Document:

Exhibit 10.2

 

FORM OF AMENDMENT

 

[TENTH] AMENDMENT TO THE

AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT OF

THE MACERICH PARTNERSHIP, L.P.

 

THIS
[TENTH] AMENDMENT (the “Amendment”) TO
THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT DATED AS OF MARCH 16,
1994, AMENDED AS OF AUGUST 14, 1995, FURTHER AMENDED AS OF JUNE 27,
1997, FURTHER AMENDED AS OF NOVEMBER 16, 1997, FURTHER AMENDED AS OF FEBRUARY 25,
1998, FURTHER AMENDED AS OF FEBRUARY 26, 1998, FURTHER AMENDED AS OF JUNE 17,
1998, FURTHER AMENDED AS OF DECEMBER 23, 1998, FURTHER AMENDED AS OF NOVEMBER 9,
2000, AND FURTHER AMENDED AS OF JULY 26, 2002 (the “Agreement”)
OF THE MACERICH PARTNERSHIP, L.P. (the “Partnership”)
is dated effective as of                           .

 

RECITALS

 

WHEREAS, MACP LP, a
subsidiary of the Partnership, has merged with and into Wilmorite Holdings,
L.P. (“WHLP”), a Delaware partnership (the “Partnership Merger”) effective as
of                     ;

 

WHEREAS, simultaneously
with the consummation of the Partnership Merger, the agreement of limited
partnership of WHLP was amended and restated (the “2005 Amended and Restated
WHLP Agreement”);

 

WHEREAS, pursuant to Section 8.10
of the 2005 Amended and Restated WHLP Agreement, the Partnership has the right
to cause each limited partner of WHLP (each, a “WHLP Partner”) to exchange his,
her or its partnership units in WHLP for interests in the Partnership (the “Partnership
Call”), and certain WHLP Partners have the right to exchange part or all of
their partnership units in WHLP for interests in the Partnership (the “WHLP
Partner Put Right”);

 

WHEREAS, the Partnership Call and/or the WHLP Partner
Put Right has been exercised (each such date of exercise being a “WHLP
Contribution Date”);

 

WHEREAS, the Partnership has agreed to issue to one or more of the WHLP
Partners, (1) in exchange for all or a portion of their common units in WHLP
(the “WHLP Common Units”), Common Units; (2) in exchange for all or a portion
of their nonparticipating Class A Preferred Units in WHLP (the “WHLP Nonparticipating
CPUs”), special partnership units of the Partnership (the “Series N Preferred
Units”) having the terms and subject to the conditions set forth herein; and
(3) in exchange for all or a portion of their participating Class A Preferred
Units in WHLP (the “WHLP Participating CPUs”), special partnership units of the
Partnership (the “Series P Preferred Units”) having the terms and subject to
the conditions set forth herein;

 

WHEREAS, the Series N Preferred Units shall have the terms set forth in
Exhibit B to this Amendment and the redemption rights set forth in Exhibits D
and F to this Amendment;

 

 

WHEREAS, the Series P Preferred Units shall have the terms set forth in
Exhibit C to this Amendment and the redemption rights set forth in Exhibit E to
this Amendment;

 

WHEREAS, Section 3.3(a)(i) of the
Agreement authorizes the General Partner to cause the Partnership to issue
additional interests in the Partnership in one or more classes, or one or more
series of any of such classes, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to those of the Limited Partners,
all as shall be determined by the General Partner in its sole and absolute discretion
and without the approval of any of the Limited Partners;

 

WHEREAS, Section 12.1(b)(iii) of the
Agreement provides that the General Partner has the power, without the consent
of the Limited Partners of the Partnership, to amend the Agreement as may be
required to facilitate or implement setting forth the designations, rights,
powers, duties, and preferences of the holders of any additional interests in
the Partnership issued pursuant to Section 3.3;

 

WHEREAS, the General Partner has made the determination
pursuant to Section 12.1(b)(iii) of the Agreement that consent of
the Limited Partners of the Partnership is not required with respect to the
matters set forth in this Amendment; and

 

WHEREAS, all things necessary to make this Amendment
a valid agreement of the Partnership have been done;

 

NOW,
THEREFORE, pursuant
to the authority granted to the General Partner under the Agreement, the
Agreement is hereby amended as follows:

 

1.                                       Amendments.

 

(a)                                  In exchange for the contribution of WHLP
Common Units, the Partnership hereby issues to each new Limited Partner
identified under the heading “Common Units” on Exhibit A to this Amendment the
number of Common Units set forth opposite such new Limited Partner’s name.  Each new Limited Partner is hereby admitted
as a Limited Partner in respect of such Common Units, and each such new Limited
Partner agrees to be bound by the provisions of this Agreement, as amended from
time to time.  Without limitation of the
foregoing, each such new Limited Partner is deemed to have made all of the
representations, warranties, acknowledgements, waivers and agreements set forth
in Sections 10.6, 11.1 and 13.11 of the Agreement. The Capital Contribution
made by each such new Limited Partner shall be deemed to be the fair market value
of the contributed WHLP Common Units,
which shall be the Cash Amount (as such term is defined in the 2005 Amended and
Restated WHLP Agreement) that would have been payable if the common units were
redeemed pursuant to Section 8.6 of the 2005 Amended and Restated WHLP
Agreement as of the date of such redemption.

 

(b)                                 Section 2.2 of the Agreement is hereby
amended by inserting the following new Sections 2.2(f) and 2.2(g) to read as
follows:

 

(f)                                    Series N Preferred Units.  In
exchange for the contribution of the WHLP Nonparticipating CPUs, the
Partnership hereby issues to each new Limited Partner identified under the
heading “Series N Preferred Units” on Exhibit A to this Amendment 

 

2

 

the
number of Series N Preferred Units set forth opposite such new Limited Partner’s
name.  Each new Limited Partner is hereby
admitted as a Limited Partner in respect of such Series N Preferred Units, and
each such new Limited Partner agrees to be bound by the provisions of this
Agreement, as amended from time to time. 
Without limitation of the foregoing, each such new Limited Partner is
deemed to have made all of the representations, warranties, acknowledgements,
waivers and agreements set forth in Sections 10.6, 11.1 and 13.11 of the
Agreement.  The Capital Contribution made
by each such new Limited Partner shall be deemed to be the fair market value of
the contributed WHLP Nonparticipating CPUs, which shall be reasonably
determined in good faith by the General Partner.  Series N Preferred Units
shall have the rights, powers and duties set forth in Exhibit B to this
Amendment.

 

(g)                                 Series P Preferred Units.  In
exchange for the contribution of the WHLP Participating CPUs, the Partnership
hereby issues to each new Limited Partner identified under the heading “Series
P Preferred Units” on Exhibit A to this Amendment the number of Series P
Preferred Units set forth opposite such new Limited Partner’s name.  Each new Limited Partner is hereby admitted
as a Limited Partner in respect of such Series P Preferred Units, and each such
new Limited Partner agrees to be bound by the provisions of this Agreement, as
amended from time to time.  Without
limitation of the foregoing, each such new Limited Partner is deemed to have
made all of the representations, warranties, acknowledgements, waivers and
agreements set forth in Sections 10.6, 11.1 and 13.11 of the Agreement.  The Capital Contribution made by each such
new Limited Partner shall be deemed to be the fair market value of the contributed
WHLP Participating CPUs, which shall be reasonably determined in good faith by
the General Partner.  Series P Preferred Units shall have the
rights, powers and duties set forth in Exhibit C to this Amendment.

