EXHIBIT 10.22


 





Tax Protection Agreement


This TAX PROTECTION AGREEMENT (this “Agreement”)
is entered into as of December 10, 2015, by and among Retail Opportunity Investments Corp., a Maryland corporation (the “REIT”),
Retail Opportunity Investments Partnership, LP, a Delaware limited partnership (the “Operating Partnership”),
and each Protected Partner identified as a signatory on Schedule I, as amended from time to time.


RECITALS


WHEREAS, pursuant to that certain Contribution
Agreement dated December 1, 2015 between the REIT, the Operating Partnership and the “Owner” signatory thereto (the
“Acquisition Agreement”), the REIT intends cause the Operating Partnership to acquire the real property and
improvements commonly known as Sternco Shopping Center located at 14625 NE 20th St., Bellevue, WA (the “Property”)
from the Owner in exchange for OP Units (as defined below); and


WHEREAS, in connection with the Contribution
Agreement, the REIT and the Operating Partnership shall enter into this Agreement with Owner and each Protected Partner, who is
receiving units of partnership interest in the Operating Partnership (“OP Units”) by distribution from Owner
following the transactions effected pursuant to the Contribution Agreement.


NOW, THEREFORE, in consideration of
the promises and mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:


ARTICLE I - DEFINED TERMS


Capitalized terms employed herein and not
otherwise defined shall have the meanings assigned to them in the Acquisition Agreement. Otherwise, for purposes of this Agreement
the following definitions shall apply:


Section 1.1Intentionally omitted.


Section 1.2“Agreement”
has the meaning set forth in the preamble.


Section 1.3“Closing Date”
means the closing of the contribution of the Property to the Operating Partnership pursuant to the Contribution Agreement.


Section 1.4“Code” means
the United States Internal Revenue Code of 1986, as amended.


Section 1.5Intentionally omitted


Section 1.6Intentionally omitted






    	1 - TAX PROTECTION AGREEMENT



    	 



    

Section 1.7Intentionally omitted


Section 1.8“Exchange”
has the meaning set forth in Section 2.1(b) of this Agreement.


Section 1.9“Fundamental Transaction”
means a merger, consolidation or other combination of the Operating Partnership with or into any other entity, a transfer of all
or substantially all of the assets of the Operating Partnership, any reclassification, recapitalization or change of the outstanding
equity interests of the Operating Partnership, or a conversion of the Operating Partnership into another form of entity. Notwithstanding
the above, a Fundamental Transaction shall not include any transaction to the extent that a Protected Partner is offered (whether
or not such offer is accepted) the opportunity to participate in such transaction in a manner such that (i) the Protected Partner
receives any one or more of the following: (A) consideration approved by a majority of the Notice Partners, or (B) consideration
having a value (as determined in good faith by the Board of Directors of the REIT, including a majority of its independent directors,
in reliance on written advice or analysis of an independent financial advisor selected by such Board of Directors) that is substantially
equivalent to the value of the OP Units held by such Protected Partner immediately prior to such transaction (but excluding from
the analysis the impact of any customary lock-ups or transfer restrictions) and (ii) if such offer is accepted, the receipt of
such consideration would not result in the recognition of taxable income or gain by such Protected Partner.


Section 1.10“Gross Up Amount”
has the meaning set forth in Section 1.15 under the definition of “Make Whole Amount.”


Section 1.11Intentionally omitted


Section 1.12Intentionally omitted


Section 1.13Intentionally omitted


Section 1.14Intentionally omitted


Section 1.15“Make Whole Amount”
means, with respect to any Protected Partner that recognizes gain under Section 704(c) of the Code as a result of a Tax Protection
Period Transfer, the sum of (i) the product of (x) the income and gain recognized by such Protected Partner
under Section 704(c) of the Code in respect of such Tax Protection Period Transfer (taking into account any adjustments under
Section 743 or 734 of the Code which such Protected Partner is entitled to offset against such income and gain) multiplied
by (y) the Make Whole Tax Rate, plus (ii) an amount equal to the combined Federal, applicable state and local
income taxes (calculated using the Make Whole Tax Rate) imposed on such Protected Partner as a result of the receipt by such Protected
Partner of a payment under Section 2.2 (the “Gross Up Amount”); provided, however, that
the Make Whole Amount shall be computed without regard to any losses, credit, or other tax attributes that such Protected Partner
might have that would reduce its actual tax liability.


