Document:

EXHIBIT 10.2

     

    
      

      

    

    EXHIBIT
      10.2

     

    

     

    CONSENT
      TO AMENDMENT AND WAIVER

     

    This
      CONSENT TO AMENDMENT AND WAIVER (this “Consent”),
      dated
      as of April 9, 2007 (the “Effective
      Date”),
      is
      entered into among EMCORE Corporation, a New Jersey corporation (the
“Company”),
      and
      the beneficial owner party hereto (the
      “Consenting
      Holder”).
      Capitalized terms used but not defined herein have the meanings assigned to
      them
      in the Indenture, dated as of November 16, 2005 (the “Indenture”),
      between the Company and Deutsche Bank Trust Company Americas, as trustee (the
      “Trustee”).
      

     

    RECITALS

     

    WHEREAS,
      the Company announced on November 6, 2006 that its board of directors
      established a special committee (the “Special
      Committee”)
      to
      conduct an internal investigation relating to the Company’s historical stock
      option grant procedures and that the Company has informed the Securities and
      Exchange Commission (the “SEC”)
      of the
      Special Committee’s investigation;

     

    WHEREAS,
      on December 15, 2006, the Company filed a Form 12b-25 with the SEC stating
      that
      the Company is (i) continuing to review the findings of the Special Committee
      as
      well as the accounting guidance regarding stock option granting practices
      recently published by the SEC to determine, among other things, for which
      specific prior periods a restatement of its historical financial statements
      may
      be required and (ii) unable to file its Form 10-K for the fiscal year ended
      September 30, 2006 (the “Form
      10-K”)
      within
      the time period prescribed by the SEC;

     

    WHEREAS,
      on January 30, 2007, the Company received a letter purporting to constitute
      a
      notice of default from Cede & Co., the nominee of The Depository Trust
      Company (“DTC”)
      and
      the Holder of record of entire principal amount of the then outstanding 5%
      Convertible Senior Subordinated Notes due 2011 (the “Notes”)
      issued
      pursuant to the Indenture (the “Notice”);

     

    WHEREAS,
      on February 12, 2007, the Company filed a Form 12b-25 with the SEC stating
      that
      the Company would not be able to timely file its Quarterly Report on Form 10-Q
      for the quarter ended December 31, 2006 (the “Form
      10-Q”);
      

     

    WHEREAS,
      under Sections 8.01 and 8.02 of the Indenture, if the Company does not cure
      the
      purported default within sixty (60) calendar days following notice of default,
      an Event of Default would occur under the Indenture and the Trustee or the
      Holders of at least 25% of the outstanding principal amount of the Notes could
      accelerate the maturity of the Notes causing the outstanding principal amount
      of
      the Notes and accrued and unpaid interest thereon to become immediately due
      and
      payable; 

     

    WHEREAS,
      Section 11.02 of the Indenture permits the Company and the Trustee to amend
      or
      supplement the Indenture with the consent of the Holders of at least a majority
      in principal amount of the Notes then outstanding and Sections 8.04 and 11.02
      of
      the Indenture permit the Holders of at least a majority in principal amount
      of
      the Notes to waive compliance by the Company with any provision of the Indenture
      and the Notes; 

     

    WHEREAS,
      the Company and the Consenting Holder desire to amend the Indenture and the
      Notes in the form of the First Supplemental Indenture between the Company and
      the Trustee, a copy of which is attached hereto as Exhibit
      A
      (the
“Supplemental
      Indenture”);
      and

     

    WHEREAS,
      the Indenture, dated as of February 24, 2004 (the “2004
      Indenture”),
      between the Company and Deutsche Bank Trust Company Americas, as trustee, has
      been amended by consent of a majority of the beneficial owners to permit the
      Company to hold, purchase or exchange notes issued pursuant to the 2004
      Indenture (the “2004
      Notes”)
      without the requirement to surrender such 2004 Notes to the Trustee under the
      2004 Indenture for cancellation, and the Company is providing the Consenting
      Holder the right under this Consent to exchange certain Notes with the Company
      for 2004 Notes that may be held or purchased by the Company.

     

    NOW,
      THEREFORE, in consideration of the foregoing and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereby agree as follows:

     

    AGREEMENT

     

    Section
      1.  Waiver.
      Pursuant to Sections 8.04 and 11.02 of the Indenture and subject to the
      provisions set forth in Section 11 of the Supplemental Indenture upon
      effectiveness of the Supplemental Indenture, the Consenting Holder hereby waives
      (the “Waiver”)
      any
      and all Defaults or Events of Default relating to any failure of the Company
      to
      observe or perform any covenant or agreement contained in the Notes or the
      Indenture as a result of the Company’s failure to file with the SEC, or with the
      Trustee, the Form 10-K, the Form 10-Q and/or any other reports that the Company
      fails to file in a timely manner (collectively, the “Asserted
      Reports Defaults”)
      for
      reasons in whole or in part directly or indirectly attributable to or arising
      out of the Company’s review of its historical stock option grants as initially
      reported in a Current Report on Form 8-K filed with the SEC on November 6,
      2006.
      Any Defaults or Events of Default that have occurred with respect to Section
      6.03 of the Indenture shall be deemed to have been cured for all purposes and
      the Notices are hereby withdrawn. 

