Document:

exv10w2

 

July 20, 2005

CONFIDENTIAL

Paul Royalty Fund, L.P.

Paul Royalty Fund Holdings II

c/o Paul Capital Management, L.L.C.

50 California Street

Suite 3000

San Francisco, CA 94111

Attention: Chief Financial Officer

Walter Flamenbaum, M.D.

Mr. Lionel Leventhal

Paul Capital Partners

140 East 45th Street, 44th Floor

New York, NY 10017

Ladies and Gentlemen:

     Reference is made to the Revenue Interest Assignment Agreement dated October 28, 2003 (the
“RIAA”), among Artery, LLC (“Assignor”), Guilford Pharmaceuticals Inc. (“Guilford”), GPI Holdings,
Inc., Paul Royalty Fund, L.P. (“PRF”), and Paul Royalty Fund Holdings II (together with PRF, the
“Assignees”). Capitalized terms used in this letter without definition shall have the meanings
given to those terms in the RIAA.

     Guilford has advised Assignees that Guilford may enter into a transaction (the “Transaction”)
with MGI Pharma, Inc. (the “Purchaser”) that, if consummated, will result in the Change of Control
of Guilford. As a condition to entering into the Transaction, the Purchaser has asked Assignees to
confirm, by their signatures below, that Purchaser may repurchase the Assigned Interests in whole,
without any recourse, representation or warranty by the Assignees, for the amount calculated in
accordance with Schedule A of this letter (the “Repurchase Amount”), and upon such
repurchase terminate any and all obligations of Guilford (including its Subsidiaries and
Affiliates) under the Transaction Documents (except to the extent that such obligations survive the
termination of the Transaction Documents in accordance with their respective terms and excluding
the Warrants). Upon payment in full of the Repurchase Amount, the Assignees will terminate,
release and discharge all security interests and liens which it may have on any real or personal
property of Guilford (including its Subsidiaries and Affiliates) and file UCC termination
statements with respect to any such security interests or liens.

 

 

Paul Royalty Fund, L.P.

Paul Royalty Fund Holdings II

Walter Flamenbaum, M.D.

Mr. Lionel Leventhal

July 20, 2005

Page 2 of 4

     In consideration for the confirmation provided by Assignees pursuant to this letter,
Purchaser, by its signature below, agrees to repurchase the Assigned Interests for the Repurchase
Amount on or before the consummation of the Transaction. The agreements set forth in this letter
shall terminate if (i) the agreement regarding the Transaction is terminated prior to the
consummation of the Transaction, (ii) a definitive agreement regarding the Transaction is not
executed by Guilford and the Purchaser prior to August 31, 2005, or (iii) the Transaction does not
close on or before December 31, 2005.

     The parties understand and agree that until such time as the Repurchase Amount is paid, the
RIAA and Transaction Documents shall remain in full force and effect.

     Please indicate your acceptance of matters set forth in this letter by counter signing this
letter in the space provided and returning this letter by overnight mail to Guilford
Pharmaceuticals Inc., 6611 Tributary Street, Baltimore, MD 21224, Attention: Asher M. Rubin,
Senior Vice President, General Counsel and Secretary, and by facsimile ((410)-631-6899).

	 	 	 	 	 	 	 
	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	GUILFORD PHARMACEUTICALS INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Dean J. Mitchell 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Dean J. Mitchell 	 	 
	 

	 	Title:	 	President and Chief Executive
Officer 	 	 

	 	 	 	 	 	 	 
	PAUL ROYALTY FUND, L.P.	 	 
	 
	 	 	 	 	 	 
	By:	 	Paul Capital Management, LLC,	 	 
	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Lionel Leventhal 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Lionel Leventhal 	 	 
	 

	 	Title:	 	Manager 	 	 

[signatures continued]

 

 

Paul Royalty Fund, L.P.

Paul Royalty Fund Holdings II

Walter Flamenbaum, M.D.

Mr. Lionel Leventhal

July 20, 2005

Page 3 of 4

	 	 	 	 	 	 	 	 	 
	PAUL ROYALTY FUND HOLDINGS II.	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	Paul Royalty Fund II, L.P.,	 	 
	 	 	Its Managing Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Paul Capital Royalty Management, LLC,	 	 
	 	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:  	 	/s/ Lionel Leventhal 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Name: Lionel Leventhal	 	 
	 

	 	 	 	Title:   Manager	 	 

	 	 	 	 	 
	MGI PHARMA, INC.	 	 
	 
	 	 	 	 
	By:  
	 	/s/ Leon O. Moulder 	 	 
	 

	 	 	 
	Name:
Leon O. Moulder, Jr.
	 	 
