Document:

QuickLinks
 -- Click here to rapidly navigate through this document
  

 
 

Exhibit 10.42    
  

 
  TRANSITION AND ADVISORY AGREEMENT    
  

        THIS TRANSITION AND ADVISORY AGREEMENT (the "Agreement") is made
and entered into as of the    day of July, 2002, by and between Richard G. Babbitt (the "Advisor") and BIA Advisors, Inc.
("BIA"), a California corporation, on the one hand, and Inamed Corporation, a Delaware corporation (the
"Corporation"), on the other hand. 

RECITALS

        1.    The
Corporation desires to retain the Advisor to provide the services described herein, and the Advisor is willing to provide the services in accordance with the terms
hereinafter set forth; 

        2.    The
Board of Directors of the Corporation and the Compensation Committee of the Board, by appropriate resolutions, have authorized the Corporation to enter into this
Agreement; 

        3.    The
Advisor and the Corporation desire to declare the employment agreement entered into between the Corporation and the Advisor, dated as of January 23, 1998 (the
"Employment Agreement"), null and void and to enter into this superseding Agreement; 

        4.    The
Corporation desires to retain BIA effective February 1, 2003, to provide the advisory services required under this Agreement; and 

        5.    BIA
intends to employ Advisor to perform such advisory services and Advisor intends to accept such employment. 

        The
parties hereto, intending to be legally bound, do hereby agree as follow: 

1. DEFINITIONS.  

        In addition to certain terms defined elsewhere in this Agreement, the following terms shall have the following respective meanings: 

        1.1  "Affiliate" shall mean any Person controlling, controlled by or under common control with, the Corporation. 

        1.2  "Board" shall mean the Board of Directors of the Corporation. 

        1.3  "Cause" shall mean that the Advisor: 

	(a)
	has
been convicted of any felony or any crime involving fraud, theft, embezzlement, dishonesty or moral turpitude;

	(b)
	has
engaged in conduct which is materially injurious to the Corporation or its Affiliates, or any of their respective customer or supplier relationships, financially or otherwise;

	(c)
	has
failed to provide the services as required under Section 2 to the reasonable satisfaction of the Board after being provided
with notice thereof and thirty (30) days opportunity to remedy such failure; or

	(d)
	has
engaged in acts or omissions constituting gross negligence or willful misconduct resulting, in either case, in material harm to the Corporation, in providing the services under
this Agreement. 

The
parties agree that no actions or omissions by the Advisor prior to the date this Agreement becomes fully executed shall provide the basis for a Cause termination unless the Corporation could not
reasonably have known of such actions or omissions at the time of execution. 

Page 1 of 13

 

        1.4  "Corporation Property" shall mean all items and materials provided by the Corporation to the Advisor, or to which the
Advisor has access, in the course of his employment and while providing services under this Agreement, including, without limitation, all files, records, documents, drawings, specifications,
memoranda, notes, reports, manuals, equipment, computer disks, videotapes, drawings, blueprints and other documents and similar items relating to the Corporation, its Affiliates or their respective
customers, whether prepared by the Advisor or others, and any and all copies, abstracts and summaries thereof. 

        1.5  "Competition" shall mean any direct or indirect research on, or development, production, marketing, leasing or selling
of, any product, process or service which is the same as, similar to, or in competition with, any line of business or research in which the Corporation or any Affiliate is now engaged or hereinafter
engages. 

        1.6  "Confidential Information" shall mean all nonpublic and/or proprietary information and trade secrets respecting the
business of the Corporation or any Affiliate, including, without limitation, its products, programs, projects, promotions, marketing plans and strategies, business plans or practices, business
operations, employees, research and development, intellectual property, software, databases, trademarks, pricing information and accounting and financing data. Confidential Information also includes
information concerning the Corporation's or any Affiliate's customers or clients, such as their identity, address or any other information kept by the Corporation or any Affiliate concerning its
customers whether or not such information has been reduced to documentary form. Confidential Information does not include information that is, or becomes, available to the public unless such
availability occurs through an unauthorized act on the part of the Advisor. 

        1.7  "Disability" shall mean a physical or mental incapacity that prevents the Advisor from providing the services under this
Agreement for a period of one hundred eighty (180) days as determined by the following procedure: The Advisor agrees to submit to medical examinations by a licensed healthcare professional selected by
the Corporation, in its sole discretion, to determine whether a Disability exists. In addition, the Advisor may submit to the Corporation documentation of a Disability, or lack thereof, from a
licensed healthcare professional of his choice. Following a determination of a Disability or lack of Disability by the Corporation's or the Advisor's licensed healthcare professional, the other Party
may submit subsequent documentation relating to the existence of a Disability from a licensed healthcare professional selected by such other Party. In the event that the medical opinions of such
licensed healthcare professionals conflict, such licensed healthcare professionals shall appoint a third licensed healthcare professional to examine the Advisor, and the opinion of such third licensed
healthcare professional shall be dispositive. 

        1.8  "Good Reason" shall mean and exist if, without the Advisor's prior written consent, one or more of the following events
occurs: 

	(a)
	the
Base Compensation or Advisory Fees are decreased by the Corporation; or

	(b)
	the
Corporation fails to provide the Advisor with any benefits required under Section 3 of this Agreement; 

provided, however, that neither of the foregoing shall constitute Good Reason if: (i) the Advisor gives the Corporation timely notice of his
intent to terminate this Agreement for Good Reason, and the Corporation cures or remedies the reasons cited by the Advisor in said notice within thirty (30) days of receipt of said notice, or
(ii) sixty (60) days or more pass between the event(s) constituting Good Reason and the Advisor's giving notice that he is terminating this Agreement for Good Reason. 

        1.9  "Person" shall mean any individual, firm, partnership, association, trust, company, corporation or other entity. 

Page 2 of 13

 

2. ENGAGEMENT.  

        2.1  The Transition Term.

        2.1.1    From
the date first written above and continuing through December 31, 2002 (the "Initial Transition Term"), the
Advisor shall serve as a member of the Board of Directors (the "Board"). Effective as of December 31, 2002, the Advisor will be deemed to have
resigned from the Board without further action from the Advisor or the Corporation. 

        2.1.2    From
January 1, 2003, through January 31, 2003, (the "Supplemental Transition Term"), the Advisor shall
perform such services as the Board may direct. (The Initial Transition Term and the Supplemental Transition Term shall be referred to collectively herein as the "Transition
Term"). 

        2.2  The Advisory Term.

        2.2.1    Commencing
on February 1, 2003, and continuing through December 31, 2004 (the "Advisory Term"), the
Corporation and BIA will maintain a consultancy arrangement pursuant to which BIA will make Advisor available to the Corporation to serve as a Special Advisor to the Board in Advisor's area of
expertise, at reasonable times and upon reasonable advance notice, to the extent that the Board may reasonably request. 

        2.3  Responsibilities.    During the Transition Term and the Advisory Term, the Advisor shall observe and comply
with the Corporation's rules, regulations and policies and shall carry out and perform all reasonable orders and directions given to him by the Board periodically, either orally or in writing. The
Advisor shall at all times carry out the duties assigned to him in a loyal, trustworthy and businesslike manner. 

        2.4  The Term of Engagement.    The Transition Term and the Advisory Term shall collectively be referred to herein
as the Term of Engagement. The Transition Term and the Advisory Term and this Agreement may be earlier terminated pursuant to the terms and conditions of Sections 6 and
7. If the Transition Term is earlier terminated as provided in Sections 6 and 7, the Advisory Term shall not commence. 

