Exhibit 10.47


 


SERVICES AGREEMENT


 


This
Services Agreement (the “Agreement”) is made and entered into as of December 1,
2004 (the “Effective Date”) by and among Kan Am Grundbesitz GmbH, a German
company (“Kan Am Grundbesitz”), Kan Am Services Limited Partnership, a Delaware
limited partnership (“Kan Am Services,” and collectively with Kan Am
Grundbesitz, “Kan Am”), and The Mills Limited Partnership, a Delaware limited
partnership (“TMLP”).


 


RECITALS:


 


WHEREAS, certain affiliates of Kan Am have invested in
partnerships (the “JV Partnerships”) with TMLP or entities owned or controlled
by TMLP or its predecessors in interest (collectively, the “Mills Entities”),
which JV Partnerships owned and operated, directly or indirectly, “Mills type”
shopping centers and malls and related properties (such affiliates of Kan Am
are collectively referred to hereinafter as the “Kan Am Entities” and
individually as a “Kan Am Entity”);


 


WHEREAS, the Kan Am Entities directly or indirectly
contributed their interests in the JV Partnerships to TMLP in exchange for
units of limited partnership in TMLP (the “TMLP Units”);


 


WHEREAS, certain of such Kan Am Entities have recently
dissolved or distributed TMLP Units to their respective limited partners, most
of whom are foreign persons within the meaning of Section 7701(a)(1) and
(4) of the Internal Revenue Code of 1986, as amended (the “Code”) (the “Kan
Am Unitholders”);


 


WHEREAS, as of the date hereof, there are
approximately two thousand (2,000) Kan Am Unitholders and it is anticipated
that there will be additional Kan Am Unitholders, including as a result of the
dissolution of, or distribution of TMLP Units by, Kan Am Entities; and


 


WHEREAS, TMLP desires to have Kan Am, as agent,
provide the services described below to the Kan Am Unitholders for the account
of TMLP on the terms and conditions set forth herein.


 


NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the parties hereto agree as follows:


 


1.                                      Appointment
and Delegation of Authority.  


 


TMLP hereby appoints and
employs Kan Am as TMLP’s agent to provide the Services (as defined below) for the term
of this Agreement, beginning as of the Effective Date.  Kan Am accepts said appointment and agrees to provide
such Services during the term of this Agreement in accordance with the terms
and conditions hereinafter set forth.


 





















 


2.                                      Services
to be Provided by Kan Am.  


 


Subject to satisfaction by
TMLP of its obligations under Section 3, Kan Am shall provide the
following services during the term of this Agreement (collectively, the “Services”):


 


a.                                       Regular Cash Distributions and Federal
Withholding.


 


(i)                                     Kan Am shall deliver to the Kan Am Unitholders by check, wire
transfer or other methods as may be approved by TMLP, quarterly distributions,
net of amounts of federal, state and local withholding taxes withheld by TMLP,
payable by TMLP to the Kan Am Unitholders on the later to occur of (A) two
(2) Business Days after the Cash Payment Certificate referenced in Section 3(a) shall
have been delivered by TMLP to Kan Am and (B) delivery by TMLP to Kan Am
of immediately available funds in an amount sufficient to make such
distributions.


 


(ii)                                  Kan Am shall cooperate with and provide assistance to TMLP in
connection with TMLP’s efforts to estimate the amounts (in the aggregate and
with respect to each individual Kan Am Unitholder) required to be withheld from
each cash distribution pursuant to Sections 1445 and/or 1446 of the Code and
state and local taxes, provided, however, that TMLP’s
determination of the amounts to be withheld shall be final.


 


(iii)                               TMLP acknowledges that Kan Am, for its own account and solely at its
risk, may, from time to time, aggregate distributions made in respect of the
TMLP Units with other payments due and owing by the Kan Am Entities (the “Kan
Am Distributions”) to the Kan Am Unitholders, provided, however,
that at the time of such Kan Am Distributions (A) Kan Am provides each Kan
Am Unitholder with a reasonably detailed written breakdown of the components of
each aggregated payment and (B) Kan Am shall be deemed to have made a
representation to TMLP that, when Kan Am does so, it is acting for its own
account and not as an agent of TMLP and that TMLP shall have no liability
whatsoever with respect to the Kan Am Distributions.  Kan Am shall notify the Kan Am Unitholders
that it has and will continue to make aggregate distributions as described
above, and shall give the Kan Am Unitholders the right to require that Kan Am
make such distributions pursuant to separate checks.


 


(iv)                              Within thirty (30) days following a written request from TMLP,  Kan Am shall provide TMLP with reasonably
detailed backup information, including, without limitation, check registers and
copies of checks, with respect to the most recent cash distributions paid by Kan
Am to the Kan Am Unitholders, together with such other related information as
may be requested by TMLP.  Kan Am shall
maintain and reconcile accumulated uncashed checks and the amounts of those
checks that are attributable to TMLP’s cash distributions (if TMLP’s cash
distributions are aggregated with the Kan Am Distributions) and shall provide a
summary of uncashed checks to TMLP on a quarterly basis.  If any check remains outstanding and uncashed
on or after the 90th day following the date of its issuance, Kan Am
will use reasonable efforts to deliver a letter to the payee of such check
indicating that the check has not been cashed and that the check will expire on
the 180th day following its issuance, and requesting that the payee
deposit the check prior the expiration of the 180-day period.  If any check remains outstanding and uncashed
after the 180th day following the date of the applicable check, Kan
Am shall return


 


2





















 


the sums in respect of such TMLP’s cash distributions
included in such uncashed check (less the full amount of any associated stop
payment fee actually incurred by Kan Am or one-half the amount of any
associated stop payment fee actually incurred by Kan Am in the event such check
includes Kan Am Distributions) to TMLP and once returned, Kan Am will not have
any further obligation to distribute such amount to the Kan Am Unitholder that
failed to cash the check. To the extent that any check issued in payment of
distributions is less than the associated stop payment fee, Kan Am shall
consult TMLP prior to issuing the stop payment order.  Notwithstanding the foregoing, if the payee
of any uncashed check subsequently requests payment of the distribution amount
represented by such check and TMLP satisfies its obligations under Section 3(a),
Kan Am shall perform its obligations anew under this Section 2.