     

    Section
      2.  Supplemental
      Indenture.
      Pursuant to Section 11.02 of the Indenture, the Consenting Holder hereby
      consents to the execution and delivery by the Company and the Trustee of the
      Supplemental Indenture in substantially the form attached hereto as Exhibit
      A
      and to
      the amendments to the Indenture and the Notes set forth therein (the
“Amendments”).
      

     

    Section
      3.  Rescission
      and Agreement to Rescind.
      In the
      event that Holders or beneficial owners of the Notes (other than the Consenting
      Holder) holding at least 25% in aggregate principal amount of the outstanding
      Notes deliver or the Trustee delivers a notice of acceleration to the Company
      relating to any Asserted Reports Defaults and/or declares all of the Notes
      to be
      due and payable (the “Acceleration”),
      the
      Consenting Holder hereby agrees to provide, within three business days after
      the
      Company notifies the Consenting Holder that Holders or beneficial owners of
      the
      Notes have given such Acceleration, written notice to the Trustee that the
      Consenting Holder rescinds such notice and/or the Acceleration, as applicable,
      in accordance with Section 8.02 of the Indenture. 

     

    Section
      4.  Transfer.
      The
      Consenting Holder may transfer its Notes (together with its rights
      hereunder) to any Person, subject to the ability of such Person to make the
      representations and warranties set forth in Section 6 of this Consent and
      subject to each such Person executing a counterpart to this Consent and
      delivering such counterpart to the Trustee and the Company prior to the
      transfer. Any transfer in violation of this Section 4 shall be null and void.
      The provisions of this Section 4 will terminate on the Purchase Expiration
      Date
      (as defined in Section 5 hereof). The parties agree that the Trustee shall
      have
      no responsibility whatsoever with respect to any transfers in accordance with
      this Section 4.

     

    Section
      5.  Purchase
      and Exchange of Notes.

     

    (a)  Purchase
      of Notes.
      At any
      time prior to the fifth Business Day following the Effective Date (the
“Purchase
      Expiration Date”),
      the
      Company may purchase an aggregate of 12% of the outstanding principal amount
      of
      Notes held by each of the Consenting Holders, upon notice to the Consenting
      Holders setting forth the purchase date (not later than the Purchase Expiration
      Date), at a purchase price equal to $1,000 per $1,000 principal amount of the
      Notes purchased plus accrued and unpaid interest, if any, to but excluding
      the
      date of purchase. On the purchase date, the Company shall notify the Trustee
      as
      to which Notes the Company intends to repurchase and shall transmit by wire
      transfer to the Paying Agent (as defined in the Indenture) an aggregate amount
      of money sufficient to pay the purchase price of and accrued interest on the
      Notes to be purchased from the Consenting Holders. Each Consenting Holder shall
      cause the broker or custodian holding the Consenting Holder’s beneficial
      interest in the Notes to be purchased from the Consenting Holder to submit
      an
      instruction through DTC’s DWAC system to the Paying Agent to withdraw the amount
      of Notes to be purchased from the Consenting Holder. Upon the Paying Agent’s
      receipt of such instructions, the Company shall cause the Paying Agent to
      deliver to the account number set forth next to each Consenting Holder’s name on
Schedule
      I
      hereto
      payment in the amount set forth next to each Consenting Holder’s name on
Schedule
      I
      hereto.
      On and after the purchase date, interest shall cease to accrue on the Notes
      purchased by the Company on the purchase date.

     

    (b)  Agreement
      Regarding Purchase. The
      Company agrees that it will not exercise its right to purchase any Notes under
      this Section 5 unless it is also exercising its right to purchase a pro rata
      amount of the 2004 Notes pursuant to Section 5 of that certain Consent to
      Amendment and Waiver entered into by the Company and certain holders of the
      2004
      Notes (the “2004
      Indenture Consent”).
      

     

    (c)   Exchange
      of Notes. The
      Company hereby agrees to exchange all 2004 Notes that the Company purchases
      pursuant to the 2004 Indenture Consent for a like principal amount of Notes
      held
      by the Consenting Holder. Such exchange shall occur promptly after a purchase
      of
      2004 Notes pursuant to the 2004 Indenture Consent, but in no event later than
      April 30, 2007.

