{"id":43745,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/tax-allocation-agreement-reliant-energy-inc-and-reliant.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"tax-allocation-agreement-reliant-energy-inc-and-reliant","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/tax-allocation-agreement-reliant-energy-inc-and-reliant.html","title":{"rendered":"Tax Allocation Agreement &#8211; Reliant Energy Inc. and Reliant Resources Inc."},"content":{"rendered":"<pre>\n                            TAX ALLOCATION AGREEMENT\n\n                                  BY AND AMONG\n\n                          RELIANT ENERGY, INCORPORATED\n\n                          AND ITS AFFILIATED COMPANIES\n\n                                       AND\n\n                             RELIANT RESOURCES, INC.\n\n                          AND ITS AFFILIATED COMPANIES\n\n\n   2\n\n\n                            TAX ALLOCATION AGREEMENT\n\n         THIS TAX ALLOCATION AGREEMENT (this \"Agreement\") is entered into as of\nDecember 31, 2000, by and among Reliant Energy, Incorporated (\"REI\"), a Texas\ncorporation, each REI Affiliated Company (as defined below), Reliant Resources,\nInc. (\"UNREGCO\"), a Delaware corporation, and each UNREGCO Affiliated Company\n(as defined below) in connection with the Restructuring and Spinoff (as defined\nbelow).\n\n                                    RECITALS\n\n         WHEREAS, REI is the common parent of an affiliated group of\ncorporations within the meaning of Section 1504(a) of the Internal Revenue Code\nof 1986, as amended (the \"Code\"), which currently files a consolidated Federal\nIncome Tax (as defined below) return, and which, together with other affiliated\ncorporations, is a successor party to the Tax Sharing Agreement (as defined\nbelow);\n\n         WHEREAS, as set forth in the Master Separation Agreement entered into\nas of December 31, 2000 (the \"Master Separation Agreement\"), and subject to the\nterms and conditions thereof, REI, UNREGCO and each member of the REI\nConsolidated Group (as defined below) have determined it would be appropriate\nand desirable for REI to reorganize its operations to separate further its\nunregulated businesses from its regulated businesses (the \"Restructuring\"), and\nas part of such restructuring, as more fully discussed in the Master Separation\nAgreement, to form REGCO (as defined below) as the new holding company for REI's\nregulated businesses;\n\n         WHEREAS REI contemplates that as part of the Restructuring, REI will\nmake an initial public offering (the \"IPO\") of UNREGCO common stock that will\nreduce REI's ownership of UNREGCO to not less than the amount required for REI\nto control UNREGCO within the meaning of Section 368(c) of the Code and, for REI\nto satisfy the stock ownership requirement of Section 1504(a)(2) of the Code\nwith respect to the stock of UNREGCO;\n\n         WHEREAS subsequent to the IPO, REGCO will be formed and MERGERCO2, a\ntransitory wholly-owned subsidiary of REGCO, has been or will be formed to merge\nwith and into REI, with REI surviving as a wholly-owned subsidiary of REGCO;\n\n         WHEREAS, in connection with the Restructuring, REI will distribute its\nshares of UNREGCO common stock to REGCO (the \"First Distribution\") and REGCO\nwill distribute all of its shares of UNREGCO common stock, on a pro rata basis,\nto the holders of the common stock of REGCO, subject to the terms and conditions\nof the Master Separation Agreement (the \"Distribution\");\n\n         WHEREAS, the First Distribution and the Distribution are intended to\nqualify as tax free distributions under Section 355 of the Code;\n\n         WHEREAS, upon the Distribution, UNREGCO and REGCO will cease to be\nmembers of the same affiliated group for Federal Income Tax purposes; and\n\n                                      -1-\n   3\n\n         WHEREAS, in contemplation of the Distribution the parties hereto have\ndetermined to enter into this Agreement, setting forth their agreement with\nrespect to certain Tax matters.\n\n         NOW THEREFORE, in consideration of the mutual covenants and promises\ncontained herein, and other good and valuable consideration, the receipt and\nsufficiency of which are hereby acknowledged, the parties agree as follows:\n\nSECTION 1. DEFINITIONS\n\n           1.1 In General. As used in this Agreement, the following capitalized\nterms shall have the following meanings:\n\n           \"Adequate Assurances\" means posting a bond or providing a letter of\ncredit reasonably acceptable to the Indemnitee; provided, however, if the\nIndemnifying Party fails to post such bond or provide such letter of credit, the\nIndemnifying Party shall provide cash equal to the Indemnity Amount to the\nIndemnitee not less than thirty (30) days prior to the date on which such Tax\nwould become due and payable by the Indemnitee.\n\n           \"Audit\" includes any audit, assessment of Taxes, other examination by\nany Tax Authority, proceeding, or appeal of such a proceeding relating to Taxes,\nwhether administrative or judicial, including proceedings relating to competent\nauthority determinations.\n\n           \"Code\" means the Internal Revenue Code of 1986, as amended, including\ninterpretations issued thereunder through (i) Treasury Regulations, (ii) court\ndecisions and (iii) revenue rulings, notices and other generally applicable\npronouncements of the Service.\n\n           \"Consolidated Group\" means an affiliated group under Section 1504(a)\nof the Code that files a Consolidated Return.\n\n           \"Consolidated Return\" means any Tax Return with respect to Federal\nIncome Taxes filed on a consolidated basis.\n\n           \"Consolidated Return Regulations\" means the Treasury Regulations\npromulgated under Chapter 6 of Subtitle A of the Code, including, as applicable,\nany predecessors or successors thereto.\n\n           \"Consolidated Return Year\" means any taxable year for which a\nConsolidated Return is filed.\n\n           \"Consolidated State Tax\" means any Tax incurred by a Legal Entity\nthat is not a Federal Income Tax and that is filed on a combined, unitary, or\nconsolidated basis.\n\n           \"Consolidated State Tax Return\" means a Tax Return filed with respect\nto a Consolidated State Tax liability.\n\n           \"Control\" means stock constituting a 50% or greater interest under\nSection 355(e) of the Code.\n\n                                      -2-\n   4\n\n         \"DIT\" means any \"deferred intercompany transaction\" or \"intercompany\ntransaction\" within the meaning of the Treasury Regulations (or predecessors\nthereto).\n\n         \"Distribution\" has the meaning set forth in the Recitals to this\nAgreement.\n\n         \"Distribution Date\" means the date on which the Distribution is\neffective.\n\n         \"Estimated Federal Installment Payment\" has the meaning set forth in\nSection 4.1(c).\n\n         \"Estimated UNREGCO State Installment Payment\" has the meaning set forth\nin Section 4.1(e).\n\n         \"Estimated REI State Installment Payment\" has the meaning set forth in\nSection 4.1(d)(i).\n\n         \"Excluded Adjustment Payments\" means (i) an increase in Tax liability\nrelated to an UNREGCO Retained Tax liability as a result of a Redetermination,\n(ii) an increase in an UNREGCO Consolidated State Tax liability as a result of a\nRedetermination and (iii) an increase in Tax liability related to a Temporary\nTax Adjustment.\n\n         \"Federal Income Tax\" means any Tax imposed under Subtitle A of the Code\n(including the Taxes imposed by Sections 11, 55, and 1201(a) of the Code and any\nTax imposed on a Consolidated Group), and any interest, additions to Tax or\npenalties applicable or related thereto, and any other income-based U.S. federal\nTax which is hereinafter imposed upon corporations.\n\n         \"Federal Income Tax Return\" means a Tax Return filed with respect to a\nFederal Income Tax liability.\n\n         \"Filing Party\" has the meaning set forth in Section 2.3(b) of this\nAgreement.\n\n         \"Final Determination\" means with respect to any issue (i) a decision,\njudgment, decree or other order by any court of competent jurisdiction, which\ndecision, judgment, decree or other order has become final and not subject to\nfurther appeal, (ii) a closing agreement (whether or not entered into under\nSection 7121 of the Code) or any other binding settlement agreement (whether or\nnot with the Service) entered into in connection with or in contemplation of an\nadministrative or judicial proceeding, or (iii) the completion of the highest\nlevel of administrative proceedings if a judicial contest is not or is no longer\navailable. A \"Final Determination\" shall also include an agreement that the\nparties mutually designate as a Final Determination regarding any issue.\n\n         \"First Distribution\" has the meaning set forth in the Recitals to this\nAgreement.\n\n         \"First Spinoff\" means the separation of UNREGCO from REI through the\nFirst Distribution.\n\n                                      -3-\n   5\n\n\n         \"Foreign Country\" means any country, or political subdivision of a\ncountry, other than the United States of America.\n\n         \"Foreign Legal Entity\" means any Legal Entity that is organized under\nthe laws of a Foreign Country.\n\n         \"Income Taxes\" means (1) any Tax based upon, measured by, or calculated\nwith respect to (A) net income or profits (including any capital gains tax,\nminimum tax and any tax on items of Tax preference, but not including sales,\nuse, real or personal property, gross or net receipts, transfer or similar\ntaxes) or (B) multiple bases if one or more of the bases upon which such tax may\nbe based, measured by, or calculated with respect to, is described in clause (A)\nabove, or (2) any U.S. state or local income and\/or franchise tax.\n\n         \"Indemnified Liability\" has the meaning set forth in Section 6.3.\n\n         \"Indemnifying Party\" has the meaning set forth in Section 6.2(d) of\nthis Agreement.\n\n         \"Indemnitee\" has the meaning set forth in Section 6.2(d) of this\nAgreement.\n\n         \"Indemnity Amount\" has the meaning set forth in Section 6.5.\n\n         \"Initial Private Letter Ruling\" means the first private letter ruling\nissued by the Service to REI or its successor, REGCO, in connection with the\nFirst Spinoff and the Spinoff.\n\n         \"Legal Entity\" means a corporation, partnership, limited liability\ncompany or other legal entity under the corporation, partnership, limited\nliability company or other organizational laws of a state or other jurisdiction.\n\n         \"Master Separation Agreement\" has the meaning set forth in the Recitals\nto this Agreement.\n\n         \"MERGERCO2\" has the meaning set forth in the Recitals to this\nAgreement.\n\n         \"Non-Filing Party\" means with respect to a particular Tax Return (i)\nUNREGCO if the Legal Entity that filed such Tax Return was REI or a member of\nthe REI Group (or as successors, REGCO or a member of the REGCO Group) or (ii)\nREI (or its successor REGCO) if the Legal Entity that filed such Tax Return was\nUNREGCO or a member of the UNREGCO Group.\n\n         \"Non-Filing Party Responsible Taxes\" has the meaning set forth in\nSection 7.3(a).\n\n         \"Option Deduction Reallocation\" has the meaning set forth in Section\n5.4(h).\n\n         \"Other Tax Item Refund\" has the meaning set forth in Section 5.2(c).\n\n         \"Post-Distribution Period\" means any taxable period beginning after the\nDistribution Date.\n\n                                      -4-\n   6\n\n         \"Pre-Distribution Period\" means any taxable period ending on or prior\nto the Distribution Date.\n\n         \"Pre-1997 Tax Liability\" means the Tax liability of the former NorAm\nEnergy Corp. and any Legal Entity that was in the same Consolidated Group as\nNorAm Energy Corp. prior to August 6, 1997, to the extent such Tax liability (i)\nrelates to a Tax period ending on or before, or that includes, August 6, 1997,\nand (ii) relates to a Legal Entity that is or was a member (or whose successor\nis a member) of the UNREGCO Consolidated Group.\n\n         \"Pro Forma UNREGCO Returns\" has the meaning set forth in Section\n2.4(a).\n\n         \"Prohibited Act\" has the meaning set forth in Section 6.2(c).\n\n         \"Prohibited Transaction\" has the meaning set forth in Section 6.2(b).\n\n         \"Redetermination\" means any redetermination that occurs as the result\nof an Audit by the Service (or the relevant state, local or foreign governmental\nauthority), a claim for refund, an amended Tax Return or otherwise, and that is\nresolved by a Final Determination.\n\n         \"Redetermination Interest\" has the meaning set forth in Section 5.6(e).\n\n         \"Redetermination Tax\" has the meaning set forth in Section 5.6(e).\n\n         \"REGCO\" has the meaning set forth in the Recitals to this Agreement and\nis the Legal Entity referred to as Regco in the Master Separation Agreement.\n\n         \"REGCO Affiliated Company\" means at a given time any corporation that\n(i) would be a member of the affiliated group, as defined under Section 1504(a)\nof the Code, on the assumption that REGCO is the common parent of such\naffiliated group and (ii) is not a member of the UNREGCO Group.\n\n         \"REGCO Consolidated Group\" means with respect to a particular Tax\nperiod a Consolidated Group in which REGCO is the common parent for all or a\nportion of such Tax period.\n\n         \"REGCO Group\" means REGCO and each REGCO Affiliated Company.\n\n         \"REI Affiliated Company\" means at a given time any corporation that (i)\nwould be a member of the affiliated group, as defined under Section 1504(a) of\nthe Code, on the assumption that REI is the common parent of such affiliated\ngroup and (ii) is not a member of the UNREGCO Group.\n\n         \"REI Consolidated Group\" means with respect to a particular Tax period\na Consolidated Group in which REI is the common parent for all or a portion of\nsuch Tax period.\n\n         \"REI Consolidated State Tax\" means a Consolidated State Tax for a\nparticular Tax period for which REI or a member of the REI Group (or its\nsuccessors REGCO or the \n\n                                      -5-\n   7\n\nREGCO Group) has the legal obligation to file a Tax Return with respect to such\nConsolidated State Tax.\n\n         \"REI Consolidated State Tax Return\" means a Tax Return filed with\nrespect to an REI Consolidated State Tax.\n\n         \"REI Estimated UNREGCO State Installment Payment\" has the meaning set\nforth in Section 4.1(e)(ii).\n\n         \"REI Estimated UNREGCO State Installment Refund\" has the meaning set\nforth in Section 4.1(e)(ii).\n\n         \"REI Group\" means REI and each REI Affiliated Company.\n\n         \"REI Stock Award\" means an award of stock options, restricted stock,\nperformance shares or other equity-based award which is payable in, or measured\nbased on the value of, the common stock of REI (or its successor REGCO).\n\n         \"RES Temporary Tax Adjustment\" means a Temporary Tax Adjustment that is\ncaused as a result of a Redetermination that resulted in an increase or decrease\nto an item of income, deduction, gain or loss attributable to Reliant Energy\nServices, Inc.\n\n         \"Restricted Period\" means the period beginning two years before the\nDistribution Date and ending two years after the Distribution Date.\n\n         \"Restructuring\" has the meaning set forth in the Recitals to this\nAgreement.\n\n         \"Restructuring Tax\" means any Tax imposed as a result of the\ntransactions contemplated by the Restructuring.\n\n         \"Ruling Documents\" means (1) the request for a ruling under Section 355\nand various other sections of the Code, that have been or will be filed with the\nService in connection with the First Spinoff or the Spinoff, together with any\nsupplemental filings or ruling requests or other materials subsequently\nsubmitted on behalf of REI (or its successor, REGCO), its subsidiaries and\nshareholders to the Service, the appendices and exhibits thereto, and any\nrulings issued by the Service to REI in connection with the First Spinoff or the\nSpinoff or (2) any similar filings submitted to, or rulings issued by, any other\nTax Authority in connection with the First Spinoff or the Spinoff.\n\n         \"Separate State Tax\" means any Tax incurred by a Legal Entity that is\nnot a Federal Income Tax and that is filed on a separate company basis.\n\n         \"Separate State Tax Return\" means any Tax Return filed with respect to\na Separate State Tax liability.\n\n         \"Separate UNREGCO Tax Item\" has the meaning set forth in Section\n2.4(b).\n\n         \"SFAS 109\" has the meaning set forth in Section 5.6(b).\n\n                                      -6-\n   8\n\n         \"Service\" means the Internal Revenue Service.\n\n         \"Spinoff\" means the separation of UNREGCO from REGCO through the\nDistribution.\n\n         \"Straddle Period\" means any Tax period that begins before but ends\nafter the Distribution Date.\n\n         \"Subpart F Tax\" has the meaning set forth in Section 5.4(g).\n\n         \"Tax\" includes any charges, fees, levies, imposts, duties, or other\nassessments of a similar nature, including income, alternative or add-on\nminimum, gross receipts, profits, lease, service, service use, wage, wage\nwithholding, employment, workers compensation, business occupation, occupation,\npremiums, environmental, estimated, excise, employment, sales, use, transfer,\nlicense, payroll, franchise, severance, stamp, occupation, windfall profits,\nwithholding, social security, unemployment, disability, ad valorem, estimated,\nhighway use, commercial rent, capital stock, paid up capital, recording,\nregistration, property, real property gains, value added, business license,\ncustom duties, or other tax or governmental fee of any kind whatsoever, imposed\nor required to be withheld by any Tax Authority including any interest,\nadditions to tax, or penalties applicable or related thereto.