 


b.                                      Schedule K-1.  Within fifteen (15) days after Kan Am
receives the federal and state Schedule K-1 referenced in Section 3(b),
Kan Am shall deliver the Schedule K-1 to each Kan Am Unitholder (or
such Kan Am Unitholder’s designated U.S. tax preparer) the Schedule K-1.


 


c.                                       Reports and Other Information.  If
requested by TMLP from time to time, Kan Am shall cause to be delivered to each
of the Kan Am Unitholders copies of the Annual Report to the Stockholders of
The Mills Corporation, the general partner of TMLP (“TMC”), Annual Reports on Form 10-K
of TMC or TMLP, Quarterly Reports on Form 10-Q of TMC or TMLP, or
such other reports or communications as may be prepared by either TMC or TMLP
within ten (10) Business Days after the same have been delivered by TMLP
to Kan Am.


 


d.                                      Other Federal Tax Filings.


 


(i)                                     In connection with any redemptions effected by
Kan Am Unitholders, Kan Am shall cooperate with and assist TMLP in connection
with the preparation of IRS Forms 8288 and 8288-A.


 


(ii)                                  To the extent timely provided by TMLP, Kan Am
shall forward to the Kan Am Unitholders, together with federal and state Schedule K-1’s,
copies of all IRS Forms 8804, 8805 and 8813 prepared by or on behalf of TMLP
with respect to each Kan Am Unitholder.


 


(iii)                               Within thirty (30) days after the end of each
Expiration Date, Kan Am shall provide TMLP with an updated list of those TMLP
Units that are held jointly for legal purposes. 
In each case, such updated list shall indicate how the ownership of the
jointly held TMLP Units are to be treated for tax purposes.


 


e.                                       Redemptions of TMLP Units.  Subject to Section 8(b) of this
Agreement, Kan Am shall cooperate with and provide assistance to TMLP in
connection with the redemption from time to time of TMLP Units held by the Kan
Am Unitholders for, at the option of TMC (in the event TMC has assumed the
redemption obligation on behalf of TMLP), shares of TMC’s common stock or cash
and shall, upon request of TMLP, forward to the Kan Am Unitholders such
documents as are reasonably necessary, appropriate or desirable in connection
with any such redemptions.  In
furtherance of the foregoing, Kan Am shall, among other things, (i) cause


 


3





















 


all original redemption notices and requests and other
necessary documentation to be sent to its offices in Germany (the ”Office”),
(ii) cause the Office to process such redemption notices and requests, listing
the number of units held by each redeeming Kan Am Unitholder and the number of
units being so redeemed by such unitholder, (iii) assist TMLP in verifying
the identity of each Kan Am Unitholder requesting the redemption, (iv) assist
TMLP in determining amounts required to be withheld under Sections 1445 and/or
1446 of the Code with respect to each redemption, and (v) facilitate
payments, if any, by Kan Am Unitholders to TMLP in connection with any
redemption.  The original redemption
notices, supporting documentation and materials prepared by Kan Am pursuant to
the redemptions shall be delivered by Kan Am to TMLP promptly but in no event
later than the day on which the redemption period is set to expire (which,
unless otherwise modified in writing by TMC, shall be the 30th day following the filing of a Quarterly Report on Form 10-Q
or Annual Report on Form 10-K by TMC or by TMLP if TMLP files such
reports with the SEC, or if such 30 th day is not a
Business Day, the next Business Day following the expiration of such 30-day
period) (the “Expiration Date”).  If the
original redemption notices and the supporting documentation are not received
by TMLP by the Expiration Date, the redemptions shall not be deemed effective
for such redemption period.


 


f.                                         Transfers of TMLP Units.


 


(i)                                     General. 
Kan Am shall cooperate with and provide assistance to TMLP in connection
with any transfer of TMLP Units by Kan Am Unitholders in accordance with the
terms of the TMLP Partnership Agreement.


 


(ii)                                  Transfers Upon Death. 
At such time as Kan Am becomes aware of the death of a Kan Am
Unitholder, Kan Am shall request a copy of the death certificate of the
deceased Kan Am Unitholder and shall deliver a copy of such death certificate
to TMLP promptly following receipt.  Kan
Am shall use reasonable efforts thereafter to obtain a copy of the certificate
of inheritance following the settlement of the deceased unitholder’s estate,
and shall deliver a copy of such certificate to TMLP promptly following
receipt.  Once Kan Am has reviewed the
foregoing death certificate and certificate of inheritance, Kan Am shall send
to TMLP a certificate (the ”Transfer Certificate”) stating, among other
things, that (A) to its knowledge, it has received all necessary
documentation supporting the transfer submitted on behalf of the deceased
unitholder, (B) it has reviewed all such documentation, and (C) to
its knowledge, such proposed transfer is consistent with the local law.  Each of TMLP and Kan Am understands and acknowledges
that no transfers of TMLP Units
that result from the death of a Kan Am Unitholder will be recorded on TMLP’s
books and records until TMLP has received the Transfer Certificate from Kan
Am.  For federal income tax purposes,
TMLP shall not be obligated to treat the death as occurring any earlier than in
the year in which it was notified by Kan Am.