3. REMUNERATION.  

        3.1  Compensation During the Transition Term.

        3.1.1    Base Compensation.    The Advisor's annual base compensation (the "Base
Compensation") during the Transition Term shall be FOUR HUNDRED THOUSAND DOLLARS ($400,000.00), payable in accordance with the Corporation's pay policies, with applicable
federal, state and local taxes withheld. 

        3.1.2    Incentive Compensation.    The Corporation may, but is not obligated to, pay the Advisor a discretionary
bonus for the fiscal year ending December 31, 2002, in an amount that will be determined by the Compensation Committee based on such factors as the Advisor's performance and the performance of
the Corporation. Any bonus that may be awarded to the Advisor shall be paid at the same time as annual bonuses are paid to other senior officers of the Corporation. 

        3.1.3    Benefits.    During the Transition Term, the Advisor shall be entitled to participate in the following
benefit plans (the "Benefit Plans") maintained by the Corporation: group medical, dental, life and disability insurance plans and 401(k) plan. The
Advisor's participation in all Benefit Plans shall cease as of January 31, 2003, except to the extent permitted by any Benefit Plan, as required by this Agreement, or as otherwise required by
law. 

        3.2  Advisory Fees During the Advisory Term.    During the Advisory Term, the Corporation shall pay BIA an annual
advisory fee in the amount of FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) (the "Advisory Fee"). All Advisory Fees paid to BIA shall be reported by the
Corporation 

Page 3 of 13

 

to the Internal Revenue Service on a Form 1099, and BIA shall be responsible, without contribution from the Corporation, for the payment of any taxes determined to be due on such payments. 

        3.3  Termination Benefits.    In consideration of the Advisor's and the Corporation's mutual agreement to terminate
the Employment Agreement, for a period commencing on February 1, 2003, and continuing until July 31, 2005 (the "Benefits Reimbursement
Period"), the Corporation shall reimburse the Advisor for his costs reasonably incurred in connection with obtaining continued medical coverage that is substantially equal to
the group medical coverage the Advisor was receiving from the Corporation during the Transition Term, as follows: 

	(a)
	reimbursement
for the Advisor's premiums to continue his and/or his spouse's coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") through July 31, 2004, and through any additional portion of the remaining balance of the Benefits Reimbursement Period if determined
at the applicable time to be permitted by COBRA and the Corporation's group medical carrier;

	(b)
	reimbursement
for the Advisor's premiums for Medicare supplemental insurance coverage, Plan J, or its equivalent, either through the Corporation's group health plans or, if the
same not permitted by such plans, through individual coverage, for any portion of the Benefits Reimbursement Period in which COBRA coverage is not available; and

	(c)
	in
the event that medical coverage is obtained under Medicare supplemental insurance in accordance with Section 3.3(b), above,
and such coverage does not provide comparable coverage for prescription drugs, the Corporation will provide the Advisor with additional reimbursement not to exceed one thousand five hundred dollars
($1,500.00) per month to cover the Advisor's actual prescription costs, subject to Advisor providing documentation of such costs. 

The
Parties agree that it shall be the Advisor's sole responsibility to take such actions as may be necessary to elect or obtain COBRA coverage and/or Medicare supplemental insurance coverage as
provided above. 

4. DUTY OF LOYALTY.  

        4.1  Advisor's Position of Trust.    As a result of the Advisor's employment pursuant to the Employment Agreement
and his engagement under this Agreement, the Advisor has had, and will continue to have, access to Confidential Information. 

        4.2  Obligations During the Term of Engagement.    The Advisor agrees that during the Term of Engagement he shall
not, without prior express written authorization of the Board, directly or indirectly, either alone or in concert with others, engage in any of the following activities: 

	(a)
	Perform
or render any services of a business, professional or commercial nature, relating to services or products competitive with the Corporation, to or for the benefit of himself or
any other person or entity, whether for compensation or otherwise, except for personal investments and other activities approved by the Board in accordance with Subsection
4.5, below;

	(b)
	Engage
in any activity directly or indirectly in competition with or adverse to the Corporation;

	(c)
	Engage
in any activity for purpose of influencing or attempting to influence the Corporation's customers, either directly or indirectly, to conduct business with any business
enterprise in competition with the Corporation; or 

Page 4 of 13

 

	(d)
	Undertake
or participate in any planning for or organization of any business activity that is or will be in competition with the Corporation in any field(s) or area(s) in which the
Advisor has worked or with which the Advisor has come into contact, or of which the Advisor has gained knowledge during his employment with the Corporation or during the Term of Engagement. 

        4.3  Continuing Obligations.    As a condition of the Advisor's having access to Confidential Information, and in
consideration of the payments and benefits provided hereunder, the Advisor agrees that he will not, at any time prior to December 31, 2004, directly or indirectly, either for himself or for any
other person or entity, whether as an agent, consultant, employee, officer, director, investor, partner, shareholder, proprietor or in any other individual or representative capacity, do any of the
following: 

	(a)
	Engage
in competition with the Corporation without the Corporation's prior express written approval;

	(b)
	Divert
or take away (or attempt to divert or take away), any of the Corporation's present, former or prospective customers, including, but not limited to, those upon whom he called,
met with or became acquainted with while engaged as an employee of the Corporation or while providing services under this Agreement;

	(c)
	Interfere
with the contractual or business relationships of the Corporation;

	(d)
	Solicit
or attempt to solicit any employees or clients of the Corporation; or

	(e)
	Slander
or disparage the Corporation, or undertake any activity that adversely impacts, or is reasonably likely to impact, the goodwill of the Corporation and its business
opportunities. 

        4.4  Corporation Property.    The Advisor agrees that upon termination of his engagement by the Corporation for any
reason, or at such earlier time as the Corporation may request, the Advisor shall forthwith return to the Corporation all documents and other property in his possession belonging to the Corporation or
any of its Affiliates. 

        4.5  Permitted Activities.    Nothing in this Section 4 shall
prevent the Advisor from the following: 

	(a)
	holding
for investment less than five percent (5%) of the outstanding securities of any corporation which are regularly traded on a recognized stock exchange;

	(b)
	engaging
in civic, educational and charitable activities; or

	(c)
	upon
receiving written approval from the Board, serving as a director of any corporation that does not engage in competition with the Corporation, as determined by the Board in good
faith, or receiving any remuneration from as a result thereof; 

provided, however, that the Advisor shall not engage in any of the foregoing activities which, in the good faith opinion of the Board, interfere or
could reasonably be expected to interfere with the Advisor's performance of his duties and responsibilities as set forth in Article 2. 

        4.6  Severability.    Each of the covenants of Section 4  shall be construed as separate covenant covering the subject matter in each of the
separate counties and states in the United States and governmental subdivisions outside of
the United States (collectively, the "Governmental Units"). To the extent that any covenant is determined by a court of competent jurisdiction to be
unenforceable in any one or more of said Governmental Units, said covenant shall not be affected with respect to any other Governmental Unit, each covenant with respect to each Governmental Unit being
construed as severable and independent. 

Page 5 of 13

 

5. INTELLECTUAL PROPERTY AND CONFIDENTIALITY AGREEMENT.  

        5.1  On
or about January 23, 1998, the Advisor executed an Intellectual Property and Confidentiality Agreement, a copy of which is attached to this Agreement as  Exhibit A  and the terms of which are
incorporated herein by reference. The terms of this Agreement shall prevail in the case of any discrepancy between
Exhibit A and the remainder of the provisions of this Agreement. 