	Title:  
President & CEO
	 	 

 

 

Schedule A

The Repurchase Amount shall be an amount equal to the Assignees Option Repurchase Price (calculated
at the time of payment of the Repurchase Amount in accordance with Schedule 5.07(a) of the RIAA)
less payments previously made by Guilford and Artery to Assignees, but without the
application of the factors set forth on Schedule 5.07(c) of the RIAA to such payments and without
any adjustment for the Warrants (which shall be retained by Assignees). For illustrative purposes,
if the Repurchase Amount would have been paid as of June 30, 2005, the Repurchase Amount would have
been $59.29 million, calculated as follows:

	 	 	 	 	 
	All amount in table are in millions
	 	 	 	 
	 
	 	 	 	 
	Assignees Option Repurchase Price Calculation as of 6/30/05 (Schedule
5.07(a))
	 	$	68.32	 
	Credits to Assignees Option Repurchase Price (no multiplication factor, as
negotiated) for amounts received:
	 	 	 	 
	2003
	 	$	0.14	 
	2004
	 	$	5.76	 
	6/30/2005
	 	$	3.13	 
	Total credits through 6/30/05
	 	$	9.03	 
	 
	Illustrative Repurchase Amount
	 	$	59.29	 

	 	 	 	 	 
	 	 	Initials:
	 
	 	 	 	 
	 	 	GUILFORD PHARMACEUTICALS INC.
	 
	 	 	 	 
	 

	 	 	 	/s/ DM       
	 
	 	 	 	 
	 	 	PAUL ROYALTY FUND, L.P.
	 
	 	 	 	 
	 

	 	 	 	/s/ LL       
	 
	 	 	 	 
	 	 	PAUL ROYALTY FUND HOLDINGS II.
	 
	 	 	 	 
	 

	 	 	 	/s/ LL       
	 
	 	 	 	 
	 	 	MGI PHARMA, INC.
	 
	 	 	 	 
	 

	 	 	 	/s/ LOMexv10w9

 

Exhibit 10.9

January 24, 2002

Mr. Kevin Fairbairn

106 Kennedy Court

Los Gatos, CA 95032

Dear Kevin

On behalf of Intevac (the “Company”), I am pleased to offer you the position of President and Chief
Executive Officer of the Company. Speaking for myself, as well as the other members of the
Company’s Board of Directors, we are all very impressed with you and your credentials and we look
forward to your future success in this position.

The terms of your new position with the Company are set forth below:

You will become the President and Chief Executive of the Company. As President and Chief Executive
Office, you will have responsibility for the general management of the Company’s business and you
will report to the Board of Directors.

You will be paid a monthly base salary of $20,417, which is equivalent to $245,000 on an annualized
basis. Your salary will be payable pursuant to the Company’s regular payroll policy. You will
be eligible for an annual performance bonus of up to 200% of annual salary predicated upon
achieving specific goals and objectives. At the Company’s election the bonus paid above 50% of
salary may be paid in cash or stock. The details of this bonus plan will be worked out jointly
between you and the Board and agreed to annually within sixty (60) days after approval of the
years’ annual operating plan. For the year 2002 the understanding is that a bonus of 50% will be
awarded at end of 2002 provided the company performance is reasonably good with details to be
agreed by 4/1/02.

In addition, upon becoming an employee of the Company, I will recommend that the Board of Directors
grant you an option to purchase an aggregate of 250,000 shares Intevac’s common stock at an
exercise price equal to the fair market value of the Common Stock on the date of the grant, as
determined by the Board of Directors. These option shares will vest at the rate of
1/5th of the total number of shares on the first anniversary of your date of employment,
and an additional 1/60th of the total number of shares at the end of each one-month
period thereafter.

In the event of a Change of Control after which Intevac stock would not exist (such as purchase of
the Company for cash) all options in this grant that have not vested will immediately vest and be
exercised.

In the event of a Change of Control after which Intevac stock survives the employee may elect to
retain the unvested options or to accelerate vesting with conditions like those in the “purchase of
the Company for cash” situation.

In the event of a Change of Control after which stock in the acquiring company is exchanged for
Intevac stock and the acquiring company offers to provide an option in a different stock of
equivalent economic value the employee may elect to accept the new stock options or accelerate
vesting with conditions like those in the “purchase the Company for cash” situation

 

 

“Change of Control” means a merger or acquisition of the Company in a transaction pursuant to
which the shareholders of the Company immediately prior to such transaction own less than fifty
percent (50%) of the surviving entity in such transaction, or sale of all or substantially all of
the assets of the Company.

In the event of the involuntary termination of your position as President and Chief Executive
Officer for any reason not involving good cause, conditioned upon your execution of a wavier and
release of claims that is acceptable to the Company, the Company will continue to pay your base
salary for twelve (12) months following such termination.

In the event of change of control where the buyer decides to not continue your position, the
Company will continue to pay you an amount equal to your base salary for twelve (12) months in one
lump sum. In the event the buyer requests that you continue as CEO or equivalent position a
contract will be established with the buyer requiring them to pay you an amount equal to twice (2
times) your annual salary after 12 months employment.

You will be eligible to participate in the Company’s standard benefits program, details of which
will be sent under separate cover.

This offer of employment is contingent upon (1) your signing the Company’s Employee Proprietary
Information Agreement, and (2) your providing proof of your eligibility to work in the U.S.

Your employment with the Company will be on an “at will” basis, meaning that either you or the
Company may terminate your employment at any time for any reason or no reason.

Kevin, we are all delighted to be able to extend you this offer and look forward to working with
you.

To indicate your acceptance of the Company’s offer, please sign and date this letter in the space
provided below and return it to me.

Sincerely,

/s/ Norman H. Pond

Norman H. Pond

Chairman

Accepted and Agreed:

Signature: /s/ Kevin Fairbairn

Start Date: January 24, 2002

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