\n\n         \"Tax Adjustment\" has the meaning set forth in Section 5.6(a).\n\n         \"Tax Authority\" means any governmental authority or any subdivision,\nagency, commission or authority thereof or any quasi-governmental or private\nbody having jurisdiction over the assessment, determination, collection or\nimposition of any Tax (including the Service).\n\n         \"Tax Expert\" means a partner specializing in Federal Income Tax matters\nat a nationally recognized law firm or a partner specializing in Federal Income\nTax matters at a Big 5 accounting firm.\n\n         \"Tax Item\" means any item of income, gain, loss, deduction or credit,\nor other attribute that may have the effect of increasing or decreasing any Tax.\n\n         \"Tax Law\" means any federal, state, local or foreign law with respect\nto Taxes, including the Code and Treasury Regulations.\n\n         \"Tax Return\" means any return, report, certificate, form or similar\nstatement or document (including, any related or supporting information or\nschedule attached thereto and any information return, amended Tax Return, claim\nfor refund or declaration of estimated Tax) required to be supplied to, or filed\nwith, a Tax Authority in connection with the determination, assessment or\ncollection of any Tax or the administration of any laws, regulations or\nadministrative requirements relating to any Tax.\n\n         \"Tax Sharing Agreement\" means the Tax Sharing Agreement, dated as of\nAugust 6, 1997, entered into by and among Houston Industries, Incorporated,\nNorAm Energy Corp., and Houston Industries Energy, Inc.\n\n                                      -7-\n   9\n\n         \"Temporary Tax Adjustment\" has the meaning set forth in Section 5.6(b).\n\n         \"Temporary Tax Adjustment Balance\" has the meaning set forth in Section\n5.6(d).\n\n         \"Temporary Tax Adjustment Payment\" has the meaning set forth in Section\n5.6(g).\n\n         \"Temporary Tax Adjustment Payment Balance\" has the meaning set forth in\nSection 5.6(f).\n\n         \"Transition Services Agreement\" refers to the agreement entered into\nbetween the parties as of December 31, 2000.\n\n         \"Treasury Regulations\" means the final, temporary and proposed income\ntax regulations promulgated under the Code, as such regulations may be amended\nfrom time to time (including corresponding provisions of succeeding\nregulations).\n\n         \"UNREGCO\" has the meaning set forth in the Recitals to this Agreement.\n\n         \"UNREGCO Affiliated Company\" means at a given time any corporation that\nwould be a member of the affiliated group, as defined under Section 1504(a) of\nthe Code, on the assumption that UNREGCO is the common parent of such affiliated\ngroup.\n\n         \"UNREGCO Basket Interest\" means UNREGCO Interest that is not UNREGCO\nNon-Basket Interest.\n\n         \"UNREGCO Consolidated Group\" means with respect to a particular Tax\nperiod a Consolidated Group in which UNREGCO is the common parent for all or a\nportion of such Tax period.\n\n         \"UNREGCO Consolidated State Tax\" means a Consolidated State Tax for a\nparticular Tax period for which UNREGCO or a member of the UNREGCO Group has the\nlegal obligation to file a Tax Return with respect to such Consolidated State\nTax.\n\n         \"UNREGCO Consolidated State Tax Return\" means a Tax Return filed with\nrespect to an UNREGCO Consolidated State Tax.\n\n         \"UNREGCO Estimated Federal Installment Payment\" has the meaning set\nforth in Section 4.1(c)(ii).\n\n         \"UNREGCO Estimated Federal Installment Refund\" has the meaning set\nforth in Section 4.1(c)(ii).\n\n         \"UNREGCO Estimated REI State Installment Payment\" has the meaning set\nforth in Section 4.1(d) (ii).\n\n         \"UNREGCO Estimated REI State Installment Refund\" has the meaning set\nforth in Section 4.1(d)(ii).\n\n                                      -8-\n   10\n\n           \"UNREGCO Group\" means UNREGCO and each UNREGCO Affiliated Company.\n\n           \"UNREGCO Interest\" has the meaning set forth in Section 5.6(h)(i).\n\n           \"UNREGCO Non-Basket Interest\" means UNREGCO Interest that relates to\na Federal Income Tax that is incurred by the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group) for a Pre-Distribution Period or Straddle\nPeriod as a result of a Redetermination and that is related to a transaction\nthat UNREGCO or an UNREGCO Affiliated Company entered into on or after January\n1, 2001.\n\n           \"UNREGCO Option Payment\" means a payment UNREGCO is obligated to make\nto REI pursuant to Section 5.4(h) as a result of an Option Deduction\nReallocation.\n\n           \"UNREGCO Retained Tax Liability\" means a Pre-1997 Tax Liability, an\nNOL Carryback Refund, or an Other Tax Item Refund.\n\n           \"UNREGCO Stock Award\" means an award of stock options, restricted\nstock, performance shares or other equity-based award which is payable in, or\nmeasured based on the value of, the common stock of UNREGCO.\n\n           1.2 Construction Principles. As used in this Agreement, the singular\nshall be deemed to include the plural and vice versa, and the captions and\nsection headings are inserted for convenience of reference only and are not\nintended to have any significance for the interpretation of, or construction of,\nthe provisions of this Agreement.\n\nSECTION 2. PREPARATION AND FILING OF TAX RETURNS.\n\n           2.1 In General.\n\n           (a) (i) With respect to any Pre-Distribution Period and any Straddle\nPeriod, except as provided in Section 2.1(a)(ii), REI (or its successor REGCO)\nshall timely file or cause to be filed all Tax Returns required to be filed that\ninclude any member or members of the REI Group, the REGCO Group or the UNREGCO\nGroup for any portion of such period; any such return that includes a member of\nthe UNREGCO Group shall be subject to the reasonable review and approval of\nUNREGCO.\n\n               (ii) With respect to any Pre-Distribution Period and any Straddle\nPeriod, UNREGCO (on behalf of itself and each UNREGCO Affiliated Company) shall\ntimely file or cause to be filed all Tax Returns for UNREGCO Consolidated State\nTaxes and for Separate State Taxes of UNREGCO or any UNREGCO Affiliated Company.\n\n           (b) REI (or its successor REGCO) shall timely file or cause to be\nfiled any Tax Return required to be filed that includes any member of the REI\nGroup or REGCO Group for any Post-Distribution Period. UNREGCO shall timely file\nor cause to be filed any Tax Return required to be filed that includes any\nmember of the UNREGCO Group for any Post-Distribution Period.\n\n                                      -9-\n   11\n\n           (c) Notwithstanding this Section 2.1, for the term of the Transition\nServices Agreement, the allocation of responsibility for preparing Tax Returns\nbetween REI (or its successor REGCO) and UNREGCO shall be as set forth in the\nTransition Services Agreement.\n\n           2.2 Information and Cooperation.\n\n           (a) In addition to any obligation imposed elsewhere under this\nAgreement, REI, REGCO and UNREGCO shall provide each other all documents and\ninformation, and make available employees and officers of REI, REGCO and\nUNREGCO, as reasonably requested by the other party, on a mutually convenient\nbasis during normal business hours, to aid the other party (i) in preparing any\nTax Return described in Section 2.1 of this Agreement to the extent the\ninformation needed for completing such Tax Return relates to any\nPre-Distribution Period or Straddle Period, (ii) in preparing any Tax Return\nrequired to be completed by REI (or its successor REGCO) under the Transition\nServices Agreement, (iii) to contest any Audit of any such Tax Return, (iv) to\nassist on a timely basis the other party to respond in a timely manner to\nrequests for information or similar inquiries from the Public Utility Commission\nof Texas (or its successor) or a similar body from any other state in connection\nwith a rate case (or similar proceeding) and (v) in preparing the notice in\naccordance with Section 5.6(e).\n\n           (b) In the case of any Tax Return for a Pre-Distribution Period or a\nStraddle Period described in Section 2.1 of this Agreement, REI (or its\nsuccessor REGCO) will provide UNREGCO with a copy of that portion of each such\nTax Return to the extent it relates to UNREGCO or any UNREGCO Affiliated\nCompany, together with all related Tax accounting work papers, as soon as\npracticable after such Tax Return becomes available. In addition, REI (or its\nsuccessor REGCO) will provide to employees of UNREGCO responsible for preparing\na Tax Return of UNREGCO or any UNREGCO Affiliated Company for any\nPre-Distribution Period, Straddle Period or Post-Distribution Period with access\nto any private letter rulings, together with any requests therefor and related\ndocuments and any other relevant information, as it relates to UNREGCO or an\nUNREGCO Affiliated Company for any period prior to the Distribution Date, and\nwill provide UNREGCO with a copy of such rulings or documents to the extent that\nthe issues discussed therein are relevant to UNREGCO or a UNREGCO Affiliated\nCompany, not later than thirty (30) days after the receipt of a written request\ntherefor.\n\n           (c) Notwithstanding any other provision of this Agreement, neither\nREI, any REI Affiliated Company, REGCO nor any REGCO Affiliated Company shall be\nrequired to provide UNREGCO or any UNREGCO Affiliated Company access to or\ncopies of any information that relate to REI, any REI Affiliated Company, REGCO\nor any REGCO Affiliated Company unless it also relates to UNREGCO or an UNREGCO\nAffiliated Company. In the event that REI or REGCO determines that the provision\nof any information to UNREGCO or any UNREGCO Affiliated Company could be\ncommercially detrimental, violate any law or agreement or waive any privilege\nthat may be asserted under applicable law including, any privilege arising under\nor relating to the attorney-client relationship (including the attorney-client\n(including the protections under Section 7525 of the Code) and work product\nprivileges), the accountant-client privilege, and any privilege relating to\ninternal evaluation processes, the parties shall take all reasonable measures to\npermit the compliance with such obligations in a manner that avoids any such\nharm or consequence.\n\n                                      -10-\n   12\n\n           (d) Notwithstanding any other provision of this Agreement (except\nthat nothing in this Section 2.2(d) shall be interpreted to prevent or relieve\nUNREGCO or any UNREGCO Affiliated Company from complying with Section 2.4),\nneither UNREGCO nor any UNREGCO Affiliated Company shall be required to provide\nREI, any REI Affiliated Company, REGCO or any REGCO Affiliated Company access to\nor copies of any information that relates to UNREGCO or any UNREGCO Affiliated\nCompany unless it also relates to REI, any REI Affiliated Company, REGCO or any\nREGCO Affiliated Company. In the event that UNREGCO determines that the\nprovision of any information to REI, any REI Affiliated Company, REGCO or any\nREGCO Affiliated Company could be commercially detrimental, violate any law or\nagreement or waive any privilege that may be asserted under applicable law\nincluding, any privilege arising under or relating to the attorney-client\nrelationship (including the attorney-client (including the protections under\nSection 7525 of the Code) and work product privileges), the accountant-client\nprivilege, and any privilege relating to internal evaluation processes, the\nparties shall take all reasonable measures to permit the compliance with such\nobligations in a manner that avoids any such harm or consequence.\n\n           2.3 Manner of Filing Tax Returns.\n\n           (a) REI (for itself and the REI Affiliated Companies), REGCO (for\nitself and REGCO Affiliated Companies) and UNREGCO (for itself and the UNREGCO\nAffiliated Companies) agree to file all Tax Returns for any Pre-Distribution\nPeriod and any Straddle Period, and to take all other actions in a manner\nconsistent with the position that UNREGCO and the UNREGCO Affiliated Companies\nare part of the REI Consolidated Group for Federal Income Tax purposes for all\nTax periods through and including the Distribution Date.\n\n           (b) Except as otherwise provided in this Section 2.3 and Section 2.4\nof this Agreement, the party that is required to file a Tax Return under Section\n2.1(a) or (b) of this Agreement (the \"Filing Party\") shall have the exclusive\nright to determine (1) the manner in which such Tax Return shall be prepared and\nfiled, including the elections, methods of accounting, positions, conventions\nand principles of taxation to be used and the manner in which any Tax Item shall\nbe reported, (2) whether any extensions may be requested, (3) the elections that\nwill be made in such Tax Return, (4) whether any amended Tax Returns shall be\nfiled, (5) whether any claims for refund shall be made, (6) whether any refunds\nshall be paid by way of refund or credited against any liability for the related\nTax, and (7) whether to retain outside specialists to prepare such Tax Return,\nwhom to retain for such purpose and the scope of any such retainer.\nNotwithstanding the foregoing, if UNREGCO requests REI (or its successor REGCO)\nto make a particular determination under this Section 2.3(b) with respect to a\nTax Item of UNREGCO or an UNREGCO Affiliated Company, REI (or its successor\nREGCO) shall not unreasonably withhold its consent to such request.\n\n           2.4 Pro Forma UNREGCO Returns.\n\n           (a) Initial Preparation of Pro Forma UNREGCO Returns. For each\ntaxable year for which an REI Consolidated Group (or successor REGCO\nConsolidated Group) Consolidated Return is filed and UNREGCO or any UNREGCO\nAffiliated Company is a member of the REI Consolidated Group (or successor REGCO\nGroup) for all or a portion of such taxable year, UNREGCO shall prepare (on its\nown behalf and on the behalf of each UNREGCO Affiliated \n\n\n                                      -11-\n   13\n\nCompany) a pro forma Federal Income Tax Return for UNREGCO and for each UNREGCO\nAffiliated Company (the \"Pro Forma UNREGCO Returns\") covering all of the taxable\nyear or the portion of such taxable year in which UNREGCO or any UNREGCO\nAffiliated Company is a member of the REI Consolidated Group (or successor REGCO\nGroup). The Pro Forma UNREGCO Returns shall be complete and accurate, and shall\nbe in such form and include such information as shall be determined from time to\ntime by REI (or its successor REGCO). The Pro Forma UNREGCO Returns shall be\nprepared in accordance with subsections (b) and (c) of this Section 2.4 and\nshall report the federal taxable income (including, for all purposes of this\nAgreement, alternative minimum taxable income) for such taxable year (or the\nportion thereof) that UNREGCO and each UNREGCO Affiliated Company would have\nreported if each such company had not been included in the Consolidated Return\nfiled for the REI Consolidated Group (or successor REGCO Consolidated Group)\nwith respect to such taxable year (or portion thereof) and all prior Pro Forma\nUNREGCO Returns filed after December 31, 2000, had been actual Tax Returns. The\nprovisions of the Code that require consolidated calculations, including,\nwithout limitation, Sections 1201, 1211, 1212 and 1231, shall be applied\nseparately to UNREGCO and each UNREGCO Affiliated Company, but with any\nsimplifying conventions approved or suggested by the Tax Director of REI (or its\nsuccessor REGCO). The Pro Forma UNREGCO Returns shall include gains and losses\nwith respect to DITs if, and only if, and to the extent that, such gains or\nlosses are actually restored and reflected on the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group) Consolidated Return.\n\n           (b) Standards for Positions Taken on Pro Forma UNREGCO Returns.\nUNREGCO shall prepare the Pro Forma UNREGCO Returns by reporting the Tax\ntreatment of any item by utilizing such positions that, in UNREGCO's discretion,\nare appropriate for UNREGCO and each UNREGCO Affiliated Company; provided, that\neach position is more likely than not to be ultimately sustained; and provided\nfurther that the positions reflected other than positions which are Legal Entity\nspecific in the context of an UNREGCO Tax Item within a Consolidated Return of\nREI (or its successor REGCO) (\"Separate UNREGCO Tax Item\") by UNREGCO on the Pro\nForma UNREGCO Returns shall be consistent with the elections made and the\npositions reflected on the relevant portion of the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group) Consolidated Return (including carryovers or\ncarrybacks of net operating losses, net capital losses, excess Tax credits or\nother Tax attributes from prior or subsequent taxable years). UNREGCO may\nutilize a position on the Pro Forma UNREGCO Returns that does not meet this\nstandard but that does have a reasonable basis in law and in fact, but only if\nUNREGCO has obtained, after prior notice to and consultation with REI (or its\nsuccessor REGCO), REI's (or its successor REGCO's) written consent to utilize\nsuch position on Pro Forma UNREGCO Returns for such taxable year. Except as\notherwise required by Tax law and with respect to a Separate UNREGCO Tax Item,\nUNREGCO may not utilize a position on the Pro Forma UNREGCO Returns that is\ninconsistent with any position utilized on a Pro Forma UNREGCO Return or REI\nConsolidated Group Consolidated Return for a prior taxable year.\n\n           (c) Standards for Methods and Elections on Pro Forma UNREGCO Returns.