     

    (d)  Investment
      Representations.
      The
      Consenting Holder understands that the 2004 Indenture Notes delivered to it
      in
      exchange for the Notes (the “Exchange
      Notes”)
      have
      not been registered under the Securities Act of 1933, as amended (the
“Securities
      Act”).
      The
      Consenting Holder also understands that (x) if the exchange and delivery of
      the
      Exchange Notes for certain of the Notes involves an offer and sale of the
      Exchange Notes to the Consenting Holder and (y) if such offer and sale is not
      exempt from registration under the Securities Act by reason of Section 3(a)(9)
      thereof (it being understood that the Company makes no representation or
      warranty as to the legal matters referred to in the immediately preceeding
      clauses (x) and (y)), the Exchange Notes being delivered to it in exchange
      for
      certain of the Notes pursuant to an exemption from registration contained in
      the
      Securities Act based in part upon the Consenting Holder’s representations
      contained in this Consent. The Consenting Holder, hereby represents and warrants
      as follows:

     

    (i)  Consenting
      Holder Bears Economic Risk.
      The
      Consenting Holder has substantial experience in evaluating and investing in
      private placement transactions of securities in companies similar to the Company
      so that it is capable of evaluating the merits and risks of its investment
      in
      the Company and has the ability to protect its own investment interests. The
      Consenting Holder understands that it must bear the economic risk of investment
      in the Exchange Notes indefinitely unless the Exchange Notes are registered
      pursuant to the Securities Act, or an exemption from registration is available.
      The Consenting Holder understands that the Company has no obligation to register
      the Exchange Notes under the Securities Act. 

     

    (ii)  Acquisition
      for Own Account. 
      The
      Consenting Holder is acquiring the Exchange Notes for its own account and not
      with a view towards their distribution.

     

    (iii)  Qualified
      Institutional Buyer. 
      The
      Consenting Holder is a qualified institutional buyer as defined in Rule 144A
      under the Securities Act.

     

    (iv)  Company
      Information.
      The
      Consenting Holder has had an opportunity to discuss the Company’s business,
      management and financial affairs with officers and management of the Company
      and
      has had the opportunity to review the Company’s operations and facilities. The
      Consenting Holder has also had the opportunity to ask questions of, and receive
      answers from, the Company and its management regarding the terms and conditions
      of an investment in the Exchange Notes.

     

    (v)  Rule
      144. 
      The
      Consenting Holder acknowledges and agrees that the Exchange Notes are
“restricted securities” as defined in Rule 144 promulgated under the Securities
      Act (“Rule
      144”)
      as in
      effect from time to time and must be held indefinitely unless they are
      subsequently registered under the Securities Act or an exemption from such
      registration is available. The Consenting Holder has been advised or is aware
      of
      the provisions of Rule 144, which permits limited resale of securities that
      are
“restricted securities” (as defined in Rule 144) subject to the satisfaction of
      certain conditions specified in Rule 144.

     

    (vi)  Transfer
      Restrictions.
      The
Consenting
      Holder understands that the Exchange Notes shall be subject to restrictions
      on
      transfer under the Securities Act and, subject to Section 5(e), will bear a
      restrictive legend as to such restrictions and will be subject to stop-transfer
      restrictions.

     

    (e)   Opinion
      of Counsel.
      Upon
      request by the Company, the Consenting Holder shall deliver to the Company,
      prior to any exchange of Notes pursuant to the provisions hereof, an opinion
      of
      counsel to the Consenting Holder, that such exchange would be exempt from
      registration under Section 4(2) of the Securities Act or that such exchange
      otherwise does not require registration of the Exchange Notes under the
      Securities Act.

     

    (f)  Rule
      144. The
      Consenting Holder acknowledges that pursuant to Rule 144, current
      interpretations thereof by the Securities and Exchange Commission (the
“SEC”)
      and
“no-action” letters from the staff of the SEC, the Consenting Holder will be
      entitled to relate back (i.e., “tack”) the holding period of the Exchange Notes
      and the shares of common stock issuable upon conversion thereof (the
“Conversion
      Shares”)
      to the
      Consenting Holder’s holding period of the Notes and, so long as (x) the
      aggregate period during which the Notes and the Exchange Notes and the
      Conversion Shares are held is at least two years and (y) at the time of
      determination the Consenting Holder is not and has not for the preceding three
      months been an “affiliate” (as such term is defined in Rule 144) of the Company,
      the Exchange Notes and the Conversion Shares may be sold pursuant to Rule 144(k)
      (the “Rule
      144 Interpretation”).
      The
      Company shall not, directly or indirectly, dispute or otherwise interfere with
      any claim by the Consenting Holder that the holding period of the Exchange
      Notes
      and the Conversion Shares for purposes of Rule 144 tacks to the holding period
      of the Notes; provided, however, that nothing contained in this Section 5(e)
      shall obligate the Company or its legal counsel to take a position that is
      inconsistent with the provisions of applicable law or regulations and the
      administrative and judicial interpretations thereof in effect from time to
      time
      after the date hereof that alter the Rule 144 Interpretation (collectively,
      “Applicable
      Law”).
      The
      Company and the Consenting Holder agree and acknowledge that the foregoing
      covenants shall in no way (A) limit the transfer restrictions to which the
      Exchange Notes and any Conversion Shares are subject as set forth in Section
      5(d)(vi); or (B) require the Company to take any action to authorize the
      transfer of any Exchange Notes or Conversion Shares if the Consenting Holder
      has
      not demonstrated to the Company’s reasonable satisfaction that the Exchange
      Notes or Conversion Shares have been acquired for the Consenting Holder’s own
      account and not with a view towards their distribution. Upon receipt of a legal
      opinion of the Consenting Holder’s legal counsel, which opinion is in form and
      scope reasonably acceptable to the Company, to the effect that particular
      Exchange Notes or Conversion Shares may be sold or transferred without
      registration under the Securities Act, the Company shall (x) act expeditiously
      to permit and to facilitate the transfer of such Exchange Securities and
      Conversion Shares and (y) issue new Exchange Notes or Conversion Shares without
      restrictive legend if the same is covered in the scope of such legal opinion,
      which Exchange Notes shall, to the extent permitted by The Depositary Trust
      Company and the CUSIP Service Bureau, have the same CUSIP as the other 2004
      Notes at the time outstanding that are not Exchange Notes.

