EXHIBIT 10(ai)
INVESTMENT BANKING AGREEMENT
This Agreement is made as of this day May 28, 2002, by and between Universal
Automotive Industries, Inc.; having its business office at 00000 Xxxxx Xxxxxxx
Xxx., Xxxxx, Xxxxxxxx (the "Company") and Rockwell Asset Management Inc., with
its principal office located at 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxx
Xxxx, 00000 (the "Consultant").
WHEREAS, the Company desires to retain the Consultant and the Consultant desires
to be retained by the Company, all pursuant to the terms and conditions
hereinafter set forth:
NOW THEREFORE, in consideration of the foregoing and the mutual promises and
covenants herein contained, it is agreed as follows:
1. Retention - The Company hereby retains the Consultant to perform
non-exclusive consulting services related to corporate finance and other
matters, and the Consultant hereby accepts such retention and shall perform
for the Company and the duties described herein, faithfully and to the best
of its ability. In this regard, subject to paragraph 7 hereof, the
Consultant shall devote such time and attention to the business of the
Company, as shall be determined by the Consultant, subject to the direction
of the President or Chief Executive Officer of the Company.
a) The Consultant agrees, to the extent reasonably required in the
conduct of the business of the Company, and at the Company's request,
to place at the disposal of the Company its judgment and experience
and to provide business development services to the Company including
the following:
(i) Review business plans and projections.
(ii) Review financial data as it relates to financing.
(iii) Advise on the Company's capital structure and on
alternatives for raising capital
(iv) Review and advise on prospective mergers and
acquisitions, and on any financing required to
complete such transactions.
(v) Advise on issues relating to public offerings
(vi) Review managerial needs.
(vii) Advise on issues relating to public relations.
(viii) Review feasibility of Online advertising for business
transactions.
2. Term - The Consultant's retention hereunder shall be for a term of twelve
months commencing on the date of this Agreement.
3. Compensation - The Consultant shall be compensated in accordance with the
following schedule:
(a) The Company shall pay to the Consultant a one-time fee of
$25,000.
(b) The Company shall pay to the Consultant a monthly fee of
$5,000 per month, payable Quarterly, in advance.
(c) The Company shall grant to the Consultant a warrant (the
"Warrant"); to purchase 150,000 shares of the common stock of
the Company for a period of thirty-six (36) months according
to the following schedule; 25,000 at an exercise price of
$2.25, 25,000 at an exercise price of $2.50, 100,000 at an
exercise price of $2.75.
The Warrant, shall possess anti-dilution provisions for stock
dividends, splits, mergers, sale of substantially all of the Company's
assets, sale of stock at below the then current exercise price of the
consultant's Warrant and for the other events (other than employee benefit
and stock option plans for the employees and advisors of the Company and
other than for all existing warrants or stock options).
The Company also agrees, to grant to the Consultant, subject to
the conditions listed below, the right to demand registrations of the
Common Stock issueable upon exercise of the Warrant referred to above, on
up two (2) occasions with all expenses of the first registration to be
borne by the Company and all expenses of the second registration to be
borne by the Consultant; provided, however, that such demand registration
rights shall be exercisable after twelve (12) months from the date of the
Agreement.
The Company will, subject to the conditions listed below, to the
extent necessary to permit the sale of such shares, grant "piggy back"
registration rights to include the shares of the Common Stock issueable
upon exercise of the Warrant in any registration statement filed by the
Company under the Securities Act of 1933 relating to any underwriting of
the sale of Common Stock or other security. Inclusion of such shares is
subject to the willingness of the managing underwriter(s) to include said
shares of Common Stock. In the event that the Company after the date hereof
grants registration rights to any other shareholder
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on terms and conditions the Consultant deems to be more favorable than
these granted hereunder, the Company agrees to grant the same rights to the
Consultant.
4. Expenses - The Company agrees to reimburse the Consultant for reasonable
expenses incurred by the Consultant in connection with the services
rendered hereunder, including but not limited to the Consultant's due
diligence activities with respect to the Company. Any such expenses shall
require the prior written approval of the Company.
5. Indemnification - Since the Consultant will be acting on behalf of the
Company in connection with its engagement hereunder, the Company and
Consultant have entered into a separate indemnification agreement
substantially in the form attached hereto as Exhibit A and dated the date
hereof, providing for the indemnification of Consultant by the Company. The
Consultant has entered into this Agreement in reliance on the indemnities
set forth in such indemnification agreement.
6. Status of Consultant - The Consultant shall be deemed to be an independent
contractor and, except as expressly provided or authorized in this
Agreement, shall have no authority to act for or represent the Company.
7. Other Activities of Consultant - The Company recognizes that the Consultant
now renders and may continue to render financial consulting and other
investment banking services to other companies, which may or may not
conduct business and activities similar to those of the Company. The
Consultant shall not be required to devote its full time and attention to
the performance of its duties under this Agreement, but shall devote only
so much of its time and attention as it deems reasonable or necessary for
such purposes. The Consultant shall give written notice to the Company upon
acceptance of any investment banking agreement with other companies in
similar industries and businesses. The Consultant agrees to maintain as
confidential any information it procures in rendering consulting services
hereunder regarding the Company that is not generally known to the public,
and agrees to not transmit any of such information to: (i.) any employees
of Consultant engaged in the trading of the Company's securities; or (ii)
any competitors of the Company for whom Consultant performs consulting
services. Consultant agrees that for so long as it provides services under
this Agreement or owns warrants or common stock of the Company either
directly or through affiliates, that neither Consultant nor its affiliates
will sell short any of the Company's securities, except to maintain and
orderly market as a market maker.
8. Control - Nothing contained herein shall be deemed to require the Company
to take any action contrary to its Certificate of Incorporation or By-Laws,
or any applicable statute or regulation, or to deprive its Board of
Directors of their responsibility for any control of the conduct of the
affairs of the Company.
9. Notices - Any notices hereunder shall be sent to the Company and the
Consultant at their respective addresses above set forth. Any notice shall
be given by registered or certified mail, postage prepaid, or overnight
receipted delivery service (such as Federal Express) and shall be deemed to
have been given when deposited in the United States mail. Either party may
designate any other address to which notice shall be given, by giving
written notice to the other of such change in address in the manner herein
provided.
10. Governing Law - This Agreement has been made in the State of New York and
shall be construed and governed in accordance with the laws thereof without
regard to conflicts of laws.
11. Entire Agreement - This Agreement contains the entire agreement between the
parties, may not be altered or modified, except in writing and signed by
the party to be charged thereby and supersedes any and all previous
agreements between the parties.
12. Binding Effect - This Agreement shall be binding upon the parties hereto
and their respective heirs, administrators, successors, and assigns.
13. Termination - Either party may terminate this Agreement in writing. If the
Agreement is terminated after 6 months, the Consultant is deemed to have
earned its fee in full.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
UNIVERSAL AUTOMOTIVE INDUSTRIES INC. ROCKWELL ASSET MANAGEMENT
By Xxxxxxxx X. Xxxxxx
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Title President
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