        5.2  The
Advisor will not, at any time prior to December 31, 2004, undertake any employment or activity competitive with the Corporation wherein the loyal and complete
fulfillment of the duties of the competitive employment or activity would call upon the Advisor to make judgments on or otherwise to use any information concerning the Corporation that is covered by
this Agreement or the Intellectual Property and Confidentiality Agreement. 

6. TERMINATION.  

        6.1  Grounds.    This Agreement and the Advisor's services hereunder, shall terminate upon the occurrence of any of
the following events: 

        6.1.1    Expiration of Term.    Upon expiration of the Term of Engagement; 

        6.1.2    Termination by the Advisor.    By the Advisor (a) with Good Reason, or (b) without Good Reason, in each case
upon thirty (30) days' prior written notice to the Corporation; 

        6.1.3    Termination by the Corporation for Cause.    By the Corporation immediately for Cause; 

        6.1.4    Termination by the Corporation without Cause.    By the Corporation without Cause, upon thirty (30) days'
written notice to the Advisor; 

        6.1.5    Disability.    In the event of the Advisor's Disability; or 

        6.1.6    Death.    Upon the death of the Advisor. 

7. TERMINATION PAYMENTS.  

        7.1  Termination Due to Death or Disability.    In the event of a termination due to the Advisor's death or
Disability, the Advisor or his estate or BIA, as the case may be, shall be entitled, in lieu of any other remuneration whatsoever, to: 

	(a)
	payment
of all Base Compensation and/or Advisory Fees, as applicable, through the balance of the Term of Engagement; and

	(b)
	(i)
such rights to other benefits as may be provided in applicable plans and programs of the Corporation, including, without limitation, applicable employee benefit plans and
programs, according to the terms and provisions of such plans and programs, if such termination occurs during the Transition Term, and (ii) the reimbursement costs required under  Section 3.3,
if termination occurs during the Advisory Term, in either case through the date of termination in the event of a termination due to
death, and through the balance of the Term of Engagement and the Benefit Reimbursement Period (the "Post-Termination Period") in the event of a
termination due to Disability. 

        7.2  Termination for Cause or Without Good Reason.    In the event that the Corporation terminates this Agreement
for Cause or the Advisor terminates this Agreement without Good Reason, the Advisor or BIA, as the case may be, shall be entitled, in lieu of any other remuneration and benefits whatsoever, to: 

	(a)
	payment
of all unpaid Base Compensation or Advisory Fees, as the case may be, payable through the date of termination; and 

Page 6 of 13

 

	(b)
	(i)
such rights to other benefits as may be provided in applicable plans and programs of the Corporation, including, without limitation, applicable employee benefit plans and
programs, according to the terms and provisions of such plans and programs, if such termination occurs during the Transition Term, and (ii) the reimbursement costs required under  Section 3.3,
if termination occurs during the Advisory Term, in either case through the date of termination.
 

        7.3  Termination Without Cause or for Good Reason.    In the event the Corporation terminates this Agreement
hereunder without Cause or the Advisor terminates this Agreement for Good Reason, the Advisor or BIA, as the case may be, shall be entitled to the following payments and benefits: 

	(a)
	payment
of all Base Compensation and/or Advisory Fees, as applicable, through the balance of the Term of Engagement; and

	(b)
	(i)
such rights to other benefits as may be provided in applicable plans and programs of the Corporation, including, without limitation, applicable employee benefit plans and
programs, according to the terms and provisions of such plans and programs, if such termination occurs during the Transition Term, and (ii) the reimbursement costs required under  Section 3.3,
if termination occurs during the Advisory Term, in either case through the Post-Termination Period. 

        7.4  Non-Duplication of Benefit.    Notwithstanding the foregoing, nothing in this Agreement shall result in a
duplication of payments or benefits provided under this Section 7, nor shall anything in this Agreement require the Corporation to make any
payment or to provide any benefit to the Advisor that the Corporation is otherwise required to provide under any other contract, agreement or arrangement. 

        7.5  General Release.    No payments or benefits payable to the Advisor or BIA upon the termination of this
Agreement pursuant to this Section 7 shall be made unless and until Advisor and BIA execute a general release in a form satisfactory to the
Corporation and such general release becomes effective pursuant to its terms. 

8. MISCELLANEOUS.  

        8.1  Notices.    Any written notice required or permitted to be given shall be deemed delivered either when
personally delivered or when mailed, registered or certified, postage prepaid with return receipt requested, if to the Advisor and/or BIA, addressed to the last residence address of the Advisor as
shown in the records of the Corporation, and if to the Corporation, addressed to the Board at its principal office in Santa Barbara, California. Mailed notices shall be deemed received two (2)
business days after the date of deposit in the mail. Any party may change its/his address by providing the other parties notice of such new address pursuant to the provisions of this  Section 8.1.

        8.2  Remedies.

        8.2.1    Equitable Remedies.    The Advisor acknowledges and agrees any breach, violation or evasion of the terms,
conditions and provisions of Sections 4 and 5 above, will result in immediate and irreparable injury and harm to the Corporation and shall entitle the
Corporation to injunctive relief, as well as to all other legal equitable remedies to which the Corporation may be entitled. 

        8.2.2    Cessation/Reimbursement of Payments.    If the Advisor violates any provision of  Sections 4 or 5, the Corporation may, upon giving written
notice to the Advisor, immediately cease all payments and benefits that it may be providing to
the Advisor pursuant to this Agreement, and the Advisor may be required to reimburse the Corporation for any payments received from, and the cash value of any benefits provided by, the Corporation
between the first day of the violation and the date such notice is given; provided, however, that the foregoing shall be in addition to such 

Page 7 of 13

 

other remedies as may be available to the Corporation and shall not be deemed to permit the Advisor to forego or waive such payments in order to avoid his obligations under  Sections 4 or 5. 

        8.3  General Release of Employment Claims.    In partial consideration for the Corporation's agreement to enter into
this Agreement, the Advisor has agreed to sign the General Release attached to this Agreement as Exhibit B. 

        8.4  Partial Invalidity.    If any term or provision of this Agreement or the application thereof to any person or
circumstance shall be held to be invalid or unenforceable to any extent, the remainder of this Agreement or application of such term or provision to persons or circumstances other than those to
which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of the Agreement shall be valid and be enforced to the fullest extent permitted by law. 

        8.5  Waiver.    No waiver of any right hereunder shall be effective for any purpose unless in writing, signed by the
party hereto possessing said right, nor shall any waiver be construed to be a waiver of any subsequent right, term or provision of this Agreement. 

        8.6  Assignment; Effect on Agreement.    It is hereby acknowledged and agreed that the Advisor's rights and
obligations under this Agreement are personal in nature and shall not be assigned or delegated. This Agreement shall be binding on and inure to the benefit of the heirs, personal representatives,
successors and assigns of the parties, subject, however, to the restrictions on assignment and delegation contained herein. 

        8.7  Disputes Resolution and Arbitration.    

        8.7.1    Any
dispute arising in connection with the interpretation or enforcement of the provisions of this Agreement, or its application or validity, will be submitted to
arbitration. Such arbitration proceedings shall be instituted in Santa Barbara, California, in accordance with the rules then existing of the American Arbitration Association. This Agreement to
arbitrate is specifically enforceable. 