 

(c)                                  Section 4.1 of the Agreement is hereby
amended to read as follows:

 

4.1  Distribution of Net Cash Flow.  The
General Partner shall cause the Partnership to distribute all or a portion of
Net Cash Flow to the Partners from time to time as determined by the General
Partner, but in any event not less frequently than quarterly, in such amounts
as the General Partner shall determine. 
Notwithstanding the foregoing, the General Partner shall use its
reasonable efforts to cause the Partnership to distribute sufficient amounts to
enable the General Partner to pay shareholder dividends that will
(a) satisfy the requirements for qualifying as a REIT under the Code and
Regulations (“REIT Requirements”), and
(b) avoid any federal income or excise tax liability of the General
Partner.  All amounts withheld pursuant
to the Code or a provision of any state or local tax law with respect to any
allocation, payment or distribution to the General Partner or any Limited
Partner shall be treated as amounts distributed to such Partner.  Upon the receipt by the General Partner of
each Exercise Notice, Series D Exercise Notice, Series N Exercise Notice,
Series P Exercise Notice, or Special Exercise Notice pursuant to which one or
more Redemption Partners, Series D Redemption Partners, Series N Redemption
Partners, or Series P Redemption Partners exercise Redemption Rights in
accordance with the provisions of Article IX and the Redemption
Rights Exhibit, the Series D Redemption Rights Exhibit, the Series N Redemption
Rights Exhibit, the Series P Redemption Rights Exhibit, or Special Redemption
Rights in 

 

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accordance
with the provisions of Article IX and the Special Redemption Rights
Exhibit, the General Partner shall, unless the General Partner has elected to
issue only Shares to such Redemption Partners in respect of the Purchase Price
of the Offered Interests, Series D Preferred Shares to such Series D Redemption
Partners in respect of the Series D Purchase Price of the Series D Offered
Interests, Shares to such Series N Redemption Partners in respect of (x) the
Series N Purchase Price of the Series N Offered Interests or (y) the Special
Purchase Price of the Special Offered Interests, or Shares to such Series P
Redemption Partners in respect of the Series P Purchase Price of the Series P
Offered Interests, cause the Partnership to distribute to the Partners, pro
rata in accordance with their respective distribution rights as of the
date of delivery of such Exercise Notice, Series D Exercise Notice, Series N
Exercise Notice, Series P Exercise Notice, or Special Exercise Notice, all (or
such lesser portion as the General Partner shall reasonably determine to be
prudent under the circumstances) of Net Cash Flow, which distribution shall be
made prior to the closing of the redemption or purchase and sale of the Offered
Interests, Series D Offered Interests, Series N Offered Interests, Series P
Offered Interests, or Special Offered Interests specified in such Exercise
Notice, Series D Exercise Notice, Series N Exercise Notice, Series P Exercise
Notice, or Special Exercise Notice. 
Subject to any restrictions or limitations imposed by any provisions of
any agreement with respect to indebtedness or Section 17-607 of the Act,
distributions shall be made in accordance with the following order of priority:

 

(a)                                  First, to the General Partner, with respect
to the Series A Preferred Units and Series B Preferred Units, and to the
holders of the Series D Preferred Units, the Series N Preferred Units, and the
Series P Preferred Units, pro  rata, in an amount equal to the
cumulative and unpaid Series A Preferred Return on such Series A Preferred
Units, the cumulative and unpaid Series B Preferred Return on such Series B
Preferred Units, the cumulative and unpaid Series D Preferred Return on such
Series D Preferred Units, the cumulative and unpaid Series N Preferred Return
on such Series N Preferred Units, and the cumulative and unpaid Series P
Preferred Return on such Series P Preferred Units in such a way as to allow the
General Partner to pay cumulative preferential dividends and any additional
amounts required on the Series A Preferred Shares, the Series B Preferred
Shares, the Series D Preferred Units, any outstanding Series D Preferred
Shares, the Series N Preferred Units, and the Series P Preferred Units,
respectively, payable to the holders thereof; and

 

(b)                                 Then, to the Partners holding Common Units, pro
rata in accordance with such Partners’ then Percentage Interests.

 

(d)                                 Subsections (a), (b) and (c) of Section 9.1
of the Agreement are hereby amended to read as follows:

 

(a)                                  The Partnership does hereby grant to each
Redemption Partner and each Redemption Partner does hereby accept the rights (“Redemption
Rights”), but without obligation to the Redemption Partner, to require the
Partnership to redeem from time to time part or all of its Partnership Interest
for the Purchase Price set forth in the Redemption Rights Exhibit or, in the
case of Series D Preferred Units, for the Series D Purchase Price set forth in
the Series D Redemption Rights Exhibit; in the case of Series 

 

4

 

N Preferred Units, for the Series N Purchase Price
set forth in the Series N Redemption Rights Exhibit; or in the case of Series P
Preferred Units, for the Series P Purchase Price set forth in the Series P
Redemption Rights Exhibit.

 

(b)                                 Notwithstanding the provisions of Section 9.1(a),
the General Partner may, in its sole and absolute discretion, assume directly
the obligation with respect to and satisfy the Redemption Partner’s exercise of
a Redemption Right by paying to the Redemption Partner, at the General Partner’s
election, either the Cash Purchase Price or the Share Purchase Price; the
Series D Cash Purchase Price or the Series D Share Purchase Price; the Series N
Cash Purchase Price or the Series N Share Purchase Price; or the Series P Cash
Purchase Price or the Series P Share Purchase Price, as applicable; provided,
however, that notwithstanding the foregoing the General Partner may not elect
to pay the Share Purchase Price, the Series D Share Purchase Price, the Series
N Share Purchase Price, or the Series P Share Purchase Price in respect of a
Redemption Right to the extent that the issuance of Shares or Series D
Preferred Shares would cause a violation of the REIT Requirements.  If the General Partner assumes such
obligations with respect to an exercise of a Redemption Right, then the
Partnership shall have no obligation to pay any amount to the Redemption
Partner with respect to such Redemption Partner’s exercise of the Redemption
Right, and any Partnership Units redeemed shall be owned by the General Partner
for all purposes.

 

(c)                                  Such Redemption Rights shall be exercisable,
in whole or in part, at any time or from time to time, on the terms and subject
to the conditions and restrictions contained in the Redemption Rights Exhibit,
the Series D Redemption Rights Exhibit, the Series N Redemption Rights Exhibit,
or the Series P Redemption Rights Exhibit, as applicable, upon delivery to the
General Partner of an Exercise Notice in the form of Schedule 1
attached to the Redemption Rights Exhibit, a Series D Exercise Notice in the
form of Schedule 1 attached to the Series D Redemption Rights
Exhibit, a Series N Exercise Notice in the form of Schedule 1
attached to the Series N Redemption Rights Exhibit, or a Series P Exercise
Notice in the form of Schedule 1 attached to the Series P
Redemption Rights Exhibit, which notice shall specify the portion of the
Redemption Partner’s Partnership Interest to be redeemed.  Once delivered, any such Exercise Notice,
Series D Exercise Notice, Series N Exercise Notice, or Series P Exercise Notice
shall be irrevocable, subject to payment of the applicable Purchase Price,
Series D Purchase Price, Series N Purchase Price, or Series P Purchase Price in
respect of such Partnership Interest in accordance with the terms hereof.

 

(e)                                  Subsections (f), (g) and (h) are hereby added
to Section 9.1 of the Agreement to read as follows:

 

(f)                                    The Partnership does hereby grant to each
holder of Series N Preferred Units (other than (i) the general partner of WHLP,
(ii) the Company, (iii) any Affiliates of (i) or (ii), and (iv) any Parent
Transferee (as such term is defined in the 2005 Amended and Restated WHLP
Agreement) (each, a “Special Redemption Partner”) and each Special Redemption
Partner does hereby accept the rights (“Special Redemption Rights”), but
without obligation to the Special Redemption Partner, to require the
Partnership to redeem from time to time part or all of its Series N Preferred
Units for the 

 

5

 

Special
Cash Purchase Price or the Special Unit Purchase Price, at the Partnership’s
election, set forth in the Special Redemption Rights Exhibit and subject to the
limitations specified therein.

 

(g)                                 Notwithstanding the provisions of Section 9.1(f),
the General Partner may, in its sole and absolute discretion, assume directly
the obligation with respect to and satisfy the Special Redemption Partner’s
exercise of a Special Redemption Right by paying to the Special Redemption
Partner, at the General Partner’s sole election, either the Special Cash
Purchase Price or the Special Share Purchase Price; provided, however, that
notwithstanding the foregoing the General Partner may not elect to pay the Special
Share Purchase Price in respect of a Special Redemption Right to the extent
that the issuance of Shares would cause a violation of the ownership
limitations in the General Partner’s Organizational Documents or cause the
General Partner to no longer be in compliance with the REIT Requirements.  If the General Partner assumes such
obligations with respect to an exercise of a Special Redemption Right, then the
Partnership shall have no obligation to pay any amount to the Special
Redemption Partner with respect to such Special Redemption Partner’s exercise
of the Special Redemption Right, and any Partnership Units redeemed shall be
owned by the General Partner for all purposes.

 

(h)                                 Such Special Redemption Rights shall be
exercisable, in whole or in part, at any time or from time to time, on the
terms and subject to the conditions and restrictions contained in the Special
Redemption Rights Exhibit upon delivery to the General Partner of a Special
Exercise Notice in the form of Schedule 1 attached to the Special
Redemption Rights Exhibit, which notice shall specify the portion of the
Special Redemption Partner’s Series N Preferred Units to be redeemed.  Once delivered, any such Special Exercise
Notice shall be irrevocable, subject to payment of the applicable Special
Purchase Price in respect of such Series N Preferred Units in accordance with
the terms hereof.

