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EXHIBIT 1.2
DRAFT
1/21/98
ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the __ day of __________,
1998 by and between Xxxxx Xxxx & Co., Inc., a Delaware corporation ("Xxxxx
Xxxx"), and Rockwell Medical Technologies, Inc., a Michigan corporation (the
"Company").
In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. PURPOSE: The Company hereby engages Xxxxx Xxxx for the term specified
in Paragraph 2 hereof to render consulting advice to the Company as an
investment banker relating to financial and similar matters upon the terms and
conditions set forth herein.
2. TERM: Except as otherwise specified in paragraph 4 hereof, this
Agreement shall be effective from ___________, 1998 to _________, 2000.
3. DUTIES OF XXXXX XXXX: During the term of this Agreement, Xxxxx Xxxx
shall seek out Transactions (as hereinafter
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defined) on behalf of the Company and shall furnish advice to the Company in
connection with any such Transactions.
4. COMPENSATION: In consideration for the services rendered by Xxxxx Xxxx
to the Company pursuant to this Agreement (and in addition to the expenses
provided for in Paragraph 5 hereof), the Company shall compensate Xxxxx Xxxx as
follows:
(a) The Company shall pay Xxxxx Xxxx a fee of $5,208.34 per month during
the term of this Agreement, which aggregate sum of $125,000 shall be payable
in full on the date of this Agreement;
(b) In the event that any Transaction (as hereinafter defined) occurs
during the term of this Agreement or one year thereafter, the Company shall pay
fees to Xxxxx Xxxx as follows:
CONSIDERATION FEE
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$ - 0 - to $500,000 Minimum fee of $25,000
$ 500,000 to $5,000,000 5% of Consideration
$ 5,000,000 or more $250,000 plus 1% of the
Consideration in excess of
$5,000,000
For the purposes of this Agreement, "Consideration" shall mean the total
market value on the day of the closing of stock, cash, assets and all other
property (real or personal) exchanged or received, directly or indirectly by
the Company or any of its security
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holders in connection with any Transaction. Any co-broker retained by Xxxxx
Xxxx shall be paid by Xxxxx Xxxx.
For the purposes of the Agreement, a "Transaction" shall mean (a) any
transaction originated by Xxxxx Xxxx, other than in the ordinary course of
trade or business of the Company, whereby, directly or indirectly, control of
or a material interest in the Company or any of its businesses or any of their
respective assets, is transferred for Consideration or(b) any transaction
originated by Xxxxx Xxxx whereby the Company acquires any other company or the
assets of any other company or an interest in any other company (an
"Acquisition").
In the event Xxxxx Xxxx originates a line of credit with a lender, the
Company and Xxxxx Xxxx will mutually agree on a satisfactory fee and the terms
of payment of such fee; provided, however, that in the event the Company is
introduced to a corporate partner by Xxxxx Xxxx in connection with a merger,
acquisition or financing and a credit line develops directly as a result of the
introduction, the appropriate fee shall be the amount set forth in the schedule
above. In the event Xxxxx Xxxx introduces the Company to a joint venture
partner or customer and sales develop as a result of the introduction, the
Company agrees to pay a fee of five percent (5%), or such mutually agreed upon
amount, of total sales generated directly from this introduction during the
first two years following the date of the first sale. Total sales shall mean
cash receipts less any applicable refunds, returns, allowances, credits and
shipping charges
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and monies paid by the Company by way of settlement or judgment arising out of
claims made by or threatened against the Company. Commission payments shall be
paid on the 15th day of each month following the receipt of customers' payment.
In the event any adjustments are made to the total sales after the commission
has been paid, the Company shall be entitled to an appropriate refund or credit
against future payments under this Agreement. All fees to be paid pursuant to
this Agreement, except as otherwise specified, are due and payable to Xxxxx
Xxxx in cash at the closing or closings of any transaction specified in
Paragraph 4 hereof. In the event that this Agreement shall not be renewed or
if terminated for any reason, notwithstanding any such non-renewal or
termination, Xxxxx Xxxx shall be entitled to a full fee as provided under
Paragraphs 4 and 5 hereof, for any transaction for which the discussions were
initiated during the term of this Agreement and which is consummated within a
period of twelve months after non-renewal or termination of this Agreement.
5. EXPENSES OF XXXXX XXXX: In addition to the fees payable hereunder, and
regardless of whether any transaction set forth in Paragraph 4 hereof is
proposed or consummated, the Company shall reimburse Xxxxx Xxxx for all
reasonable fees and disbursements of Xxxxx Xxxx'x counsel and Xxxxx Xxxx'x
reasonable travel and out-of-pocket expenses incurred in connection with the
services performed by Xxxxx Xxxx pursuant to this Agreement, including without
limitation,
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hotels, food and associated expenses and long-distance telephone calls.
6. LIABILITY OF XXXXX XXXX:
(1) The Company acknowledges that all opinions and advice (written
or oral) given by Xxxxx Xxxx to the Company in connection with Xxxxx Xxxx'x
engagement are intended solely for the benefit and use of the Company in
considering the transaction to which they relate, and the Company agrees that
no person or entity other than the Company shall be entitled to make use of or
rely upon the advice of Xxxxx Xxxx to be given hereunder, and no such opinion
or advice shall be used for any other purpose or reproduced, disseminated,
quoted or referred to at any time, in any manner or for any purpose, nor may
the Company make any public references to Xxxxx Xxxx, or use Xxxxx Xxxx'x name
in any annual reports or any other reports or releases of the Company without
Xxxxx Xxxx'x prior written consent.