\nThe Pro Forma UNREGCO Returns shall reflect any elections made and Tax methods\nused by REI (or its successor REGCO) with respect to the REI's Consolidated\nGroup (or successor REGCO's Consolidated Group) Consolidated Return (other than\nwith respect to a Separate UNREGCO Tax Item) that in the sole and absolute\ndiscretion of REI (or its successor REGCO), but after prior good faith\nconsultation with UNREGCO (if requested by the Tax Director of UNREGCO), \n\n\n                                      -12-\n   14\n\nshould be made, taken or used consistently by the REI Consolidated Group (or\nsuccessor REGCO Group) in filing such Consolidated Return. UNREGCO may utilize\nany other election, method or simplifying convention subject to REI's (or its\nsuccessor REGCO's) approval, which approval shall not be unreasonably withheld,\nin preparing the Pro Forma UNREGCO Returns. Notwithstanding the foregoing,\nUNREGCO may not utilize any election or Tax method in preparing the Pro Forma\nUNREGCO Returns for a taxable year that is inconsistent with any election,\nposition or method utilized on a Pro Forma UNREGCO Return or REI Consolidated\nReturn for a prior taxable year if the effect of such treatment is to allow a\ndouble deduction or benefit with respect to any item (or unless UNREGCO has\neliminated such double deduction or benefit in a manner acceptable to REI (or\nits successor REGCO)).\n\n           (d) Delivery to REI of Pro Forma UNREGCO Returns; Assistance. UNREGCO\nwill deliver to REI (or its successor REGCO) the Pro Forma UNREGCO Returns on or\nbefore August 1 of each year or later if mutually agreed. Appropriate personnel\nof UNREGCO or a UNREGCO Affiliated Company that are responsible for the\npreparation of the Pro Forma UNREGCO Returns shall be available upon reasonable\nnotice to meet with appropriate personnel of REI (or successor REGCO) to discuss\nall aspects of such Tax Returns and upon request by REI (or its successor REGCO)\nshall furnish or make available for inspection any and all documents used in\npreparation of the Pro Forma UNREGCO Returns (documents relied upon by UNREGCO\nin ascertaining whether any position is more likely than not to be ultimately\nsustained or has a reasonable basis in law or in fact shall be furnished only to\nthe principal Tax legal officer of REI (or its successor REGCO) under cover of\nthe attorney-client privilege (including the protections under Section 7525 of\nthe Code) and work product doctrine).\n\n           (e) Adjustment by REI of Pro Forma UNREGCO Returns. REI (or its\nsuccessor REGCO), within 15 days of the due date of the REI Consolidated Group's\n(or successor REGCO Consolidated Group's) Consolidated Return (taking into\naccount any extensions thereof that have been granted to REI (or its successor\nREGCO)) shall adjust the Pro Forma UNREGCO Returns, as appropriate (i) in\naccordance with the terms of this Agreement, (ii) consistent with the elections,\nmethods of accounting, positions, conventions and principles of taxation (other\nthan with respect to a Separate UNREGCO Tax Item) as reflected on the most\nrecently filed prior Tax Returns of the REI Consolidated Group involving similar\nmatters and (iii) after prior notice to and good faith consultation with\nUNREGCO, to correct any error of fact or law thereon or any error in mechanical\ncalculation and any failure to reflect the principles set forth in this Section\n2.4; provided, however, that if REI (or its successor REGCO) proposes an\nadjustment to a Pro Forma UNREGCO Return to which REI has not previously\nconsented to under Section 2.4(b) and UNREGCO objects to such adjustment, REI\n(or its successor REGCO) and UNREGCO shall jointly select and pay a Tax Expert\nto render a legal opinion as to whether the position advocated by UNREGCO is\nmore likely than not to be sustained. The adjustment proposed by REI (or its\nsuccessor REGCO) will only be made if the legal opinion from a Tax Expert\nconcludes that the position asserted by UNREGCO does not meet the more likely\nthan not standard. Similarly, except as stated in the following sentence, any\nfailure by REI (or its successor REGCO) to properly and fully adjust the Pro\nForma Returns within the 15-day period set forth in this Section 2.4(e) shall\nnot prevent REI (or its successor REGCO), in its sole and absolute discretion,\nbut after prior good faith consultation with the Tax Director of UNREGCO, from\nmaking subsequent adjustments as circumstances warrant within the applicable\nstatute of limitation (determined as if the Pro Forma UNREGCO Returns were\nactual Tax Returns that are \n\n\n                                      -13-\n   15\n\nsubject to any extensions that have been granted by REI (or its successor REGCO)\nwith respect to the REI Consolidated Group (or successor REGCO Consolidated\nGroup) Consolidated Return), nor relieve UNREGCO of liability for such\nadjustments. The adjustment described in the preceding sentence shall not be\nmade if such adjustment would increase UNREGCO's obligations set forth in\nSection 5.2, Section 5.3, Section 5.4(h) or Section 5.6, in accordance with the\nprocedures of this Section 2.4(e).\n\n           2.5 Agent.\n\n           (a) UNREGCO hereby irrevocably designates, and agrees to cause each\nUNREGCO Affiliated Company to so designate, REI (and its successor REGCO) as its\nsole and exclusive agent and attorney-in-fact to take such action (including\nexecution of documents) as REI (and its successor REGCO), in its sole\ndiscretion, may deem appropriate in any and all matters (including Audits)\nrelating to any Consolidated Return or Consolidated State Tax Return filed on a\ncombined, unitary or consolidated basis described in Section 2.1(a) of this\nAgreement or Section 2.1(b) if the filing of such Tax Return is the\nresponsibility of REI (or its successor REGCO) under the Transition Services\nAgreement; provided, however, that REI (and its successor REGCO) shall not\nexercise its rights as agent and attorney-in-fact in any manner that is\ninconsistent with the rights granted to UNREGCO under this Agreement, and\nnothing in this Section 2.5(a) shall limit the rights granted to UNREGCO under\nthis Agreement.\n\n           (b) REI (or its successor REGCO) hereby irrevocably designates, and\nagrees to cause each REI Affiliated Company (or successor REGCO Affiliated\nCompany) to so designate, UNREGCO as its sole and exclusive agent and\nattorney-in-fact to take such action (including execution of documents) as\nUNREGCO, in its sole discretion, may deem appropriate in any and all matters\n(including Audits) relating to any UNREGCO Consolidated State Tax Return\ndescribed in Section 2.1(b) of this Agreement; provided, however, that UNREGCO\nshall not exercise its rights as agent and attorney-in-fact in any manner that\nis inconsistent with the rights granted to REI (or its successor REGCO) under\nthis Agreement, and nothing in this Section 2.5(b) shall limit the rights\ngranted to REI (or its successor REGCO) under this Agreement.\n\nSECTION 3. REPRESENTATIONS AND COVENANTS.\n\n           3.1 REI Representations and Covenants. REI hereby represents,\nwarrants and covenants that:\n\n           (a) REI will review the information and representations made in the\nRuling Documents that will be submitted to the Service, and, REI covenants that\nall of such information or representations that relate to REI or any REI\nAffiliated Company, or the business or operations of either, will be true,\ncorrect and complete to REI's knowledge and will identify to UNREGCO any\ninformation or representations that are incorrect or incomplete.\n\n           (b) REI (or its successor REGCO) will not, and will cause each REI\nAffiliated Company (and REGCO will cause each REGCO Affiliated Company) not to,\ntake any action, or fail or omit to take any action, that would cause any of the\ninformation or representations made in the Ruling Documents that relate to REI\nor any REI Affiliated Company (or as successors, REGCO or any REGCO Affiliated\nCompany) or the business or operations of each, to be untrue, \n\n\n                                      -14-\n   16\n\nregardless of whether such information or representations are included in the\nInitial Private Letter Ruling (or any supplemental ruling).\n\n           (c) REI covenants and agrees for itself and on behalf of REGCO to\ncomply with the covenants set forth in this Section 3.1, and REI covenants and\nagrees to cause REGCO to expressly assume the obligations under this Agreement\nrequired to be performed by REI, REGCO, or any REGCO Affiliated Company.\n\n           3.2 UNREGCO Representations and Covenants. UNREGCO hereby represents,\nwarrants, and covenants that:\n\n           (a) UNREGCO will review the information and representations made in\nthe Ruling Documents that will be submitted to the Service, and UNREGCO\ncovenants that all of such information or representations that relate to UNREGCO\nor any UNREGCO Affiliated Company, or the business or operations of either, will\nbe true, correct and complete to UNREGCO's knowledge and will identify to REI\n(or its successor REGCO) any information or representations that are incorrect\nor incomplete.\n\n           (b) UNREGCO will not, and will cause each UNREGCO Affiliated Company\nnot to, take any action, or fail or omit to take any action, that would cause\nany of the information or representations made in the Ruling Documents that\nrelate to UNREGCO or any UNREGCO Affiliated Company or the business or\noperations of each, to be untrue, regardless of whether such information or\nrepresentations are included in the Initial Private Letter Ruling (or any\nsupplemental ruling).\n\nSECTION 4. TAX ALLOCATION AND PAYMENTS.\n\n           4.1 In General. Except to the extent modified or supplemented herein,\nthe Tax Sharing Agreement shall continue in full force and effect. The\nprovisions of the Tax Sharing Agreement shall fix the rights and obligations of\nthe parties as to the matters covered thereby.\n\n           (a) Except as provided to the contrary in Section 5.2, Section 5.3,\nSection 5.4(h) or Section 5.6, and except for any Restructuring Taxes for which\nREI or any REI Affiliated Company (or as successors, REGCO or any REGCO\nAffiliated Company) is liable under Section 5 of this Agreement,\n\n                (i) UNREGCO shall be responsible for, and shall indemnify and\nhold harmless REI (or its successor REGCO) against, any and all Taxes incurred\nby UNREGCO or the UNREGCO Group, in accordance with past practices and the\nprinciples set forth in the Tax Sharing Agreement, for any Pre-Distribution\nPeriod and Straddle Period.\n\n                (ii) REI (or its successor, REGCO) shall be responsible for, and\nshall indemnify and hold harmless UNREGCO against, any and all Taxes incurred by\nREI or any REI Affiliated Company (other than Taxes attributable to UNREGCO or\nany UNREGCO Affiliated Company) in accordance with past practices and the\nprinciples set forth in the Tax Sharing Agreement for any Pre-Distribution\nPeriod and Straddle Period.\n\n                                      -15-\n   17\n\n           (b) Except as provided to the contrary in Section 5.2, Section 5.3,\nSection 5.4(h) or Section 5.6, UNREGCO shall be responsible for all Taxes that\nrelate to the UNREGCO Group with respect to any Post-Distribution Period and\nREGCO shall be responsible for all Taxes that relate to the REGCO Group with\nrespect to any Post-Distribution Period.\n\n           (c) Estimated Federal Tax Payments.\n\n                (i) In the case of any Federal Income Taxes for any\nPre-Distribution Period for the REI Consolidated Group (or successor REGCO\nConsolidated Group), UNREGCO (on behalf of itself and each UNREGCO Affiliated\nCompany) shall provide to REI (or its successor REGCO) no later than 8 days\nprior to the due date for each payment of an installment of estimated Federal\nIncome Taxes (as determined under Section 6655 of the Code or successor\nprovision then in effect) of the REI Consolidated Group (or successor REGCO\nConsolidated Group) (\"Estimated Federal Installment Payment\") such information\npertaining to UNREGCO or an UNREGCO Affiliated Company as is necessary for REI\n(or its successor REGCO) to compute the amount of such Estimated Federal\nInstallment Payment.\n\n                (ii) On or before the due date of such Estimated Federal\nInstallment Payment, REI (or its successor REGCO) shall inform UNREGCO of either\n(A) the amount (\"UNREGCO Estimated Federal Installment Payment\") that UNREGCO\n(on behalf of itself and each UNREGCO Affiliated Company) must pay REI (or its\nsuccessor REGCO) with respect to such Estimated Federal Installment Payment, or\n(B) the amount (\"UNREGCO Estimated Federal Installment Refund\") REI (or its\nsuccessor REGCO) must pay UNREGCO with respect to such Estimated Federal\nInstallment Payment. REI (or its successor REGCO) shall compute the amount of\neach UNREGCO Estimated Federal Installment Payment or the UNREGCO Estimated\nFederal Installment Refund, as the case may be, so as to equal the portion of\nthe Estimated Federal Installment Payment that is allocable to UNREGCO and the\nUNREGCO Affiliated Companies taking into account previous UNREGCO Estimated\nFederal Installment Payments and UNREGCO Estimated Federal Installment Refunds\nthat have been made for the same Pre-Distribution Period. REI (or its successor\nREGCO) shall calculate the portion of each Estimated Federal Installment Payment\nof the REI Consolidated Group (or successor REGCO Consolidated Group) that is\nallocable to UNREGCO and the UNREGCO Affiliated Companies by (C) computing the\nsum of the estimated Federal Income Tax payments that UNREGCO and each UNREGCO\nAffiliated Company would have been required to pay if each of UNREGCO and each\nUNREGCO Affiliated Company had filed a Federal Income Tax Return on a separate\ncompany basis for such estimated Federal Income Tax period and (D) taking into\naccount adjustments, if any, that are applicable on a Consolidated Return basis\nto the REI Consolidated Group (or successor REGCO Consolidated Group)\nConsolidated Return for such Pre-Distribution Period. UNREGCO shall pay REI (or\nits successor REGCO) the UNREGCO Estimated Federal Installment Payment within 24\nhours after the due date of the Estimated Federal Installment Payment to which\nit relates, and REI (or its successor REGCO) shall pay UNREGCO the UNREGCO\nEstimated Federal Installment Refund within 24 hours after the due date of the\nEstimated Federal Installment Payment to which it relates.\n\n                (iii) If (A) the portion of the actual Federal Income Tax\nLiability of the REI Consolidated Group (or successor REGCO Consolidated Group)\nfor a Pre-Distribution Period that is allocable, as determined by REI (or its\nsuccessor REGCO) in accordance with the \n\n\n                                      -16-\n   18\n\nTax Sharing Agreement and consistent with the past practices utilized by the REI\nTax Department in completing previous REI Consolidated Group Consolidated\nReturns, to UNREGCO and the UNREGCO Affiliated Companies exceeds (B)(I) the sum\nof the UNREGCO Estimated Federal Installment Payments for such Pre-Distribution\nPeriod less (II) the sum of the UNREGCO Estimated Federal Installment Refunds\nfor such Pre-Distribution Period, then REI (or its successor REGCO) shall inform\nUNREGCO of the amount of such excess on or before the due date of the REI\nConsolidated Group (or successor REGCO Group) Consolidated Return (or successor\nREGCO Consolidated Group) for such Pre-Distribution Period. UNREGCO (on behalf\nof itself and each UNREGCO Affiliated Company) shall pay the amount of such\nexcess to REI (or its successor REGCO) within 24 hours after the due date of the\nREI Consolidated Group (or successor REGCO Consolidated Group) Consolidated\nReturn.\n\n                (iv) If (A) (I) the sum of the UNREGCO Estimated Federal\nInstallment Payments for a Pre-Distribution period less (II) the sum of the\nUNREGCO Estimated Federal Installment Refunds for such Pre-Distribution period\nexceeds (B) the portion of the actual Federal Income Tax Liability of the REI\nConsolidated Group (or successor REGCO Consolidated Group) for such\nPre-Distribution Period that is allocable, as determined by REI (or its\nsuccessor REGCO) in accordance with the Tax Sharing Agreement and consistent\nwith past practices utilized by the REI Tax Department in implementing previous\nREI Consolidated Group Returns, to UNREGCO and the UNREGCO Affiliated Companies,\nthen REI (or its successor REGCO) shall pay the amount of such excess to UNREGCO\nwithin 24 hours after the due date of the Consolidated REI Consolidated Group\n(or successor REGCO Consolidated Group) Consolidated Return for such\nPre-Distribution Period.\n\n                (v) REI (or its successor REGCO) shall calculate the portion of\nthe actual Federal Income Tax Liability of the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group) that is allocable to UNREGCO and the UNREGCO\nAffiliated Companies for Sections 4.1(c)(iii) and (iv) consistent with the\nUNREGCO Pro Forma Returns submitted in accordance with Section 2.4 and\nconsistent with the principles set forth in the penultimate sentence of Section\n4.1(c)(ii).\n\n           (d) Estimated Payments of REI Consolidated State Taxes.\n\n                (i) In the case of any REI Consolidated State Tax for any\nPre-Distribution Period that includes a member of the UNREGCO Group, UNREGCO (on\nbehalf of itself and each UNREGCO Affiliated Company) shall provide to REI (or\nits successor REGCO) no later than 8 days prior to the due date for each payment\nof an installment of REI Consolidated State Tax (\"Estimated REI State\nInstallment Payment\") such information pertaining to UNREGCO or an UNREGCO\nAffiliated Company as is necessary for REI (or its successor REGCO) to compute\nthe amount of such Estimated REI State Installment Payment.