 

(f)                                    Section 9.3 of the Agreement is hereby
added to read as follows:

 

9.3  Forced Conversion Right. 
During the Conversion Window, the Partnership shall have the right (the “Series
N Forced Conversion”) to require holders of the Series N Preferred Units to
convert on thirty (30) days notice, all but not less than all, of the Series N
Preferred Units held by each such holder for that number of Common Units that,
as of the last Business Day before such notice is issued, would be redeemable
under Article IX hereof for cash equal to $82.3548 (as adjusted in
accordance with the principles of Section 8.9.G of the 2005 Amended and
Restated WHLP Agreement) per Series N Preferred Unit to be converted by such
holder.  It is understood and agreed that
the exercise and implementation of the Series N Forced Conversion will be
structured, to the extent possible, to avoid triggering the recognition of
taxable gain.

 

The notice to be provided by the Partnership in
order to exercise the Series N Forced Conversion shall be in writing in the
form attached hereto as Exhibit G and shall specify (a) the effective date of
the Series N Forced Conversion, (b) the number of Common Units into which each
Series N Preferred Unit will be converted into pursuant to the 

 

6

 

Series N Forced Conversion, (c) the number of Common
Units into which each Series N Preferred Unit would convert pursuant to the
conversion right in Section 7 of the Series N Redemption Rights Exhibit,
and (d) a statement that the holders of Series N Preferred Units may, in lieu
of having such Units converted pursuant to the Series N Forced Conversion,
exercise their rights to convert such Units pursuant to Section 7 of the
Series N Redemption Rights Exhibit by written notice to the General Partner at
the principal offices of the Partnership prior to the effective date of the
Series N Forced Conversion.

 

(g)                                 The definition of the term “Common Unit”
contained in the Glossary of Defined Terms of the Agreement is hereby amended
to read as follows:

 

“Common Unit” shall mean
Partnership Interests other than Preferred Units, Series A Preferred Units,
Series B Preferred Units, Series D Preferred Units, Series N Preferred Units
and Series P Preferred Units.

 

(h)                                 The definition of the term “Partnership
Interest” contained in the Glossary of Defined Terms of the Agreement is hereby
amended to read as follows:

 

“Partnership Interest” shall mean an ownership interest of a
Partner in the Partnership from time to time, including, as applicable, such
Partner’s Common Units, Preferred Units, Series A Preferred Units, Series B
Preferred Units, Series D Preferred Units, Series N Preferred Units, Series P
Preferred Units and Percentage Interest and such Partner’s Capital Account, and
any and all other benefits to which the holder of such Partnership Interest may
be entitled as provided in this Agreement, together with all obligations of
such Person to comply with the terms of this Agreement.

 

(i)                                     The definition of the term “Partnership Unit”
contained in the Glossary of Defined Terms of the Agreement is hereby amended
to read as follows:

 

“Partnership Unit” shall mean a Common Unit, Preferred Unit,
Series A Preferred Unit, Series B Preferred Unit, Series D Preferred Unit,
Series N Preferred Unit, or Series P Preferred Unit and shall constitute a
fractional, undivided share of the Partnership Interests corresponding to that
particular class of Units.

 

(j)                                     The Glossary of Defined Terms of the
Agreement is hereby amended to include the following definitions:

 

“2005 Amended and Restated
WHLP Agreement” shall mean that 2005 Amended and Restated Agreement
of Limited Partnership of [New Name, L.P.], dated as of [March 31, 2005],
by and among [New Name Properties, Inc.], formerly known as Wilmorite
Properties, Inc., a Delaware corporation, as the general partner of [New Name,
L.P.], formerly known as Wilmorite Holdings, L.P., a Delaware limited
partnership, and persons who have executed such agreement as limited partners
and whose names and addresses are set forth on an exhibit thereto.

 

“Conversion Window”
shall mean the thirty (30) day period following the seventh (7th)
anniversary of the effective date of the 2005 Amended and Restated WHLP
Agreement.

 

7

 

“Series N Cash
Purchase Price” is defined in the Series N Redemption Rights
Exhibit.

 

“Series N Computation Date”
is defined in the Series N Redemption Rights Exhibit.

 

“Series N
Conversion Factor” is defined in the Series N Redemption Rights
Exhibit.

 

“Series N Conversion Notice”
is defined in Exhibit B to this [Tenth] Amendment to this Agreement.

 

“Series N Conversion Ratio”
is defined in Exhibit B to this [Tenth] Amendment to this Agreement.

 

“Series N Election Notice” is defined in the Series N Redemption Rights Exhibit.

 

“Series N Exercise
Notice” is defined in the Series N Redemption Rights
Exhibit.

 

“Series N Exercising Partner” is defined in the Series N Redemption
Rights Exhibit.

 

“Series N Forced Conversion” is defined in Section 9.3
of this [Tenth] Amendment to this Agreement.

 

“Series N Offered Interests” is
defined in the Series N Redemption Rights Exhibit.

 

“Series N Preferred Return” is defined in Exhibit
B to this [Tenth] Amendment to this Agreement.

 

“Series N Preferred Units” shall mean the
Partnership Units issued pursuant to Section 2.2(f) of this
Agreement, the terms of which are set forth in Exhibit B to this [Tenth]
Amendment to this Agreement.

 

“Series N Prorated Amount” is defined in
Exhibit B to this [Tenth] Amendment to this Agreement.

 

“Series N Purchase Price” is defined in the
Series N Redemption Rights Exhibit.

 

“Series N Redemption Partner” means a Limited Partner other than the Company
holding Series N Preferred Units.

 

“Series N
Redemption Rights Exhibit” shall mean Exhibit D to this [Tenth]
Amendment to this Agreement.

 

“Series N Share
Purchase Price”
is defined in the Series N Redemption Rights Exhibit.

 

“Series P Cash
Purchase Price” is defined in the Series P Redemption Rights
Exhibit.

 

“Series P Computation Date”
is defined in the Series P Redemption Rights Exhibit.

 

“Series P
Conversion Factor” is defined in the Series P Redemption Rights
Exhibit.

 

8

 

“Series P Conversion Notice”
is defined in Exhibit C to this [Tenth] Amendment to this Agreement.

 

“Series P Conversion Ratio”
is defined in Exhibit C to this [Tenth] Amendment to this Agreement.

 

“Series P Election Notice” is defined in the Series P Redemption Rights Exhibit.

 

“Series P Exercise Notice” is defined in the Series P Redemption Rights Exhibit.

 

“Series P Exercising Partner” is defined in the Series P
Redemption Rights Exhibit.

 

“Series P Offered Interests” is
defined in the Series P Redemption Rights Exhibit.

 

“Series P Preferred Return” is defined in
Exhibit C to this [Tenth] Amendment to this Agreement.

 

“Series P Preferred Units” shall mean the
Partnership Units issued pursuant to Section 2.2(g) of this
Agreement, the terms of which are set forth in Exhibit C to this [Tenth]
Amendment to this Agreement.

 

“Series P Prorated Amount” is defined in
Exhibit C to this [Tenth] Amendment to this Agreement.

 

“Series P Purchase Price” is defined in the
Series P Redemption Rights Exhibit.

 

“Series P Redemption Partner” means a Limited Partner other than the
Company holding Series P Preferred Units.

 

“Series P
Redemption Rights Exhibit” shall mean Exhibit E to this [Tenth]
Amendment to this Agreement.

 

“Series P Share
Purchase Price”
is defined in the Series P Redemption Rights Exhibit.

 

“Special Cash
Purchase Price” is defined in the Special Redemption Rights
Exhibit.

 

“Special
Computation Date” is defined in the Special Redemption Rights
Exhibit.

 

“Special Election
Notice” is defined in the Special Redemption Rights
Exhibit.

 

“Special Exercise
Notice” is defined in the Special Redemption Rights
Exhibit.

 

“Special Exercising Partner” is defined in the Special
Redemption Rights Exhibit.

 

“Special Offered Interests” is
defined in the Special Redemption Rights Exhibit.

 

“Special Purchase Price” is defined in the
Special Redemption Rights Exhibit.

 

“Special Redemption Partner”
is defined in Section 9.1(f) of this [Tenth] Amendment 

 

9

 

to this Agreement.

 

“Special Redemption Rights”
is defined in Section 9.1(f) of this [Tenth] Amendment to this Agreement.

 

“Special
Redemption Rights Exhibit” shall mean Exhibit F to this [Tenth]
Amendment to this Agreement.

 

“Special Share
Purchase Price”
is defined in the Special Redemption Rights Exhibit.

 

“Special Unit Purchase Price” is defined in the Special
Redemption Rights Exhibit.

 

“Total Special Redemption” is defined in the Special
Redemption Rights Exhibit.

 

“WHLP” shall mean [New Name, L.P.], formerly known as
Wilmorite Holdings, L.P., a Delaware limited partnership.

 

“WHLP Contribution Date” shall mean any date on which a call
or put right has been exercised pursuant to Section 8.10 of the 2005
Amended and Restated WHLP Agreement.