        8.7.2    Any
award rendered in any such arbitration proceeding will be final and binding on each of the parties, and judgment may be entered thereon in any court of competent
jurisdiction. The arbitrator shall have the authority to compel the party that does not substantially prevail in such proceeding to pay the reasonable costs and fees of the prevailing party (including
reasonable and customary legal fees and expenses) to the extent that the arbitrator deems appropriate. 

        8.8  Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of
California. 

        8.9  Entire Agreement.    Unless expressly provided to the contrary herein, this Agreement (and the exhibits
attached hereto) contains the entire agreement and understanding between the parties and supersedes all prior agreements and understandings, oral or written, including the Employment Agreement. No
modification or termination shall be valid unless in writing and signed by both parties. 

9. ACKNOWLEDGEMENT.  

        The Advisor and BIA each represents and acknowledges the following: 

	(a)
	He/it
has carefully read this Agreement in its entirety;

	(b)
	He/it
understands the terms and conditions contained herein;

	(c)
	He/it
has had the opportunity to review this Agreement, at his/its discretion, with legal counsel of his/its own choosing and has not relied on any statement made by the Corporation
or its legal counsel as to the meaning of any term or condition contained herein or in deciding whether to enter into this Agreement; and

	(d)
	He/it
is entering into this Agreement knowingly and voluntarily. 

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the    day
of                    , 2002. 

[Signatures
on following page.] 

Page 8 of 13

 

	 	 	 	 	 
	INAMED CORPORATION	 	ADVISOR
	

 	

 	
 	

 	

 
	By:	/s/  NICHOLAS L. TETI      
	 	

	 	Nicholas L. Teti	 	Richard G. Babbit
	Title:	Chief Executive Officer	 	 	 
	

 	

 	
 	

 	

 
	Address:

5540 Ekwill Street, Suite D

Santa Barbara, California 93111	 	Address:

1221 Ocean Avenue

Santa Monica, California 90401
	

 	

 	
 	

 	

 
	Date:	7/22/02	 	Date:	

	

 	

 	
 	

 	

 
	 	 	 	AGREED TO AND ACCEPTED BY:

(with respect to the advisory services only)
	

 	

 	
 	

 	

 
	 	 	 	BI ADVISORY, INC.
	

 	

 	
 	

 	

 
	 	 	 	By:	

	 	 	 	Name:	

	 	 	 	Title:	

	 	 	 	 	 

Page 9 of 13

 

	 	 	 	 	 
	INAMED CORPORATION	 	ADVISOR
	

 	

 	
 	

 	

 
	By:	
	 	/s/  RICHARD G. BABBIT      

	 	Nicholas L. Teti	 	Richard G. Babbit
	Title:	Chief Executive Officer	 	 	 
	

 	

 	
 	

 	

 
	Address:

5540 Ekwill Street, Suite D

Santa Barbara, California 93111	 	Address:

1221 Ocean Avenue

Santa Monica, California 90401
	

 	

 	
 	

 	

 
	Date:	
	 	Date:	7/21/2002
	

 	

 	
 	

 	

 
	 	 	 	AGREED TO AND ACCEPTED BY:

(with respect to the advisory services only)
	

 	

 	
 	

 	

 
	 	 	 	BI ADVISORY, INC.
	

 	

 	
 	

 	

 
	 	 	 	By:	/s/  RICHARD G. BABBIT      

	 	 	 	Name:	Richard G. Babbit
	 	 	 	Title:	President
	 	 	 	 	 

Page 10 of 13

 
EXHIBIT A  

INTELLECTUAL PROPERTY AND

CONFIDENTIALITY AGREEMENT  

Page 11 of 13

 
EXHIBIT B

GENERAL RELEASE

        In
exchange for the agreement of Inamed Corporation (the "Corporation") to enter into the Transition and Advisory Agreement (the "Agreement") to which this General Release is attached,
but without releasing or waiving any rights thereunder, I, RICHARD G. BABBITT, hereby agree to the following: 

        1.    I
hereby release, waive and forever discharge the Corporation and its offices, branches, parents, subsidiaries and affiliates and its present and former directors,
officers, agents, representatives, employees, successors and assigns (collectively, the "Releasees"), from any and all actions, causes of action,
covenants, contracts, claims and demands whatsoever, which I ever had, now has or which my heirs, executors, administrators and assigns, or any of them hereafter can, shall or may have by reason of my
employment with or the cessation of my employment from the Corporation. 

        2.    By
signing this General Release, I am providing a complete waiver of all rights and claims that may have arisen, whether known or unknown, up until the date this General
Release is signed. This includes, but is not limited to: 

	(a)
	claims
based on Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967 (including the Older Workers Benefit
Protection Act), the Americans with Disabilities Act, the Fair Labor Standards Act, the Equal Pay Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act of 1974, the
California Fair Employment and Housing Act, and any other applicable fair employment statute, or any common law, public policy, contract (whether oral or written, express or implied) or tort law, and
any other local, state or federal law, regulation or ordinance having any bearing whatsoever on the terms and conditions of his employment with the Corporation and the cessation thereof,

	(b)
	any
rights or claims I may have under the Employment Agreement, and

	(c)
	any
claims I may have for any compensation or benefits, regardless of the basis for such claims, whether under the Employment Agreement or any other written or oral agreement other
than as set forth in the Agreement. 

        3.    As
a part of this General Release, I am expressly waiving any and all rights that I may have pursuant to Section 1542 of the Civil Code of the State of California
or any similar state or federal statute or under any common law principle of similar effect, and I acknowledge that I fully understand the consequences of such waiver. California Civil Code
Section 1542 states as follows: 

	 	 	"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH

THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN

HIS (HER) FAVOR AT THE TIME OF EXECUTING THE RELEASE,

WHICH IF KNOWN BY HIM (HER) MUST HAVE MATERIALLY

AFFECTED HIS (HER) SETTLEMENT WITH THE DEBTOR."

I
further acknowledge that I may subsequently discover facts different from, or in addition to, those that I now know or believe to be true with respect to the claims released herein and agree that
the Agreement and this General Release set forth herein shall be and remain effective in all respects notwithstanding the discovery of such different or additional facts. 

        4.    I
acknowledge that have been advised of the following: 

	(a)
	I
have been given at least twenty-one (21) days to review this General Release;

	(b)
	I
have been advised to consult, and have consulted, with legal counsel, and 

Page 12 of 13

 

	(c)
	I
have been advised that I may revoke my signature within seven (7) days of signing this Agreement.

	(d)
	I
also understand that this General Release will not become effective if I revoke my signature within seven (7) days of execution. If I revoke my signature, the Corporation may elect
to cancel the Agreement, in which case the Corporation and I will be returned to our legal positions that existed prior to the date the Agreement was entered into.

	(e)
	I
further acknowledge that I am signing this General Release knowingly, voluntarily and with full understanding of its terms and effects, and I voluntarily accept the consideration
provided for in the Agreement for the purpose of making full and final settlement of all claims referred to above. 

        It
witness hereof, I have executed this General Release this    day of                    , 2002. 

	/s/  RICHARD G. BABBITT      
 Richard G. Babbitt	 	 
	

 	

 	
 	

 
	Address:

1221 Ocean Avenue

Santa Monica, California 90401	 	 
	

 	

 	
 	

 
	Date:	7/21/2002	 	 
	 	 	 	 

Page 13 of 13

QuickLinks

Exhibit 10.42

TRANSITION AND ADVISORY AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.1    
  

 
  TAX MATTERS AGREEMENT    
  

        THIS TAX MATTERS AGREEMENT ("Agreement"), dated as of July 26, 2002, is made by and between The Macerich Partnership, L.P., a Delaware limited partnership
("TMP"), and each of the Protected Partners (as defined below) who will become limited partners of TMP as a result of the Transaction (as defined below). 