     

    Section
      6.  Representations
      and Warranties of the Consenting Holder.
      The
      Consenting Holder hereby represents and warrants to the Company as
      follows:

     

    (a) The
      Consenting Holder is the beneficial owner of the principal amount of Notes
      indicated below its name on the signature page hereto, has the power and
      authority to vote such Notes, has full power and authority to execute and
      deliver this Consent and to perform its obligations hereunder and owns the
      Notes
      through the DTC Participant or Custodian set forth in Schedule
      I
      hereto.

    

    (b) The
      Consenting Holder has such knowledge and experience in financial and business
      matters that the Consenting Holder is capable of protecting its own interests
      in
      connection with the grant of the rights set forth herein and evaluating the
      merits and risks related thereto.

    

    (c) The
      Consenting Holder and the Consenting Holder’s advisors have such knowledge and
      experience in financial, tax and business matters so as to enable the Consenting
      Holder to utilize the information made available to the Consenting Holder to
      evaluate the merits and risks of transaction contemplated by this Consent and
      to
      make an informed investment decision with respect thereto. 

    

    (d) The
      Consenting Holder has its own tax advisors and has not relied upon the Company
      and/or its representatives for tax advice in connection with the transactions
      contemplated by this Consent.

    

    (e) The
      Consenting Holder acknowledges that the Amendments, including, without
      limitation, the amendment to Section 3.07(a) of the Indenture contained in
      the
      Supplemental Indenture, provide additional rights or benefits to the Holders
      of
      the Notes and that such Amendment does not adversely affect the legal rights
      under the Indenture of the Consenting Holder.

    

    Section
      7.  Representation
      and Warranty of the Company.
      The
      Company hereby represents and warrants to the Consenting Holders that it has
      full power and authority to execute and deliver this Consent and to perform
      its
      obligations hereunder.

     

    Section
      8.  Tax
      Consequences.
      The
      Consenting Holder acknowledges that the Amendments and Waiver may constitute
      a
      taxable event with respect to the Notes and that the Consenting Holder has
      consulted its tax advisors regarding the risk that adoption of the Amendments
      and Waiver constitutes a significant modification for U.S. federal income tax
      purposes, the tax consequences to them if the Amendments and Waiver are so
      treated, the characterization of the Notes and any new notes (if the Amendments
      and Waiver constitute a significant modification) as securities for tax
      purposes, and the tax consequences of continuing to hold Notes after the
      adoption of the Amendments and Waiver (including the specific consequences
      in
      the event of a subsequent redemption of the Notes). The Consenting Holder
      further acknowledges that, to
      ensure
      compliance with requirements imposed by the Internal Revenue Service, that
      any
      U.S. federal income tax advice contained in this communication (including
      attachments) is not intended or written to be used, and cannot be used, for
      the
      purpose of (i) avoiding penalties under the Internal Revenue Code or (ii)
      promoting, marketing, or recommending to another party any transaction or matter
      addressed herein.

     

    Section
      9.  Miscellaneous.
      

     

    (a)  Severability.
      In case
      any provision of this Consent shall be invalid, illegal or unenforceable, the
      validity, legality and enforceability of the remaining provisions shall not
      in
      any way be affected or impaired thereby.

     

    (b)  Counterpart
      Originals.
      The
      parties may sign any number of counterparts of this Consent and on separate
      counterparts. Each signed counterpart shall be an original, but all of them
      together represent the same agreement.

     

    (c)  Headings.
      The
      Headings of the Sections of this Consent have been inserted for convenience
      of
      reference only, are not to be considered part of this Consent and shall in
      no
      way modify or restrict any of the terms or provisions hereof.

     

    (d)  Governing
      Law.
      THE
      INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
      THIS
      CONSENT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
      TO
      THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
      REQUIRED THEREBY.

     

    (e)  Amendment.
      This
      Consent may not be amended except by an instrument in writing signed on behalf
      of each of the parties hereto. 

     

    (f)  Notices.
      All
      notices provided for or permitted hereunder shall be made in writing by
      hand-delivery, facsimile or air courier guaranteeing overnight delivery to
      the
      other party at the following addresses (or at such other address as shall be
      given in writing by any party to the others):

     

    If
      to the
      Company:

    

    EMCORE
      Corporation

    1600
      Eubank Blvd. SE

    Albuquerque,
      NM 87123

    Attention:
      Chief Financial Officer

    Facsimile
      No.: (505) 323-3402

    

    with
      a
      copy to:

    

    Jones
      Day

    51
      Louisiana Avenue N.W.

    Washington,
      DC 20001

    Attention:
      John E. Welch, Esq.