 

“WHLP Nonparticipating CPU” shall mean a Class A Preferred
Unit in WHLP for which a Participating Election Right (as defined in the 2005
Amended and Restated WHLP Agreement) is not available.

 

“WHLP Participating CPU” shall mean a Class A Preferred Unit
in WHLP for which a Participating Election Right (as defined in the 2005
Amended and Restated WHLP Agreement) is available.

 

(k)                                  Sections 2.1 and 2.2 of Exhibit A to the
Agreement (Allocations Exhibit) are hereby amended to read as follows:

 

2.1                                 Net Income. 
After giving effect to the special allocations set forth in Article 3
of this Allocations Exhibit, Net Income for any fiscal year or other applicable
period shall be allocated in the following order and priority:

 

(a)                                  First, to the Partners, until the cumulative
Net Income allocated pursuant to this subparagraph 2.1(a) for the current and
all prior periods equals the cumulative Net Loss allocated pursuant to
subparagraphs 2.2(d) and (e) hereof for all prior periods, which allocation
shall be made among such Partners in the reverse order that such Net Loss was
allocated to them (and, in the event of a shift of a Partner’s interest in the
Partnership, to the Partners in a manner that most equitably reflects the
successors in interest of such Partners);

 

(b)                                 Second, to the General Partner in respect of
its Preferred Units, until the cumulative Net Income allocated pursuant to this
subparagraph 2.1(b) for the current and all prior periods equals the cumulative
Net Loss allocated in respect of such Preferred Units pursuant to Subparagraph
2.2(c) hereof for all prior periods;

 

10

 

(c)                                  Third, to the General Partner in respect of
its Preferred Units, until the cumulative Net Income allocated pursuant to this
subparagraph 2.1(c) for the current and all prior periods equals the cumulative
Preferred Return, if any, on the Preferred Units;

 

(d)                                 Fourth, to the General Partner in respect of
its Series A Preferred Units and Series B Preferred Units, and the holders of
the Series D Preferred Units, the Series N Preferred Units, and the Series P
Preferred Units, pro rata to such units, until the cumulative Net Income
allocated pursuant to this subparagraph 2.1(d) for the current and all prior
periods equals the cumulative Net Loss allocated pursuant to Subparagraph
2.2(b) hereof for all prior periods;

 

(e)                                  Fifth, to the General Partner in respect of
its Series A Preferred Units and Series B Preferred Units, and to the holders
of the Series D Preferred Units, the Series N Preferred Units, and the Series P
Preferred Units, pro rata to such units, until the cumulative Net Income
allocated pursuant to this subparagraph 2.1(e) equals the cumulative Series A
Preferred Return on the Series A Preferred Units, the cumulative Series B
Preferred Return on the Series B Preferred Units, the cumulative Series D
Preferred Return on the Series D Preferred Units, the cumulative Series N
Preferred Return on the Series N Preferred Units, and the cumulative Series P
Preferred Return on the Series P Preferred Units, respectively; and

 

(f)                                    Thereafter, the balance of the Net Income, if
any, shall be allocated to the Partners holding Common Units in accordance with
their respective Percentage Interests.

 

2.2                                 Net Loss. 
After giving effect to the special allocations set forth in Article 3
of this Allocations Exhibit, Net Loss of the Partnership for each fiscal year
or other applicable period shall be allocated as follows:

 

(a)                                  To the Partners holding Common Units in
accordance with their respective Common Units until the Sub-Capital Accounts
attributable to such Common Units are all reduced to zero (determined after all
capital contributions, distributions, and special allocations under Article III
of this Allocations Exhibit allocable to the Partner for the Fiscal Year have
been reflected in the Partner’s Sub-Capital Account);

 

(b)                                 Second, to the General Partner in respect of
its Series A Preferred Units and Series B Preferred Units, and to the holders
of the Series D Preferred Units, the Series N Preferred Units, and the Series P
Preferred Units in respect to their Series D Preferred Units, Series N
Preferred Units, and Series P Preferred Units, pro rata to such units, until
their Sub-Capital Accounts attributable to such units are reduced to zero;

 

(c)                                  Third, to the General Partner in respect of
its Preferred Units, until its Sub-Capital Account attributable to such
Preferred Units, if any, is reduced to zero;

 

(d)                                 Thereafter, to the Partners holding Common
Units in accordance with their respective Percentage Interests; and

 

11

 

(e)                                  Notwithstanding the preceding provisions of
this Section 2.2, to the extent any Net Losses allocated to a Partner
under this Section 2.2 would cause such Partner (hereinafter, a “Restricted Partner”) to have an Adjusted
Capital Account Deficit at the end of the fiscal year to which such Losses
related, such Losses shall not be allocated to such Restricted Partners and
instead shall be allocated to the other Partner(s) (herein, the “Permitted Partners”) pro rata in accordance
with this Section 2.2 (ignoring for this purpose such Restricted
Partners).

 

2.                                       Lock-up Period.  Each new Limited Partner executing this
Amendment agrees not to exercise any Redemption Rights with respect to any
Common Units, Series N Preferred Units, or Series P Preferred Units under Article IX
of the Agreement (as amended by this Amendment) prior to the first anniversary
of the applicable WHLP Contribution Date for such Units (the “Lock-up Period”);
provided that, after the death of any such Limited Partner, the fiduciary or
other authorized representative of such Limited Partner’s estate shall be
entitled to deliver a Series N Exercise Notice or a Series P Exercise Notice,
as applicable, to the General Partner during the Lock-up Period with respect to
the Redemption Rights of such deceased Limited Partner.  For the sake of clarity, the Lock-up Period
shall not prevent the exercise of the Series N Forced Conversion Right or the
Special Redemption Rights.

 

3.                                       Defined Terms and Recitals.  As
used in this Amendment, capitalized terms used and defined in this Amendment
shall have the meaning assigned to them in this Amendment, and capitalized
terms used in this Amendment but not defined herein, shall have the meaning
assigned to them in the Agreement.

 

4.                                       Ratification and Confirmation. 
Except to the extent specifically amended by this Amendment, the terms
and provisions of the Agreement, as previously amended, are hereby ratified and
confirmed.

 

 

[Remainder of this page has been intentionally
left blank.]

 

12

 

IN
WITNESS WHEREOF, the
undersigned has executed this Amendment effective as of the date first above
mentioned.

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  
	
   

  	
  THE MACERICH COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Richard A. Bayer

  
	
   

  	
   

  	
  Executive Vice President,

  
	
   

  	
   

  	
  General Counsel and
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NEW LIMITED PARTNERS:

  

 

13Exhibit 10.3

 

Form of Tax Protection Agreement

 

[Note: this form assumes that the Partnership
continues as a partnership for tax purposes following the “push up” – if this
is not the case, then this form will need to modified appropriately]

 

TAX MATTERS AGREEMENT

 

THIS TAX MATTERS AGREEMENT (“Agreement”), dated as of                 ,
[20   ], is made by and between The Macerich Partnership,
L.P., a Delaware limited partnership (“Parent LP”), and each of the
Wilmorite Limited Partners (as defined below) who will become limited partners
of Parent LP as a result of the Transaction (as defined below).

 

WHEREAS, on
[April]    , 2005, MACW, Inc., a Delaware corporation
owned by Parent LP (“Parent Acquisition, Inc.”) merged with and into
Wilmorite Properties, Inc., a Delaware corporation (the “Company”) and
the general partner of Wilmorite Holdings, L.P., a Delaware limited partnership
(“Holdings L.P.”), with the Company becoming a wholly-owned subsidiary
of Parent LP, as a result of the transaction (the “Merger”);

 

WHEREAS, immediately following the
consummation of the Merger, MACP LP, a Delaware limited partnership, a
subsidiary of Parent LP, merged with and into Holdings L.P (the “Partnership
Merger”), with Holdings L.P., renamed as [New Name, L.P.] (the “Partnership”),
as the surviving entity of the Partnership Merger, in accordance with the terms
of the Agreement and Plan of Merger, dated as of February 25, 2005 (the “Partnership
Merger Agreement”), among Parent LP, MACP LP and Holdings L.P.;

 

WHEREAS, simultaneously with the consummation
of the Partnership Merger, the partnership agreement of Holdings L.P. was
amended and restated (the “2005 Amended and Restated Partnership Agreement”),
the effect of which resulted in, among other things, Parent LP agreeing to certain
undertakings with respect to Taxes as set forth in Article X of such
agreement;

 

WHEREAS, pursuant to Section 8.10 of the
2005 Amended and Restated Partnership Agreement, one or more of the Wilmorite
Limited Partners have contributed part or all of their interests in the
Partnership (the “Contributed Partnership Interests”) to Parent LP so as
to become limited partners of Parent LP (the “Transaction”);

 

WHEREAS, as a result of the Transaction and in
order to give effect thereto, the parties hereto have entered into the [Tenth]
Amendment to Parent LP’s limited partnership agreement (the “[Tenth]
Amendment”); and

 

WHEREAS, as a result of the Transaction and
the [Tenth] Amendment the parties hereto would like to preserve certain of the
undertakings with respect to Taxes set forth in Article X of the 2005
Amended and Restated Partnership Agreement.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties agree as
follows:

 

 

1.                                       Definitions.  All capitalized terms used and not otherwise
defined in this Agreement shall have the meaning set forth in the 2005 Amended
and Restated Partnership Agreement.  As
used herein, the following terms have the following meanings:

 

“Applicable Protection
Period” shall mean, with respect to a Tier 1 Protected Asset and the
Protected Contributed Partnership Interests, the Tier 1 Protection Period, and
with respect to a Tier 2 Protected Asset, the Tier 2 Protection Period.

