of his/her knowledge and belief true and correct and
who acknowledged that he/she executed the same for the purpose and
consideration therein expressed.

 

GIVEN under my hand and
official seal at
                ,
this               
day of                       ,
20    .

 

 

	
   

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
  My commission expires:

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