 


g.                                      General Matters.  In
addition, Kan Am shall provide the following Services:


 


(i)                                     Communicating with the Kan Am Unitholders for such purposes as TMLP
may reasonably determine including, without limitation, for obtaining the
consent of the Kan Am Unitholders as provided in the TMLP Partnership
Agreement;


 


4





















 


(ii)                                  Researching and responding to all
written Kan Am Unitholder inquiries; and


 


(iii)                               Reconciling paid and outstanding
cash payments.


 


3.                                      Responsibilities
of TMLP.


 


In order to
facilitate the provision by Kan Am of the Services, TMLP shall have the
following obligations under this Agreement:


 


a.                                       Cash Distributions and Federal Withholding.  In connection with each
cash distribution to be made to the Kan Am Unitholders:


 


(i)                                     Not later than two (2) Business Days prior to the payment date
of such cash distribution, TMLP shall furnish to Kan Am a certificate (a “Cash
Payment Certificate”) setting forth:


 


(A)                              the date of the declaration of such cash distribution;


 


(B)                                the record date as of which Kan Am Unitholders are entitled to
payment;


 


(C)                                the payment date on which the cash distribution is to be paid;


 


(D)                               the aggregate amount of the cash distribution;


 


(E)                                 the gross amount per TMLP Unit of such cash distribution that the
Kan Am Unitholders are entitled to receive;


 


(F)                                 TMLP’s estimate of the aggregate amount required to be withheld from
the cash distributions due to the Kan Am Unitholders pursuant to Sections 1445
and/or 1446 of the Code; and


 


(G)                                the net amount (in the aggregate and per TMLP Unit) of such cash
distribution, after withholding, that the Kan Am Unitholders are entitled to
receive.


 


(ii)                                  On or prior to the payment date specified in the Cash Payment
Certificate, TMLP shall wire transfer to an account designated by Kan Am an
amount of cash sufficient for Kan Am to make the net payment specified in the
Cash Payment Certificate to the Kan Am Unitholders of record as of the
applicable record date for such payment date. 
Kan Am shall not be liable for any improper payment made in accordance
with the Cash Payment Certificate.


 


(iii)                               TMLP hereby authorizes Kan Am to stop payment of checks issued by
Kan Am in payment of distributions, but not presented for payment, when the
payees thereof allege either that they have not received the checks or that
such checks have been


 


5





















 


mislaid, lost, stolen, destroyed or, through no fault
of theirs, are otherwise beyond their control and cannot be produced by them
for presentation and collection, and Kan Am shall issue and deliver duplicate
checks in replacement thereof (less the amount of any associated stop payment
fee actually incurred by Kan Am, if Kan Am determines in its reasonable
judgment that the payee should be responsible for such fee).  Any associated stop payment fee not paid by
the payee shall be borne by Kan Am and/or TMLP as determined by such parties in
light of the circumstances.  To the extent
that any check issued in payment of distributions is less than the associated
stop payment fee, Kan Am shall consult TMLP prior to issuing the stop payment
order.


 


(iv)                              With Kan Am’s assistance, TMLP shall estimate the aggregate amount
required to be withheld from the cash distributions due to the Kan Am
Unitholders pursuant to Sections 1445 and/or 1446 of the Code, and shall remit
such withholding amounts to the United States Treasury in accordance with
applicable law.


 


(v)                                 Within fifteen (15) days or a reasonable time after TMLP files its
annual tax returns with the United States Internal Revenue Service (“IRS”)
(including any returns required to be filed with respect to withholding
amounts), TMLP shall deliver to Kan Am a certificate containing a schedule that
reconciles the aggregate amount withheld from the Kan Am Unitholders and
remitted to the United States Treasury during the applicable tax year
(the ”Quarterly Payments”) with the actual amounts due and owing for such
tax year as set forth in TMLP’s tax returns (the “Withholding Obligation”).   To the extent that the Withholding
Obligation exceeds the Quarterly Payments, TMLP shall be solely liable for
making any additional payments to the United States Treasury as may be
necessary to cause the full Withholding Obligation to be paid, provided, that,
TMLP shall be entitled to recoup such amounts from the appropriate Kan Am
Unitholder by withholding such additional amount from his or her future
distributions or upon redemption.  To the
extent that the Quarterly Payments exceed the Withholding Obligation, TMLP
shall send such excess amounts to Kan Am and Kan Am shall cause the Kan Am
Unitholders to receive their respective shares of such refunds.


 


b.                                      Schedule K-1.  Within
one hundred fifty (150) days or a reasonable time following the end of each
calendar year, TMLP shall cause to be delivered to Kan Am with respect to each
Kan Am Unitholder all data and information included as part of such Kan Am
Unitholder’s Schedule K-1 with respect to such calendar year.  Such information shall be delivered in
electronic form, shall be embedded in a Microsoft Excel spreadsheet in a format
reasonably acceptable to Kan Am and shall aggregate such information with
respect to each Kan Am Unitholder Group. 
For the purposes of this Agreement, “Kan Am Unitholder Group” shall
mean, with respect to each Kan Am Entity, the group of Kan Am Unitholders
(and  their successors and assigns) that
received TMLP Units pursuant to one or more distributions of the TMLP Units
owned by such Kan Am Entity.