 

“Change in Law”
shall mean (a) the adoption of any law, rule or regulation by any Governmental
Authority after the Effective Date, or (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the Effective Date.

 

“Governmental
Authority” shall mean the United States or any state or other political
subdivision thereof, any court or any other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

 

“Protected Assets”
shall mean the Tier 1 Protected Assets, the Tier 2 Protected Assets and the
Contributed Partnership Interests.

 

“Protected Contributed
Partnership Interests” shall mean Contributed Partnership Interests.

 

“Protected Parties”
shall mean (i) each Wilmorite Limited Partner, (ii) each direct or indirect
owner of a Wilmorite Limited Partner that is required to include in its taxable
income any portion of the income or gains of Parent LP on a current basis (a “Flow
Through Owner”), and (iii) each Person who acquires an interest in Parent
LP from a Wilmorite Limited Partner or Flow Through Owner in a transaction in
which such Person’s adjusted basis in such interest for federal income tax
purposes is determined in whole or in part by reference either to such Person’s
basis in other property or the Wilmorite Limited Partner’s or Flow Through
Owner’s basis in such interest, in each case other than the Company, Parent or
any of their respective Subsidiaries or Affiliates or any Parent Transferee,
provided that such Wilmorite Limited Partner or Person acquiring an interest in
Parent LP from a Wilmorite Limited Partner has executed this Agreement and the
[Tenth] Amendment.  For the avoidance of
doubt, (x) a person who acquires direct or indirect interests in Parent LP as a
result of the death of a Protected Party shall not be considered a Protected
Party with respect to such direct or indirect interests in Parent LP if such
person received a stepped-up basis, for federal income tax purposes, in such
direct or indirect interests in Parent LP, and (y) upon the complete redemption
of direct or indirect interests in Parent LP from any Protected Party, such
person or entity holding such direct or indirect interests in Parent LP shall
cease to be a Protected Party, except with respect to any breaches occurring
prior to the date of such complete redemption (regardless of when such breach
is actually discovered or claimed).

 

“Tier 1 Protected
Assets” shall mean those assets of the Partnership set forth on Schedule 10.7
to the 2005 Amended and Restated Partnership Agreement under the heading “Tier
1 Protected Assets,” as updated through the date hereof to give effect to
events and 

 

2

 

transactions
occurring under the 2005 Amended and Restated Partnership Agreement, and any
assets which become Tier 1 Protected Assets pursuant to Section 2(a)
hereof.

 

“Tier 2 Protected
Assets” shall mean those assets of the Partnership set forth on Schedule 10.7
to the 2005 Amended and Restated Partnership Agreement under the heading “Tier
2 Protected Assets,” as updated through the date hereof to give effect to
events and transactions occurring under the 2005 Amended and Restated
Partnership Agreement, and any assets which become Tier 2 Protected Assets
pursuant to Section 2(a) hereof.

 

“Wilmorite Limited
Partners” shall mean the persons whose names are set forth on Schedule 10.7
to the 2005 Amended and Restated Partnership Agreement under the heading “Wilmorite
Limited Partners,” as updated through the date hereof to give effect to events
and transactions occurring under the 2005 Amended and Restated Partnership
Agreement.

 

2.                                       Lock Out.

 

(a)                                  Except
as expressly permitted by this Section 2, neither the Partnership, Parent
LP nor any entity in which the Partnership or Parent LP holds a direct or
indirect interest shall, directly or indirectly, sell, transfer or otherwise
actually or constructively dispose of or permit the actual or deemed
disposition (in each case, a “Disposition”) (i) of any of the Tier 1
Protected Assets, or any direct or indirect interest therein, prior to the 20th
anniversary of the Effective Date (the “Tier 1 Protection Period”), (ii)
of any of the Tier 2 Protected Assets, or any direct or indirect interest
therein, prior to the 10th anniversary of the Effective Date (the “Tier
2 Protection Period”) or (iii) of any of the Protected Contributed
Partnership Interests, or any direct or indirect interest therein, during the
Tier 1 Protection Period. 
Notwithstanding the foregoing, the Partnership or Parent LP (or other
entity referred to in the preceding sentence) shall have the right, during the
Applicable Protection Period: (i) to consummate any Disposition of all or any
portion of any Protected Asset in a transaction with respect to which no income
or gain would be required to be recognized by any Protected Party under the
Code and any applicable state or local tax law (a “Tax-Deferred Exchange”),
[(ii) to consummate any Disposition of the Rochester Interests pursuant to an
exercise of the Participating Election Right or the Partnership Call Right](1)
or (iii) except with respect to the Partnership’s direct or indirect interests
in Tysons Corner Center and Tysons Corner Office Building, to consummate any
Disposition pursuant to the exercise, by a Person other than the Partnership or
its Affiliates and in the absence of any action by the Partnership or its
Affiliates giving rise to such Person’s right to exercise, of their rights
under any buy-sell agreement, call option or similar contractual arrangement to
which such assets are subject as of the Effective Date, provided that the
General Partner uses good faith efforts to structure any such Disposition as a
tax-free like-kind exchange under Code Section 1031 or (iv) to convert any
Preferred Units (that have become Contributed Partnership Interests) into
Common Units pursuant to the 2005 Amended and Restated Partnership
Agreement.  In situations where the
Partnership or Parent LP engages in a wholly or partially Tax-Deferred Exchange
involving a Protected Asset, the property (or as applicable, the portion
thereof) received on a tax-deferred basis in exchange for such Protected Asset
shall be treated as a Tier 1 

 

(1) Bracketed language to be deleted if this Agreement is entered into after
the Participating Election Right and the Partnership Call Right have expired.

 

3

 

Protected Asset, a Tier 2
Protected Asset or a Protected Contributed Partnership Interest, as applicable,
for all purposes under this Agreement.

 

(b)                                 If
the Partnership or Parent LP contributes or otherwise transfers any Protected
Asset directly or indirectly to any partnership or other entity in which the
Partnership or Parent LP holds or will hold a direct or indirect interest, then
as a condition to such contribution or transfer the Partnership or Parent LP
shall require that the transferee grant the Partnership or Parent LP, as
applicable, rights with respect to such Protected Asset substantially similar
to those contained in Sections 2 to 5 and Section 7 hereof.

 

3.                                       Debt Allocations and Related Matters.

 

Parent LP shall, at all
times during the Tier 1 Protection Period, maintain nonrecourse indebtedness
(including for the avoidance of doubt Parent LP’s share of nonrecourse
indebtedness from any other entity, including without limitation the
Partnership) which qualifies as “qualified nonrecourse financing” within
the meaning of Section 465(b)(6)(B) of the Code that is properly allocable
to each Wilmorite Limited Partner pursuant to Section 752 of the Code and
the Regulations thereunder in an amount at least equal to 120% of the amount of
income and gain that as of the Effective Date would have been required to be
recognized by such Wilmorite Limited Partner pursuant to Section 731(a)(1)
of the Code (including by reason of Section 752(b) of the Code) if no
Partnership nonrecourse liabilities had been properly allocable to such
Wilmorite Limited Partner (the “Required Nonrecourse Debt Amount”),
which Required Nonrecourse Debt Amount shall be 120% of the amount set forth on
Schedule 10.9 to the 2005 Amended and Restated Partnership
Agreement.  Schedule 10.9 to
the 2005 Amended and Restated Partnership Agreement was initially prepared based
on estimates as of December 31, 2004 provided by the Wilmorite Limited
Partners, but was updated promptly by the General Partner based on actual data
as of the Effective Date as such information became available.  Notwithstanding the foregoing, if the General
Partner determined that the aggregate amount that should have been set forth on
Schedule 10.9 (determined as of December 31, 2004) was greater
than 110% of the aggregate estimate amount as of December 31, 2004
provided by the Wilmorite Limited Partners on Schedule 10.9, then the
Required Nonrecourse Debt Amount shall be an aggregate amount equal to 120% of
110% of the amount set forth on the estimated Schedule 10.9, as
adjusted for operations of the Partnership from December 31, 2004 through
the Effective Date (with the amount set forth with respect to each Wilmorite
Limited Partner reduced proportionately). 
In the event that a Wilmorite Limited Partner transfers some, but not
all, of its interests in the Partnership in connection with the Transaction,
then the Required Nonrecourse Debt Amount immediately after the Transaction
shall (i) be equal to (in the case of the first Transaction) and (ii) be
increased by (in the case of subsequent Transactions), that portion of the
total Required Nonrecourse Debt Amount immediately prior to the Transaction
with respect to such Wilmorite Limited Partner as bears the same ratio to the
ratio that the Wilmorite Limited Partner’s adjusted tax basis in its
Contributed Partnership Interests contributed in the applicable Transaction
(for purposes of determining its initial tax basis in the interests in Parent
LP received in the applicable Transaction) bears to such Wilmorite Limited
Partner’s aggregate adjusted tax basis in all of its interests in the
Partnership immediately prior to the applicable Transaction, including its
Contributed Partnership Interests and any interests in the Partnership not
being contributed in the applicable Transaction.  Notwithstanding the foregoing, the total
Required Nonrecourse Debt Amount to be so allocated hereunder and under the
2005 Amended and 

