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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 liab