\n\n                (ii) On or before the due date of such Estimated REI State\nInstallment Payment, REI shall inform UNREGCO of either (A) the amount (\"UNREGCO\nEstimated REI State Installment Payment\") that UNREGCO (on behalf of itself and\neach UNREGCO Affiliated Company) must pay REI (or its successor REGCO) with\nrespect to such Estimated REI State Installment Payment, or (B) the amount\n(\"UNREGCO Estimated REI State Installment Refund\") REI (or its successor REGCO)\nmust pay UNREGCO with respect to such Estimated REI State \n\n\n                                      -17-\n   19\n\nInstallment Payment. REI (or its successor REGCO) shall compute the amount of\neach UNREGCO Estimated REI State Installment Payment or UNREGCO Estimated REI\nState Installment Refund, as the case may be, so as to equal the portion of the\nEstimated REI State Installment Payment that is allocable to UNREGCO and the\nUNREGCO Affiliated Companies taking into account previous UNREGCO Estimated REI\nState Installment Payments and UNREGCO Estimated REI State Installment Refunds\nthat have been made for the same Pre-Distribution Period. REI (or its successor\nREGCO) shall calculate the portion of each Estimated REI State Installment\nPayment that is allocable to UNREGCO and the UNREGCO Affiliated Companies by (C)\ncomputing the sum of the estimated REI Consolidated State Tax payments that\nUNREGCO and each UNREGCO Affiliated Company would have been required to pay if\neach of UNREGCO and each UNREGCO Affiliated Company had filed an REI\nConsolidated State Tax Return on a separate company basis for such estimated REI\nConsolidated State Tax period and (D) taking into account adjustments, if any,\nthat are applicable on a Consolidated State Tax basis to the REI Consolidated\nState Tax Return for such Pre-Distribution Period. UNREGCO shall pay REI (or its\nsuccessor REGCO) the UNREGCO Estimated REI State Installment Payment within 24\nhours after the due date of the Estimated REI State Installment Payment to which\nit relates, and REI (or its successor REGCO) shall pay UNREGCO the UNREGCO\nEstimated REI State Installment Refund within 24 hours after the due date of the\nEstimated REI State Installment Payment to which it relates.\n\n                (iii) If (A) the portion of the actual REI Consolidated State\nTax Liability for a Pre-Distribution Period that is allocable, as determined by\nREI (or its successor REGCO) in accordance with the Tax Sharing Agreement and\nconsistent with the past practices utilized by the REI Tax Department in\ncompleting previous REI Consolidated State Tax Returns, to UNREGCO and the\nUNREGCO Affiliated Companies exceeds (B)(I) the sum of the UNREGCO Estimated REI\nState Installment Payments for such Pre-Distribution Period less (II) the sum of\nthe UNREGCO Estimated REI State Installment Refunds for such Pre-Distribution\nPeriod, then UNREGCO (on behalf or itself and each UNREGCO Affiliated Company)\nshall pay the amount of such excess to REI (or its successor REGCO) within 24\nhours after the due date of the REI Consolidated State Tax Return for such\nPre-Distribution Period.\n\n                (iv) If (A) (I) the sum of the UNREGCO Estimated REI State\nInstallment Payments for a Pre-Distribution period less (II) the sum of the\nUNREGCO Estimated REI State Installment Refunds for such Pre-Distribution period\nexceeds (B) the portion of the actual REI Consolidated State Tax Liability for\nsuch Pre-Distribution Period that is allocable, as determined by REI (or its\nsuccessor REGCO) in accordance with the Tax Sharing Agreement and consistent\nwith the past practices utilized by the REI Tax Department in completing\nprevious REI Consolidated State Tax Returns, to UNREGCO and the UNREGCO\nAffiliated Companies, then REI (or its successor REGCO) shall pay the amount of\nsuch excess to UNREGCO within 24 hours after the due date of the REI\nConsolidated State Tax Return for such Pre-Distribution Period.\n\n                (v) For purposes of REI's (or its successor REGCO's)\ndetermination under Section 4.1(d) of the portion of the actual REI Consolidated\nState Tax liability that is allocable to UNREGCO and the UNREGCO Affiliated\nCompanies, REI (or its successor REGCO) shall allocate the amount by which the\nnet aggregate REI Consolidated State Tax liability for a particular\nPre-Distribution Period is increased or decreased because a Legal Entity\n\n\n                                      -18-\n   20\n\nincluded in the REI Consolidated State Tax Return created a nexus in a\njurisdiction resulting in the imposition of an REI Consolidated State Tax by\nsuch jurisdiction that would not otherwise had been imposed but for such nexus\neither (A) completely to UNREGCO and the UNREGCO Affiliated Companies if such\nLegal Entity is a member of the UNREGCO Group or (B) completely to the members\nof the REI Group (or successor REGCO Group) if the Legal Entity is not a member\nof the UNREGCO Group.\n\n           (e) Estimated Payments of UNREGCO Consolidated State Taxes.\n\n                (i) In the case of any UNREGCO Consolidated State Tax for any\nPre-Distribution Period that includes a member of the REI Group (or successor\nREGCO Group), REI on behalf of itself and each REI Affiliated Company (or its\nsuccessors REGCO and each REGCO Affiliated Company) shall provide to UNREGCO no\nlater than 8 days prior to the due date for each payment of an installment of\nUNREGCO Consolidated State Tax (\"Estimated UNREGCO State Installment Payment\")\nsuch information pertaining to REI (or its successor REGCO) or an REI Affiliated\nCompany (or successor REGCO Affiliated Company) as is necessary for UNREGCO to\ncompute the amount of such Estimated UNREGCO State Installment Payment.\n\n                (ii) On or before the due date of such Estimated UNREGCO State\nInstallment Payment, UNREGCO shall inform REI (or its successor REGCO) of either\n(A) the amount (\"REI Estimated UNREGCO State Installment Payment\") that REI on\nbehalf of itself and each REI Affiliated Company (or its successors REGCO and\neach REGCO Affiliated Company) must pay UNREGCO with respect to such Estimated\nUNREGCO State Installment Payment, or (B) the amount (\"REI Estimated UNREGCO\nState Installment Refund\") UNREGCO must pay REI with respect to such Estimated\nUNREGCO State Installment Payment. UNREGCO shall compute the amount of each REI\nEstimated UNREGCO State Installment Payment or the REI Estimated UNREGCO State\nInstallment Refund, as the case may be, so as to equal the portion of the\nEstimated UNREGCO State Installment Payment that is allocable to REI and the REI\nAffiliated Companies (or as successors REGCO and the REGCO Affiliated Companies)\ntaking into account previous REI Estimated UNREGCO State Installment Payments\nand REI Estimated UNREGCO State Installment Refunds that have been made for the\nsame Pre-Distribution Period. UNREGCO shall calculate the portion of each\nEstimated UNREGCO State Installment Payment that is allocable to REI and the REI\nAffiliated Companies (or as successors REGCO and the REGCO Affiliated Companies)\nby (C) computing the sum of the estimated UNREGCO Consolidated State Tax\npayments that REI and the REI Affiliated Companies (or as successors REGCO and\nthe REGCO Affiliated Companies) would have been required to pay if each of REI\nand each REI Affiliated Company (or as successors REGCO and each REGCO\nAffiliated Company) had filed an UNREGCO Consolidated State Tax Return on a\nseparate company basis for such estimated UNREGCO Consolidated State Tax period\nand (D) taking into account adjustments, if any, that are applicable on a\nConsolidated State Tax basis to the UNREGCO Consolidated State Tax Return for\nsuch Pre-Distribution Period. REI (or its successor REGCO) shall pay UNREGCO the\nREI Estimated UNREGCO State Installment Payment within 24 hours after the due\ndate of the UNREGCO Estimated REI State Installment Payment to which it relates,\nand UNREGCO shall pay REI the REI Estimated UNREGCO State Installment Refund\nwithin 24 hours after the due date of the Estimated UNREGCO State Installment\nPayment to which it relates.\n\n                                      -19-\n   21\n\n                (iii) If (A) the portion of the actual UNREGCO Consolidated\nState Tax Liability for a Pre-Distribution Period that is allocable, as\ndetermined by UNREGCO in accordance with the Tax Sharing Agreement and\nconsistent with the past practices utilized by the UNREGCO Tax Department in\ncompleting previous UNREGCO Consolidated State Tax Returns, to REI and the REI\nAffiliated Companies (or as successors REGCO and the REGCO Affiliated Companies)\nexceeds (B)(I) the sum of the REI Estimated UNREGCO State Installment Payments\nfor such Pre-Distribution Period less (II) the sum of the REI Estimated UNREGCO\nState Installment Refunds for such Pre-Distribution Period, then REI on behalf\nor itself and each REI Affiliated Company (or as successors, REGCO and each\nREGCO Affiliated Company) shall pay the amount of such excess to UNREGCO within\n24 hours after the due date of the UNREGCO Consolidated State Tax Return for\nsuch Pre-Distribution Period.\n\n                (iv) If (A) (I) the sum of the REI Estimated UNREGCO State\nInstallment Payments for a Pre-Distribution period less (II) the sum of the REI\nEstimated UNREGCO State Installment Refunds for such Pre-Distribution period\nexceeds (B) the portion of the actual UNREGCO Consolidated State Tax Liability\nfor such Pre-Distribution Period that is allocable, as determined by UNREGCO in\naccordance with the Tax Sharing Agreement and consistent with the past practices\nutilized by the UNREGCO Tax Department in completing previous UNREGCO\nConsolidated State Tax Returns to REI, and the REI Affiliated Companies (or as\nsuccessors, REGCO and the REGCO Affiliated Companies), then UNREGCO shall pay\nthe amount of such excess to REI within 24 hours after the due date of the\nUNREGCO Consolidated State Tax Return for such Pre-Distribution Period.\n\n                (v) For purposes of UNREGCO's determination under Section 4.1(e)\nof the portion of the actual UNREGCO Consolidated State Tax liability that is\nallocable to REI and the REI Affiliated Companies (or as successors REGCO and\nthe REGCO Affiliated Companies), UNREGCO shall allocate the amount by which the\nnet aggregate UNREGCO Consolidated State Tax liability for a particular\nPre-Distribution Period is increased or decreased because a Legal Entity\nincluded in the UNREGCO Consolidated State Tax Return created a nexus in a\njurisdiction resulting in the imposition of an UNREGCO Consolidated State Tax by\nsuch jurisdiction that would not otherwise had been imposed but for such nexus\neither (A) completely to UNREGCO and the UNREGCO Affiliated Companies if such\nLegal Entity is a member of the UNREGCO Group or (B) completely to REI and the\nmembers of the REI Group (or successor REGCO Group) if the Legal Entity is not a\nmember of the UNREGCO Group.\n\n           (f) Straddle Period Tax Payments.\n\n                (i) In the case of Federal Income Taxes for any Straddle Period\nof the REI Consolidated Group (or its successor REGCO Consolidated Group),\nUNREGCO (on its behalf and on behalf of each UNREGCO Affiliated Company) or REI\n(or its successor REGCO), as the case may be, shall pay to REI (or its successor\nREGCO) or UNREGCO, as the case may be, amounts (and at times) determined in\naccordance with the principles of Section 4.1(c) assuming that the relevant Tax\nperiod for purposes of applying Section 4.1(c) is the period that begins on the\nfirst day of the Straddle Period and ends on the Distribution Date. The actual\nFederal Income Tax Liability of UNREGCO and each UNREGCO Affiliated Company\nshall be determined in accordance with Section 2.4.\n\n                                      -20-\n   22\n\n                (ii) In the case of any REI Consolidated State Taxes for the\nStraddle Period, UNREGCO (on its behalf and on behalf of each UNREGCO Affiliated\nCompany) shall pay an amount to REI (or its successor REGCO), or REI on its\nbehalf and on behalf of each REI Affiliated Company (or its successor REGCO and\neach REGCO Affiliated Company) shall pay an amount to UNREGCO, as the case may\nbe, amounts (and at times) determined in accordance with the principles of\nSection 4.1(d) assuming that the relevant Tax period for purposes of applying\nSection 4.1(d) is the period that begins on the first day of the Straddle Period\nand ends on the Distribution Date. The actual REI Consolidated State Tax\nliability attributable to UNREGCO and each UNREGCO Affiliated Company shall be\ndetermined in accordance with Section 2.4.\n\n                (iii) In the case of UNREGCO Consolidated State Taxes for the\nStraddle Period, REI on its behalf and on behalf of each REI Affiliated Company\n(or its successors REGCO and each REGCO Affiliated Company) shall pay an amount\nto UNREGCO, or UNREGCO shall pay an amount to REI (or its successor REGCO), as\nthe case may be, amounts (and at times) determined in accordance with the\nprinciples of Section 4.1(e) assuming that the relevant Tax period for purposes\nof applying Section 4.1(e) is the period that begins on the first day of the\nStraddle Period and ends on the Distribution Date. The actual UNREGCO\nConsolidated State Tax liability of REI and each REI Affiliated Company (or its\nsuccessor REGCO and each REGCO Affiliated Company) shall be determined in\naccordance with Section 2.4.\n\n           4.2 Payments of Tax to Tax Authorities.\n\n           (a) Federal Income Taxes. REI (or its successor REGCO) shall pay (or\ncause to be paid) to the Service when due the Federal Income Taxes, if any, of\nthe REI Consolidated Group due and payable for the Pre-Distribution Periods and\nStraddle Periods. REI (or its successor REGCO) shall pay (or cause to be paid)\nto the Service when due all Federal Income Taxes, if any, of the REI\nConsolidated Group (or the successor REGCO Consolidated Group) due and payable\nfor all Post-Distribution Periods. UNREGCO shall pay (or cause to be paid) to\nthe Service when due all Federal Income Taxes, if any, of the UNREGCO\nConsolidated Group for all Post-Distribution Periods.\n\n           (b) State Taxes. REI (or its successor, REGCO) shall pay (or cause to\nbe paid) to the appropriate Tax Authorities when due (i) all Separate State\nTaxes, if any, that relate to REI or an REI Affiliated Company (or its\nsuccessors REGCO or a REGCO Affiliated Company) for any Pre-Distribution,\nStraddle Period or Post-Distribution Period and (ii) all REI Consolidated State\nTaxes, if any, for any Pre-Distribution Period, Straddle Period or\nPost-Distribution Period. UNREGCO shall pay (or cause to be paid) to the\nappropriate Tax Authorities when due (iii) all Separate State Taxes, if any,\nthat relate to UNREGCO or an UNREGCO Affiliated Company for any Pre-Distribution\nPeriod, Straddle Period or Post-Distribution Period and (iv) all UNREGCO\nConsolidated State Taxes, if any, that relate to any Pre-Distribution Period,\nStraddle Period or Post-Distribution Period.\n\n                                      -21-\n   23\n\nSECTION 5. ALLOCATION OF CERTAIN TAX ITEMS.\n\n           5.1 Liability for Restructuring Taxes. Except as otherwise provided\nby this Agreement, REI (or its successor REGCO) shall be responsible for any and\nall Restructuring Taxes.\n\n           5.2 NOLs; Carryforwards and Carrybacks.\n\n           (a) REGCO shall notify UNREGCO after the Distribution Date of any\nconsolidated carryover item which may be partially or totally attributed to and\ncarried over by a UNREGCO Affiliated Company and will notify UNREGCO of\nsubsequent adjustments which may affect such carryover item.\n\n           (b) If (i) the UNREGCO Consolidated Group generates a net operating\nloss in a Post-Distribution Period that it requests in writing to REI (or its\nsuccessor REGCO) be carried back to a Pre-Distribution Period or Straddle Period\nof the REI Consolidated Group (or successor REGCO Consolidated Group) and (ii)\nREI (or its successor REGCO) consents to such request, which consent shall not\nbe unreasonably withheld, then REI (or its successor REGCO) shall amend the REI\nConsolidated Group Consolidated Return for such Pre-Distribution Period or\nStraddle Period seeking a refund of Tax for such net operating loss carryback\n(\"NOL Carryback Refund\"). Upon receipt of such refund, REI (or its successor\nREGCO) shall pay the amount of such refund to UNREGCO within 24 hours of REI's\n(or its successor REGCO's) receipt of such Tax refund. The preceding principles\nshall be equally applicable to a net operating loss generated in a\nPost-Distribution Period by the UNREGCO Group that can be carried back to an REI\nConsolidated State Tax Return for a Pre-Distribution Period or Straddle Period.\n\n           (c) To the extent the UNREGCO Consolidated Group generates any other\nTax Item in a Post-Distribution Period that is required by the Code or Treasury\nRegulations to be carried back to a Pre-Distribution Period or Straddle Period,\nthen REI (or its successor REGCO) shall amend the REI Consolidated Group\nConsolidated Return for such Pre-Distribution Period or Straddle Period seeking\na refund of Tax relating to such Tax Item (\"Other Tax Item Refund\"). Upon\nreceipt of such refund, REI (or its successor REGCO) shall pay the amount of\nsuch refund to UNREGCO within 24 hours of REI's (or its successor REGCO's)\nreceipt of such Tax refund. The preceding principles shall be equally applicable\nto the carry back of any other Tax Item generated in a Post-Distribution Period\nby the UNREGCO Group to an REI Consolidated State Tax Return for a\nPre-Distribution Period or Straddle Period.\n\n           5.3 Adjustments.