 

4

 

Restated
Partnership Agreement shall not exceed the total Required Nonrecourse Debt
Amount in effect immediately prior to any such Transaction.  For purposes of this Agreement, a “Wilmorite
Limited Partner” shall include each Person who acquires an interest in
Parent LP from a Wilmorite Limited Partner in a transaction in which such
Person’s adjusted basis in such interest for federal income tax purposes is
determined in whole or in part by reference either to such Person’s basis in
other property or the Wilmorite Limited Partner’s basis in such interest, in
each case other than Parent or any Affiliate of Parent or any Parent
Transferee, provided that such transferee has executed this Agreement and the
[Tenth] Amendment.  Notwithstanding the
foregoing, (x) a Wilmorite Limited Partner who acquires direct or indirect
interests in Parent LP as a result of the death of a Wilmorite Limited Partner
shall not be considered a Wilmorite Limited Partner with respect to such
interests if such Person received a stepped-up basis, for federal income tax
purposes, in such interests, and (y) upon the complete redemption of direct or
indirect interests in Parent LP from any Protected Party, such Person holding
such interests shall cease to be a Wilmorite Limited Partner, except with
respect to any breaches occurring prior to the date of such complete redemption
(regardless of when such breach is actually discovered or claimed).

 

4.                                       Periods after the Protection Period.

 

(a)                                  Parent
LP shall, at all times after the Tier 1 Protection Period, make available to
each Wilmorite Limited Partner the opportunity (a “Guarantee Opportunity”)
to make a “bottom guarantee” of indebtedness (including indebtedness of
the Partnership) pursuant to the procedures and conditions as are specified in Section 7.5
of the limited partnership agreement of Parent LP, a copy of which shall be
provided to any Wilmorite Limited Partner upon such partner’s request.

 

(b)                                 To
the extent permitted by Regulations Section 1.752-3(a)(3), with respect to
each Wilmorite Limited Partner, Parent LP shall allocate and Parent LP shall
(to the extent permitted by the applicable partnership agreement) cause any
other entity in which it has a direct or indirect interest to allocate, “excess
nonrecourse liabilities,” as defined in Regulations Section 1.752-3(a)(3),
directly and indirectly to Parent LP and the Wilmorite Limited Partners,
respectively, up to the amount of built-in gain that is allocable to such
partner with respect to Section 704(c) property (as defined under
Regulations Section 1.704-3(a)(3)(ii)) or property for which reverse
704(c) allocations are applicable (as described in Regulations Section 1.704-3(a)(6)(i)),
less amounts previously taken into account under Regulations Sections
1.752-3(a)(1) and 1.752-3(a)(2).

 

(c)                                  Parent
LP acknowledges that the purpose and intent of providing Guarantee
Opportunities to the Wilmorite Limited Partners is to result in the guaranteed
liability being treated as a “recourse” liability as defined in
Regulations Section 1.752-1(a)(1) with respect to the guaranteeing
Wilmorite Limited Partner to the extent of the amount of such guarantee.  Except to the extent required by law or
otherwise determined in a final judicial proceeding in which the affected
Wilmorite Limited Partners have been granted the opportunity to participate,
Parent LP shall file, and shall cause to the extent within its control any
entity in which it directly or indirectly owns an interest to file, tax returns
and reports in a manner consistent with the treatment of any such guaranteed
liability as a recourse liability with respect to the guaranteeing Wilmorite
Limited Partner to the extent of the amount guaranteed.  Notwithstanding the 

 

5

 

foregoing, Parent LP makes no
representation or warranty to any Wilmorite Limited Partner that providing a “bottom
guarantee” shall result in the desired treatment of the liability as a
recourse liability for purposes of Section 752 of the Code.

 

5.                                       Partnership Tax Status of Parent LP.

 

Parent LP shall not elect to be treated as an association taxable as a
corporation for U.S. federal or any applicable state tax purposes, and Parent
LP and the General Partner shall take all actions, and refrain from taking all
actions, as necessary to prevent Parent LP from being treated as an association
or publicly traded partnership taxable as a corporation for U.S. federal or any
applicable state income tax purposes.

 

6.                                       704(c) Allocation Method.

 

Parent LP and each entity
in which Parent LP holds a direct or indirect interest shall, with respect to
each asset comprising the Protected Assets, use the “traditional method”
under Section 704(c) of the Code and the Regulations thereunder with no
curative or remedial allocations.

 

7.                                       Indemnification.

 

(a)                                  If
Parent LP or the Partnership breaches any obligation set forth in Sections 2,
3, 4, 5 or 6 of this Agreement, (a “Recognition Event”), then Parent LP
shall pay to each Protected Party an amount equal to the sum of: (1) the
product of the aggregate income or gain recognized by such Protected Party
solely by reason of such breach, multiplied by the highest combined federal,
state and local income tax rate to which such Protected Party is subject with
respect to income or gain of the type or types recognized; plus (2) the
aggregate federal, state and local income taxes (determined based on the tax
rates and assumptions in (1) above and treating any such payment as ordinary
income) for which such Protected Party becomes liable as a result of the
receipt of the payments required by this Section 7 (including, without
limitation, payments received pursuant to this clause (2), ((1) and (2)
together, the “Gross-Up Amount”). 
In the event of a Recognition Event with respect to any Protected Party,
Parent LP shall use commercially reasonable efforts to promptly notify each
Protected Party in writing of such breach, which requirement may be satisfied
by delivery of notice to each applicable Wilmorite Limited Partner, including
with such notification an estimate of the amount and character of any income or
gain to be recognized by such Protected Party and the Gross-Up Amount with
respect to such Protected Party.  The
payment of the Gross-Up Amount for each Recognition Event shall be made at
least five (5) Business Days prior to the next date upon which estimated U.S.
federal income taxes are required to be paid by individuals;  provided, however, that Parent LP may by
written notice delivered to each Protected Party at least sixteen (16) days in
advance of the date on which such Gross-Up Amount would otherwise be due,
require such Protected Party to certify to Parent LP the amount of the Gross-Up
Amount it intends to apply to U.S. federal, state and any applicable local
estimated tax payments believed in good faith to be owed by such Protected
Party as a result of the Recognition Event (including by reason of 

 