        WHEREAS,
pursuant to the Master Agreement dated as of June 29, 2002, among TMP, Westcor Realty Limited Partnership ("WRLP"), The Westcor Company Limited Partnership, The Westcor
Company II Limited Partnership, Eastrich No. 128 Corp., the limited partners of WRLP, Macerich Galahad LP, Macerich TWC II Corp., Macerich WRLP Corp., Macerich TWC II LLC and Macerich WRLP LLC
(the "Master Agreement") and the Purchase and Sale and Contribution Agreement dated as of June 29, 2002 among WRLP, Eastrich No. 128 Corp., each of the limited partners of WRLP, TMP,
Macerich WRLP Corp. and Macerich WRLP LLC ("Sale and Contribution Agreement"), TMP is, among other things, acquiring certain of the limited partnership interests in WRLP from the Protected Partners in
exchange for Series D Preferred partnership interests in TMP (the "Transaction"); 

        WHEREAS,
pursuant to the Master Agreement and the Sale and Contribution Agreement, TMP has agreed to make certain undertakings to the Protected Partners; 

        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 Master Agreement. As used herein, the following terms have the following meanings: 

        "Code"
means the Internal Revenue Code of 1986, as amended. 

        "Guarantee
Opportunity" shall have the meaning set forth in Section 2(e) hereof. 

        "Indirect
Owner" means, in the case of a Protected Partner that is an entity that is classified as a partnership or disregarded entity for federal income tax purposes, any person owning
an equity interest in such Protected Partner, and, in the case of any Indirect Owner that itself is an entity that is classified as a partnership or disregarded entity for federal income tax purposes,
any person owning an equity interest in such entity. 

        "Law
Firm" shall have the meaning set forth in Section 3(b). 

        "Protected
Amount" as to each Protected Partner, is the amount set forth with respect to such Protected Partner on Schedule 3 to this Agreement, as described in
Section 2(e) hereof; provided, however, that, (i) upon the death of any Protected Partner or of any Indirect Owner in such Protected Partner which results in a stepped-up
basis, for federal income tax purposes, to the successors of such Protected Partner or Indirect Owner in the Protected Units, or upon a fully or
partially taxable sale or exchange of part or all of a Protected Partner's Protected Units, or an Indirect Owner's equity interest in such Protected Partner, the Protected Amount of such Protected
Partner shall be reduced to the extent of the Protected Partner's (or Indirect Owner's) share of the Protected Partner's Protected Amount attributable to the stepped-up basis or the
portion of the basis increased on the transfer, or (ii) upon a partial or complete redemption of Protected Units, the Protected Amount shall be reduced proportionate to such redemption. 

        "Protected
Partners" shall mean the persons and entities whose names are set forth on Schedule 1 to this Agreement, and any person who holds Protected Units and who acquired such
Protected Units from a Protected Partner in a transaction in which such transferee's adjusted basis, as determined for federal income tax purposes, is determined, in whole or part, by reference to the
adjusted basis, as determined for federal income tax purposes, of the Protected Partner in such Protected Units. Notwithstanding the foregoing, (i) a person who acquires Protected Units as the 

result of the death of a Protected Partner shall not be considered a Protected Partner with respect to such Protected Units if such person received a stepped-up basis, for federal income
tax purposes, in such Protected Units, or (ii) upon the complete redemption of Protected Units from any Protected Partner, such person or entity holding such Protected Units shall cease to be a
Protected Partner. 

        "Protected
Partner Representative" shall mean Robert L. Ward. 

        "Protected
Period" shall mean the period beginning on the Closing Date and ending on the date which is ten (10) years after the Closing Date. 

        "Protected
Properties" shall mean those properties set forth on Schedule 2 to this Agreement and any properties acquired in exchange for a Protected Property in a transaction in
which gain is not recognized, in whole or part, for federal income tax purposes. 

        "Protected
Property Disposition" shall have the meaning set forth in Section 2(a) hereof. 

        "Protected
Units" shall mean solely those TMP Partnership Units issued in the Transaction and held by Protected Partners and any TMP Partnership Units thereafter issued by TMP in
exchange for Protected Units in a transaction in which the transferee's adjusted basis, as determined for federal income tax purposes, in the issued Protected Units is determined, in whole
part, by reference, to the transferee's adjusted basis, as determined for federal income tax purposes,
the Protected Units. For the avoidance of doubt, Protected Units shall not include LTIP Units or Class C Units. 

        "Tax
Payment Year" shall have the meaning set forth in Section 3(a) hereof. 

        2.    TMP's Obligations.    

        (a)  Subject
to Sections 2(b) and 2(c), TMP agrees, for the benefit of each Protected Partner and the Indirect Owners of such Protected Partner, that neither TMP nor any
entity in which TMP holds a direct or indirect interest will directly or indirectly sell, transfer, exchange, or otherwise dispose of any Protected Property or any direct or indirect interest therein
(a "Protected Property Disposition") during the Protected Period. 

        (b)  Section 2(a)
shall not apply to (i) any transaction with respect to a Protected Property, such as a transaction which qualifies as a tax-free
like-kind exchange under Code Section 1031 or a tax-free contribution under Code Section 721, which would not result in the recognition of income or gain by or
allocation of recognized income or gain to any Protected Partner or its Indirect Owners; (ii) the condemnation or other taking of any Protected Property by a governmental entity or authority in
eminent domain proceedings or otherwise (or pursuant to the threat thereof), provided that TMP has first used good faith efforts to structure any such disposition as either a tax-free like
kind exchange under Code Section 1031 or as a tax-free reinvestment under Code Section 1033; (iii) the disposition of Desert Sky in a foreclosure proceeding (or a deed
in lieu of foreclosure) if TMP has first offered, to the Protected Partner Representative, to distribute (or cause to be distributed) its interest in Desert Sky, subject to the debt encumbering Desert
Sky, to the Protected Partners at a valuation of $5,000, or (iv) dispositions of pads or outparcels at the Protected Properties and dispositions of de
minimis portions of the Protected Properties. 

        (c)  In
addition, Section 2(a) shall not apply to any transaction in which a Protected Property, or a direct or indirect interest therein, is sold, transferred,
exchanged or disposed of pursuant to a contractual obligation existing on the Closing Date as a result of a partner or member in the entity that owns such
Protected Property or a third party (other than partners or members who are Affiliates of TMP) (such other partner, member or third party being referred to in this Section 2(c) as the
"Non-TMP Party") exercising its rights under the partnership agreement, limited liability company operating agreement or other organizational documents for such entity, or under any other
agreement relating to such Protected Property which is binding on TMP or its Affiliates (by way of example only, buy-sell rights, rights of first offer, call rights, options to purchase or
other preferential rights) (any such event being referred to in this Section 2(c) as a 

"Required Transfer"), provided that TMP uses good faith efforts to structure any such Required Transfer as a tax-free like-kind exchange under Code Section 1031.
Notwithstanding the foregoing, if a Non-TMP Party delivers to TMP a notice exercising the Non-TMP Party's rights with respect to a Required Transfer, and, in accordance with
the applicable agreement, the Non-TMP Party's notice sets forth the price (the "Exercise Price") on which it would be willing to either purchase or sell the Protected Property (or the
applicable direct or indirect interest therein), with TMP then having the right to elect to purchase or sell the Protected Property (or the applicable direct or indirect interest therein) at the
Exercise Price, and if TMP elects to sell the Protected Property (or the applicable direct or indirect interest therein), then the following provisions and procedures will be applicable: 

        (i)    TMP
promptly shall notify the Protected Partner Representative on behalf of the Protected Partners who would recognize taxable gain as a result of such Required Transfer
(collectively, the "Affected Partners") of the proposed Required Transfer and the terms and conditions thereof (such terms and conditions, including the Exercise Price, being referred to in this
Section 2(c) as the "Terms"). 