 


c.                                       Other Information.  From time to time, TMLP shall cause to be
delivered to Kan Am such information and materials that TMLP desires to be
distributed to the Kan Am Unitholders and Kan Am shall cooperate to deliver or
cause to be delivered such materials to the Kan Am Unitholders promptly after
receipt from TMLP.  If TMLP requests
pursuant to this Section or Section 2(g)(i) that Kan Am deliver
additional communications from TMLP to the


 


6





















 


Kan Am Unitholders, TMLP shall deliver sufficient
copies of all such communications to Kan Am in accordance with instructions
provided to TMLP by Kan Am.  TMLP shall be solely
responsible for the contents of all financial reports delivered to Kan Am for
distribution to the Kan Am Unitholders relating to TMLP.


 


d.                                      Other Federal Tax Filings.


 


(i)                                     Within one hundred fifty (150) days or a reasonable time after the
end of each calendar year, TMLP shall prepare and deliver to Kan Am all
required IRS Forms 8804, 8805 and 8813 with respect to the Kan Am
Unitholders.  TMLP shall cause the same
to be filed with the IRS, and shall cause copies of the same to be delivered to
Kan Am.


 


(ii)                                  In connection with any redemptions effected by
the Kan Am Unitholders, TMLP shall cause to be filed timely with the IRS all
returns and other filings required by law to be filed by TMLP pursuant to Section 1445
of the Code, including without limitation IRS Form 8288 and IRS Form 8288-A.  TMLP shall cause copies of all such filings
to be delivered to Kan Am within fifteen (15) days after such filings have been
made with the IRS.


 


e.                                       Delivery of Documents and Monies.  All documents, data and monies required to be
delivered by TMLP to Kan Am under this Agreement shall be delivered in accordance
with the instructions attached hereto as Exhibit A, provided, that,
Kan Am shall have the right upon notice to TMLP to modify such instructions at
any time and from time to time.


 


4.                                      Standards
for Performance; Agents.


 


a.                                       Standard of Care.  Kan
Am shall at all times act in good faith and agrees to use all commercially
reasonable efforts within reasonable time limits to ensure that all services
performed under this Agreement are accurate and are performed in a manner that
is consistent with the standards of professional providers of similar services
in the United States, but shall have no liability for its failure or inability
to do so except as a result of its own or its employees’ gross negligence, bad
faith, willful misconduct or similar acts or omissions of acts.  The Services may be
performed solely by Kan Am Services, solely by Kan Am Grundbesitz or
collaboratively by Kan Am Services and Kan Am Grundbesitz, and each of Kan Am
Services and Kan Am Grundbesitz may delegate its rights and obligations to the
other without the consent of or prior notice to TMLP, provided that Kan Am
shall provide TMLP with timely notice of such delegation for purposes of
determining to which of the Kan Am Entities TMLP is required to provide
payments and notices pursuant to this Agreement.


 


b.                                      Agents and Attorneys-In-Fact.  Kan Am may employ agents or attorneys-in-fact
with the prior written authorization of TMLP to assist it in performing the
Services.  Upon the request of TMLP, Kan
Am shall provide TMLP with evidence of the financial viability of any such
agents or attorney’s-in-fact.


 


7





















 


5.                                      Compensation.


 


a.                                       Fees.


 


(i)                                     Commencing January 1, 2004, Kan Am shall be entitled to receive
for its Services hereunder a quarterly fee (the “Fee”) in accordance with the
following schedule:


 


	
  Quarterly Fee

  	
   

  	
  Number of Kan Am Unitholders**

  of Record as of the first day of the calendar quarter

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  25,000

  	
   

  	
  more than 2,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  22,500

  	
   

  	
  1,800 to 2,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  20,000

  	
   

  	
  1,600 to 1,799

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  17,500

  	
   

  	
  1,400 to 1,599

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  15,000

  	
   

  	
  fewer than 1,400

  	
   

  



 










**For purposes of determining the amount of
the Fee under this Section 5, joint unitholders shall be counted as a
single unitholder


 


The Fee shall be
paid within thirty (30) days after the end of each calendar quarter, except
that the Fee for the first, second and third quarters of 2004 shall be payable
within forty (45) days after the date of this Agreement.


 


(ii)                                  TMLP and Kan Am acknowledge and agree that Kan Am has provided
Services during 2003 for which it has not been compensated.  In full satisfaction of a payment for such
Services rendered, TMLP shall pay to Kan Am, within forty (45) days after the
date of this Agreement, the sum of $100,000, plus out-of-pocket expenses
incurred by Kan Am in connection with performing its obligations hereunder in
an amount mutually agreed by TMLP and Kan Am.


 


b.                                      Number and Identity of Kan Am Unitholders.


 


(i)                                     Kan Am has heretofore delivered to TMLP a
current list of the names and taxpayer identification numbers (where known) of
the Kan Am Unitholders as of the date of this Agreement.  Kan Am shall deliver to TMLP an updated list
of Kan Am Unitholders within thirty (30) days after each Expiration Date.  Kan Am and TMLP shall exchange information
and documentation regarding the number and identity of Kan Am Unitholders to
the extent necessary to maintain an accurate list of such Kan Am
Unitholders.  So long as each of Kan Am
Services and Kan Am Grundbesitz is an acceptance agent for the IRS, it shall, to
the extent reasonably necessary, assist Kan Am Unitholders in applying for
taxpayer identification numbers.