\n\n           (a) In General. Except for increases or decreases to Tax subject to\nSection 5.3(b) or Section 5.3(c), if a Redetermination results in an increase or\ndecrease to the Tax liability reported on an REI Consolidated Group (or\nsuccessor REGCO Consolidated Group) Consolidated Return or an REI Consolidated\nState Tax Return for a Pre-Distribution Period or the Straddle Period, then\n\n                (i) the amounts required to be paid between REI (or its\nsuccessor REGCO) and UNREGCO pursuant to Section 4 shall not be recomputed for\nsuch taxable period \n\n\n                                      -22-\n   24\n\nto take into account any such increase or decrease to the Tax that occurs as a\nresult of such Redetermination,\n\n                (ii) payments previously made between REI (or its successor\nREGCO) and UNREGCO pursuant to Section 4 shall not be adjusted to take into\naccount any such increase or decrease to the Tax that occurs as a result of such\nRedetermination,\n\n                (iii) REI (or its successor REGCO) shall be liable for and shall\npay to the appropriate Tax Authority when due any increase in Tax for such\nPre-Distribution Period or Straddle Period that occurs as a result of such\nRedetermination,\n\n                (iv) REI (or its successor REGCO) shall indemnify and hold\nUNREGCO harmless from any increase in Tax for such Pre-Distribution Period or\nStraddle Period that occurs as a result of such Redetermination,\n\n                (v) UNREGCO shall not be liable for and shall not pay any\nincrease in Tax for such Pre-Distribution Period or Straddle Period that occurs\nas a result of such Redetermination,\n\n                (vi) REI (or its successor REGCO) shall be entitled to, and\nshall retain, all refunds related to any decrease in Tax for such\nPre-Distribution Period or Straddle Period that occurs as a result of such\nRedetermination,\n\n                (vii) UNREGCO shall not be entitled to, and shall not retain,\nany refund related to any decrease in Tax for such Pre-Distribution Period or\nStraddle Period that occurs as a result of such Redetermination and\n\n                (viii) with respect to increases or decreases in Tax related to\nan Option Deduction Reallocation or to a Temporary Tax Adjustment, REI (or its\nsuccessor REGCO) and UNREGCO shall have the payment obligations to the other as\nset forth in Section 5.4(h) or Section 5.6, respectively.\n\n           (b) UNREGCO Retained Tax Liability Exception. For an increase or\ndecrease to the Tax reported on an REI Consolidated Group (or successor REGCO\nConsolidated Group) Consolidated Return or an REI Consolidated State Tax Return\nfor a Pre-Distribution Period or a Straddle Period that occurs as a result of a\nRedetermination and that relates to an UNREGCO Retained Tax Liability:\n\n                (i) Increases to Tax. REI (or its successor REGCO) shall pay to\nthe appropriate Tax Authority when due all increases in Tax for such\nPre-Distribution Period or Straddle Period that occur as a result of such\nRedetermination, and\n\n                    (A) within 15 days of making any payment under Section\n5.3(b)(i), REI shall provide UNREGCO notice of the amounts of payment to be made\nbetween UNREGCO and REI (or its successor REGCO) of UNREGCO's allocable share of\nthe Tax under Section 4 after the amounts required to be paid pursuant to\nSection 4 are recomputed, and\n\n                                      -23-\n   25\n\n                    (B) within 15 days of receiving the notice referred to in\nSection 5.3(i)(A), UNREGCO shall pay REI (or its successor REGCO) an amount\nequal to the increase, if any, in UNREGCO's allocable share of Tax under Section\n4 referred to in Section 5.3(b)(i)(A).\n\n                    (C) If UNREGCO disagrees with an item of information\nprovided on the notice referred to in Section 5.3(b)(i)(A), UNREGCO may invoke\nthe resolution procedures of Section 8.3.\n\n                (ii) Decreases to Tax. REI (or its successor REGCO) shall not be\nentitled to, and shall not retain, any refund related to any decrease in tax\nliability for such Pre-Distribution Period or Straddle Period that occurs as a\nresult of such Redetermination, and shall, within 15 days of receiving such\nrefund, pay such amount to UNREGCO.\n\n           (c) UNREGCO Consolidated State Tax Exception. If a Redetermination\nresults in an increase or decrease to the Tax reported on a UNREGCO Consolidated\nState Tax Return for a Pre-Distribution Period or a Straddle Period, then\n\n                (i) the amounts required to be paid between REI (or its\nsuccessor REGCO) and UNREGCO pursuant to Section 4 shall not be recomputed for\nsuch taxable period to take into account any such increase or decrease to the\nTax that occurs as a result of such Redetermination,\n\n                (ii) payments previously made between REI (or its successor\nREGCO) and UNREGCO pursuant to Section 4 shall not be adjusted to take into\naccount any such increase or decrease to the Tax that occurs as a result of such\nRedetermination,\n\n                (iii) UNREGCO shall be liable for and shall pay to the\nappropriate Tax Authority when due any increase in Tax for such Pre-Distribution\nPeriod or Straddle Period that occurs as a result of such Redetermination,\n\n                (iv) UNREGCO shall indemnify and hold REI (or its successor\nREGCO) harmless from any increase in Tax for such Pre-Distribution Period or\nStraddle Period that occurs as a result of such Redetermination,\n\n                (v) REI (or its successor REGCO) shall not be liable for and\nshall not pay any increase in Tax for such Pre-Distribution Period or Straddle\nPeriod that occurs as a result of such Redetermination,\n\n                (vi) UNREGCO shall be entitled to, and shall retain, all refunds\nrelated to any decrease in Tax for such Pre-Distribution Period or Straddle\nPeriod that occurs as a result of such Redetermination,\n\n                (vii) REI (or its successor REGCO) shall not be entitled to, and\nshall not retain, any refund related to any decrease in Tax for such\nPre-Distribution Period or Straddle Period that occurs as a result of such\nRedetermination and\n\n                (viii) with respect to increases or decreases in Tax related to\nan Option Reallocation Deduction or to a Temporary Tax Adjustment, REI (or its\nsuccessor REGCO) and \n\n\n                                      -24-\n   26\n\nUNREGCO shall have the payment obligations to the other as set forth in Section\n5.4(h) or Section 5.6, respectively.\n\n           (d) Characterization of Redetermination Payment. A payment by UNREGCO\nto REI (or its successor REGCO) pursuant to this Section 5.3, Section 5.4(h) or\nSection 5.6 shall be treated as a distribution under Section 301 of the Code by\nUNREGCO to REI at a time when UNREGCO and REI filed a Consolidated Tax Return. A\npayment by REI (or its successor REGCO) to UNREGCO pursuant to this Section 5.3\nshall be treated as a nontaxable contribution by REI to the capital of UNREGCO\nat a time when UNREGCO and REI filed a Consolidated Tax Return.\n\n           5.4 Allocation of Tax Items.\n\n           (a) General Rule. Except to the extent another provision of this\nAgreement provides to the contrary, all Tax computations (1) for Tax periods\nending on the Distribution Date and (2) the immediate following Tax period of\nUNREGCO or any UNREGCO Affiliated Company, shall be made pursuant to the\nprinciples of Section 1.1502-76(b) of the Treasury Regulations or of a\ncorresponding provision under the laws of other jurisdictions, as determined by\nREI (or its successor, REGCO), taking into account all reasonable suggestions\nmade by UNREGCO with respect thereto.\n\n           (b) Earnings and Profits. Within one hundred eighty (180) days after\nreceipt of a written request by UNREGCO, REGCO will advise UNREGCO in writing of\nthe allocation of earnings and profits of REGCO pursuant to Section 312(h) of\nthe Code as a result of the Distribution. If UNREGCO disagrees with such\nallocation, UNREGCO may invoke the resolution procedures of Section 8.3.\n\n           (c) Overall Foreign Loss and Separate Limitation Loss. Within sixty\n(60) days after the filing of the Federal Income Tax Return for the REI\nConsolidated Group (or its successor REGCO Consolidated Group) for the taxable\nyear that includes the Distribution Date REI (or its successor REGCO) shall\nadvise UNREGCO in writing of the allocation, consistent with the provisions of\nTreasury Regulation Section 1.1502-9, between REI (or its successor REGCO) and\nUNREGCO of the overall foreign loss and separate limitation loss as of the\nDistribution Date; provided, however that REI (or its successor REGCO) shall\nprovide UNREGCO with estimates of such amounts as reasonably requested by\nUNREGCO. If UNREGCO disagrees with such allocation, UNREGCO may invoke the\nresolution procedures of Section 8.3.\n\n           (d) Alternative Minimum Tax Items. Within sixty (60) days of the\nfiling of the Federal Income Tax Return for the REI Consolidated Group (or its\nsuccessor REGCO Consolidated Group) for the taxable year that includes the\nDistribution Date, REI (or its successor REGCO) will advise UNREGCO in writing\nof the allocation, consistent with Proposed Treasury Regulation Section\n1.1502-55 (and any subsequently finalized regulations) between REI (or its\nsuccessor REGCO) and UNREGCO of the consolidated positive adjusted current\nearnings adjustment as of the Distribution Date; provided, however, that REI (or\nits successor REGCO) shall provide UNREGCO with estimates of such amount as\nreasonably requested by UNREGCO. If UNREGCO disagrees with such allocation,\nUNREGCO may invoke the \n\n\n                                      -25-\n   27\n\nresolution procedures of Section 8.3. REI (or its successor REGCO) shall also\nprovide UNREGCO with estimates of other alternative minimum Tax items as\nreasonably requested by UNREGCO.\n\n           (e) Other Tax Item Allocations. The allocation of any other Tax Item\nshall be made by REI (or its successor REGCO) either (i) in accordance with\napplicable sections of the Code or Treasury Regulations, or (ii) if no section\nof the Code or applicable Treasury Regulations provides for an allocation of\nsuch Tax Item, in accordance with an equitable method mutually agreed to in good\nfaith by the parties. REI (or its successor REGCO) shall advise UNREGCO in\nwriting of any such allocation within 60 days after the filing of the Federal\nIncome Tax Return for the REI Consolidated Group (or its successor REGCO\nConsolidated Group) for the taxable year that includes the Distribution Date. If\nUNREGCO disagrees with such allocation, UNREGCO may invoke the resolution\nprocedures of Section 8.3.\n\n           (f) DITs. REI (or its successor REGCO) shall apply the Consolidated\nReturn Regulations and the Consolidated Returns filed by the REI Consolidated\nGroup (or successor REGCO Consolidated Group) pursuant to this Agreement or the\nTax Sharing Agreement, respectively, to determine the timing of the recognition\nof Tax Items with respect to DITs and to determine which Consolidated Group (and\nwhich member thereof) shall bear the Tax benefit or burden of such Tax Items,\nand each Consolidated Group shall be responsible for the Tax Items recognized by\nits respective members with respect to any DITs. REI (or its successor REGCO)\nshall advise UNREGCO in writing of any such determination within 60 days after\nthe filing of the Federal Income Tax Return for the REI Consolidated Group (or\nits successor REGCO Consolidated Group) for the taxable year that includes the\nDistribution Date. If UNREGCO disagrees with such determinations, UNREGCO may\ninvoke the resolution procedures of Section 8.3.\n\n           (g) Subpart F. Notwithstanding any provision of this Agreement to the\ncontrary, to the extent the UNREGCO Consolidated Group must pay Tax attributable\nto a Subpart F inclusion (\"Subpart F Tax\") under the Code that is taken into\naccount as a result of a Tax arising in the UNREGCO Consolidated Group\nConsolidated Tax Return for the taxable year that begins on the day after the\nDistribution Date (or in a later taxable year if there is a deficit in earnings\nand profits that defers such Subpart F Tax to a taxable year after the taxable\nyear that begins on the day after the Distribution Date), REI (or its successor\nREGCO) shall pay to UNREGCO a percentage of the Subpart F Tax equal to the\npercentage of days of the 12-month Tax period to which such Subpart F Tax\nrelates based on the number of days in such 12-month Tax period before the\nDistribution Date bears to the total days in such 12-month Tax period that\nincludes the Distribution Date, but only to the extent that the Subpart F Tax\nissue relates to an income inclusion that is attributable to an item that\naccrued ratably (utilizing principles similar to those of the ratable allocation\nelection of Treasury Regulation Section 1.1502-76(b)(2)(ii)(D), adjusting for\nextraordinary items similar to those set forth in Treasury Regulation Section\n1.1502-76(b)(2)(ii)(C)) over the 12-month Tax period. Within 15 days after the\nfiling of the Tax Return for the taxable year that begins on the day after the\nDistribution Date (or such later taxable year if there is a deficit in earnings\nand profits that defers such Subpart F Tax to a taxable year after the taxable\nyear that begins on the day after the Distribution Date), UNREGCO shall notify\nREI (or its successor REGCO) in writing as to the amount of payment, if any, REI\n(or its successor REGCO) owes to UNREGCO under the preceding sentence. REI (or\nits successor \n\n\n                                      -26-\n   28\n\nREGCO) shall pay UNREGCO such amount within 15 days of receiving such notice. If\nREI (or its successor REGCO) disagrees with such amount, REI (or its successor\nREGCO) may invoke the resolution procedures of Section 8.3.\n\n           (h) Stock Awards. Any deduction attributable to (i) the vesting or\nexercise after the Distribution Date of an UNREGCO Stock Award or REI Stock\nAward under Section 83(h) of the Code or Treasury Regulation Section 1.83-6 or\n(ii) a disqualifying disposition with respect to either an UNREGCO Stock Award\nor REI Stock Award under Section 421(b) of the Code shall be claimed on the\nConsolidated Return of the REI Consolidated Group (or successor REGCO\nConsolidated Group) in the case of an REI Stock Award and on the Consolidated\nReturn of the UNREGCO Consolidated Group in the case of an UNREGCO Stock Award.\nIn any case in which as a result of a Redetermination the allocation described\nin the preceding sentence of this Section 5.4(h) is not sustained and the REI\nConsolidated Group (or successor REGCO Consolidated Group) or the UNREGCO\nConsolidated Group, as the case may be, is allocated a deduction as a result of\na Redetermination contrary to the provisions of this Section 5.4(h) (\"Option\nDeduction Reallocation\"), then UNREGCO on behalf of the UNREGCO Consolidated\nGroup or REI (or successor REGCO) on behalf of the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group), as the case may be, shall pay to the other\na sum, in cash, equal to the sum of (i) the amount of the deduction allocated\ncontrary to the first sentence of this Section 5.4(h) multiplied by the sum of\n(A) the highest marginal Tax rate as provided under Section 11 of the Code and\n(B) 2.925% and (ii) interest and\/or penalties, if any, that are included as part\nof the Redetermination. If the REI Consolidated Group (or successor REGCO\nConsolidated Group) or the UNREGCO Consolidated Group, as the case may be,\nreceives a deduction as a result of an Option Deduction Reallocation, then REI\n(or its successor REGCO) or UNREGCO, as the case may be, shall inform UNREGCO or\nREI (or its successor REGCO), as the case may be, within 15 days of receiving\nsuch deduction the amount of such payment that REI (or its successor REGCO) or\nUNREGCO, as the case may be, is obligated to pay to UNREGCO or REI or its\nsuccessor REGCO), as the case may be, pursuant to the preceding sentence. REI\n(or its successor REGCO) or UNREGCO, as the case may be, shall pay such amount\nto UNREGCO or REI (or its successor REGCO), as the case may be, within 15 days\nafter it provides notice of such amount. If UNREGCO or REI (or its successor\nREGCO), as the case may be, does not agree with such amount, UNREGCO or REI (or\nits successor REGCO), as the case may be, may invoke the resolution procedures\nof Section 8.3. REI (or its successor REGCO) and the REI Affiliated Companies\n(or the successor REGCO Affiliated Companies) shall indemnify and hold harmless\nUNREGCO and the UNREGCO Affiliated Companies, and UNREGCO and the UNREGCO\nAffiliated Companies shall indemnify and hold harmless REI (or its successor\nREGCO) and the REI Affiliated Companies (or the successor REGCO Affiliated\nCompanies), from and against any Taxes, penalties or interest required to be\npaid as a result of the breach by REI (or its successor REGCO) and the REI\nAffiliated Companies (or the successor REGCO Affiliated Companies) or UNREGCO\nand the UNREGCO Affiliated Companies, as the case may be, of any obligation\nunder this Section 5.4(h). Further, if, due to any change in applicable law or\nregulations or the interpretation thereof by any court of law or other governing\nbody having jurisdiction subsequent to the date of this Agreement, performance\nof this Section 5.4(h) shall become impracticable or impossible, the parties\nhereto shall use their best efforts to find an alternative means to achieve the\nsame or substantially the same result as that contemplated by this Section\n5.4(h).\n\n                                      -27-\n   29\n\n           5.5 Foreign Taxes. Notwithstanding any provision of this Agreement to\nthe contrary, this Agreement shall not apply to Taxes that are imposed by a\nForeign Country on a Foreign Legal Entity.\n\n           5.6 Temporary Tax Adjustments.\n\n           (a) Tax Adjustment. Upon a Redetermination of an REI Consolidated\nGroup (or successor REGCO Consolidated Group) Consolidated Return Tax for a\nPre-Distribution Period or the Straddle Period and subject to Section 5.6(h), a\n\"Tax Adjustment\" is caused if such Redetermination results in any increase or\ndecrease to the amount of an item of income or of deduction, gain, or loss as\ncompared to the amount of such item reported on the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group) Consolidated Tax Return.