CONTROL AGREEMENT

 

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                                                                    Exhibit 10.2

 

                               CONTROL AGREEMENT

 

          This CONTROL AGREEMENT (the "Agreement") dated as of March 2, 2004 by

and among MGI Pharma, Inc. (the "Pledgor") and Wells Fargo Bank, National

Association, in its capacity as trustee (the "Trustee"), and Wells Fargo Bank,

National Association, a national banking association, in its capacity as

securities intermediary and depository bank (the "Account Holder").

 

                             PRELIMINARY STATEMENTS:

 

          (1)  The Pledgor has granted the Trustee a security interest (the

"Security Interest") in certain security entitlements (the "Pledged Security

Entitlements") with respect to certain U.S. Treasury securities (the "Pledged

Financial Assets") identified on Schedule I attached hereto maintained by the

Trustee with the Account Holder and carried from time to time in an account with

the Account Holder, ABA No. 121000248, Account No. 15948501, and entitled "MGI

PHARMA, INC. Senior Subordinated Convertible Notes due 2024, Collateral Pledge

Account", (the "Pledged Account") and all additions thereto and substitutions

and proceeds thereof (collectively, the "Collateral"), pursuant to, and as more

particularly described in, a Pledge Agreement dated as of March 2, 2004, among

the Pledgor and the Trustee (as the same may hereafter be amended, supplemented

or otherwise modified from time to time, the "Pledge Agreement"; terms defined

in the Pledge Agreement and not otherwise defined herein are used herein as

therein defined). The Pledgor acknowledges having received value for such pledge

of the Collateral.

 

          (2)  Terms defined in Article 8 or 9 of the Uniform Commercial Code as

in effect in the State of New York (the "UCC") are used in this Agreement

(including, without limitation, paragraph (1) above) as such terms are defined

in such Article 8 or 9.

 

          (3)  The Pledgor, the Trustee and the Account Holder are delivering

this Agreement pursuant to the terms of the Pledge Agreement.

 

          NOW, THEREFORE, in consideration of the premises and mutual agreements

contained herein, the parties hereto hereby agree as follows:

 

          SECTION 1.  Notice of Exclusive Control. The Pledgor and Trustee are

entering into this Agreement to perfect, and confirm the first priority lien of,

the Trustee's Security Interest in the Collateral. The Account Holder agrees to

promptly make all necessary entries or notations in its books and records to

reflect the Trustee's Security Interest in the Collateral and to apply any value

distributed on account of any Pledged Financial Assets as directed in writing by

the Trustee without further consent from the Pledgor. The Account Holder

acknowledges that the Trustee has exclusive control over the Pledged Account and

all Pledged Security Entitlements contained therein from time to time.

 

          SECTION 2.  The Account. The Account Holder represents and warrants

to, and agrees with, the Pledgor and the Trustee and the Holders of the Notes

that:

 

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          (a)  The Account Holder has established the Pledged Account and shall

not change the name or account number of the Pledged Account without the prior

written consent of the Trustee.

 

          (b)  The Account Holder maintains the Pledged Account for the Trustee,

and all property (including, without limitation, all funds and financial assets)

held by the Account Holder for the account of the Trustee is, and will continue

to be, credited to the Pledged Account. The Account Holder is a securities

intermediary (as defined in Section 8-102(a)(xiv) of the UCC) and is acting in

such capacity in relation to the Trustee, the Pledgor and the Pledged Account

and with respect to all property credited thereto, from time to time.

 

          (c)  The Pledged Account is a securities account. The Account Holder

is the securities intermediary with respect to financial assets credited to the

Pledged Account from time to time. The Trustee is the entitlement holder with

respect to financial assets credited from time to time to the Pledged Account.

 

          (d)  All financial assets in registered form or payable to or to the

order of and credited to the Pledged Account shall be registered in the name of,

payable to or to the order of, or endorsed to, the Account Holder and in no case

during the term of the Pledge Agreement will any financial asset credited to the

Pledged Account be registered in the name of, payable to or to the order of, or

endorsed to, the Pledgor, except to the extent the foregoing have been

subsequently endorsed by the Pledgor to the Account Holder or in blank.