        (ii)  Within
10 days after the date of TMP's notice (or, if earlier, on or before the date that is five business days prior to the date on which TMP must deliver to
the Non-TMP Party notice of TMP's election to either purchase or sell), the Protected Partner Representative shall notify TMP whether the Affected Partners wish to acquire the interest in
such Protected Property owned by the Non-TMP Party (if the proposed Required Transfer is for the transfer of an interest in the entity which owns such Protected Property), or to
form a new entity with TMP or one of its Affiliates to acquire such Protected Property (if the proposed Required Transfer is for the transfer of the Protected Property), in each case on the
Terms. In the latter case, the terms and conditions of the documents which will govern such new entity will be substantively the same as the documents governing the entity which owns such Protected
Property as of the Closing Date, with TMP or its Affiliate to hold the same percentage interest in the new entity as it holds as of the date the Non-TMP Party delivers its exercise notice,
and the Affected Partners to own the remaining percentage interests in the new entity. 

        (iii)  If
the Protected Partner Representative does not notify TMP of the election of the Affected Partners to acquire such interest within the time period set forth in
paragraph (ii) above), then TMP thereafter shall have the right to either purchase or sell the Protected Property (or the applicable direct or indirect interest therein) pursuant to the
provisions of the applicable agreement, without any obligation or liability to the Affected Partners pursuant to this Agreement resulting from such transaction. 

        (iv)  If
the Protected Partner Representative, on behalf of the Affected Partners, timely elects to acquire such interest, then TMP and the Protected Partner Representative
shall cooperate reasonably and in good faith to structure the transaction with the Non-TMP Party in a manner in which TMP (or its Affiliate) assigns to the Affected Partners TMP's rights
to acquire such interest, and the Affected Partners then directly exercise the rights of TMP (or its Affiliate) to acquire such interest from the Non-TMP Party. If the Non-TMP
Party will not agree to allow such an assignment and will not otherwise allow the Affected Partners to directly exercise such rights (in either case, at no additional cost to TMP), then TMP and the
Protected Partner Representative shall cooperate reasonably and in good faith to structure the transaction in multiple steps such that, at the conclusion of the transaction, TMP and the Affected
Partners are in the position that they would have been had the Non-TMP Party allowed the Affected Partners to directly exercise TMP's rights
(e.g., TMP or its Affiliate first will acquire the Protected Property or the applicable interest therein, and then TMP will transfer to the Affected
Partners the applicable interest). The Affected Partners will be solely responsible for the payment of any additional costs or expenses that may be payable as a result of structuring such transaction
in multiple steps (e.g., additional transfer taxes, conveyancing fees, title premiums, etc.). 

        (v)  If
the Protected Partner Representative, on behalf of the Affected Partners, elects to acquire such interest, then concurrently with delivering their exercise notice to
TMP, the Protected Partner Representative shall provide TMP with evidence reasonably satisfactory to TMP that the Affected Partners have the financial capability to timely consummate such acquisition.
Further, at such time as TMP is to notify the Non-TMP Party that TMP will exercise its right to acquire the Protected Property (or the applicable interest therein), the Affected Partners
shall provide to TMP security reasonably satisfactory to TMP for the performance by the Affected Partners of their obligations with respect to the acquisition of such Protected Property (or the
applicable interest therein), including the payment in full of the consideration payable to the Non-TMP Party and all closing costs and expenses payable by the purchaser in such
transaction, and also including any additional costs or expenses that may be payable as a result of structuring the transaction in multiple steps. If the Affected Partners breach their obligation to
consummate the subject transaction, the Affected Partners shall indemnify, defend and hold TMP and its Affiliates harmless from any losses, damages, costs, liabilities, costs or expenses incurred or
suffered by TMP or its Affiliates as a result of such breach. 

        (d)  TMP
shall use, and shall cause any other entity in which TMP has a direct or indirect interest to use (to the extent not prohibited by law), the "traditional method"
under Regulations Section 1.704-3(b) for purposes of making allocations under Code Section 704(c) with respect to each Protected Property to take into account the
book-tax disparities as of the Closing Date of the Transaction with respect to such Protected Property. 

        (e)  TMP
agrees to either (i) maintain, at all times, and on a continuous basis, with respect to each Protected Property, an amount of indebtedness sufficient to avoid
the recognition of gain by any Protected Partner or Indirect Owner as a result of a deemed distribution to any Protected Partner or Indirect Owner under Code Section 752; or
(ii) pursuant to Section 7.5 of the TMP Partnership Agreement, make available to each Protected Partner the opportunity (a "Guarantee Opportunity") to make a "bottom guarantee" of
indebtedness. With respect to clause (i) of the first sentence of this Section 2(e), TMP shall be required to maintain such debt in an amount so that the sum of each
Protected Partner's allocable share of such debt pursuant to the regulations under Code Section 752 is equal to the excess of (x) the amount of indebtedness to which each Protected
Property is subject as of the Closing Date over (y) the adjusted tax basis, as determined for federal income tax purposes, of each Protected Property as of the Closing Date, as set forth on
Schedule 3 (the "Protected Amount"). Schedule 3 initially shall be prepared based on estimates provided by the Protected Partners of the tax basis, liabilities and
pre-contribution gain of the Protected Partners in the Protected Properties, but shall be updated promptly by TMP based on actual data as of the Closing Date when such information is
available. TMP makes no representation or warranty to any Protected Partner that providing a "bottom guarantee" entered into pursuant to
Section 7.5 of the TMP Partnership Agreement shall be respected for federal income tax purposes as causing the Protected Partner to be considered to "bear the economic risk of loss" with
respect to the indebtedness thereby guaranteed by such Protected Partner for purposes of either Code Section 752 or otherwise. 

        (f)    With
respect to each Protected Property, TMP shall allocate, and shall cause any other entity in which TMP has a direct or indirect interest to allocate, "excess
nonrecourse liabilities," as defined in Regulations Section 1.752-3(a)(3), according to the amount of built-in gain under Code Section 704(c) as of the Closing
Date, as set forth on Schedule 3, less amounts previously taken into account under Regulations Sections 1.752-3(a)(1) and 1.752-3(a)(2). 