 






    	2 - TAX PROTECTION AGREEMENT



    	 



    

For purposes of calculating the amount of Section 704(c)
gain that is allocated to a Protected Partner, any “reverse Section 704(c) gain” allocated to such partner pursuant
to Treasury Regulations § 1.704-3(a)(6) shall not be taken into account; furthermore, the total amount of 704(c) gain and
income taken into account for purpose of calculating the Make Whole Amount shall not exceed the initial Section 704(c) gain amount
as of the Closing Date (as set forth on Schedule I).


Section 1.16“Make Whole Tax Rate”
means, with respect to a Protected Partner who is entitled to receive a payment under Section 2.2, the highest combined
statutory Federal, state and local tax rate in respect of the income or gain that gave rise to such payment, taking into account
the character of the income and gain in the hands of such Protected Partner, as applicable (reduced, in the case of Federal taxes
by the deduction for state or local income taxes, but assuming limitation on full deductibility of such income taxes due
to adjusted gross income levels), for the taxable year in which the event that gave rise to such payment under Section 2.2
or Section 2.4 occurred. Notwithstanding the foregoing, if a Protected Partner demonstrates to the reasonable satisfaction
of the Operating Partnership that such Protected Partner’s allocation of the income or gain that gave rise to such payment
will be subject to the alternative minimum tax, then the Make Whole Tax Rate for such Protected Partner shall be the highest combined
statutory Federal, state and local alternative minimum tax rate (not reduced by any deduction for state or local income taxes).


Section 1.17“Notice Partner”
means, with respect to each separate Protected Partner (including its successors), (i) a single representative designated as the
“Notice Partner” in a written notice from the initial Protected Partner to the Operating Partnership or (ii) if no
such designation has been made, such initial Protected Partner. There shall be only one Notice Partner at any given time for each
Protected Partner (including all of its successors) and in no event shall there be more than five Notice Partners. In no event
may two or more Protected Partners designate the same Notice Partner. Except as provided below, in the event that a Notice Partner
is unable or unwilling to continue to serve as a Notice Partner, the initial Protected Partner who designated such Notice Partner
may designate a replacement Notice Partner in a written notice to the Operating Partnership. In the event that an initial Protected
Partner has transferred any OP Units issued pursuant to the Contribution Agreement, then a majority of the holders of the OP Units
issued to such initial Protected Partner may designate a new Notice Partner or, in the event that a Notice Partner is unable or
unwilling to continue to serve as a Notice Partner, a replacement Notice Partner, in each case in a written notice to the Operating
Partnership.


Section 1.18“OP Agreement”
means the Second Amended and Restated Agreement of Limited Partnership of Retail Opportunity Investments Partnership, L.P., as
amended from time to time.


Section 1.19“Pass Through Entity”
means a partnership, disregarded entity, grantor trust, or S corporation for Federal income tax purposes.






    	3 - TAX PROTECTION AGREEMENT



    	 



    

Section 1.20“Permitted Disposition”
means a sale, exchange or other disposition of OP Units (i) by a Protected Partner: (a) to such Protected Partner’s children,
spouse or issue; (b) to a trust for such Protected Partner or such Protected Partner’s children, spouse or issue; (c) in
the case of a trust which is a Protected Partner, to its beneficiaries, or any of them, whether current or remainder beneficiaries;
(d) to a revocable inter vivos trust of which such Protected Partner is a trustee; (e) in the case of any partnership or
limited liability company which is a Protected Partner, to its partners or members; and/or (f) in the case of any corporation which
is a Protected Partner, to its shareholders, and (ii) by a party described in clauses (a), (b), (c) or (d) to a partnership, limited
liability company or corporation of which the only partners, members or shareholders, as applicable, are parties described in clauses
(a), (b), (c) or (d); provided, that for purposes of the definition of Tax Protection Period, such Protected Partner shall
be treated as continuing to own any OP Units which were subject to a Permitted Disposition unless and until there has been a sale,
exchange or other disposition of such OP Units by a permitted transferee which is not another Permitted Disposition.