 


8





















 


(ii)                                  Subject to the provisions of Section 8,
this Agreement shall be deemed terminated with respect to a Kan Am Unitholder
for purposes of determining the number of Kan Am Unitholders as to which the
Quarterly Fee is payable, and as to which the Services are to be provided
hereunder, as of the date on which (A) all of the TMLP Units held by such
Kan Am Unitholder have been redeemed or transferred and (B) a United
States federal tax return has been filed with respect to the year in which such
redemption or transfer occurred.


 


c.                                       Certain Expenses.  Kan Am
shall be entitled to reimbursement from TMLP for the reasonable out-of-pocket
costs incurred by Kan Am in connection with the performance by Kan Am of the
Services rendered hereunder, including without limitation, costs of maintaining
bank accounts and retaining agents or attorneys-in-fact as permitted under Section 4(b).  Such expenses shall be reimbursed by TMLP
within thirty (30) days of receipt by TMLP of an invoice detailing such costs
incurred; provided, however, that Kan Am shall not be entitled to
invoice TMLP more than once each calendar quarter.


 


d.                                      Kan Am acknowledges and agrees that it shall
not charge the Kan Am Unitholders any fees or seek or receive any reimbursement
from the Kan Am Unitholders for any of the Services provided or related to this
Agreement.


 


6.                                      Status
of the Parties.  It is expressly
understood and agreed that Kan Am shall act as an independent contractor and
agent of TMLP in the performance of this Agreement.  No provision hereof shall be deemed or
construed to create a partnership or a joint venture between Kan Am and TMLP.


 


7.                                      Term
and Termination of this Agreement.


 


a.                                       Term.  The initial term (“Initial Term”)
of this Agreement shall commence with the Effective Date and, unless sooner
terminated as herein provided, shall continue for a period of two (2) years,
and shall automatically renew for one (1) year successive periods (each, a
“Renewal Term”) following the expiration of the Initial Term and each Renewal
Term.  Either party shall have the right
to terminate this Agreement effective on the last day of the Initial Term or
any Renewal Term by written notice to the other party not less than ninety (90)
days prior to the expiration of the Initial Term or such Renewal Term, as
applicable.


 


b.                                      Termination by TMLP.  This
Agreement may be terminated for cause by TMLP in the event of breach by Kan Am
of its obligation under this Agreement, which breach is not cured within thirty
days after notice by TMLP.


 


c.                                       Termination by Kan Am.  This
Agreement may be terminated for cause by Kan Am in the event:


 


(i)                                     that
Kan Am fails to receive payment of any amount due to Kan Am hereunder, and such
failure continues for a period of ten (10) days after Kan Am’s written
notice thereof to TMLP; and


 


9





















 


(ii)                                  of
breach by TMLP of its obligation under this Agreement, which breach is not
cured within thirty days after notice by Kan Am.


 


d.                                      Survival.  No termination of this
Agreement shall affect any obligation owing by any party hereto which accrued
prior to the effective date of such termination.  The provisions and terms of Sections 8, 9 and
13 shall survive the expiration or termination of this Agreement.


 


8.                                      Confidentiality.


 


a.                                       Covenant.  Kan
Am agrees that it will not, at any time during the term of this Agreement or
after its termination, reveal, divulge, or make known to any person, firm,
corporation or other business organization, any customers’ lists, trade
secrets, cost figures and projections, profit figures and projections, or any
other secret or confidential information whatsoever, used or gained by Kan Am
during performance under this Agreement except
(i) as may be required by law, regulation, judicial or administrative
process, or (ii) to the extent such information (A) shall have
otherwise become publicly available (including, without limitation, any
information filed with any governmental agency and available to the public)
other than as the result of a disclosure by Kan Am or any of its personnel in
breach hereof, (B) becomes available to Kan Am on a nonconfidential basis
from a source other than TMLP which Kan Am reasonably believes is not
prohibited from disclosing such information to Kan Am by obligation to TMLP, (C) is
known by Kan Am prior to its receipt from TMLP without any obligation of
confidentiality with respect thereto, or (D) is developed by Kan Am
independently of any disclosures made by TMLP to Kan Am of such information.  Kan Am further covenants and
agrees to retain all such knowledge and information acquired during and after
the term of this Agreement respecting such lists, trade secrets, or any secret
or confidential information whatsoever in trust for the sole benefit of Kan Am
and its successors and assigns.


 


b.                                      Limitation of Redemption of Certain Kan Am
Persons.  Kan Am and TMLP acknowledge that, in
connection with the Services to be provided by Kan Am pursuant to this
Agreement, certain officers or affiliates of Kan Am as set forth on Exhibit B,
who are also Kan Am Unitholders (referred to hereinafter as the “Kan Am Persons”),
may acquire certain knowledge about TMLP or transactions involving TMLP that
may not be generally known to the public. 
Such information may include, without limitation, knowledge of pending
redemptions by the Kan Am Unitholders. 
Each Kan Am Person agrees that any redemption notices submitted by such
Kan Am Person with respect to a particular redemption period shall become
effective on the later of (i) the applicable Expiration Date or (ii) the
day on which the last batch of redemption notices from the Kan Am Unitholders
are submitted to TMLP for the applicable redemption period (such date is
referred to hereinafter as the “Kan Am Person Permitted Redemption Date”), provided, however, that in the event that the Kan Am Person Permitted Redemption Date
would be after the commencement of TMC’s quarterly and annual earnings call “blackout
period” applicable to its officers and directors (the “Earnings Call Blackout
Period”), the Kan Am Person Permitted Redemption Date shall be the third
business day prior to the applicable Earnings Call Blackout Period.  Nothing in this section or this
Agreement shall be construed as a waiver or exception of the Earnings Call
Blackout Period by TMC with respect to the Kan Am Persons.