        3.    Indemnity for Breach of Obligations set forth in Section 2 by TMP.    

        (a)  If
TMP breaches one or more of its obligations set forth in Section 2 hereof to any Protected Partner (or an Indirect Owner thereof), each such Protected Partner
(or Indirect Owner thereof) shall receive from TMP as damages an amount equal to the aggregate federal, state and local income taxes incurred by such Protected Partner (or Indirect Owner thereof) as a
result of 

the gain recognized by or allocated to such Protected Partner (or Indirect Owner thereof) with respect to Protected Units solely by reason of such breach plus an additional amount so that, after the
payment by such Protected Partner (or Indirect Owner thereof) of all taxes on amounts received pursuant to this Section 3(a), such Protected Partner (or Indirect Owner thereof) retains an
amount equal to its total tax liability incurred solely as a result of such breach. In the event of a breach of Section 2 hereof with respect to any Protected Partner (or Indirect Owner
thereof), TMP shall promptly notify such Protected Partner (or Indirect Owner thereof) in writing of such breach. In addition, TMP shall prepare a computation of the indemnity payment, if any, owing
to such Protected Partner (or Indirect Owner thereof) under this Section 3(a), which computation shall be delivered to such Protected Partner (or Indirect Owner thereof) no later than
January 15th of the year following the year (the "Tax Payment Year") in which the Protected Partner (or Indirect Owner thereof) is required to report the gain resulting from the breach on such
Protected Partner's (or Indirect Owner's) federal income tax return. TMP shall make any required indemnity payment owing to a Protected Partner (or Indirect Owner thereof) pursuant to this
Section 3(a) no later than April 1st of the applicable Tax Payment Year, or, for any Protected Partner (or Indirect Owner thereof) who is required to make an additional quarterly payment
of estimated tax for the year in which the Protected Partner (or Indirect Owner thereof) is required to report the gain resulting from the breach, TMP shall prepare a computation of the indemnity
payment and shall make any required indemnity payment owing to a Protected Partner (or Indirect Owner thereof) no later than 5 days prior to the due date for such quarterly estimated tax
payment, provided such Protected Partner (or Indirect Owner thereof) provides to TMP, not later than
15 days prior to the due date for such quarterly estimated tax payment, a written statement in a form reasonably acceptable to TMP setting forth the reasons for, and a calculation of, the
additional quarterly payment of estimated tax. For purposes of this Section 3(a), (i) all income arising from a transaction or event that is treated as ordinary income under the
applicable provisions of the Code and all payments under this Section 3(a) shall be treated as subject to federal, state and local income tax at an effective tax rate imposed on ordinary income
of individuals residing in the city and state of residence of such Protected Partner (or Indirect Owner thereof), determined using the maximum federal rate of tax on ordinary income and the maximum
state and local rates of tax on ordinary income then in effect in such city and state, (ii) all other income arising from the transaction or event shall be subject to federal, state, and local
income tax at the effective tax rate imposed on long-term capital gains of individuals residing in the city and state of residence of such Protected Partner (or Indirect Owner thereof),
determined using the maximum federal, city and state rates on long-term capital gains then in effect, (iii) any amounts giving rise to a payment pursuant to this Section 3(a)
will be determined assuming that the transaction or event giving rise to TMP's obligation to make a payment was the only transaction or event reported on the Protected Partner's (or Indirect Owner's)
tax return (i.e., without giving effect to any loss carry forwards or other deductions attributable to such Protected Partner or Indirect Owner), and (iv) any amounts payable with respect to
state and local income taxes shall be assumed to be deductible for federal income tax purposes. In the case of a Protected Partner which is a partnership or disregarded entity for federal income tax
purposes, the preceding sentence shall be applied treating each Indirect Owner of such partnership as if it were directly a Protected Partner, and in the case of a corporate Protected Partner (or
Indirect Owner thereof), the preceding sentence shall be applied using the highest marginal rate of tax applicable to corporations for federal income tax purposes and state corporate income or
franchise tax purposes. For purposes of computing the damages payable in the aggregate to the Protected Partners (or Indirect Owner thereof) under this Section 3(a) with respect to a breach of
TMP's obligations under Section 2 hereof, in no event shall the gain taken into account with respect to the Protected Property exceed the amount of gain with respect to such Protected Property
that would have been recognized by or allocated to the Protected Partners and Indirect Owners thereof with respect to the Protected Units if TMP had sold such Protected Property in a fully taxable
transaction on the day following the Closing Date of the Transaction for a purchase price equal to the fair market value of such Protected Property at such time, provided that, for purposes of
computing such amount, the aggregate amount of such gain with respect to such Protected Property shall not 

exceed each Protected Partners' (or Indirect Owner's) share of the Code Section 704 (c) gain stated with respect to such Protected Property on Schedule 3 of this Agreement (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) a Protected Partner on a
transfer of some or all of its Protected Units to a transferee who is treated as a Protected Partner with respect to such Protected Units, (b) an Indirect Owner upon a sale or exchange of some
or all of such Indirect Owner's equity interest in such Protected Partner, (c) any Protected Partner who has ceased to be a Protected Partner as of the end of the calendar year in which such
gain is recognized, and (d) either a Protected Partner or an Indirect Owner to the extent of any decrease in the difference between the tax adjusted basis, as determined for federal income tax
purposes, and the book value of the Protected Property pursuant to Regulations Section 1.704-3). All determinations of indemnity payments shall be made by applying the federal and
state tax laws as in effect on the Closing Date and in no event shall any indemnity payment be due as a result of a change in the applicable tax law, a change in the interpretation of the applicable
tax law or as a result of an adjustment made in the resolution (whether by settlement or by judicial decision) of any federal or state tax audit or examination. 

        (b)  Notwithstanding
any provision of this Agreement to the contrary, the sole and exclusive rights and remedies of any Protected Partner (or Indirect Owner thereof) for a
breach of the obligations set forth in Section 2 hereof shall be a claim for damages against TMP, computed as set forth in Section 3(a), and no Protected Partner (or Indirect Owner
thereof) shall be entitled to pursue a claim for specific performance of the covenants set forth in Section 2 hereof or bring a claim against any person that acquires a Protected Property.
Notwithstanding anything to the contrary in this Agreement, TMP 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. 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. If TMP has breached an obligation set forth in Section 2 hereof (or a Protected
Partner or Indirect Owner asserts that TMP has breached an obligation set forth in Section 2 hereof), TMP and the Protected Partner Representative 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 Partner (or Indirect Owner thereof) under Section 3(a) hereof. If any such
disagreement cannot be resolved by TMP and such Protected Partner Representative within thirty (30) days after notice to the other party of the alleged breach, TMP and the Protected Partner
Representative shall jointly retain a nationally recognized law firm (the "Law Firm") to act as an arbitrator to resolve as expeditiously as possible all points of any such disagreement (including,
without limitation, whether a breach of an obligation set forth in Section 2 hereof has occurred and, if so, the amount of damages to which the Protected Partner (or Indirect Owner thereof) is
entitled as a result thereof, determined as set forth in Section 3(a) hereof). All determinations made by the Law Firm with respect to the resolution of any alleged breach of the obligations
set forth in Section 2 hereof and the amount of any damages payable to the Protected Partner (or Indirect Owner thereof) under Section 3(a) hereof shall be final, conclusive and binding
on TMP and the Protected Partner (or Indirect Owner thereof). The fees and expenses of the Law Firm incurred in connection with any such determination shall be shared equally by TMP and the Protected
Partner (or Indirect Owner thereof). If TMP and a Protected Partner Representative, each having acted in good faith and with its or his best efforts to select an Law Firm, are unable to retain a Law
Firm 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
court of competent jurisdiction. TMP shall be considered to have satisfied its obligations under Section 2(e) hereof, and therefore shall have no liability under this Section 3 for
breach of such Section 2(e), if TMP offers a Protected Partner (or Indirect Owner thereof) a Guarantee Opportunity in accordance with Section 2(e) hereof, and such Protected Partner (or
Indirect Owner thereof) fails to accept such Guarantee Opportunity. 