\n\n           (b) Temporary Tax Adjustment. Subject to Section 5.6(h), a Tax\nAdjustment is a \"Temporary Tax Adjustment\" if such Tax Adjustment\n\n                (i) constitutes a temporary difference or a tax carryforward\nunder paragraphs 3(c), 8(b), or 13 of Statement of Financial Accounting Standard\n109 (\"SFAS 109\");\n\n                (ii) is expected, at the time of such Redetermination, to result\nin a corresponding and offsetting decrease or increase to the amount of an item\nof income or of deduction, gain or loss as compared to the amount of such item\nthat would otherwise have been expected (but for the Redetermination) to have\nbeen recognized by the UNREGCO Consolidated Group during a Post-Distribution\nPeriod;\n\n                (iii) does not relate to the income tax basis of a\nnondepreciable, nonamortizable or nondepletable asset or to the basis of stock\nof any company (whether domestic or foreign) in which UNREGCO holds an equity\ninterest irrespective of the application of paragraph 34 of SFAS 109; and\n\n                (iv) does not relate to a Pre-1997 Tax Liability or an Option\nDeduction Reallocation.\n\n           (c) Value of Tax Adjustment and of Temporary Tax Adjustment. The\nvalue of a Tax Adjustment equals the product of\n\n                (i) the amount of the increase or decrease to the item of\nincome, deduction, gain or loss as compared to the amount of such item reported\non the REI Consolidated Group (or successor REGCO Consolidated Group)\nConsolidated Tax Return and\n\n                (ii) (A) if such Tax Adjustment is not an RES Temporary Tax\nAdjustment, the highest marginal Federal Income Tax rate applicable to\ncorporations in effect during the Pre-Distribution Period or Straddle Period to\nwhich the Redetermination that produced such Tax Adjustment relates\n\n                     (B) if such Tax Adjustment is an RES Temporary Tax\nAdjustment, the sum of\n\n                                      -28-\n   30\n\n                          (I)  2% and\n\n                          (II) the highest marginal Federal Income Tax rate \napplicable to corporations in effect during the Pre-Distribution Period or\nStraddle Period to which the Redetermination that produced such Tax Adjustment\nrelates.\n\nA Tax Adjustment that constitutes an (i) increase to an item of expense or loss\nas compared to the amount of such item reported on the REI Consolidated Group\n(or successor REGCO Consolidated Group) Consolidated Tax Return or a (ii)\ndecrease to an item of income or gain as compared to the amount of such item\nreported on the REI Consolidated Group (or successor REGCO Consolidated Group)\nConsolidated Tax Return shall constitute a negative amount. A Tax Adjustment\nthat constitutes a (i) decrease to an item of expense or loss as compared to the\namount of such item reported on the REI Consolidated Group (or successor REGCO\nConsolidated Group) Consolidated Tax Return or an (ii) increase to an item of\nincome or gain as compared to the amount of such item reported on the REI\nConsolidated Group (or successor REGCO Consolidated Group) Consolidated Tax\nReturn shall constitute a positive amount. The value of a Temporary Tax\nAdjustment equals its value as a Tax Adjustment.\n\n           (d) Temporary Tax Adjustment Balance.\n\n                (i) At any given time, the \"Temporary Tax Adjustment Balance\"\nequals the sum of the values of the Temporary Tax Adjustments that have been\ncaused by Redeterminations of the REI Consolidated Group (or successor REGCO\nConsolidated Group) Consolidated Return for a Pre-Distribution Period or\nStraddle Period.\n\n                (ii) For purposes of computing the Temporary Tax Adjustment\nBalance pursuant to this Section 5.6(d),\n\n                    (A) positive values and negative values shall offset one\nanother and\n\n                    (B) the Temporary Tax Adjustment Balance may be a negative\namount.\n\n           (e) Notice. Within 15 days after each Redetermination of an REI\nConsolidated Group (or successor REGCO Consolidated Group) Consolidated Return\nrelating to a Pre-Distribution Period or Straddle Period, REI (or its successor\nREGCO) shall provide written notice to UNREGCO setting forth\n\n                (i) a brief description of each Tax Adjustment caused by such\nRedetermination,\n\n                (ii) whether each enumerated Tax Adjustment is a Temporary Tax\nAdjustment,\n\n                (iii) the value of each Temporary Tax Adjustment and the\nidentification of the taxable year to which the Temporary Tax Adjustment\nrelates,\n\n                                      -29-\n   31\n\n                (iv) the value of the Temporary Tax Adjustment Balance at the\ntime such notice is prepared, including the effect of the Temporary Tax\nAdjustment related to the Redetermination with respect to such notice,\n\n                (v) the value of the Temporary Tax Adjustment Payment Balance at\nthe time such notice is prepared, including the effect of the Temporary Tax\nAdjustment related to the Redetermination with respect to such notice,\n\n                (vi) the amount of additional Federal Income Tax (excluding\ninterest and penalties) that the REI Consolidated Group (or successor REGCO\nConsolidated Group) must pay, or the amount of Federal Income Tax (excluding\ninterest and penalties) that is refunded to the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group), for each taxable year (collectively,\n\"Redetermination Tax\") that applies to such Redetermination,\n\n                (vii) the amount of interest that the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group) must pay (represented as a positive amount),\nor the amount of interest that is refunded to the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group) (represented as a negative amount), for each\ntaxable year (collectively, \"Redetermination Interest\") that applies to such\nRedetermination,\n\n                (viii) the portion of Redetermination Interest for each taxable\nyear that applies to such Redetermination that constitutes UNREGCO Basket\nInterest and UNREGCO Non-Basket Interest, and\n\n                (ix) the amount of any payment that one party is obligated to\npay the other pursuant to Section 5.6(g) or 5.6(h) after applying Section\n5.6(e)(iii)-(viii).\n\nIf UNREGCO disagrees with any item on such notice, UNREGCO may invoke the\nresolution procedures of Section 8.3.\n\n           (f) Temporary Tax Adjustment Payment Balance.\n\n                (i) At any given time, the \"Temporary Tax Adjustment Payment\nBalance\" equals the sum of the values of the payments that have been made\npursuant to Section 5.6(g).\n\n                (ii) The value of a payment that is made pursuant to Section\n5.6(g) equals the amount of the payment.\n\n                (iii) A payment from UNREGCO to REI (or its successor REGCO)\npursuant to Section 5.6(g) shall be treated as a positive amount, and a payment\nfrom REI (or its successor REGCO) to UNREGCO pursuant to Section 5.6(g) shall be\ntreated as a negative amount.\n\n                (iv) For purposes of computing the Temporary Tax Adjustment\nPayment Balance pursuant to this Section 5.6(g),\n\n                                      -30-\n   32\n\n                    (A) positive values and negative values shall offset one\nanother and\n\n                    (B) the Temporary Tax Adjustment Payment Balance may be a\nnegative amount.\n\n           (g) Temporary Tax Adjustment Payment. Within 15 days after REI (or\nits successor REGCO) provides a notice pursuant to Section 5.6(e), REI (or its\nsuccessor REGCO) shall make a payment to UNREGCO, or UNREGCO shall make a\npayment (the \"Temporary Tax Adjustment Payment\") to REI (or its successor\nREGCO), as the case may be, in an amount such that after the value of such\nTemporary Tax Adjustment Payment is added to the existing Temporary Tax\nAdjustment Payment Balance, the following is true:\n\n                (i) if the Temporary Tax Adjustment Balance is less than\nnegative one million ($-1,000,000), then the Temporary Tax Adjustment Payment\nBalance equals the amount, represented by a negative value, by which the\nTemporary Tax Adjustment Balance is less than negative one million\n($-1,000,000),\n\n                (ii) if the Temporary Tax Adjustment Balance equals an amount\ngreater than or equal to negative one million ($-1,000,000) and less than or\nequal to positive fifteen million ($15,000,000), then the Temporary Tax\nAdjustment Payment Balance equals zero and\n\n                (iii) if the Temporary Tax Adjustment Balance equals an amount\nthat is greater than positive fifteen million ($15,000,000), then the Temporary\nTax Adjustment Payment Balance equals the amount by which the Temporary Tax\nAdjustment Balance is greater than positive fifteen million ($15,000,000).\n\nExhibit 1 illustrates examples of calculations under Section 5.6.\n\n           (h) Interest Payments.\n\n                (i) UNREGCO Interest. For each taxable year that applies to a\nRedetermination relating to a Pre-Distribution Period or Straddle Period of the\nREI Consolidated Group (or successor REGCO Consolidated Group), the portion of\nRedetermination Interest that constitutes UNREGCO Interest shall be determined\nas follows:\n\n                    (A) if the sum of the values of the Temporary Tax\nAdjustments for a taxable year are negative and if the sum of the values of the\nTax Adjustments (ignoring the value of the Temporary Tax Adjustments) for such\ntaxable year are positive, then\n\n                        (I) if the Redetermination Interest is a positive \namount, no amount of such Redetermination Interest constitutes UNREGCO Interest,\nand\n\n                        (II) if the Redetermination Interest is a negative \namount, all of such Redetermination Interest constitutes UNREGCO Interest.\n\n                                      -31-\n   33\n\n                    (B) if the sum of the values of the Temporary Tax\nAdjustments for a taxable year are positive and if the sum of the values of the\nTax Adjustments (ignoring the value of the Temporary Tax Adjustments) for such\ntaxable year are negative, then\n\n                        (I) if the Redetermination Interest is a positive \namount, all of such Redetermination Interest constitutes UNREGCO Interest, and\n\n                        (II) if the Redetermination Interest is a negative \namount, none of such Redetermination Interest constitutes UNREGCO Interest.\n\n                    (C) if the sum of the values of the Temporary Tax\nAdjustments for a taxable year are positive and if the sum of the values of the\nTax Adjustments (ignoring the value of the Temporary Tax Adjustments) for such\ntaxable year are positive, then\n\n                        (I) if the Redetermination Interest is a positive \namount, then UNREGCO Interest equals the product of (1) the value of the\nRedetermination Interest and (2) the absolute value of the quotient of the sum\nof the values of Temporary Tax Adjustments for such taxable year divided by the\nRedetermination Tax for such taxable year, and\n\n                        (II) if the Redetermination Interest is a negative \namount, then none of such Redetermination Interest constitutes UNREGCO Interest.\n\n                    (D) if the sum of the values of the Temporary Tax\nAdjustments for a taxable year are negative and if the sum of the values of the\nTax Adjustments (ignoring the value of the Temporary Tax Adjustments) for such\ntaxable year are negative, then\n\n                        (I) if the Redetermination Interest is a positive \namount, then none of such Redetermination Interest constitutes UNREGCO Interest,\nand\n\n                        (II) if the Redetermination Interest is a negative \namount, then UNREGCO Interest equals the product of (1) the value of the\nRedetermination Interest and (2) the absolute value of the quotient of the sum\nof the values of Temporary Tax Adjustments for such taxable year divided by the\nRedetermination Tax for such taxable year.\n\n                (ii) UNREGCO Basket Interest. UNREGCO Basket Interest shall\nconstitute a Temporary Tax Adjustment, regardless of whether the conditions of\nSection 5.6(a) or (b) are met. The value of UNREGCO Basket Interest equals the\namount of such UNREGCO Basket Interest. UNREGCO Basket Interest that represents\na portion of the Redetermination Interest that the REI Consolidated Group (or\nsuccessor REGCO Consolidated Group) paid shall be treated as a positive amount,\nand UNREGCO Basket Interest that represents a portion of the Redetermination\nInterest that the REI Consolidated Group (or successor REGCO Consolidated Group)\nreceived as a refund shall be treated as a negative amount.\n\n                (iii) UNREGCO Non-Basket Interest.\n\n                    (A) UNREGCO Non-Basket Interest shall not constitute a\nTemporary Tax Adjustment. The value of UNREGCO Non-Basket Interest equals the\namount of such UNREGCO Non-Basket Interest. UNREGCO Non-Basket Interest that\nrepresents a portion \n\n\n\n                                      -32-\n   34\n\nof the Redetermination Interest that the REI Consolidated Group (or successor\nREGCO Consolidated Group) paid shall be treated as a positive amount, and\nUNREGCO Non-Basket Interest that represents a portion of the Redetermination\nInterest that the REI Consolidated Group (or successor REGCO Consolidated Group)\nreceived as a refund shall be treated as a negative amount.\n\n                    (B) Within 15 days after REI (or its successor REGCO)\nprovides a notice pursuant to Section 5.6(e), then\n\n                        (I) if the value of the UNREGCO Non-Basket Interest for \na taxable year that applies to the Redetermination is positive, UNREGCO shall\nmake a payment to REI (or its successor REGCO) equal to the value of the UNREGCO\nNon-Basket Interest for such taxable year, and\n\n                        (II) if the value of the UNREGCO Non-Basket Interest \nfor a taxable year that applies to the Redetermination is negative, REI (or its\nsuccessor REGCO) shall make a payment to REI (or its successor REGCO) equal to\nthe absolute value of the UNREGCO Non-Basket Interest for such taxable year.\n\n           5.7 Continuing Covenants. REI (for itself and each REI Affiliated\nCompany), REGCO (for itself and each REGCO Affiliated Company) and UNREGCO (for\nitself and each UNREGCO Affiliated Company) agree (1) not to take any action\nreasonably expected to result in a new or changed Tax Item that is detrimental,\nand (2) to take any action reasonably requested by the other party that would\nreasonably be expected to result in a new or changed Tax Item that produces a\nbenefit or avoids a detriment, provided that such action does not result in any\nadditional cost not fully compensated for by the requesting party. The parties\nhereby acknowledge that the preceding sentence is not intended to limit, and\ntherefore shall not apply to, the rights of the parties with respect to matters\notherwise covered by this Agreement.\n\nSECTION 6. INDEMNIFICATION PROVISIONS.\n\n           6.1 General Indemnification. UNREGCO and each UNREGCO Affiliated\nCompany shall jointly and severally indemnify REI, each REI Affiliated Company,\nREGCO, each REGCO Affiliated Company and their respective directors, officers\nand employees, and hold them harmless from and against any and all Taxes for\nwhich UNREGCO or any UNREGCO Affiliated Company is liable under this Agreement\nand any loss, cost, damage or expense, including reasonable attorneys' fees and\ncosts, that is attributable to, or results from, the failure of UNREGCO, any\nUNREGCO Affiliated Company or any of their respective directors, officers, or\nemployees to make any payment required to be made under this Agreement. REI,\neach REI Affiliated Company, REGCO and each REGCO Affiliated Company shall\njointly and severally indemnify UNREGCO, each UNREGCO Affiliated Company and\ntheir respective directors, officers and employees, and hold them harmless from\nand against any and all Taxes for which REGCO or any REGCO Affiliated Company is\nliable under this Agreement and any loss, cost, damage or expense, including\nreasonable attorneys' fees and costs, that is attributable to, or results from\nthe failure of REI, any REI Affiliated Company, REGCO any REGCO Affiliated\nCompany or any of their directors, officers or employees to make any payment\nrequired to be made under this Agreement.\n\n                                      -33-\n   35\n\n           6.2 Spinoff Indemnification.\n\n           (a) In General. Notwithstanding anything herein or in the Tax Sharing\nAgreement to the contrary, the provisions of this Section 6 shall govern all\nmatters among the parties hereto related to an Indemnified Liability (as defined\nin Section 6.3 below) and an Indemnity Amount (as defined in Section 6.5 below).\n\n           (b) Continued Conduct of Business. During the Restricted Period, each\nof REI, each REI Affiliated Entity, REGCO, each REGCO Affiliated Entity, UNREGCO\nand each UNREGCO Affiliated Entity agree that it (i) will not cause or permit to\nbe caused a change in its Control (ii) nor cease the active conduct of its trade\nor business within the meaning of Section 355(b) of the Code to the extent the\nexistence of such trade or business was necessary to a conclusion reached by the\nService in the Initial Private Letter Ruling, unless expressly required or\npermitted pursuant to the Master Separation Agreement or unless, for actions\nafter the Distribution Date, REI (or its successor REGCO) or UNREGCO first\nobtains, and permits the other party (UNREGCO or REI (or its successor REGCO),\nas the case may be) to review, a supplemental ruling from the Service, that such\naction or non-action referred to in this Section 6.2(b), will not affect the\nqualification of the First Spinoff and the Spinoff under Section 355 of the\nCode.