Document:

EXHIBIT 10.1

 

SECOND AMENDMENT TO

AGREEMENT
AND PLAN OF MERGER

THIS SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER
(this "Amendment") is made and entered
into as of March 28, 2007, by and among VALENTIS, INC., a Delaware corporation
("Parent"), VALENTIS HOLDINGS, INC.,
a Delaware corporation and direct wholly-owned subsidiary of Parent
("Merger Sub"), and URIGEN N.A.,
INC., a Delaware corporation ("Urigen").

Reference is hereby made to that certain Agreement and
Plan of Merger, dated as of October 5, 2006, as amended February 1, 2007,
by and among Parent, Merger Sub, and Urigen (the "Merger
Agreement").  Capitalized
terms used and not otherwise defined herein shall have the respective meaning
ascribed to such terms in the Merger Agreement.

WHEREAS, Parent, Merger Sub, and Urigen wish to amend
the terms of the Merger Agreement as more fully set forth under Section I
of this Amendment.

NOW, THEREFORE, in consideration of the agreements,
provisions and consents contained herein, and other good and valuable consideration,
the receipt and sufficiency of which the parties hereby acknowledge, the
parties hereto agree as follows:

I.              Amendment to Merger Agreement

A.            Section 14.1(d)(i)
of the Merger Agreement is hereby amended and restated in its entirety as
follows:

“(i)          if the Effective Time of
the Merger has not occurred on or prior to May 31, 2007 (the “Termination Date”); provided, that the right to terminate
this Agreement pursuant to this clause shall not be available to any party
whose failure to fulfill any material obligation of this Agreement or other
material breach of this Agreement has been the cause of, or resulted in, the
failure of the Effective Time of the Merger to have occurred on or prior to the
aforesaid date;”

II.            Miscellaneous Provisions

A.            Remaining
Terms Unaffected.  Except for the
amendments to the Merger Agreement set forth herein, all other provisions of
the Merger Agreement shall remain in full force and effect and are incorporated
herein as if fully set forth herein.

B.            Governing
Law.  This Amendment shall be
governed by and construed and interpreted in accordance with the laws of the
State of Delaware without giving effect to the principles of conflicts of law
thereof, except to the extent that Section 2709 of the Delaware Code would
require or permit application of the laws of the State of Delaware.

C.            Counterparts and
Facsimile Signature.  This Amendment
may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.  This Amendment may be
executed by facsimile signature.

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

	
  

  	
  VALENTIS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Benjamin F. McGraw, III

  
	
   

  	
   

  	
  Benjamin F.
  McGraw, III

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VALENTIS HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Benjamin F. McGraw, III

  
	
   

  	
   

  	
  Benjamin F.
  McGraw, III

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  URIGEN N.A., INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin E. Shmagin

  
	
   

  	
   

  	
  Martin E.
  Shmagin

  
	
   

  	
   

  	
  Chief Financial
  OfficerExhibit
10.1

March 5, 2007

Mr. Robert F. Reich

3622 Honey Hill Drive SE

Cedar Rapids, Iowa 52403

Dear Robert:

This letter confirms our discussions regarding your
employment with Hawaiian Telcom, Inc., a Hawaii corporation (the “Company”).  The purpose of this letter is to summarize
the terms of your employment. 
Notwithstanding anything herein to the contrary, you will be an employee
at-will of the Company.  The Company may
terminate your employment at any time with or without cause, at its
discretion.  Likewise, you may terminate
your employment with the Company at any time for any reason.   We ask
that, as a courtesy, however, you give the Company 30 days advance notice,
prior to a voluntary employment separation. 
Additionally, your employment may be terminated if the Company is not
satisfied with the results of a background check, or if information that you
provided in connection with your application is determined by the Company to be
false, inaccurate, or misleading.

1.                                      Start
Date: April 16, 2007 (“Start Date”).

2.                                      Position:  Vice President and Controller

3.                                      Direct
Report:  You shall report to the
Chief Financial Officer.

4.                                      Base
Salary:  $195,000 per year (the “Base
Salary”), payable in accordance with the Company’s customary payroll
practices.  Paydays are expected to be
every other Friday (total of 26 pay days a year).  Your paycheck shall be delivered to you or
made available to you on such dates.  If
a payday falls on a holiday or weekend, you may pick up your paycheck on the
weekday immediately preceding the payday.