Section 1.21“Person”
means an individual or a corporation, partnership, trust, unincorporated organization, association, limited liability company or
other entity.


Section 1.22“Protected Partner”
means: (i) each signatory on Schedule I attached hereto, as amended from time to time; who holds OP Units on or after
February 1, 2016; (ii) any person who holds OP Units on or after February 1, 2016, and who acquired such OP Units from another
Protected Partner in a transaction in which such person’s adjusted basis in such OP Units, as determined for Federal income
tax purposes, is determined, in whole or in part, by reference to the adjusted basis of the other Protected Partner in such OP
Units; and (iii) with respect to a Protected Partner that is Pass Through Entity, and solely for purposes of computing the
amount to be paid under Section 2.2 with respect to such Protected Partner, any person who (y) holds an interest in
such Protected Partner, either directly or through one or more Pass Through Entities, and (z) is required to include all or
a portion of the income of such Protected Partner in its own gross income.


Section 1.23“Protected Property”
means that certain project commonly known as Sternco Shopping Center in the City of Bellevue, County of King, State of Washington,
with street address of 14625 NE 20th Street, and related personal property, and any property acquired in Exchange for the Protected
Property as set forth in Section 2.1(b).


Section 1.24Intentionally omitted


Section 1.25Intentionally omitted


Section 1.26Intentionally omitted


Section 1.27“Tax Protection Period”
means the ten-year period beginning on the Closing Date and ending on the tenth anniversary of the Closing Date; provided,
however, that such period shall end prior to the tenth anniversary of the Closing Date with respect to any Protected Partner
to the extent that, on any date after the Closing Date and prior to the tenth anniversary of the Closing Date, such Partner owns
less than thirty five percent (35%) of the Common OP Units and SC Limited Participation OP Units that were originally owned by
the Protected Partner as of February 1, 2016, disregarding the sale, exchange or other disposition of any such OP Units sold, exchanged
or otherwise disposed of by the Protected Partner in a Permitted Disposition.






    	4 - TAX PROTECTION AGREEMENT



    	 



    

Section 1.28“Tax Protection Period
Transfer” has the meaning set forth in Section 2.1(a) of this Agreement.


Section 1.29“Transfer”
means any direct or indirect sale, exchange, transfer or other disposition, whether voluntary or involuntary.


Section 1.30“Treasury Regulations”
means the income tax regulations under the Code, whether such regulations are in proposed, temporary or final form, as such regulations
may be amended from time to time (including corresponding provisions of succeeding regulations).


ARTICLE II - TAX PROTECTIONS


Section 2.1Taxable Transfers.


(a)Unless the applicable Notice Partner(s)
expressly consent in writing to a Tax Protection Period Transfer, during the Tax Protection Period, the Operating Partnership shall
indemnify each Protected Partner as set forth in Section 2.2 if the Operating Partnership or any entity in which the Operating
Partnership holds a direct or indirect interest shall cause or permit: (i) any Transfer of all or any portion of the Protected
Property (including any interest in the Protected Property or in any entity owning, directly or indirectly, an interest in the
Protected Property, other than a transfer of an OP Unit by a Protected Partner) in a transaction that results in the recognition
of taxable income or gain by any Protected Partner under Section 704(c) of the Code with respect to the Protected Property;
or (ii) any Fundamental Transaction that results in the recognition of taxable income or gain by any Protected Partner under Section
704(c) of the Code with respect to the Protected Property (such a Transfer or Fundamental Transaction taking place during the Tax
Protection Period, a “Tax Protection Period Transfer”).