 

          (e)  Notwithstanding any other agreement to the contrary, the Account

Holder's jurisdiction with respect to the Pledged Account for purposes of the

UCC is, and will continue to be for so long as the Security Interest shall be in

effect, the State of New York.

 

          (f)  The Account Holder does not know of any claim to or interest in

the Pledged Account or any property (including, without limitation, all funds

and financial assets) credited to the Pledged Account, except for claims and

interests of the parties referred to in this Agreement.

 

          SECTION 3.  Control by Trustee. (a) The Account Holder will comply

with (A) all written instructions directing disposition of the funds in the

Pledged Account (such instructions, a "Payment Order"), (B) all notifications

and entitlement orders that the Account Holder receives directing it to transfer

or redeem any financial asset in the Pledged Account and (C) all other

directions concerning the Collateral, including, without limitation, directions

to distribute to the Trustee proceeds of any such transfer or redemption or

interest on any property in the Pledged Account (any such instruction,

notification or direction referred to in clause (A), (B) or (C) above being an

"Account Direction"), in each case of clauses (A), (B) and (C) above originated

by the Trustee without further consent by the Pledgor or any other person.

 

          (b)  The Trustee hereby acknowledges that it shall maintain and

exercise control of the Pledged Account on behalf of the Holders of the Notes.

 

          (c)  The Account Holder will not (i) comply with Account Directions or

other directions concerning the Collateral originated by the Pledgor or (ii)

distribute to the Pledgor

 

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interest or other distributions on or in respect of the Collateral, unless

instructed to do so by the Trustee, in its absolute discretion.

 

          SECTION 4.  Priority of Trustee's Security Interest. (a) The Account

Holder (i) subordinates to the Security Interest and in favor of the Trustee any

security interest, lien, or right of setoff the Account Holder may have, now or

in the future, against the Pledged Account or property in the Pledged Account,

and (ii) agrees that it will not exercise any right in respect of any such

security interest or lien or any such right of setoff until the Security

Interest is terminated, except that the Account Holder will retain its prior

lien on property in the Pledged Account to secure payment for property purchased

for the Pledged Account and normal commissions and fees for the Pledged Account.

 

          (b)  The Account Holder will not enter into any other agreement with

any Person relating to Account Directions or other directions with respect to

the Pledged Account.

 

          SECTION 5.  Statements, Confirmations, and Notices of Adverse Claims.

(a) The Account Holder will send copies of all statements and confirmations for

the Pledged Account simultaneously to the Pledgor and the Trustee. So long as

the Trustee and the Account Holder are the same institution, the Account Holder

is not required to send copies of statements and confirmations as provided in

the preceding sentence.

 

          (b)  When the Account Holder knows of any claim or interest in the

Pledged Account or any property credited to the Pledged Account other than the

claims and interests of the parties referred to in this Agreement, the Account

Holder will promptly notify the Trustee and the Pledgor of such claim or

interest.

 

          SECTION 6.  The Account Holder's Responsibility.(a) The Account Holder

will not be liable to the Pledgor or the Trustee or the Holders of the Notes for

complying with an Account Direction or other direction concerning the Collateral

originated by the Trustee, even if the Pledgor notifies the Account Holder that

the Trustee is not legally entitled to issue the Account Direction or such other

direction unless the Account Holder takes the action after it is served with an

injunction, restraining order, or other legal process enjoining it from doing

so, issued by a court of competent jurisdiction, and had a reasonable

opportunity to act on the injunction, restraining order or other legal process.

 

          (b)  This Agreement does not create any obligation of the Account

Holder except for those expressly set forth in this Agreement, in Part 5 of

Article 8 of the UCC, or in Article 4 of the UCC. In particular, the Account

Holder need not investigate whether the Trustee is entitled under the Trustee's

agreements with the Pledgor to give an Account Direction or other direction

concerning the Pledged Account. The Account Holder may conclusively rely on

notices and communications it believes given by the appropriate party.

 

          (c)  In no event shall the Account Holder or any of its affiliates,

shareholders, directors, officers, employees or agents be liable for indirect,

special, punitive, incidental or consequential damages of any kind whatsoever

even if advised of the possibility of such damages, other than such damages