6

 

receipt of the Gross-Up
Amount).  If (1) any such certification
is requested in accordance with the foregoing and not received by Parent LP by
the day prior to the date a Gross-Up Amount would otherwise be due or (2) such
certification shows that such Protected Party’s estimated tax payments believed
in good faith to be owed by such Protected Party as a result of the Recognition
Event (including by reason of receipt of the Gross-Up Amount) will be less than
the Gross-Up Amount, then, as to a failure to provide a certification, Parent
LP need not pay the Gross-Up Amount until March 31st of the
next calendar year, and as to any increase in a Protected Party’s estimated tax
payments, Parent LP shall timely pay such increase in its estimated tax payment
amount to such Protected Party on the date provided above, with any remaining
portion of the Gross-Up Amount to be paid no later than March 31st
of the next calendar year.  For purposes
of this Section 7(a), (i) any amounts giving rise to a payment pursuant to
this Section 7(a) will be determined assuming that the transaction or
event giving rise to Parent LP’s obligation to make a payment was the only
transaction or event reported on the Protected Party’s tax return (i.e.,
without giving effect to any loss carry forwards or other deductions
attributable to such Protected Party) and (ii) subject to any applicable
phase-outs or other then applicable limitations (including, but not limited to
the “alternative minimum tax”), any amounts payable with respect to
state and local income taxes shall be assumed to be deductible for federal
income tax purposes.  Notwithstanding the
foregoing, in the case of a Protected Party that is exempt from tax for federal
income tax purposes, as well as any Protected Party that qualifies either as a
regulated investment company or as a real estate investment trust, such
Protected Party shall not be entitled to indemnification pursuant to this
Agreement, except, in the case of a Protected Party that is exempt from tax
(other than a “qualified organization” within the meaning of Section 514(c)(9)(C)
to the extent such income constitutes debt-financed income or gain from real
property), to the extent that such income or gain constitutes “unrelated
business taxable income” as defined in Section 512 of the Code with
respect to such Protected Party solely by reason of the activities or borrowing
of Parent LP.  For purposes of
determining the Gross-Up Amount in respect of any breach of Section 2
hereof, in no event shall the gain taken into account by a Protected Party with
respect to the Disposition of a Protected Asset (the “Maximum Protected
Amount”) exceed the amount of gain that would have been recognized by or
allocated to such Protected Party (or in the case of a person who is a
Protected Party by reason of clause (iii) of the definition thereof, the
original Protected Party described in clause (i) or (ii) from whom such
Protected Party directly or indirectly acquired its Units) if Parent LP or the
Partnership had sold such Protected Asset in a fully taxable transaction (a) on
the day following the Effective Date in the case of a Tier 1 or Tier 2
Protected Asset, or (b) on the date following the Transaction, in the case of a
Protected Contributed Partnership Interest, in each case for a purchase price
equal to its fair market value at such time, provided that, for purposes of
computing such amount, the aggregate amount of such gain with respect to each
Protected Asset allocated to each Protected Party shall not exceed such
Protected Party’s share of the Code Section 704(c) gain stated with
respect to such Protected Asset (a) in the case of a Tier 1 or Tier 2 Protected
Asset, on Schedule 10.9 of the 2005 Amended and Restated
Partnership Agreement or (b) in the case of a Protected Contributed Partnership
Interest, on Schedule A hereto, (in each case, after subtracting
from such scheduled amount the amount of any gain attributable to such
scheduled amount which was previously recognized by or was otherwise allocable
to a Protected Party with respect to such Protected Asset (a) with respect to a
direct or indirect transfer (including any redemption) of some or all of its
direct or indirect interests in the Partnership or Parent LP to the extent of
any reduction in 704(c) gain with respect to such Protected Party and Protected
Asset as a result of such transfer (or redemption) or (b) to the extent of any
decrease in the difference between the adjusted tax basis, as determined for
federal income tax purposes, and the book value of the Protected Assets pursuant
to Regulation Section 1.704-3).  For
the avoidance of doubt, in the event of any Disposition of a Tier 1 Protected
Asset or Tier 2 Protected Asset with respect to which gain is 

 

7

 

specially allocated under Section 704(c)
of the Code or the Regulations thereunder to the holder of the Contributed
Partnership Interests, then to the extent that such gain is further specially
allocated under Section 704(c) by the holder of the Contributed
Partnership Interests directly or indirectly to a Protected Party and such gain
results in an indemnification payment pursuant to this Agreement, then the
Maximum Protected Amount with respect to such Protected Party’s applicable
Protected Contributed Partnership Interests shall be reduced by the amount of
such gain with respect to which such indemnification payment is made to such
Protected Party.  For the avoidance of
doubt and except in the case of a Transaction pursuant to Section 8.10 of
the 2005 Amended and Restated Partnership Agreement, for purposes of
determining the Gross-Up Amount in no event shall any “new layer” of Code Section 704(c)
built-in gain created on account of the contribution of any properties to or
the distribution of any properties from the Partnership or Parent LP, including
but not limited to through application of Regulations Section 1.704-1(b)(2)(iv)(d),
(e) and (f), be entitled to protection under this Agreement or otherwise.
Notwithstanding anything to the contrary herein, the payment of any Gross-Up
Amount hereunder shall not be required with respect to any Protected
Contributed Partnership Interest for any income or gain arising due to a Change
in Law.  The payment of any Gross-Up
Amount hereunder shall be made without duplication of any such amount paid
pursuant to the terms of the 2005 Amended and Restated Partnership Agreement.

 

(b)                                 Notwithstanding
Section 7(a) hereof, in the event that Tysons Corner Center and/or Tysons
Corner Office Building is sold, transferred or exchanged pursuant to the exercise,
by a Person other than the Partnership or its Affiliates and in the absence of
any action by the Partnership or its Affiliates giving rise to such Person’s
right to exercise, of their rights under any buy-sell agreement or similar
contractual arrangement to which such assets are subject as of the Effective
Date, the aggregate amount payable to the Protected Parties and the Protected
Parties under Section 10.13.B of the 2005 Amended and Restated Partnership
Agreement (the “Other Protected Parties”) as a result of such Disposition shall
not exceed the lesser of (a) the aggregate amount otherwise payable to such
Protected Parties pursuant to Section 7 hereof and such Other Protected
Parties pursuant to Section 10.13.B of the 2005 Amended and Restated Partnership
Agreement and (b) $20 million.  Any
reduction in the aggregate amount payable to the Protected Parties or the Other
Protected Parties by reason of the foregoing limitation shall reduce the amount
payable to each Protected Party and each Other Protected Party in proportion to
the total amount otherwise payable to such Protected Party pursuant to Section 7
hereof and such Other Protected Party pursuant to Section 10.13.B of the
2005 Amended and Restated Partnership Agreement with respect to the disposition
that is subject to this Section 7(b).

 

(c)                                  Notwithstanding
any provision of this Agreement to the contrary, the sole and exclusive rights
and remedies of any Partner or Protected Party for a breach of the obligations
set forth in Sections 2, 3, 4 or 5 hereof shall be a claim for damages against
Parent LP, computed as set forth in Section 7(a), and no Partner or
Protected Party shall be entitled to pursue a claim for specific performance of
the covenants set forth in Section 2, 3, 4 or 5 hereof, or bring a claim
against any person that acquires a Protected Asset, other than as provided in Section 2(b).  Notwithstanding anything to the contrary in
this Agreement, Parent LP shall not be liable for, or obligated to indemnify
any Person with respect to, any claim or cause of action requesting or claiming
special, exemplary, incidental, indirect, punitive, reliance or consequential
damages or losses with respect to any Recognition Event, other than claims for
any reasonable attorney’s, accountant’s or similar fees reasonably incurred in
connection with the determination or 

 

8

 

collection of any damages
incurred as a result of any breach of this Agreement.  Any claim or cause of action requesting or
claiming any such damages is specifically waived and barred, whether or not
such damages were foreseeable or any party was notified of the possibility of
such damages.

 

(d)                                 If
Parent LP or the Partnership has breached an obligation set forth in this
Agreement (or a Protected Party or the Limited Partner Tax Representative
asserts that Parent LP or the Partnership has breached an obligation set forth
in this Agreement), Parent LP and the Limited Partner Tax Representative (or if
the Limited Partner Tax Representative is not a Protected Party claiming or
disputing a Gross-Up Amount owed to it, the Protected Parties claiming or
disputing the Gross-Up Amount) agree to negotiate in good faith to resolve any
disagreements regarding any such alleged breach and the amount of damages, if
any, payable to such Protected Party under Section 7 hereof.  If any such disagreement cannot be resolved
within thirty (30) days after notice to the other party of the alleged breach
or disputed amount, Parent LP and the Limited Partner Tax Representative (or
Protected Party) shall refer the matter to an independent law firm, accounting
firm, valuation firm or other independent arbitrator mutually agreed upon by
them (the “Tax Arbitrator”) to resolve as expeditiously as possible all
points of any such disagreement.  All
determinations made by the Tax Arbitrator with respect to the resolution of any
alleged breach or amount of damages shall be final, conclusive and binding on
Parent LP and the Limited Partner Tax Representative and/or the affected
Protected Parties.  The fees and expenses
of the Tax Arbitrator incurred in connection with any such determination shall
be shared equally by Parent LP and the affected Protected Parties (or in the
case of a dispute not involving a payment pursuant to Section 7 hereof, by
all Wilmorite Limited Partners).  If
Parent LP and the Limited Partner Tax Representative or Protected Parties, as
applicable, each having acted in good faith and with its or his best efforts to
select a Tax Arbitrator, are unable to agree upon and retain a Tax Arbitrator
within sixty (60) days after the thirty (30) day period mentioned above, then
following the expiration of such sixty (60) day period, any disagreement may be
settled in any Delaware Court pursuant to Section 11(i) hereof.