(b)Section 2.1(a) shall not apply
to any Tax Protection Period Transfer of the Protected Property (including any interest therein or in the entity owning, directly
or indirectly, the Protected Property): (i) in a transaction in which no gain is required to be recognized by a Protected Partner
(an “Exchange”), including a transaction qualifying under Section 1031 or Section 721 (or any successor
statutes) of the Code; provided, however, that any property acquired by the Operating Partnership in the Exchange
shall remain subject to the provisions of this Article II in place of the exchanged Protected Property for the remainder of the
Tax Protection Period (and, in the case of any Exchange involving a contribution of Protected Property to a partnership, such Protected
Property and the partnership interest received by the Operating Partnership in such Exchange (unless such partnership interest
is an interest in a successor partnership to the Operating Partnership or to the extent the Protected Partner otherwise holds an
interest in such partnership) shall both be treated as Protected Property following the Exchange); (ii) as a result of the condemnation
or other taking of the Protected Property by a governmental entity in an eminent domain proceeding or otherwise, provided
that the Operating Partnership shall use commercially reasonable efforts to structure such disposition as either a tax-free like-kind
exchange under Section 1031 or a tax-free reinvestment of proceeds under Section 1033, provided that in no event shall the
Operating Partnership be obligated to acquire or invest in any property that it otherwise would not have acquired or invested in.






    	5 - TAX PROTECTION AGREEMENT



    	 



    

Section 2.2Indemnification for Taxable
Transfers.


(a)In the event of a Tax Protection Period
Transfer described in Section 2.1(a), each Protected Partner shall receive from the Operating Partnership an amount of cash
equal to the Make Whole Amount applicable to such Tax Protection Period Transfer. Any Make Whole Amounts required to be paid under
this Section 2.2(a) shall be paid to each Protected Partner at least 5 days before April 15 of the year following the year
in which the Tax Protection Period Transfer took place; provided that, if the Protected Partner is required to make estimated
tax payments that would include such gain, the Operating Partnership shall make payment to such Protected Partner at least 5 days
before the due date for such estimated tax payment and such payment from the Operating Partnership shall be in an amount that corresponds
to the estimated tax being paid by the Protected Partner at such time, with the remaining portion of the Make Whole Amount payable
at least 5 days before April 15 of the year following the year in which the Tax Protection Period Transfer took place.


(b)Notwithstanding any provision of this
Agreement to the contrary, the sole and exclusive rights and remedies of any Protected Partner under Section 2.1(a) shall
be a claim against the Operating Partnership for the Make Whole Amount as set forth in this
section, and no Protected Partner shall be entitled to pursue a claim for specific performance of the covenants set forth in Section
2.1(a) or bring a claim against any person that acquires the Protected Property from the Operating Partnership in violation
of Section 2.1(a).


(c)In the event that there has been a
Tax Protection Period Transfer, the Operating Partnership shall provide to each person who is a Notice Partner) notice of the transaction
or event giving rise to such Tax Protection Period Transfer not later than thirty (30) days after such Tax Protection Period Transfer.
As soon as reasonably practicable after giving notice described in the preceding sentence, but in no event more than sixty (60)
days after the Tax Protection Period Transfer, the Operating Partnership shall be obligated to (i) provide each Notice Partner
with a detailed calculation of the amount of such Notice Partner’s Make Whole Amount for the Protected Partners represented
by such Notice Partner, and (ii) provide each such Notice Partner with such evidence or verification as such Notice Partner may
reasonably require as to the items necessary to confirm the calculation of such amount. In the event a Protected Partner disagrees
with the Operating Partnership’s determination of a Make Whole Amount, the Operating Partnership and the Protected Partner
will work in good faith to resolve such disagreement. If such disagreement cannot be resolved within fifteen (15) days after notice
of such calculation was provided to the Protected Partner, then the Operating Partnership and the Protected Partner shall jointly
retain a nationally recognized independent public accounting firm, other than the REIT’s accounting firm which is currently
Ernst & Young (an “Accounting Firm”) to act as an arbitrator to resolve as expeditiously as possible all computational
points of any such disagreement. All determinations made by the Accounting Firm with respect to the amount of the Make Whole Amount
payable to the Protected Partner shall be final, conclusive and binding on the Operating Partnership and the Protected Partner.
The fees and expenses of any Accounting Firm incurred in connection with any such determination shall be shared equally by the
Operating Partnership and the Protected Partner, provided that if the amount determined by the Accounting Firm to be owed by the
Operating Partnership to the Protected Partner is more than ten percent (10%) higher than the amount proposed by the Operating
Partnership to be owed to such Protected Partner prior to the submission of the matter to the Accounting Firm, then all of the
fees and expenses of any Accounting Firm incurred in connection with any such determination shall be paid by the Operating Partnership
and if the amount determined by the Accounting Firm to be owed by the Operating Partnership to the Protected Partner is more than
ten percent (10%) less than the amount proposed by the Operating Partnership to be owed to such Protected Partner prior to the
submission of the matter to the Accounting Firm, then all of the fees and expenses of any Accounting Firm incurred in connection
with any such determination shall be paid by the Protected Partner. The Operating Partnership shall pay any amounts finally determined
under this Section 2.2(c) within the later of the time period provided in Section 2.2(a) or five (5) business days
following the earlier of the date on which the parties agree to the Make Whole Amount or the date on which the Accounting Firm
provides notice to the Operating Partnership and the Notice Partner of its determination as to the disputed items.