5.                                      Sign-on
Bonus:  In addition to your Base Salary,
you will receive a sign-on bonus of $40,000, payable in two (2)
installments.  The first installment,
$25,000, will be paid in the first payroll cycle after your start date
according to usual payroll processes and practices; the second installment,
$15,000 will be paid in the first payroll cycle after the six-month anniversary
of your Start Date according to usual payroll processes and practices.  Both installments are subject to normal taxes.  If, however, your employment is terminated
for Cause, as defined herein, or you voluntarily leave prior to the one year
anniversary of your Start Date, the Company’s obligations under this paragraph shall
cease and you shall be obligated to reimburse the Company for the entire sign-on
bonus paid to you.  Your signed
acknowledgement and acceptance of this offer letter authorizes the Company to
make a payroll deduction for reimbursement of said bonus in the event that you
become obligated to reimburse the Company pursuant to this Paragraph 5.

	
  

  	
   

  
	
   

  	
  Employee

  
	
   

  	
  Initials

  

 

6.                                      Annual
Performance Bonus:  Annual maximum
bonus of 50% of Base Salary.  The
availability and amount of such bonus, if any, shall be governed by the terms of
the Company’s bonus plan, provided, however, the bonus for the 2007 plan year
will not be prorated to reflect your April 16, 2007 Start Date.

7.                                      Stock
Option:  You will be eligible to
receive a grant of a nonqualified stock option to purchase a number of shares
of the common stock of the Company’s parent, Hawaiian Telcom Holdco, Inc.,
pursuant to the Company’s stock option plan. 
The number of shares subject to the option grant shall be determined
based on financial models prepared by or under the direction of the Company or
its affiliates which, among other things, assume a certain rate of return on an
investment in Hawaiian Telcom Holdco, Inc. under various possible future
scenarios.  You shall receive options
covering that number of shares as would produce a pre-tax target option value
of $750,000 at such specified future date as is determined by the Company if as
of that date an investment in the Company achieved a specified rate of return
as determined by the Company.

8.                                      Employee
Benefits:   You shall be eligible to
participate in Company employee benefit plans and programs commensurate with
your position and seniority. You shall be entitled to three weeks paid vacation
each calendar year.  Vacation scheduling
should be coordinated with your direct supervisor to avoid undue impacts on the
Company and productivity. Unused vacation may carry over to subsequent years up
to a maximum of four weeks.  Please note
that the Company reserves the right to change its benefits package at its sole
discretion.

9.                                      Relocation
Expenses:  In accordance with the
Company’s applicable relocation plans and policies, the Company shall reimburse
you for reasonable relocation and travel expenses incurred in connection with
your move to Hawaii.  Such expenses
include costs of packing, unpacking and transporting you and your family’s
personal effects, including transportation of two automobiles and two dogs.  Travel expenses shall include the reasonable
costs for you and your wife from Cedar Rapids to Hawaii to search for a new
home, and one-way airline tickets for you and your wife from Cedar Rapids to
Hawaii, pursuant to the Company’s travel policy and upon approval of the Vice
President, Human Resources through the Hawaiian Telcom relocation agency.  Interim living expenses prior to the delivery
of your household goods will be part of your relocation expenses per the
approval from the Vice President, Human Resources through the Company’s
relocation agent.  Per our executive
relocation policy, you will be reimbursed the usual and customary closing costs
for home sale and home purchase through our relocation agency.  If, however, your employment is terminated
for Cause, as defined herein, or you voluntarily leave prior to the one year
anniversary of your Start Date, the Company’s obligations under this paragraph shall
cease and you shall be obligated to reimburse the Company for all relocation
expenses paid to you.  Your signed
acknowledgement and acceptance of this offer letter authorizes the Company to
make a payroll deduction for reimbursement of relocation expenses in the event
that you become obligated to reimburse the Company pursuant to this Paragraph 9.  Enclosed is a Repayment Agreement which, upon
signature and return, will be forwarded to our relocation agency which will
contact you to assist in your relocation. 
For purposes of this letter, “Cause” is defined as follows:

Knowing
or intentional violation of Company rules, policies, or procedures or any law
or regulation applicable to the Company’s business activities;

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Intentional,
reckless or willful neglect of duties;

Unacceptable
performance of duties;

Conviction,
plea bargain, or plea of nolo contendere
or imposition of unadjudicated probation with respect to a crime involving
dishonesty or moral turpitude;

Fraud
or dishonesty involving the Company’s business activities;

Unlawful
use or possession of a controlled substance;

Personal
conduct which, in the sole judgment of the Chief Executive Officer, damages the
Company’s reputation.