 

8.                                       Limited Partner Tax Representative.

 

The Limited Partner Tax
Representative has been duly appointed as agent and representative of the
Protected Parties and the Wilmorite Limited Partners for the purposes set forth
herein, and the Limited Partner Tax Representative has accepted such
appointment on the terms set forth herein. 
The Limited Partner Tax Representative represents and warrants to Parent
LP that it has the right, power and authority to (i) enter into and perform
this Agreement and to bind all of the Protected Parties and the Wilmorite
Limited Partners for the purposes set forth herein, (ii) give and receive
directions, instructions and notices hereunder, and (iii) make all
determinations that may be required or that it deems appropriate under this
Agreement.  Until notified in writing by
a notice signed by all of the Wilmorite Limited Partners, Parent LP may rely
conclusively and act upon the directions, instructions and notices of the
Limited Partner Tax Representative for the purposes set forth herein and,
thereafter, upon the directions, instructions and notices of any successor
named in a writing executed by all of the Protected Parties and the Wilmorite
Limited Partners.  In addition, the
Protected Parties and the Wilmorite Limited Partners acknowledge that Parent LP
may rely exclusively upon the directions, instructions and notice of the
Limited Partner Tax Representative for the purposes set forth herein, 

 

9

 

notwithstanding
the fact that Parent LP may have received conflicting directions, instructions
and notices from the Protected Parties or the Wilmorite Limited Partners.

 

9.                                       Exclusion of Certain Transactions.

 

For the avoidance of
doubt, the indemnification provided in Section 7 shall not apply to any
taxes or other amounts of a Protected Party incurred as a result of (i) the
consummation of the Merger and the consummation of the transactions
contemplated thereby, including the payment of any purchase price adjustments,
(ii) the Partnership Merger and the consummation of the transactions
contemplated thereby, including the amendment of the Partnership’s limited
partnership agreement by the 2005 Amended and Restated Partnership Agreement,
and (iii) the creation or exercise of the Class A Forced Conversion, Class A
Put Right, Redemption Right, the Participating Election Right, the Partnership
Call Right or the rights described in Section 8.9 and 8.10.B of the 2005
Amended and Restated Partnership Agreement (and any corresponding rights
provided under the [Tenth] Amendment), and the creation of the rights set forth
in Section 8.10 thereof (and any corresponding rights provided under the
[Tenth] Amendment); provided, however, that the foregoing shall
not in any respect limit Parent LP’s obligation to maintain the Required
Nonrecourse Debt Amount in accordance with Section 3 hereof upon any
exercise of the rights referred to in this clause (iii) or to limit the rights
of a Protected Party under Section 7 in respect of any breach of such
obligation to maintain the Required Nonrecourse Debt Amount in accordance with Section 3.

 

10.                                 Prior Tax Protection Agreements.

 

Upon the Effective Date,
any and all Prior Partnership Tax Protection Agreements including, but not
limited to, the Tax Protection Agreement dated as of February 24, 2000 by
and between the Partnership, ACI Danbury, Inc. and the other parties thereto,
shall cease to be in force and be of no further effect provided, however,
that this sentence shall not be construed to refer to that certain Shoppingtown
Option Agreement made as of the 30th day of April 1996.  For these purposes “Prior Partnership Tax
Protection Agreements” shall mean any agreement entered into prior to the
Effective Date to which the Partnership is a party pursuant to which (i) any
liability to any Partner (or any owner of any Partner) relating to taxes may
arise; (ii) in connection with the deferral of income taxes of a Partner (or
owner of any Partner), the Partnership or any of its subsidiaries has agreed to
(A) maintain a minimum level of, put in place or replace any debt or continue a
particular debt, (B) retain or not dispose of assets for a period of time that
has not since expired, (C) make or refrain from making tax elections, (D)
operate (or refrain from operating) in a particular manner, and/or (E) only
dispose of assets in a particular manner; (iii) the Partners (or their owners)
have guaranteed debt, or have the opportunity to guarantee debt, directly or
indirectly, of the Partnership or its Subsidiaries (including without
limitation any “deficit restoration obligation,” guarantee (including,
without limitation, a “bottom guarantee”), indemnification agreement or
other similar arrangement); and/or (iv) any other agreement that would require
the Partnership, the General Partner or Parent LP to consider separately the
interests of any Partner (or owner of any Partner) in respect of taxes.

 

10

 

11.                                 General Provisions.

 

(a)                                  Addresses
and Notice.  Any notice, demand,
request or report required or permitted to be given or made to a Partner under
this Agreement shall be in writing and shall be deemed given or made when
delivered in person or when sent by certified first class United States mail,
return receipt requested, nationally recognized overnight delivery service or
facsimile transmission (with receipt confirmed) to the Partner at the address
set forth on the signature page hereto or such other address of which the
Partner shall notify Parent LP in writing.

 

(b)                                 Titles
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.

 

(c)                                  Pronouns
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.

 

(d)                                 Further
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.

 

(e)                                  Binding
Effect.  Subject to the terms set
forth herein, 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.

 

(f)                                    Creditors.  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 Parent LP or the Partnership.

 

(g)                                 Third
Party Beneficiaries.  This Agreement
shall inure to the benefit of the Protected Parties and their permitted
assigns.

 

(h)                                 Waiver.  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 other covenant, duty,
agreement or condition.

 

(i)                                     Counterparts.  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.

 

11

 

(j)                                     Applicable
Law; Consent to Jurisdiction.

 

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

 

Each of the parties to this
Agreement hereby irrevocably and unconditionally consents to submit to the sole
and exclusive jurisdiction of any court located in the State of Delaware (the “Delaware
Courts”) for any litigation arising out of or relating to this Agreement,
or the negotiation, validity or performance of this Agreement, or the
transactions contemplated hereby or other matters arising between or involving
Parent LP and any of the Protected Parties (and agrees not to commence any
litigation relating thereto except in such courts), waives any objection to the
laying of venue of any such litigation in the Delaware Courts and agrees not to
plead or claim in any Delaware Court that such litigation brought therein has
been brought in an inconvenient forum. 
Each of the parties hereto agrees, (i) to the extent such party is not
otherwise subject to service of process in the State of Delaware, to appoint
and maintain an agent in the State of Delaware as such party’s agent for
acceptance of legal process, and (ii) that service of process may also be made
on such party by prepaid certified mail with a proof of mailing receipt
validated by the United States Postal Service constituting evidence of valid
service.  Service made pursuant to (i) or
(ii) above shall have the same legal force and effect as if served upon such
party personally within the State of Delaware. 
For purposes of implementing the parties’ agreement to appoint and
maintain an agent for service of process in the State of Delaware, each of the
parties hereto does hereby appoint The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, as such agent.

 

(k)                                  Invalidity
of Provisions.  If any provision of
this Agreement shall to any extent be held void or unenforceable (as to
duration, scope, activity, subject or otherwise) by a court of competent
jurisdiction, such provision shall be deemed to be modified so as to constitute
a provision conforming as nearly as possible to the original provision while
still remaining valid and enforceable. 
In such event, the remainder of this Agreement (or the application of
such provision to Persons or circumstances other than those in respect of which
it is deemed to be void or unenforceable) shall not be affected thereby.  Each other provision of this Agreement,
unless specifically conditioned upon the voided aspect of such provision, shall
remain valid and enforceable to the fullest extent permitted by law; any other
provisions of this Agreement that are specifically conditioned on the voided
aspect of such invalid provision shall also be deemed to be modified so as to
constitute a provision conforming as nearly as possible to the original
provision while still remaining valid and enforceable to the fullest extent
permitted by law.

 

(l)                                     No
Rights as Stockholders.  Nothing
contained in this Agreement shall be construed as conferring upon the Protected
Parties any rights whatsoever as stockholders of Parent, including without limitation,
any right to receive dividends or other distributions made to such stockholders
by Parent or to vote or consent or to receive notice as stockholders in respect
of any meeting of such stockholders for the election of directors of Parent or
any other matter.

 

12

 

(m)                               Entire
Agreement and Coordination.  This
Agreement, the 2005 Amended and Restated Partnership Agreement and the Exhibits
and Schedules thereto, and Parent LP’s limited partnership agreement, contain
the entire understanding and agreement among the Partners with respect to the
subject matter hereof and supersede the Prior Agreements, and any other prior
written or oral understandings or agreements among them with respect thereto, provided,
however, that the undertakings with respect to Taxes as set forth in Article X
of the 2005 Amended and Restated Partnership Agreement shall continue to be in
effect for periods prior to the date hereof as well as for interests in the
Partnership that the Protected Parties continue to hold in the Partnership
after the applicable Transaction.

 

[Signature Page Follows]

 

13

 

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

 

	
   

  	
  PARENT
  LP:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMORITE
  LIMITED PARTNER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

14

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