\n\n           (c) Ruling Requirement for Major Transactions Undertaken during the\nRestricted Period. During the Restricted Period, REI, REGCO, and UNREGCO will\nnot enter into any of the following transactions, or enter into any other\ntransaction (\"Prohibited Transaction\") which, by itself or in the aggregate, may\ncause the First Distribution or Distribution to be treated as part of a plan\npursuant to which one or more persons acquire directly or indirectly stock\nrepresenting Control of REI, REGCO or UNREGCO, as the case may be, within the\nmeaning of Code Section 355(e):\n\n                (i) merge or consolidate with or into any other corporation;\n\n                (ii) liquidate or partially liquidate (within the meaning of\nsuch terms as defined in Section 346 and Section 302, respectively, of the\nCode);\n\n                (iii) sell or transfer all or substantially all its assets\n(within the meaning of Rev. Proc. 77-37, 1977-2 C.B. 568) in a single\ntransaction or series of related transactions;\n\n                (iv) redeem or otherwise repurchase any of REGCO or UNREGCO's\ncapital stock; or\n\n                (v) make any change in its equity structure (including stock\nissuances, pursuant to the exercise of options or otherwise, option grants, the\nadoption of, or authorization of shares under a stock option plan, capital\ncontributions or acquisition but not including the Distribution),\n\n(actions (i), (ii), (iii), (iv) and (v) and the Prohibited Transactions are\ncollectively referred to as the \"Prohibited Acts\"), unless expressly required or\npermitted pursuant to the Master Separation Agreement or unless for actions\nafter the Distribution Date, REI (or its successor REGCO) or UNREGCO first\nobtains, and permits the other party (UNREGCO or REGCO, as the case may \n\n\n\n                                      -34-\n   36\n\nbe) to review, a supplemental ruling from the Service, that such transaction,\nand any transaction related thereto, will not affect the qualification of the\nFirst Spinoff and the Spinoff under Section 355 of the Code.\n\n           (d) Indemnification Obligation. If REI, REGCO or UNREGCO breaches any\nrepresentations set forth in Section 3 of this Agreement or takes any action or\nenters into any agreement to take any action, including, without limitation, any\nbreach of Sections 6.2(b) and (c), and the First Spinoff or Spinoff shall fail\nto qualify under Section 355 of the Code as a result of such action or actions,\nthen such party (the \"Indemnifying Party\") shall indemnify and hold harmless the\nother party against any and all federal, state and local taxes, interest,\npenalties and additions to Tax imposed upon or incurred by REI, the REI\nConsolidated Group, REGCO, the REGCO Consolidated Group, UNREGCO or the UNREGCO\nConsolidated Group, as the case may be, (each such party an \"Indemnitee\") as a\nresult of the failure of the First Spinoff or the Spinoff to so qualify to the\nextent provided herein.\n\n           6.3 Indemnified Liability - First Spinoff and Spinoff. For purposes\nof this Agreement, the term \"Indemnified Liability\" means any liability imposed\nupon or incurred by (1) REI, any member of the REI Group, REGCO or any member of\nthe REGCO Group for which REI, REGCO or any other member of the REI Group or\nREGCO Group is indemnified and held harmless under Section 6.2, or (2) UNREGCO\nor any member of the UNREGCO Group, for which UNREGCO or any other member of the\nUNREGCO Group is indemnified and held harmless under Section 6.2, but in either\ncase (1) or (2) shall not refer to the amount of such liability.\n\n           6.4 Amount of Indemnified Liability for Income Taxes - First Spinoff\nand Spinoff. The amount of an Indemnified Liability for a federal or state Tax\nincurred by an Indemnitee based on or determined with reference to income shall\nbe deemed to be the amount of Tax computed by multiplying (i) the taxing\njurisdiction's highest effective Tax rate applicable to Indemnitee for the\ncharacter of the Tax Item subject to Tax as a result of the failure of the First\nSpinoff and\/or Spinoff to qualify under Section 355 of the Code for the taxable\nperiod in which the First Spinoff and\/or Spinoff occurs, times (ii) the gain or\nincome of Indemnitee which is subject to Tax in the taxing jurisdiction as a\nresult of the failure of the First Spinoff and\/or Spinoff to qualify under\nSection 355 of the Code, and (iii) in the case of a state, times the percentage\nrepresenting the extent to which such gain or income is apportioned or allocated\nto such state; provided, however, that in the case of a state Tax determined as\na percentage of Federal Income Tax liability, the amount of Indemnified\nLiability shall be deemed to be the amount of Tax computed by multiplying (x)\nthat state's highest effective rate applicable to Indemnitee for the character\nof the Tax Item subject to Tax as a result of the failure of the First Spinoff\nand\/or Spinoff to qualify under Section 355 of the Code for the taxable period\nin which the First Spinoff and\/or Spinoff occurs, times (y) the amount of deemed\nFederal Income Tax (whether or not incurred) imposed upon Indemnitee from the\nfailure of the First Spinoff and\/or Spinoff to qualify under Section 355 of the\nCode computed in accordance with this Section 6.4, times (z) the percentage\nrepresenting the extent to which the gain or income required to be recognized on\nthe First Spinoff and\/or Spinoff is apportioned to such state.\n\n           6.5 Indemnity Amount - First Spinoff and Spinoff. With respect to any\nSpinoff Indemnified Liability, the amount which the Indemnifying Party shall pay\nto Indemnitee\n\n\n                                      -35-\n   37\n\nas indemnification (the \"Indemnity Amount\") shall be the sum of (i) the amount\nof the Indemnified Liability, as determined under Section 6.4, (ii) any\npenalties and interest imposed with respect to the Indemnified Liability and\n(iii) an amount such that when the sum of the amounts set forth in clauses (i),\n(ii) and this clause (iii) of this Section 6.5 are reduced by all Taxes imposed\nas a result of the receipt of such sum, (taking into account any related current\ncredits or deductions payable by the Indemnitee or any of its Affiliated\nCompanies under any law or governmental authority) the reduced amount is equal\nto the sum of the amounts set forth in clauses (i) and (ii) of this Section 6.5.\n\n           6.6 Indemnity Alternate Remedy - First Spinoff and Spinoff. Each of\nREI (or its successor REGCO) and UNREGCO, recognizes that any failure by it or\nany REI Affiliated Company (or REGCO Affiliated Company) or UNREGCO Affiliated\nCompany to comply with its obligations under this Section 6 may result in\nadditional Taxes which could cause irreparable harm to REI (or its successor\nREGCO) and its shareholders, the REI Affiliated Companies (or REGCO Affiliated\nCompanies), and\/or UNREGCO and the UNREGCO Affiliated Companies, and that such\nentities may be inadequately compensated by monetary damages for such failure.\nAccordingly, if (A) (i) a party shall fail to comply with any obligation under\nthis Section 6 which would be reasonably foreseeable to result in any additional\nTaxes, and (ii) such party shall fail to provide the other party with a written\nlegal opinion of a Tax Expert that the failure to comply with such obligation\nwill not result in any increase in Taxes of REGCO and its shareholders, any REI\nAffiliated Company (or REGCO Affiliated Company), UNREGCO or any UNREGCO\nAffiliated Company, as the case may be, and such opinion is provided to such\nparty for its review and approval, which approval will not be unreasonably\nwithheld, or if (B) it is probable in the written legal opinion of a Tax Expert\nthat the failure by such party to comply with any such obligation under this\nSection 6 will result in an Indemnified Liability under this Agreement and the\nIndemnifying Party fails to provide Adequate Assurances to the Indemnitee of its\nability to pay the Indemnity Amount under this Agreement, then REI (or its\nsuccessor REGCO) or UNREGCO, as the case may be, shall be entitled to injunctive\nrelief in addition to all other remedies.\n\n           6.7 Indemnity Payments.\n\n           (a) In General. Except as otherwise provided under this Agreement, to\nthe extent that the Indemnifying Party has an indemnification or payment\nobligation to the Indemnitee pursuant to this Agreement, the Indemnitee shall\nprovide the Indemnifying Party with its calculation of the amount of such\nindemnification payment. Such calculation shall provide sufficient detail to\npermit the Indemnifying Party to reasonably understand the calculations. All\nindemnification payments shall be made to the Indemnitee or to the appropriate\nTax Authority as specified by the Indemnitee within the time prescribed for\npayment in this Agreement, or if no period is prescribed, within thirty (30)\ndays after delivery by the Indemnitee to the Indemnifying Party of written\nnotice of a payment, or if such liability is contested pursuant to Section 7.3\nof this Agreement, within thirty (30) days of the incurrence of such an amount\nbased on a Final Determination, together with a computation of the amounts due.\nAny disputes with respect to indemnification payments shall be resolved in\naccordance with Section 8.11 below.\n\n                                      -36-\n   38\n\n           (b) Electronic Payments. Any payment required under this Agreement in\nan amount in excess of one million dollars ($1,000,000.00) shall be made by\nelectronic funds transfer of immediately available funds.\n\n           6.8 Prompt Performance. All actions required to be taken by any party\nunder this Agreement shall be performed within the time prescribed for\nperformance in this Agreement, or if no period is prescribed, such actions shall\nbe performed promptly.\n\n           6.9 Interest. Payments pursuant to this Agreement that are not made\nwithin the period prescribed in Section 6.7(a) shall bear interest for the\nperiod from and including the date immediately following the last date of the\nperiod through and including the date of payment at a per annum rate equal to\nthe prime rate as published in The Wall Street Journal on the date of\ndetermination, plus two percent (2%). Such interest will be payable at the same\ntime as the payment to which it relates and shall be calculated on the basis of\na year of 365 days and the actual number of days for which due.\n\n           6.10 Tax Records. The parties to this Agreement hereby agree to\nretain and provide on proper demand by any Taxing Authority (subject to any\napplicable privileges) the books, records, documentation and other information\nrelating to any Tax Return until the later of (a) the expiration of the\napplicable statute of limitations (giving effect to any extension, waiver or\nmitigation thereof), (b) the date specified in an applicable records retention\nagreement entered into with the Service and (c) in the event any claim is made\nunder this Agreement for which such information is relevant, until a Final\nDetermination with respect to such claim. Notwithstanding the prior sentence, no\nparty may destroy any such records without the approval of all other parties to\nthis Agreement.\n\nSECTION 7. AUDITS AND CONTEST RIGHTS.\n\n           7.1 In General\n\n           (a) Upon the termination of UNREGCO and the UNREGCO Affiliated\nCompanies as members of the REI Consolidated Group, the Tax Sharing Agreement\nand this Agreement shall apply with respect to any period (or portion thereof)\nin which the income of the terminating member is included in an REI Consolidated\nReturn. Subject to Section 2.2(c) of this Agreement, the terminating member\nshall cooperate and provide reasonable access to books, records and other\ninformation needed in connection with Audits, administrative proceedings,\nlitigation and other similar matters related to periods in which the member was\na member of the REI Consolidated Group.\n\n           (b) Except as otherwise provided in this Agreement, the respective\nFiling Party shall have the right to control, contest, and represent the\ninterests of REI, any REI Affiliated Company, REGCO, any REGCO Affiliated\nCompany, UNREGCO or any UNREGCO Affiliated Company in any Audit relating to any\nTax Return that the Filing Party is responsible for filing under Section 2.1 of\nthis Agreement and to resolve, settle or agree to any deficiency, claim or\nadjustment proposed, asserted or assessed in connection with or as a result of\nany such Audit. Except as otherwise provided in this Agreement, the Filing\nParty's rights shall extend to any \n\n\n                                      -37-\n   39\n\nmatter pertaining to the management and control of an Audit, including execution\nof waivers, choice of forum, scheduling of conferences and the resolution of any\nTax Item.\n\n           7.2 Notice. If, after the date of this Agreement, REI (or any REI\nAffiliated Company), REGCO (or any REGCO Affiliated Company) or UNREGCO (or any\nUNREGCO Affiliated Company) receives written notice of, or relating to, an Audit\nfrom a Tax Authority that asserts, proposes or recommends a deficiency, claim or\nadjustment that, if sustained, could result in a Redetermination of Taxes for\nwhich the other party is responsible under this Agreement, then the party\nreceiving such notice shall provide a copy of such notice to such other party\nwithin ten (10) days of receipt thereof.\n\n           7.3 Contests.\n\n           (a) If any Tax Authority asserts, proposes or recommends a\ndeficiency, claim or adjustment that, if sustained, could lead to a\nRedetermination that (i) could result in Taxes for which the Non-Filing Party is\nresponsible under this Agreement, (ii) could result in an increased Tax\nliability for the Non-Filing Party for future Tax periods or (iii) could result\nin a payment obligation for the Non-Filing Party under this Agreement\n(collectively, \"Non-Filing Party Responsible Taxes\"), then upon request by the\nNon-Filing Party, the Filing Party shall contest, or continue to contest, any\ndeficiency, claim or adjustment and the Filing Party shall keep the Non-Filing\nParty informed in a timely manner reasonably in advance of all actions taken or\nproposed to be taken by the Filing Party in connection with such deficiency,\nclaim or adjustment.\n\n           (b) In the case of an Audit with respect to any Tax Item for which a\nRedetermination could result in Non-Filing Party Responsible Taxes, the Filing\nParty shall:\n\n                (1) in the case of any material correspondence or filing\n           submitted to the Tax Authority or any judicial authority that relates\n           to the merits of such deficiency, claim or adjustment (i) reasonably\n           in advance of such submission, but subject to applicable time\n           constraints imposed by such Tax Authority or judicial authority,\n           provide the Non-Filing Party with a draft copy of the portion of such\n           correspondence or filing that relates to such deficiency, claim or\n           adjustment, (ii) incorporate, subject to applicable time constraints\n           imposed by such Tax Authority or judicial authority and the review\n           and approval by the Filing Party, the Non-Filing Party's comments and\n           changes on such draft copy of such correspondence or filing, and\n           (iii) provide the Non-Filing Party with a final copy of the portion\n           of such correspondence or filing that relates to such deficiency,\n           claim or adjustment;\n\n                (2) provide the Non-Filing Party with notice reasonably in\n           advance of, and the Non-Filing Party shall have the right to attend,\n           any meetings with the Tax Authority (including meetings with\n           examiners) or hearings or proceedings before any judicial authority\n           to the extent they relate to such deficiency, claim or adjustment;\n           and\n\n                (3) at the Filing Party's reasonable request (or upon the Filing\n           Party's consent to a request by the Non-Filing Party, which consent\n           shall not be \n\n\n                                      -38-\n   40\n\n           unreasonably withheld), the Non-Filing Party shall assume\n           responsibility for (i) contesting and presenting the merits with\n           respect to any deficiency, claim or adjustment that, if sustained,\n           would result in Non-Filing Party Responsible Taxes, or (ii)\n           resolving, settling or agreeing to any such deficiency, claim or\n           adjustment. Any such request (or consent) by the Filing Party shall\n           be subject to the Non-Filing Party's continued compliance with the\n           conditions of Section 7.4 of this Agreement and to such other\n           conditions as the Filing Party and Non-Filing Party reasonably agree.\n\n           7.4 Limitations.