Prior
to a termination for Cause, the Company shall conduct a reasonable
investigation to determine, based on information reasonably available to the
Company at the time, whether Cause for termination exists.  Nothing in this letter, however, shall be
deemed to alter the employment-at-will relationship.

10.                               Housing
Allowance:  To allow for adjustment
to living in Hawaii, the Company shall pay you a reasonable housing allowance
of up to $3,000 per month, based on the Company’s good faith independent
verification and analysis of your housing requirements.  This housing allowance will be in effect for a
period of three (3) years to allow you and your family to localize into the
Hawaii living environment. The three (3) year period will commence as of the
earlier of a) six months from your Start Date, or b) the establishment of your
permanent residence as evidenced by the delivery of your household goods, or a
lease agreement or a home purchase closing statement, whichever occurs
first.  After the three (3) year period,
the housing allowance will cease.  Such
allowance shall be subject to applicable withholding taxes and paid in lump-sum
or periodically, in accordance with the Company’s policies and procedures. The housing
allowance is taxable to you, and you shall be entitled to an additional payment
in an amount such that, after payment by you of all income taxes imposed on the
housing allowance and the additional payment, you would retain an amount equal
to such housing allowance.

11.                               Severance:  In the event that your employment is
terminated by the Company without Cause, the Company shall, subject to your
execution of a general waiver and release of claims agreement in the Company’s
customary form, continue to pay, in accordance with normal payroll practices,
your Base Salary for the period beginning on the date of such termination of
employment (“Date of Termination”) and ending on the earliest to occur
of (a) the six month anniversary of the Date of Termination or (b) the first
date you violate any covenant contained in the Hawaiian Telcom Business Protection
Agreement, attached as Exhibit A.

12.                               Pre-employment
Controlled Substance Testing:  This
offer of employment is conditioned upon a satisfactory pre-employment
controlled substance test, which will be conducted at the Company’s direction
before you are allowed to start work.

13.                               Certain
Restrictions:  You must execute the Hawaiian
Telcom Business Protection Agreement. Additionally, you shall be subject to the
policies, practices and procedures maintained by the Company as set forth in
the Company’s Code of Business 

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Conduct, employee
handbook and other Company policies, which may be modified from time to
time.  You understand that this offer is
conditioned upon an inquiry into your criminal conviction record for the past
ten years, and if the Company determines that you have a criminal conviction
record that bears a rational relationship to the duties and responsibilities of
your intended position, this offer of employment may be withdrawn.

14.                               Arbitration:

You agree to and sign the arbitration agreement attached
as Exhibit B.

15.                               Interpretation
and Severability:  The words of this letter
shall be interpreted according to their common meaning.  If any provision of this letter is deemed
unenforceable for any reason, said provision shall not affect the remaining
terms of this letter and a court, upon motion by the Company, may amend said
provision so as to render it valid and enforceable while providing to the
Company the maximum protections permitted by law.  Hawaii law shall govern the interpretation
and enforcement of this letter.

If you agree with the terms of employment set forth in
this letter, please indicate your understanding and agreement by executing in
the space provided and returning this letter, complete with signed Exhibits A
and B to me by Friday, March 9th.  By
executing in the space provided you acknowledge that no promises,
representations, understandings  or
agreements, either oral or in writing, were made with you that are inconsistent
with the terms of this letter and that this offer of employment shall, in any
event, supersede any such prior promises, representations, understandings, or
agreements.

I look forward to working
with you in building, developing and integrating the Company into a strong
business with a positive community presence.

	
  

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Claire K.S.
  Cooper

  
	
   

  	
  Claire K.S.
  Cooper

  
	
   

  	
  Vice President,
  Human Resources

  
	
   

  	
   

  
	
  Understood,
  accepted and

  	
   

  
	
  agreed to on
  this 8th day

  	
   

  
	
  of March, 2007

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Robert Reich

  	
   

  
	
  Signature

  	
   

  
	
   

  	
   

  
	
  Robert Reich

  	
   

  
	
  Print Name

  	
   

  

 

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