    	6 - TAX PROTECTION AGREEMENT



    	 



    

(d)In the event a required payment is
made after the date required pursuant to Section 2.2, interest shall accrue on the aggregate amount required to be paid
from such date to the date of actual payment at a rate equal to the “prime rate” of interest plus 4%, with the prime
rate as published in the Wall Street Journal (or if no longer published there, as announced by Citibank) effective as of the date
the payment is required to be made. In addition, if such late payment results in late tax
payment penalties (excluding interest) for such Protected Partner, the payment shall include reimbursement for such penalties plus
) an amount equal to the combined Federal, applicable state and local income taxes (calculated using the Make Whole Tax Rate) payable
by the Protected Partner as a result of the receipt of any payment under this sentence.


Section 2.3Section 704(c) Gains.
The estimated amount of Section 704(c) gain allocable to each Protected Partner as of the Closing Date is set forth on Schedule
I hereto. Each Protected Partner has provided the Operating Partnership with an accurate computation of such Protected Partners
allocable Section 704(c) gain based on information provided to the Protected Partner by his or her tax accountant. The parties
acknowledge that the initial amount of Section 704(c) gain allocated to any Protected Partner may be reduced over time as required
by Section 704(c) of the Internal Revenue Code and the regulations promulgated thereunder. For purposes of this Agreement, references
to Section 704(c) shall include gain recognized upon the disposition of OP Units in a Fundamental Transaction which is indemnified
under Section 2.1(a)(ii) to the extent attributable to the gain which would have been recognized under Section 704(c) and
subject to indemnification under Section 2.1(a)(i) upon the sale of the Protected Property.


Section 2.4Intentionally omitted


Section 2.5Dispute Resolution.
Any controversy, dispute, or claim of any nature arising out of, in connection with, or in relation to the interpretation, performance,
enforcement or breach of this Agreement (and any closing document executed in connection herewith) shall be governed by Section
16.11 of the Contribution Agreement, except as otherwise provided in Section 2.2(c) hereof.


 






    	7 - TAX PROTECTION AGREEMENT



    	 



    

ARTICLE III - GENERAL PROVISIONS


Section 3.1Notices. Except as specifically
set forth in this Agreement, all notices, demands, declarations, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms of this Agreement shall be given in the same manner as in the OP Agreement.


Section 3.2Titles and Captions.
All Article or Section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this
Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically
provided otherwise, references to “Articles” and “Sections” are to Articles and Sections of this Agreement.


Section 3.3Pronouns and Plurals.
Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.


Section 3.4Further Action. The
parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary
or appropriate to achieve the purposes of this Agreement.


Section 3.5Binding Effect. This
Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors,
legal representatives and permitted assigns.