 


10





















 


9.                                      Indemnification.


 


a.                                       TMLP shall indemnify and hold harmless
Kan Am and its directors, trustees, officers, employees, members, managers,
partners, agents or representatives (the “Kan Am Indemnitees”) from and against
any and all claims, demands, liabilities, losses, costs or expenses (including
reasonable attorneys’ fees and expenses), judgment, award, amount paid in
settlement, fine, penalty and liability of any and every kind incurred by or
asserted against any of the Kan Am Indemnitees, by reason of (i) the
contractual arrangement with Kan Am hereunder, (ii) the performance by Kan
Am of the Services, (iii) the breach by TMLP of its obligations under the
terms of this Agreement, (iv) the noncompliance by TMLP with applicable
laws, and (v) the occurrence or existence of any event or circumstances
which resulted or is alleged in any suit, action or proceeding (whether
threatened, initiated or completed) by reason of any of the foregoing; provided, however, that TMLP shall have no obligation to indemnify
the Kan Am Indemnitees under this Section 9(a) against such loss,
cost or expense that results from, arises out of or is in any way connected
with any negligence, bad faith, willful misconduct or similar acts, omissions,
by or on the part of any of the Kan Am Indemnitees, its agents, employees or
representatives.


 


b.                                      Kan Am Services and Kan Am Grundbesitz
jointly and severally shall indemnify and hold harmless TMLP and its
affiliates, and their directors, trustees, officers, employees, members,
managers, partners, agents or representatives (the “TMLP Indemnitees”) from and
against any and all claims, demands, liabilities, losses, costs or expenses
(including reasonable attorneys’ fees and expenses), judgment, award, amount
paid in settlement, fine, penalty and liability of any and every kind incurred
by or asserted against any of the TMLP Indemnitees that results from, arises
out of or is in any way connected with any negligence, bad faith, willful
misconduct or similar acts, omissions, by or on the part of any of the Kan Am
Indemnitees, its agents, employees or representatives in providing the Services
pursuant to this Agreement.


 


c.                                       Limitation on Kan Am’s Obligations and
Liability.  Anything contained herein or elsewhere to the
contrary notwithstanding, Kan Am shall have no obligation to perform its
obligations hereunder, no liability for failure to do so, and shall not be in
default hereunder (i) if TMLP fails to provide all required funds as
specified in this Agreement for such purposes, (ii) if TMLP fails to
timely provide Kan Am with all documents, instruments, information and other
materials that are reasonably required for Kan Am to perform the Services
hereunder as specified in this Agreement, (iii) if TMLP fails to comply
with applicable law, or (iv) Kan Am is prevented from performing, or is
delayed in performing, its obligations due to a material default by TMLP in
performing its obligations under this Agreement.


 


10.                               Representations,
Warranties and Covenants of TMLP.   TMLP hereby represents and warrants to and
covenants with Kan Am that:


 


a.                                       Organization, Standing and Authority.   TMLP (i) is
a limited partnership formed, validly existing and in good standing under the
laws of the State of Delaware; and (ii) has the partnership power to
execute and deliver this Agreement, and has taken all necessary action to
authorize the execution and delivery of this Agreement and the transactions


 


11





















 


contemplated hereby, and this Agreement
constitutes a valid and binding obligation of TMLP, enforceable against TMLP in
accordance with its terms.


 


b.                                      Authority.  The execution, delivery and
performance of this Agreement does not (i) violate any provision of TMLP’s
Partnership Agreement, (ii) violate any provision of, or result in the
acceleration of any obligation under, any material mortgage, deed of trust,
note, lien, lease, franchise, license, permit, contract, agreement, instrument,
order, arbitration award, judgment, injunction or decree, or result in the
termination of any material license, franchise, lease or permit to which TMLP
is a party or by which it is bound other than such violation, acceleration or
termination which will not have a material adverse effect on the financial
condition and results of operations of TMLP and its subsidiaries taken as a
whole; or (iii) except as may be required under applicable securities
laws, require any filing with, notice to or permits, consent or approval of any
U.S. governmental or regulatory body.


 


11.                               Representations,
Warranties and Covenants of Kan Am.  Each
of Kan Am Services and Kan Am Grundbesitz hereby represents and warrants to and
covenants with TMLP that:


 


a.                                       Organization, Standing and Authority.  Each
of Kan Am Services and Kan Am Grundbesitz (i) is an entity organized or formed, validly existing and in good
standing under the laws of the jurisdiction pursuant to which it was organized
or formed, (ii) has the power to execute and deliver this Agreement, and
has taken all necessary action to authorize the execution and delivery of this
Agreement and the transactions contemplated hereby, and this Agreement
constitutes a valid and binding agreement of each of Kan Am Services and Kan Am Grundbesitz,
enforceable against Kan Am Services and Kan Am
Grundbesitz in accordance with its
terms.