    Facsimile
      No.: (202) 626-1700

    

    If
      to the
      Consenting Holder, at the addresses shown below its name on the signature page
      attached to this Consent, or to such other address as has been designated by
      notice in writing by such party to the others in accordance with the provisions
      of this Section 9(f).

     

    All
      such
      notices shall be deemed to have been duly given (i) when delivered by hand,
      if personally delivered, (ii) when confirmation of receipt is delivered by
      facsimile transmission or (iii) on the next business day, if timely
      delivered to an air courier guaranteeing overnight delivery. For purposes of
      this Consent, “business day” shall mean any day other than a Saturday, Sunday or
      a day on which banking institutions in the State of New York are authorized
      or
      obligated by law or executive order to close.

     

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
      as of the date first above written.

     

    

    EMCORE
      CORPORATION

    

    

    By:
      /s/
      Reuben Richards Jr.  

    Name:
      Reuben Richards Jr.

    Title:
      Chief Executive Officer

    
      
        
          Signature
            Page to Consent to Amendment and Waiver

        

         

      

      
         

        
          

        

      

      
         

        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Consent to be duly executed
      as of the date first above written.

     

    CONSENTING
      HOLDER:

    

    ALEXANDRA
      GLOBAL MASTER FUND LTD.

    

    By:
      ALEXANDRA INVESTMENT MANAGEMENT, LLC, as Investment Manager

    

    

    By:
      /s/
      Mikail Filimonov  

    Name:
      Mikhail Filimonov

    Title:
      Chairman & CEO

    

    Holder
      of
      $16,580,460 principal amount of the Notes

    

    Address:

    c/o
      Alexandra Investment Management, LLC

    767
      Third
      Avenue

    39th
      Floor

    New
      York,
      New York 10017

    Facsimile
      No.: 211-301-1810ex10-1

     

    Exhibit
      10.1

     

    EMPLOYMENT
      AGREEMENT

    

    This
      Employment Agreement (the “Agreement”) is entered into as of April 5, 2007 by
      and between Advanced Magnetics, Inc., a Delaware corporation with offices at
      125
      CambridgePark Drive, Cambridge, MA 02140 (“AMI” or the “Company”) and David A.
      Arkowitz, 627 Chestnut Street, Waban, MA 02468 (“you”).

    

    Whereas,
      AMI desires to employ you, and you desire to accept employment with AMI on
      and
      subject to the terms and conditions set forth in this Agreement;

    

    Now
      therefore, AMI and you agree as follows:

    

    1. Position;
      Duties.

     

                   
      a) Position.
      You
      shall serve as Chief Financial Officer and Chief Business Officer, reporting
      to
      the Chief Executive Officer of the Company. 

    

    b) Duties.
      You
      shall perform for AMI the duties and have the authority customarily associated
      with the offices of Chief Financial Officer and Chief Business Officer,
      including but not limited to the accounting, financial reporting, financial
      planning and analysis, tax, treasury, investor relations, and corporate business
      development functions, and such other duties as may be assigned to you from
      time
      to time by AMI’s Chief Executive Officer. You shall devote substantially your
      full business time and best efforts to the performance of your duties hereunder
      and the business and affairs of AMI and will not undertake or engage in any
      other employment, occupation or business enterprise; provided, however, that
      you
      may participate as a member of the board of directors or advisory board of
      other
      entities and in professional organizations and civic and charitable
      organizations; provided further, that any such positions are disclosed to the
      Board of Directors (the “Board”) or the Audit Committee thereof and do not
      materially interfere with your duties and responsibilities at AMI. You shall
      be
      based in AMI’s principal offices, which currently are in Cambridge,
      Massachusetts. 

    

    2. Term.
      The
      term of this Agreement shall be for a three (3) year period commencing on the
      date hereof unless terminated earlier pursuant to Section 4 below (the “Term”).
      You may continue to be employed by AMI beyond the Term of this Agreement, but
      such employment shall be on such terms and conditions as you and AMI then may
      agree. The parties will enter into discussions regarding their respective
      intentions to renew this Agreement within ninety (90) days of expiration of
      the
      Term.

    

    3. Compensation
      and Benefits.
      AMI
      shall pay you the following compensation and benefits for all services rendered
      by you under this Agreement:

    

    a) Base
      Salary.
      AMI
      will pay you an initial base salary (the “Base Salary”) at the annualized rate
      of $300,000.00, minus withholdings as required by law and other deductions
      authorized by you, which amount shall be paid in equal installments at AMI’s
      regular payroll intervals, but not less often than monthly. Your base salary
      may
      be increased annually by the Board or the Compensation Committee of the Board
      in
      its discretion.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    b) Bonus.
      You
      will be eligible to receive an annual performance bonus of up to forty percent
      (40%) of your base salary for each fiscal year during the term of this Agreement
      beginning with the fiscal year which commenced October 1, 2006 based on the
      extent to which, in the discretion of the Board or the Compensation Committee
      in
      consultation with the Chief Executive Officer, you achieve specific and
      measurable individual and company performance objectives established by the
      Board or Compensation Committee in consultation with the Chief Executive Officer
      and communicated to you in advance. The exact amount of the bonus for any year
      during the term shall be determined by the Board or the Compensation Committee
      in its sole discretion and may be more than the target bonus in the event you
      achieve all of your personal and company performance objectives or less than
      the
      target bonus if you do not achieve all of your personal and company performance
      objectives. No bonus shall be deemed to have been earned by you for any year
      in
      which you are not actively employed for the entire fiscal year to which the
      bonus relates, with the exception of the fiscal year which began on October
      1,
      2006, provided that you are still employed by the Company through the date
      bonuses are approved for such fiscal year.

    

    c)
      Options/RSUs.
      

    

    (i) You
      will
      be granted options to purchase 50,000 shares of AMI’s common stock as of your
      first date of employment with the Company. The foregoing options shall have
      an
      exercise price equal to the fair market value of a share of AMI common stock
      on
      the date of grant (equal to the closing price as reported on the Nasdaq Global
      Market) and shall vest in four equal annual installments beginning on the first
      anniversary of your first date of employment with the Company. The foregoing
      options will be subject to the terms and conditions of AMI’s Amended and
      Restated 2000 Stock Plan and form stock option agreements. 

    

    (ii)
       You
      will
      be granted options to purchase an additional 10,000 shares of AMI’s common stock
      as of your first date of employment with the Company. The foregoing options
      shall have an exercise price equal to the fair market value of a share of AMI
      common stock on the date of grant (equal to the closing price as reported on
      the
      Nasdaq Global Market) and shall vest in full immediately upon the Company’s
      achievement of certain specific and measurable performance goals established
      by
      the Board or the Compensation Committee and communicated to you in advance.
      The
      foregoing options will be subject to the terms and conditions of AMI’s Amended
      and Restated 2000 Stock Plan and form stock option agreements

    

    (iii)
      You
      will be granted restricted stock units (“RSUs”) as of your first date of
      employment with the Company granting you the right to receive an additional
      3,000 shares of AMI’s common stock at no cost to you. The RSUs shall vest in
      four equal annual installments beginning on the first anniversary of your first
      date of employment with the Company. The RSUs will be subject to the terms
      and
      conditions of AMI’s Amended and Restated 2000 Stock Plan and form restricted
      stock unit agreement. 

    

    d)
      Vacation.
      You
      will receive four (4) weeks of paid vacation per calendar year, which shall
      accrue ratably on a monthly basis commencing on the Effective Date.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    e)
      Benefits.
      You
      will be eligible to participate in all group health, dental, 401(k), and other
      insurance and/or benefit plans that AMI may offer to similarly situated
      executives of AMI from time to time on the same terms as offered to such other
      executives.

    

    f)
      Business
      Expenses.
      AMI
      will reimburse you for all reasonable and usual business expenses incurred
      by
      you in the performance of your duties hereunder in accordance with AMI’s expense
      reimbursement policy.

    

    4. Termination.
      Your
      employment with AMI may be terminated prior to the expiration of the Term as
      follows:

    

    a) Death.
      This
      Agreement shall terminate automatically upon your death. 

    

    b) Disability.
      AMI may
      terminate your employment in accordance with applicable laws in the event that
      you shall be prevented, by illness, accident, disability or any other physical
      or mental condition (to be determined by means of a written opinion of a
      competent medical doctor chosen by mutual agreement of AMI and you or your
      personal representative(s)) from substantially performing your duties and
      responsibilities hereunder for one or more periods totaling one hundred and
      twenty (120) days in any twelve (12) month period. 

    c) By
      AMI
      for Cause.
      AMI may
      terminate your employment for “Cause” upon written notice to you. For purposes
      of this Agreement, “Cause” shall mean any of (i)
      fraud, embezzlement or theft against AMI or any of its affiliates; (ii) you
      are
      convicted of, or plead guilty or no contest to, a felony;
      (iii)
      willful nonperformance by you (other than by reason of illness) of your material
      duties hereunder; or (iv) you commit
      an
      act of gross negligence, engage in willful
      misconduct
      or
      otherwise act with willful disregard for AMI’s best interests.

    

    d) By
      AMI
      Other Than For Death, Disability or Cause.
      AMI may
      terminate your employment other than for Cause, disability or death upon thirty
      (30) days prior written notice to you. 

    

    e) By
      You
      For Good Reason or Any Reason.
      You may
      terminate your employment at any time with or without Good Reason upon thirty
      (30) days prior written notice to AMI. For purposes of this Agreement, “Good
      Reason” shall mean that any of the following occurs without your prior written
      consent: (i)
      a
      material adverse change in your position, duties or responsibilities;
      (ii)
      any relocation of your principal place of business to a location more than
      fifty
      (50) miles from the Company’s current executive offices in Cambridge, MA; or
      (iii) a material breach by AMI of any
      of
      the terms or provisions of this Agreement and failure to remedy such breach
      within thirty (30) days following written notice from you identifying the
      breach.
      