Section 3.6Creditors. Other than
as expressly set forth herein, none of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by,
any creditor of the Operating Partnership.


Section 3.7Waiver. No failure by
any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any covenant, duty, agreement
or condition.


Section 3.8Counterparts. This Agreement
may be executed in counterparts, all of which together shall constitute one agreement binding on all of the parties hereto, notwithstanding
that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement
immediately upon affixing its signature hereto.


Section 3.9Applicable Law. This
Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Washington, without regard
to the principles of conflicts of law.


Section 3.10Invalidity of Provisions.
If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality or enforceability
of other remaining provisions contained herein shall not be affected thereby.






    	8 - TAX PROTECTION AGREEMENT



    	 



    

Section 3.11Entire Agreement. This
Agreement contains the entire understanding and agreement among the Partners with respect to the subject matter hereof and amends,
restates and supersedes the OP Agreement and any other prior written or oral understandings or agreements among them with respect
thereto. This Agreement may not be amended except by a written instrument signed by the REIT, the Operating Partnership and a majority
of the Notice Partners.


Section 3.12No Rights as Stockholders.
Nothing contained in this Agreement shall be construed as conferring upon the holders of the OP Units any rights whatsoever as
stockholders of the REIT, including, without limitation, any right to receive dividends or other distributions made to stockholders
of the REIT or to vote or to consent or to receive notice as stockholders in respect of any meeting of stockholders for the election
of directors of the REIT or any other matter.


Section 3.13Tax Advice and Cooperation.
Each party hereto acknowledges and agrees that it has not received and is not relying upon tax advice from any other party hereto,
and that it has and will continue to consult its own tax advisors. Each party hereto agrees to cooperate to the extent reasonably
requested by any other party in connection with the filing of any tax returns or any audit, litigation or other proceeding related
to taxes associated with the matters described herein, such cooperation shall include the retention and, upon request, provision
of records and information that are relevant to such matters, as may reasonably be requested.


[The remainder of this page has been intentionally left blank.]


 


 






    	9 - TAX PROTECTION AGREEMENT



    	 



    

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


REIT:


RETAIL OPPORTUNITY INVESTMENTS CORP.,


a Maryland corporation


 


By: /s/ Michael B. Haines


Name:Michael B. Haines


Title:  Chief Financial Officer


OPERATING PARTNERSHIP:


RETAIL OPPORTUNITY INVESTMENTS PARTNERSHIP, LP,


a Delaware limited partnership





	By:	Retail Opportunity Investments GP, LLC,
	 	a Delaware limited liability company,
	 	its general partner
	 	 	 
	 	By:	Retail Opportunity Investments Corp.,
	 	 	a Maryland corporation
	 	 	its sole member
	 	 	 
	 	 	 
	 	 	By: /s/ Michael B. Haines
	 	 	Name: Michael B. Haines
	 	 	Title:   Chief Financial Officer










 


Tax Protection Agreement



    	 



    	 



    

PROTECTED PARTNERS:


ACSW, LLC, a Washington limited liability company


 


 


 


By: /s/ Allan Sternoff


Name:Allan Sternoff


Title:Member


 


 


ELLEN BURT LLC, a Washington limited liability company


 


 


 


By: /s/ Burton Sternoff


Name:Burton Sternoff


Title:Member


 


 


 


By: /s/ Jay Sternoff


Name:Jay Sternoff


Title:Holder


 


 


 


By: /s/ Nancy Sternoff


Name:Nancy Sternoff


Title:Holder


 


 


 


By: /s/ Richard Sternoff


Name:Richard Sternoff


Title:Holder


 


 


 


 


Tax Protection Agreement



    	 



    	 



    

SCHEDULE I 


PROTECTED PARTNERS AND SECTION 704(c) AMOUNTS


 


	Partner	704(c) Amount
	ACSW, LLC	$9,500,000
	Ellen Burt LLC	$9,500,000
	Richard Sternoff	$6,500,000
	Jay Sternoff	$6,500,000
	Nancy Sternoff	$4,600,000