 


b.                                      Authority.  The execution, delivery and
performance of this Agreement does not (i) violate any provision of the
organizational documents of Kan Am Services or Kan Am Grundbesitz, (ii) violate
any provision of, or result in the acceleration of any obligation under, any
material mortgage, deed of trust, note, lien, lease, franchise, license,
permit, contract, agreement, instrument, order, arbitration award, judgment,
injunction or decree, or result in the termination of any material license,
franchise, lease or permit to which Kan Am Services or Kan Am Grundbesitz is a
party or by which any of them is bound other than such violation, acceleration
or termination which will not have a material adverse effect on the financial
condition and results of operations of either Kan Am Services or Kan Am
Grundbesitz, as the case may be; or (iii) except as may be required under
applicable securities laws, require any filing with, notice to or permits,
consent or approval of any U.S. or German governmental or regulatory body.


 


12





















 


12.                               Conditions
Beyond Control of Parties. 
Neither party shall be held liable for failure to comply with any of the
terms of this Agreement when such failure has been caused solely by fire, labor
dispute, strike, war, insurrection, government restrictions, force majeure, or
act of God beyond the control and without fault on the part of the party
involved, provided such party uses due diligence to remedy such failure to
comply.


 


13.                               Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to principles of conflicts of laws.  Each of the parties hereto agrees to submit
to the exclusive jurisdiction of the courts of the State of Delaware with respect
to any dispute arising hereunder.


 


14.                               Notices.  Notices, statements and other communications
to be given under the terms of this Agreement shall be in writing and delivered
by facsimile (confirmed by transmission receipt), by hand, including overnight
delivery services, or sent by certified or registered mail, postage prepaid,
return receipt requested:


 


	
  To Kan Am Grundbesitz:

  	
   

  	
  Kan Am Grundbesitz GmbH

  Widenmayerstrasse 6

  80538 Munich

  Germany

  Attention: Karlheinz Fichtel

  Facsimile: 011-49-89-21010118.

  Email: KHF@kanam.de

  
	
   

  	
   

  	
   

  
	
  To Kan Am
  Services:

  	
   

  	
  Kan Am Services
  Limited Partnership

  The Forum - Suite 825

  3290 Northside Parkway

  Atlanta, Georgia 30327

  
	
   

  	
   

  	
  Attention:

  	
  T. Kent Hammond

  
	
   

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
  Facsimile:

  	
  404-239-0624

  
	
   

  	
   

  	
  Email:

  	
  tkhammond@kanamusa.com

  
	
   

  	
   

  	
   

  	
   

  
	
  To TMLP:

  	
   

  	
  The Mills
  Corporation

  1300 Wilson Boulevard

  Suite 400

  Arlington, Virginia 22209

  
	
   

  	
   

  	
  Attention:

  	
  Thomas E. Frost, Esq.

  
	
   

  	
   

  	
   

  	
  Executive Vice
  President and Secretary

  
	
   

  	
   

  	
  Facsimile:

  	
  703-526-5333

  
	
   

  	
   

  	
  Email:

  	
  tom.frost@themills.com

  



 


13





















 


or at such other address as is from time to
time designated by the party receiving the notice.  Any such notice which is properly mailed, as
described above, shall be deemed to have been served as of three Business Days
after said posting.


 


15.                               Definitions


 


Whenever used in this
Agreement, the following words and phrases shall have the following meanings:


 


a.                                       “Business Day” shall be deemed to be each day
on which banks are open for business in Delaware.


 


b.                                      “Cash Payment Certificate” shall have the
meaning given to it in Section 3(a)(i).


 


c.                                       “Certificate” shall mean any notice,
instruction, or other instrument in writing, authorized or required by this
Agreement to be given to Kan Am by TMLP, which is signed by any Officer.


 


d.                                      “Code” shall mean the Internal Revenue Code of 1986, as amended.


 


e.                                       “Earnings Call Blackout Period” shall have the meaning given to it in Section 8(b).


 


f.                                         “Effective Date” shall have the meaning given to it in the Preamble.


 


g.                                      “Expiration Date” shall
have the meaning given to it in Section 2(e).


 


h.                                      “Initial Term” shall have the meaning given to it in Section 7(a).


 


i.                                          “IRS” shall mean the Internal Revenue Service.


 


j.                                          “JV Partnerships” shall have the meaning given to it in the
Recitals.


 


k.                                       “Kan Am” shall have the meaning given to it in the Preambles.


 


l.                                          “Kan Am Distributions” shall have the meaning given to it in Section 2(a)(iii).


 


m.                                    “Kan Am Entity” or “Kan Am Entities” shall have the meaning given to
it in the Recitals.


 


14





















 


n.                                      “Kan Am Group” shall mean, with respect to each Kan Am Entity that
has dissolved, the group of Kan Am Unitholders (and their successors and
assigns) that received TMLP Units in exchange for their interests in such Kan
Am Entity.


 


o.                                      “Kan Am Grundbesitz” shall
have the meaning given to it in the Preambles.


 


p.                                      “Kan Am Indemnitees” shall have the meaning given to it in Section 9(a).


 


q.                                      “Kan Am Persons” shall have the meaning given to it in Section 8(b).


 


r.                                         “Kan Am Persons Permitted Redemption Date” shall have the meaning given to it in Section 8(b).


 


s.                                       “Kan Am Services” shall have the meaning given to it in the
Preambles.


 


t.                                         “Kan Am Unitholders” shall
have the meaning given to it in the Recitals.


 


u.                                      “Mills Entities” shall have the meaning given to it in the Recitals.


 


v.                                      “Office” shall have the meaning given to it in Section 2(e).