\n\n           (a) In General. Except with respect to a deficiency, claim or\nadjustment that relates to a Redetermination that could result in Non-Filing\nParty Responsible Taxes, the Filing Party shall have no obligation to contest,\nor to continue to contest, any deficiency, claim or adjustment in accordance\nwith Section 7.3, and the Non-Filing Party shall have no right to control or\nparticipate under Section 7.3 of this Agreement unless:\n\n                        (I) the Non-Filing Party shall have agreed to be bound \nby a Final Determination of such deficiency, claim or adjustment;\n\n                        (II) the Non-Filing Party shall have agreed to pay, and\nshall be currently paying, all reasonable out of pocket costs and expenses\nincurred by the Filing Party to contest such deficiency, claim or assessment\nincluding reasonable outside attorneys', accountants' and investigatory fees and\ndisbursements;\n\n                        (III) the Non-Filing Party shall have advanced to the \nFiling Party, on an interest-free basis (and with no additional net after-Tax\ncost to the Filing Party), the amount of Tax in controversy (but not in excess\nof the lesser of (A) the amount of Tax for which the Non-Filing Party could be\nliable under this Agreement or (B) the amounts actually expended by the Filing\nParty for this item) to the extent necessary for the contest to proceed in the\nforum selected by the Non-Filing Party;\n\n                        (IV) the Non-Filing Party shall have provided to the \nFiling Party all documents and information, and shall have made available\nemployees and officers of the Non-Filing Party, as may be necessary, useful or\nreasonably required by the Filing Party in contesting such deficiency, claim or\nadjustment; and\n\n                        (V) the contest of such deficiency, claim or adjustment\nshall involve no material danger of the sale, forfeiture or loss of, or the\ncreation of any lien on, any asset of the Filing Party (except if the Non-Filing\nParty shall have adequately bonded such lien or otherwise made provision to\nprotect the interests of the Filing Party in a manner reasonably satisfactory to\nthe Filing Party).\n\n           (b) Settlement. Notwithstanding Section 7.4(a), the Filing Party,\nwith respect to Tax Returns that it is responsible for filing under Section 2.1,\nmay resolve, settle or agree to any deficiency, claim or adjustment proposed,\nasserted or assessed in connection with any Audit of such Tax Returns, if, with\nrespect to any Non-Filing Party Responsible Taxes, the Filing Party has provided\nthe Non-Filing Party with a reasonable opportunity to review a copy of that\nportion \n\n\n                                      -39-\n   41\n\nof the settlement or compromise proposal which relates to the claim for which\nthe Filing Party is seeking indemnification hereunder; provided, that if (a) the\nFiling Party fails to provide the Non-Filing Party such a reasonable opportunity\nto review such portion of such proposal, or (b) after such reasonable\nopportunity to review such proposal the Non-Filing Party in writing reasonably\nwithholds its consent to all or part of such settlement or compromise proposal,\nthen, the Non-Filing Party shall not be obligated to indemnify the Filing Party\nhereunder to the extent of the amount attributable to the loss to which such\nsettlement or compromise relates as to which the Non-Filing Party has reasonably\nwithheld its consent, or with respect to any other loss for which a successful\ncontest is foreclosed because of such settlement or compromise as to which the\nNon-Filing Party has reasonably withheld its consent. If the Filing Party\neffects a settlement or compromise of such contest, notwithstanding that the\nNon-Filing Party has reasonably withheld its consent thereto, the Filing Party\nshall repay to the Non-Filing Party such amounts that the Non-Filing Party\nadvanced pursuant to Section 7.4(a)(3) hereof as relate to such claim, to the\nextent that the Non-Filing Party has reasonably withheld its consent to the\nsettlement or compromise thereof (together with interest at the prime rate as\npublished in the Wall Street Journal on any such amount paid by the Non-Filing\nParty from the date paid by Lessee to the date repaid by the Filing Party).\n\n           (c) Waiver. Notwithstanding any other provision of this Section 7.4,\nthe Filing Party may resolve, settle, or agree to any deficiency, claim or\nadjustment for any taxable period if the Filing Party waives it right to\nindemnity, if any, with respect to such Tax Item. In such event, the Filing\nParty shall promptly reimburse the Non-Filing Party for all amounts previously\nadvanced by the Non-Filing Party to the Filing Party in connection with such\ndeficiency, claim or adjustment under Section 7.4(a)(3) of this Agreement. In\naddition, the Filing Party shall reimburse the Non-Filing Party for any Tax\nDetriment that directly results from the settlement of such deficiency, claim or\nadjustment. No waiver by the Filing Party under this Section 7.4(c) with respect\nto any deficiency, claim or adjustment relating to any single Tax Item,\nposition, issue or transaction or relating to any single Tax for any one taxable\nperiod shall operate as a waiver with respect to any other deficiency, claim or\nadjustment.\n\n           7.5 Failure to Notify, Etc. The failure of the Filing Party promptly\nto notify the Non-Filing Party of any matter relating to a particular Tax for a\ntaxable period or to take any action specified in Section 7.3 of this Agreement\nshall not relieve the Non-Filing Party of any liability and\/or obligation which\nit may have to the Filing Party under this Agreement with respect to such Tax\nfor such taxable period except to the extent that the Non-Filing Party's rights\nhereunder are materially prejudiced by such failure and in no event shall such\nfailure relieve the Non-Filing Party of any other liability and\/or obligation\nwhich it may have to the Filing Party.\n\n           7.6 Remedies. Except as otherwise provided in this Agreement, the\nparties hereby agree that the sole and exclusive remedy for a breach by the\nFiling Party of the Filing Party's obligations to the Non-Filing Party with\nrespect to a deficiency, claim or adjustment relating to the redetermination of\na Tax Item of the Non-Filing Party for a taxable period shall first be a\nreduction in the amount that would otherwise be payable by the Non-Filing Party\nfor such taxable period and then an increase in amount that would otherwise be\npayable by the Filing Party for such taxable period, in either case because of\nthe breach. The parties further agree that no claim against the Filing Party and\nno defense to the Non-Filing Party's liabilities to the Filing Party under this\nAgreement shall arise from the resolution by the Filing Party of any deficiency,\n\n\n\n                                      -40-\n   42\n\nclaim or adjustment relating to the Redetermination of any Tax Item of the\nFiling Party for which the Non-Filing Party is not liable under this Agreement.\n\nSECTION 8. MISCELLANEOUS.\n\n           8.1 Effectiveness. This Agreement shall become effective as of\nJanuary 1, 2001.\n\n           8.2 Renegotiation for Delayed Distribution. If the Distribution does\nnot occur on or before December 31, 2001, REI (or its successor REGCO) and\nUNREGCO shall negotiate any changes to this Agreement that may be necessary in\nlight of the fact that the Distribution did not occur in 2001.\n\n           8.3 Resolution Procedures.\n\n           (a) If another section of this Agreement grants to REI (or its\nsuccessor REGCO) or to UNREGCO the right to invoke the resolution procedures of\nthis Section 8.3 to disagree with an amount, allocation, characterization or\nother item of information provided to it by the other party and if within 15\ndays of receiving notice of such amount, allocation, characterization or other\nitem of information, REI (or its successor REGCO) or UNREGCO, as the case may\nbe, invokes the resolution procedures of this Section 8.3 by sending written\nnotice to the other party, then\n\n                (i) the parties shall jointly select a Tax Expert to determine\nthe correct amount, allocation or other information that is in dispute,\n\n                (ii) the parties shall share the costs of such Tax Expert\nequally,\n\n                (iii) the parties agree to be bound by the decision reached by\nthe Tax Expert,\n\n                (iv) the due date of a payment based on or equal to an amount,\nallocation or other information that is being determined by the Tax Expert\npursuant to this Section 8.3(a) shall be extended to the date that is 5 days\nafter the Tax Expert renders a decision as to the correct amount, allocation,\ncharacterization or other item of information and\n\n                (v) if the otherwise applicable due date of payment is extended\npursuant to Section 8.3(a)(iv), then the party making such payment shall add to\nthe amount of such payment (as determined in accordance with the determination\nby the Tax Expert under this Section 8.3(a)) interest for the period of such\nextension. The amount of interest that accrues during such extension period\nshall be computed in accordance with the procedures set forth in Section 6.9.\n\n           (b) If another section of this Agreement grants to REI (or its\nsuccessor REGCO) or to UNREGCO, as the case may be, the right to invoke the\nresolution procedures of this Section 8.3 to disagree with an amount,\nallocation, characterization or other item of information provided to it by the\nother party and REI (or its successor REGCO) or UNREGCO, as the case may be,\ndoes not invoke the resolution procedures of this Section 8.3 within 15 days of\nreceiving \n\n\n                                      -41-\n   43\n\nnotice of such amount, allocation, characterization or other item of\ninformation, then the amount, allocation, characterization or other item of\ninformation provided to REI (or its successor REGCO) or to UNREGCO by the other\nparty shall be deemed conclusive and correct as between REI (or its successor\nREGCO) and UNREGCO.\n\n           8.4 Notices. Unless expressly provided herein, all notices, claims,\ncertificates, requests, demands and other communications hereunder shall be in\nwriting and shall be deemed to be duly given (i) when personally delivered or\n(ii) if mailed registered or certified mail, postage prepaid, return receipt\nrequested, on the date the return receipt is executed or the letter refused by\nthe addressee or its agent or (iii) if sent by overnight courier which delivers\nonly upon the signed receipt of the addressee, on the date the receipt\nacknowledgment is executed or refused by the addressee or its agent or (iv) if\nsent by facsimile or other generally accepted means of electronic transmission,\non the date confirmation of transmission is received (provided that a copy of\nany notice delivered pursuant to this clause (iv) shall also be sent pursuant to\nclause (ii) or (iii)), addressed to the attention of the addressee's General\nCounsel at the address of its principal executive office or to such other\naddress or facsimile number for a party as it shall have specified by like\nnotice.\n\n           8.5 Changes in Law.\n\n           (a) Any reference to a provision of the Code or a law of another\njurisdiction shall include a reference to any applicable successor provision or\nlaw.\n\n           (b) If, due to any change in applicable law or regulations or their\ninterpretation by any court of law or other governing body having jurisdiction\nsubsequent to the date of this Agreement, performance of any provision of this\nAgreement or any transaction contemplated thereby shall become impracticable or\nimpossible, the parties hereto shall use their commercially reasonable efforts\nto find and employ an alternative means to achieve the same or substantially the\nsame result as that contemplated by such provision.\n\n           8.6 Binding Effect; Assignment. This Agreement shall inure to the\nbenefit of and be binding upon the parties hereto and their respective legal\nrepresentatives and successors, and nothing in this Agreement, express or\nimplied, is intended to confer upon any other Person any rights or remedies of\nany nature whatsoever under or by reason of this Agreement. This Agreement may\nnot be assigned by any party hereto.\n\n           8.7 Affiliated Companies. REI (or as successors, REGCO and any REGCO\nAffiliated Company) shall cause to be performed, and hereby guarantees the\nperformance of, all actions, agreements and obligations set forth herein to be\nperformed by any REI or REGCO Affiliated Company, and UNREGCO shall cause to be\nperformed, and hereby guarantees the performance of, all actions, agreements and\nobligations set forth herein to be performed by any UNREGCO Affiliated Company.\n\n           8.8 Authorization, Etc. Each of the parties hereto hereby represents\nand warrants that it has the power and authority to execute, deliver and perform\nthis Agreement, that this Agreement has been duly authorized by all necessary\ncorporate action on the part of such party, that this Agreement constitutes a\nlegal, valid and binding obligation of each such party and \n\n\n                                      -42-\n   44\n\nthat the execution, delivery and performance of this Agreement by such party\ndoes not contravene or conflict with any provision of law or of its charter or\nbylaws or any agreement, instrument or order binding on such party.\n\n           8.9 Entire Agreement. This Agreement contains the entire agreement\namong the parties hereto with respect to the subject matter hereof.\n\n           8.10 Governing Law; Jurisdiction. This Agreement shall be governed by\nand construed and enforced in accordance with the laws of the State of Texas as\nto all matters regardless of the law that might otherwise govern under the\nprinciples of conflicts of law applicable thereto.\n\n           8.11 Dispute Resolution. Except for disputes, controversies or claims\nwithin the scope of Section 8.3, the resolution of any and all disputes arising\nfrom or in connection with this Agreement shall be governed by and settled in\naccordance with the provisions of Article IX of the Master Separation Agreement.\n\n           8.12 Counterparts. This Agreement may be executed in any number of\ncounterparts, each of which shall be deemed an original, but all of which\ntogether shall constitute one and the same Agreement.\n\n           8.13 Severability. If any term, provision, covenant, or restriction\nof this Agreement is held by a court of competent jurisdiction (or an arbitrator\nor arbitration panel) to be invalid, void, or unenforceable, the remainder of\nthe terms, provisions, covenants, and restrictions set forth herein shall remain\nin full force and effect, and shall in no way be affected, impaired, or\ninvalidated. It is hereby stipulated and declared to be the intention of the\nparties that they would have executed the remaining terms, provisions,\ncovenants, and restrictions without including any of such which may be hereafter\ndeclared invalid, void, or unenforceable. In the event that any such term,\nprovision, covenant or restriction is held to be invalid, void or unenforceable,\nthe parties hereto shall use their best efforts to find and employ an alternate\nmeans to achieve the same or substantially the same result as that contemplated\nby such terms, provisions, covenant, or restriction.\n\n           8.14 No Third Party Beneficiaries. This Agreement is solely for the\nbenefit of REI, REI Affiliated Companies, REGCO, the REGCO Affiliated Companies,\nUNREGCO and the UNREGCO Affiliated Companies. This Agreement should not be\ndeemed to confer upon third parties any remedy, claim, liability, reimbursement,\ncause of action or other rights in excess of those existing without this\nAgreement.\n\n           8.15 Waivers, Etc. No failure or delay on the part of the parties in\nexercising any power or right hereunder shall operate as a waiver thereof, nor\nshall any single or partial exercise of any such right or power, or any\nabandonment or discontinuance of steps to enforce such right or power, preclude\nany other or further exercise thereof or the exercise of any other right or\npower. No modification or waiver of any provision of this Agreement nor consent\nto any departure by the parties therefrom shall in any event be effective unless\nthe same shall be in writing.\n\n                                      -43-\n   45\n\n           8.16 Setoff. All payments to be made by any party under this\nAgreement may be netted against payments due to such party under this Agreement,\nbut otherwise shall be made without setoff, counterclaim or withholding, all of\nwhich are hereby expressly waived.\n\n\n\n                                      -44-\n   46\n\n\n           IN WITNESS WHEREOF, each of the parties hereto has caused this\nAgreement to be executed by a duly authorized officer as of the date first above\nwritten.\n\n\n                               RELIANT ENERGY, INCORPORATED\n                               On behalf of Itself and Its Affiliated Companies\n\n\n                               By:    \/s\/ David M. McClanahan   \n                                      -----------------------------------------\n                                          David M. McClanahan\n                                          Vice Chairman\n\n\n\n                               RELIANT RESOURCES, INC.\n                               On behalf of Itself and Its Affiliated Companies\n\n\n                               By:    \/s\/ R. S. Letbetter         \n                                      -----------------------------------------\n                                          R. S. Letbetter\n                                          Chairman, President and\n                                          Chief Executive Officer\n\n                                      -45-\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8672,8673],"corporate_contracts_industries":[9534],"corporate_contracts_types":[9622,9628],"class_list":["post-43745","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-reliant-energy-inc","corporate_contracts_companies-reliant-resources-inc","corporate_contracts_industries-utilities__electric","corporate_contracts_types-planning","corporate_contracts_types-planning__separation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43745"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43745"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43745"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}