    

    5. Payment
      Upon Termination.
      In the
      event that your employment with AMI terminates, you will be paid the
      following:

    

    a) Termination
      for Any Reason.
      In the
      event that your employment terminates for any reason, AMI shall pay you for
      the
      following items that were earned and accrued but unpaid as of the date of your
      termination: (i) your Base Salary; (ii) a cash payment for all accrued, unused
      vacation calculated at your then Base Salary rate; (iii) reimbursement for
      

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    any
      unpaid business expenses; and (iv) such other benefits and payments to which
      you
      may be entitled by law or pursuant to the benefit plans of AMI then in effect.
      

    

    b)
       Termination
      Without Cause or for Good Reason.
      In
      addition to the payments provided for in Section 5(a), in the event that (i)
      AMI
      terminates your employment other than for death, disability or Cause pursuant
      to
      Section 4(d) or you terminate your employment for Good Reason pursuant to
      Section 4(e); (ii) you comply fully with all of your obligations under the
      Nondisclosure and Developments Agreement dated April 5, 2007 between AMI and
      you; and (iii) you execute, deliver to AMI and do not revoke a general release
      (in a form acceptable to AMI) releasing and waiving any and all claims that
      you
      have or may have against AMI and its directors, officers, employees, agents,
      successors and assigns with respect to your employment (other than any
      obligation of AMI set forth herein which specifically survives the termination
      of your employment), then AMI will provide you with twelve (12) months of
      severance pay (calculated at your last Base Salary rate). The foregoing
      severance shall be paid in equal installments over the severance period in
      accordance with AMI’s usual payroll schedule. This Section 5(b) shall not apply
      during the one year period following a Change of Control, in which case Section
      5(c) shall apply.

    

    c) Termination
      Within One Year of a Change of Control.
      In the
      event that (i) within one year from the date a Change of Control (as defined
      below) of AMI occurs, AMI (for purposes of this section, such term to include
      its successor) terminates your employment other than for Cause pursuant to
      Section 4(c), death or disability; (ii) you comply fully with all of your
      obligations under all agreements between AMI and you; and (iii) you execute,
      deliver to AMI and do not revoke a general release (in a form acceptable to
      AMI)
      releasing and waiving any and all claims that you have or may have against
      AMI
      and its directors, officers, employees, agents, successors and assigns with
      respect to your employment (other than any obligation of AMI set forth herein
      which specifically survives the termination of your employment), then AMI will
      pay you twelve (12) months of severance pay (calculated at your last Base Salary
      rate). The severance shall be paid in equal installments over the severance
      period in accordance with AMI’s usual payroll schedule. In addition, in
      accordance with AMI’s Change of Control Policy, upon a Change of Control, fifty
      percent (50%) of the unvested options to purchase common stock and other equity
      incentives then held by you shall become immediately vested. In the event you
      are terminated by AMI (or its successor) or you terminate your employment with
      AMI (or its successor) for Good Reason pursuant to Section 4(e) within one
      year
      following a Change of Control for any reason, the remaining fifty percent (50%)
      of the unvested options or other equity incentives held by you on the date
      of
      closing of the Change of Control shall become immediately vested. For purposes
      of this Agreement, “Change
      of Control”
shall
      mean the first to occur of any of the following: (a) any “person” or “group” (as
      defined in the Securities Exchange Act of 1934, as amended) becomes the
      beneficial owner of a majority of the combined voting power of the then
      outstanding voting securities with respect to the election of the Board of
      Directors of AMI; (b) any merger, consolidation or similar transaction involving
      AMI, other than a transaction in which the stockholders of AMI immediately
      prior
      to the transaction hold immediately thereafter in the same proportion as
      immediately prior to the transaction not less than 50% of the combined voting
      power of the then voting securities with respect to the election of the Board
      of
      Directors of the resulting entity; (c) any sale of all or substantially all
      of
      the assets of AMI; or (d) any other acquisition by a third party of all or
      substantially all of the business or assets of AMI, as determined by the Board
      of Directors, in its sole discretion. After the one year period following

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    a
      Change
      of Control, this Section 5(c) shall no longer apply, and Section 5(b) shall
      continue to apply.

    

    6. Nonsolicitation
      Covenant.
      In
      exchange for the consideration provided by this Agreement, you shall not, for
      a
      period of one year following the termination of your employment with AMI for
      any
      reason, directly or indirectly, whether through your own efforts, or in any
      way
      assisting or employing the assistance of any other person or entity (including,
      without limitation, any consultant or any person employed by or associated
      with
      any entity with which you are employed or associated), recruit, solicit or
      induce (or in any way assist another in recruiting, soliciting or inducing)
      any
      employee or consultant of AMI to terminate his or her employment or other
      relationship with AMI.

    

    7. Assignment.
      This
      Agreement and the rights and obligations of the parties hereto shall bind and
      inure to the benefit of any successor of AMI by reorganization, merger or
      consolidation and any assignee of all or substantially all of its business
      and
      properties. Neither this Agreement nor any rights or benefits hereunder may
      be
      assigned by you, except that, upon your death, your earned and unpaid economic
      benefits will be paid to your heirs or beneficiaries.