 


w.                                    “Officer” shall mean any of the following officers of TMC:  the Chief Executive Officer, President, any
Vice President, the Secretary, the Chief Financial Officer, the Chief
Accounting Officer, any Assistant Treasurer, and any Assistant Secretary duly
authorized by the Board of Directors of TMC to execute any Certificate,
instruction, notice or other instrument on behalf of TMLP and named in a Certificate.


 


x.                                        “Quarterly Payments” shall have the meaning given to it in Section 3(a)(iv).


 


y.                                      “Renewal Term” shall have the meaning given to it in Section 7(a).


 


z.                                        “Services” shall the
meaning given to it in Section 2(a).


 


aa.                                 “TMC” shall mean The Mills Corporation, a
Delaware corporation.


 


15





















 


bb.                               “TMLP” shall have the
meaning given to it in the Preambles.


 


cc.                                 “TMLP Indemnitees” shall have the meaning given to it in Section 9(b).


 


dd.                               “TMLP Partnership Agreement” shall mean the
Agreement of Limited Partnership of TMLP, dated April 21, 1994, as
amended.


 


ee.                                 “TMLP Units” shall mean the units of limited
partnership of TMLP.


 


ff.                                     “Transfer Certificate” shall have the meaning
given to it in Section 2(f)(ii).


 


gg.                               “Withholding Obligation” shall have the meaning given to it in Section 3(a)(iv).


 


16.                               Miscellaneous.


 


a.                                       Counterparts.  This Agreement has been executed in a number
of identical counterparts, and each such counterpart shall be deemed to be an
original instrument, but in making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart.


 


b.                                      Execution by Facsimile.  The execution and delivery of this Agreement
by facsimile signature shall be sufficient for all purposes and shall be
binding upon any party who so executes.


 


c.                                       Successors and Assigns.  This Agreement shall extend to and shall be
binding upon the parties hereto and their respective successors and
assigns.  This Agreement shall not be
assignable by either party without the prior written consent of the other
party, provided, that, either Kan Am Services and/or Kan Am Grundbesitz shall
have the right to assign its rights and/or obligations hereunder to any entity
controlled by, in control of, or under common control with, Kan Am Services or
Kan Am Grundbesitz, as the case may be.


 


d.                                      Collection of Funds.  Kan Am shall not be responsible for any
money, whether or not represented by any check, draft or other instrument for
the payment of money, received by it on behalf of TMLP until Kan Am actually
receives and collects such funds.


 


e.                                       Invalid Provisions.  The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.


 


f.                                         Headings.  The captions contained in this
Agreement are inserted solely for convenience of reference and shall not affect
the meaning or interpretation of this Agreement.


 


16





















 


g.                                      Entire Agreement and Amendment.  This
Agreement sets forth the entire Agreement between the parties hereto and
supersedes all prior written and oral understandings.  Any change, amendment or modification of this
Agreement must be in writing and signed by all the parties hereto.


 


[signature pages follow]


 


17





















 


IN WITNESS
WHEREOF, TMLP and Kan Am have caused this Agreement to be executed by their
duly authorized officers and their corporate seals to be hereunto affixed as of
the date first above written.


 


 


	
   

  	
  THE
  MILLS LIMITED PARTNERSHIP

  
	
   

  	
  By: The Mills
  Corporation, its general partner

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ MJ Morrow

  
	
   

  	
  Name: Mary Jane Morrow

  
	
   

  	
  Title: Executive Vice President and Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KAN AM GRUNDBESITZ GmbH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Karlheinz Fichtl

  
	
   

  	
  Name: Karlheinz Fichtl

  
	
   

  	
  Title: Geschaetsfuehrer

  
	
   

  	
   

  
	
   

  	
  KAN AM
  SERVICES LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ T. Kent
  Hammond

  
	
   

  	
  Name: T. Kent Hammond

  
	
   

  	
  Title: Vice President

  



 


18





















 


Solely with
respect to the obligations set forth in Section 8(b):


 


	
   

  	
  /s/ Dietrich Von
  Boetticher

  
	
   

  	
  Dietrich von Boetticher

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Franz von
  Perfal

  
	
   

  	
  Franz von Perfall

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James
  Braithwaite

  
	
   

  	
  James C.
  Braithwaite

  



 


19





















 


EXHIBIT A


 


DELIVERY INSTRUCTIONS


 


The
following items required to be delivered by TMLP in accordance with the
Agreement shall be delivered as directed below:


 


1.               Schedule K-1
data and information:


 


Kan Am Services


The Forum – Suite 825


3290 Northside Parkway


Atlanta, GA  30327


Attention:  T. Kent Hammond


Facsimile:     404-239-0624


Email:                 tkhammond@kanamusa.com


 


2.               Distributions
and other payments:


 


Wire instructions for Hypo Bank New York:


 


Deutsche Bank, Munich


SWIFT code DEUTDEMM


Account #  2413979


For the account of Kan Am Grundbesitz GmbH


 


3.               Periodic
Financial Reports:


 


Kan Am Grundbesitz GmbH


Widenmayerstrasse 6


80538 Munich


Germany


Attention:  Karlheinz
Fichtel


Facsimile: 011-49-89-21010118


Email: 
KHF@kanam.de


 


20





















 


EXHIBIT B


 


LIST OF KAN AM PERSONS


 


1.                                       Dietrich
von Boetticher


 


2.                                       Franz
von Perfall


 


3.                                       James
C. Braithwaite


 


21