        4.    Notice of Death and Sale Events.    Each Protected Partner and Indirect Owner, hereby covenants and agrees to
provide, on its own behalf or through its legal representatives, TMP with prompt written notice of any transfer of Protected Units or the death of such Protected Partner or Indirect Owner. 

        5.    Successors and Assigns.    If TMP or any of its successors or assigns (i) consolidates with or merges
into any other person and is not the continuing or surviving entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any
person, then, and in each such case, TMP shall cause proper provision to be made so that the successors and assigns of TMP assume the obligations to the Protected Partners set forth in this Agreement. 

        6.    Third Party Beneficiaries.    TMP acknowledge, agree and confirm that every Protected Partner, person who
becomes a Protected Partner, and Indirect Owner or person that becomes an Indirect Owner, other than a person which becomes a Protected Partner or an Indirect Owner in a transaction in which gain or
loss is recognized for federal income tax purposes or by inheritance, is an intended third party beneficiary of the provisions of this Agreement and the provisions of this Agreement are enforceable by
any one of them. 

        7.    Appointment of Protected Partner Representative.    The Protected Partner Representative has been duly appointed
as agent and representative of the Protected Partners (and Indirect Owners) for the purposes set forth herein, and the Protected Partner Representative has accepted such appointment on the terms set
forth herein. The Protected Partner Representative represents and warrants to TMP that it has the right, power and authority to (i) enter into and perform this Agreement and to bind all of the
Protected Partners (and Indirect Owners) 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 Protected Partners, TMP may rely conclusively and act upon the directions,
instructions and notices of the Protected Partner 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 Partners. In addition, the Protected Partners (and Indirect Owners) acknowledge that TMP may rely exclusively upon the directions, instructions and notice of the
Protected Partner Representative for the purposes set forth herein, notwithstanding the fact that TMP may have received conflicting directions, instructions and notices from the Protected Partners (or
Indirect Owners). 

        8.    General Provisions.    

        (a)    Notices.    All notices, requests, claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally, sent by overnight courier (providing proof of delivery) or sent by telecopy (providing confirmation of transmission) to
the parties at the following addresses or telecopy numbers (or at such other address or telecopy number for a party as shall be specified by like notice): 

	(1)
	if
to TMP, to: 

Richard
A. Bayer, Esq.

The Macerich Company

401 Wilshire Blvd., Suite 700

Santa Monica, California 90401 

with
a copy to: 

Frederick
B. McLane, Esq.

O'Melveny & Myers LLP

400 S. Hope Street

Los Angeles, California 90071 

	(2)
	if
to a Protected Partner, to: 

Such
Protected Partner

[At the Address Provided on Schedule 1 hereto] 

Fax
No.:                          

with
a copy to: 

[include
Protected Partner Representative] 

        (b)    Counterparts.    This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. 

        (c)    Governing Law.    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF. 

        IN
WITNESS WHEREOF, TMP, WRLP and the Protected Partners have caused this Agreement to be signed personally or by their respective officers, general partners or members thereunto duly
authorized all as of the date first written above. 

[ADD
SIGNATURE BLOCKS] 

Exhibit I  

Schedule 1  

Protected Partners  

Exhibit I  

Schedule 2  

Protected Properties  

"Protected
Properties" means the parcels of real property listed below, including any improvements now or hereafter constructed on such parcels, and any interest in any entity owning, directly or
indirectly, such real property: 

	1.
	Desert
Sky Mall (including Desert Sky Peripheral Land)—Regional Shopping Center located at the SWC of 75th Avenue and Thomas Road in Phoenix, AZ. The net site
area, excluding anchors, is approximately 40 acres. The Peripheral Land is approximately 37 additional acres surrounding Desert Sky Mall.

	2.
	Flagstaff
Mall—Regional Shopping Center located at the SWC of U.S. Highway 89 and Railhead Avenue in Flagstaff, AZ. The net site area, excluding anchors, is approximately
25 acres.

	3.
	Paradise
Valley Mall—Regional Shopping Center located at the NWC of Cactus Rd. & Tatum Blvd. in Phoenix, AZ. The net site area, excluding anchors, is approximately
53 acres.

	4.
	The
Borgata—Specialty Center located at the NWC of Scottsdale Road and Rose Lane in Scottsdale, AZ. The net site area is approximately 7 acres.

	5.
	Camelback
Colonnade—Urban Village located at the SWC of 20th Street and Camelback Road in Phoenix, AZ. The net site area is approximately is 41 acres.

	6.
	Hilton
Village Shopping Center (including Office Park)—Specialty Center located at the NEC of Scottsdale Road and McDonald Drive in Scottsdale, AZ. The net site area,
including Office Park, is approximately 11 acres.

	7.
	PVIC
Ground Leases—Consists of a total of 28 parcels of land encumbered by ground lease agreements. The majority of the parcels are situated around Paradise Valley Mall in
Phoenix, AZ. The sites total approximately 44 acres.

	8.
	Village
Center—Urban Village located at the NWC of Cactus Road and Paradise Village Parkway in Phoenix, AZ. The net site area is approximately 12 acres.

	9.
	Village
Crossroads—Urban Village located at the SEC of Cactus Road and Tatum Boulevard in Phoenix, AZ. The net site area is approximately 16 acres.

	10.
	Village
Fair—Urban Village located at the SEC of Tatum Boulevard and Paradise Village Parkway East in Phoenix, AZ. The net site area is approximately 19 acres.
Schedule 2 (continued) Protected Properties

	11.
	Village
Plaza—Urban Village located at the NEC of Cactus Road and Tatum Boulevard in Phoenix, AZ. The net site area is approximately 8 acres.

	12.
	Village
Square II—Urban Village located at the SWC of Cactus Road and Paradise Village Parkway in Phoenix, AZ. The net site area is approximately 12 acres.

	13.
	Westbar
(including Cost Plus)—Consists of a total of 44 parcels of land all of which are situated around Metrocenter regional mall in Phoenix, AZ. Of these 44 sites, 36
are ground leased, seven have single tenant buildings on them and one has a three-tenant building on it. Cost Plus located at the NEC of 28th Drive and Metro Parkway, the Metrocenter
ring road. The net site area is approximately 2 acres.

	14.
	Arrowhead
Towne Center—Regional Shopping Center located at the NWC of Bell Road and 75th Avenue in Glendale, AZ. The net site area, excluding anchors, is
approximately 38 acres.

	15.
	Scottsdale
Fashion Square (including SFS Office Building)—Regional Shopping Center located at the NWC of Camelback Road and Scottsdale Road in Scottsdale, AZ. The net site
area, excluding anchors, is approximately 52 acres. The SFS Office Building is adjacent to Scottsdale Fashion Square with a net site area of approximately 4 acres.

	16.
	Superstition
Springs Center—Regional Shopping Center located at the NWC of the Superstition Freeway and Power Road in Mesa, AZ. The land is owned by Superstition Springs
Ground Lease.

	17.
	Superstition
Springs Ground Lease—Landowner of Superstition Springs Center at the NWC of the Superstition Freeway and Power Road in Mesa, AZ. The total net site area,
excluding anchors, is approximately 41 acres. 

Schedule 3  

Protected
Amounts and 704(c) Gain / (Loss) of the Protected Partners as of the Closing Date 

QuickLinks

Exhibit 10.1

TAX MATTERS AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}]]