     

    8. Interpretation
      and Severability.
      It is
      the express intent of the parties that (a) in case any one or more of the
      provisions contained in this Agreement shall for any reason be held to be
      excessively broad as to duration, geographical scope, activity or subject,
      such
      provision shall be construed by limiting and reducing it as determined by a
      court of competent jurisdiction, so as to be enforceable to the fullest extent
      compatible with applicable law; and (b) in case any one or more of the
      provisions contained in this Agreement cannot be so limited and reduced and
      for
      any reason is held to be invalid, illegal or unenforceable, such invalidity,
      illegality or unenforceability shall not affect the other provisions of this
      Agreement, and this Agreement shall be construed as if such invalid, illegal
      or
      unenforceable provision had never been contained herein.

     

    9. Notices.
      Any
      notice that you or AMI are required to give the other under this Agreement
      shall
      be given by personal delivery, recognized overnight courier service, or
      registered or certified mail, return receipt requested, addressed in your case
      to you at your last address of record with AMI, or at such other place as you
      may from time to time designate in writing, and, in the case of AMI, to AMI
      at
      its principal office, or at such other office as AMI may from time to time
      designate in writing. The date of actual delivery of any notice under this
      Section 9 shall be deemed to be the date of receipt thereof.

     

    10. Waiver.
      No
      consent to or waiver of any breach or default in the performance of any
      obligation hereunder shall be deemed or construed to be a consent to or waiver
      of any other breach or default in the performance of any of the same or any
      other obligations hereunder. No waiver hereunder shall be effective unless
      it is
      in writing and signed by the waiving party.

     

    11. Complete
      Agreement; Modification.
      This
      Agreement sets forth the entire agreement of the parties with respect to the
      subject matter hereof, and supersedes any previous oral or written
      communications, negotiations, representations, understandings, or agreements
      between them. Any modification of this Agreement shall be effective only if
      set
      forth in a written document signed by you and a duly authorized officer of
      AMI.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    12. Headings.
      The
      headings of the Sections hereof are inserted for convenience only and shall
      not
      be deemed to constitute a part, or affect the meaning, of this
      Agreement.

     

    13. Counterparts.
      This
      Agreement may be signed in two (2) counterparts, each of which shall be deemed
      an original and both of which shall together constitute one
      agreement.

     

    14. Choice
      of Law; Jurisdiction.
      This
      Agreement shall be deemed to have been made in the Commonwealth of
      Massachusetts, and the validity, interpretation and performance of this
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      Massachusetts, without regard to conflict of law principles. You hereby consent
      and submit without limitation to the jurisdiction of courts in Massachusetts
      in
      connection with any action arising out of this Agreement, and waive any right
      to
      object to any such forum as inconvenient or to object to venue in Massachusetts.
      You agree that, in any action arising out of this Agreement, you will accept
      service of process by registered mail or the equivalent directed to your last
      known address or by such other means permitted by such court. 

     

    15. Advice
      of Counsel; No Representations.
      You
      acknowledge that you have been advised to review this Agreement with your own
      legal counsel, that prior to entering into this Agreement, you have had the
      opportunity to review this Agreement with your attorney, and that AMI has not
      made any representations, warranties, promises or inducements to you concerning
      the terms, enforceability or implications of this Agreement other than as are
      contained in this Agreement. 

     

    16. I.R.C.
      § 409A. All
      other
      provisions of this Agreement notwithstanding, this Agreement shall be construed
      to avoid any adverse tax consequences to you under Internal Revenue Code Section
      409A, and the parties agree to amend this Agreement from time to time as may
      be
      necessary to that end, in a manner that best preserves the economic benefits
      to
      you. Further, for so long AMI has a class of stock that is publicly traded
      on an
      established securities market or otherwise, then AMI shall from time to time
      compile a list of “Specified Employees” as defined in, and pursuant to, Prop.
      Treasury Reg. § 1.409A-1(i) or any successor regulation. If you are a Specified
      Employee on the date of the termination of your employment with AMI, then,
      notwithstanding any other provision herein, no payment shall be made to you
      pursuant to Section 5(b) or 5(c) above during the period lasting six (6) months
      from the date of such termination of employment unless AMI determines that
      there
      is no reasonable basis for believing that making such payment would cause you
      to
      suffer any adverse tax consequences pursuant to Section 409A. If any payment
      to
      you is delayed pursuant to the provisions of this paragraph, such delayed
      payment shall instead be made on the first business day following the expiration
      of the six (6) month period referred to herein. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      AMI and
      you have executed this Agreement as of the day and year first set forth above.
      

    

    

    ADVANCED
      MAGNETICS, INC.

    

    

    By:
      /s/
      Brian J.G. Pereira________________

    Name:
      Brian J.G. Pereira 

    Title:
      Chief Executive Officer

    

    

    /s/
      David A. Arkowitz____________________

    David
      A.
      Arkowitz

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}]]