(2) The Company acknowledges that Xxxxx Xxxx makes no commitment
whatsoever as to making a market in the Company's securities or to recommending
or advising its clients to purchase the Company's securities. Research reports
or corporate finance reports that may be prepared by Xxxxx Xxxx will, when and
if prepared, be done solely on the merits or judgment of analysis of Xxxxx Xxxx
or any senior corporate finance personnel of Xxxxx Xxxx.
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7. XXXXX XXXX'X SERVICES TO OTHERS: The Company acknowledges that Xxxxx
Xxxx'x or its affiliates are in the business of providing financial services
and consulting advice to others. Nothing herein contained shall be construed
to limit or restrict Xxxxx Xxxx in conducting such business with respect to
others, or in rendering such advice to others.
8. COMPANY INFORMATION:
(a) The Company recognizes and confirms that, in advising the Company
and in fulfilling its engagement hereunder, Xxxxx Xxxx will use and rely on
data, material and other information furnished to Xxxxx Xxxx by the Company.
The Company acknowledges and agrees that in performing its services under this
engagement, Xxxxx Xxxx may rely upon the data, material and other information
supplied by the Company without independently verifying the accuracy,
completeness or veracity of same.
(b) Except as contemplated by the terms hereof or as required by
applicable law, Xxxxx Xxxx shall keep confidential all material non-public
information provided to it by the Company, and shall not disclose such
information to any third party, other than such of its employees and advisors
as Xxxxx Xxxx determines to have a need to know and who agree to keep such
information confidential.
9. INDEMNIFICATION:
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a. The Company shall indemnify and hold Xxxxx Xxxx harmless against
any and all liabilities, claims, lawsuits, including any and all awards and/or
judgments to which it may become subject under the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, as amended (the
"Act") or any other federal or state statute, at common law or otherwise,
insofar as said liabilities, claims and lawsuits (including awards and/or
judgments) arise out of or are in connection with the services rendered by
Xxxxx Xxxx hereunder or any transactions in connection with this Agreement,
except for any liabilities, claims and lawsuits (including awards and/or
judgments), arising out of acts or omissions of Xxxxx Xxxx. In addition, the
Company shall also indemnify and hold Xxxxx Xxxx harmless against any and all
costs and expenses, including reasonable counsel fees, incurred or relating to
the foregoing.
Xxxxx Xxxx shall give the Company prompt notice of any such liability,
claim or lawsuit which Xxxxx Xxxx contends is the subject matter of the
Company's indemnification hereunder and the Company thereupon shall be granted
the right to take any and all necessary and proper action, at its sole cost and
expense, with respect to such liability, claim and lawsuit, including the right
to settle, compromise and dispose of such liability, claim or lawsuit,
excepting therefrom any and all proceedings or hearings before any regulatory
bodies and/or authorities.
Xxxxx Xxxx shall indemnify and hold the Company harmless against any and
all liabilities, claims and lawsuits,
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including any and all awards and/or judgments to which it may become subject
under the 1933 Act, the Act or any other federal or state statute, at common
law or otherwise, insofar as said liabilities, claims and lawsuits (including
awards and/or judgments) arise out of or are based upon (i) any act or omission
of Xxxxx Xxxx or (ii) any untrue statement or alleged untrue statement of a
material fact required to be stated or necessary to make the statement therein,
not misleading, which statement or omission was made in reliance upon
information furnished in writing to the Company by or on behalf of Xxxxx Xxxx
for inclusion in any registration statement or prospectus or any amendment or
supplement thereto in connection with any transaction to which this Agreement
applies. In addition, Xxxxx Xxxx shall also indemnify and hold the Company
harmless against any and all costs and expenses, including reasonable counsel
fees, incurred or relating to the foregoing.
The Company shall give to Xxxxx Xxxx prompt notice of any such
liability, claim or lawsuit which the Company contends is the subject matter of
Xxxxx Xxxx'x indemnification and Xxxxx Xxxx thereupon shall be granted the
right to a take any and all necessary and proper action, at its sole cost and
expense, with respect to such liability, claim and lawsuit, including the right
to settle, compromise or dispose of such liability, claim or lawsuit, excepting
therefrom any and all proceedings or hearings before any regulatory bodies
and/or authorities.
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b. In order to provide for just and equitable contribution under the
Act in any case in which (i) any person entitled to indemnification under this
Section 9 makes claim for indemnification pursuant hereto but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 10 provides for indemnification in
such case, or (ii) contribution under the Act may be required on the part of
any such person in circumstances for which indemnification is provided under
this Section 10, then, and in each such case, the Company and Xxxxx Xxxx shall
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after any contribution from others) in such proportion
taking into consideration the relative benefits received by each party from the
offering covered by the prospectus with respect to any transactions in
connection with this Agreement (taking into account the portion of the proceeds
of the offering realized by each), the parties' relative knowledge and access
to information concerning the matter with respect to which the claim was
assessed, the opportunity to correct and prevent any statement or omission and
other equitable considerations appropriate under the circumstances; provided,
however, that notwithstanding the above in no event shall Xxxxx Xxxx be
required to contribute any amount in excess of 10% of the public offering price
of any securities to which such Prospectus applies; and
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provided, that, in any such case, no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
Within fifteen (15) days after receipt by any party to this
Agreement (or its representative) of notice of the commencement of any action,
suit or proceeding, such party will, if a claim for contribution in respect
thereof is to be made against another party (the "Contributing Party"), notify
the Contributing Party of the commencement thereof, but the omission so to
notify the Contributing Party will not relieve it from any liability which it
may have to any other party other than for contribution hereunder. In case any
such action, suit or proceeding is brought against any party, and such party
notifies a Contributing Party or his or its representative of the commencement
thereof within the aforesaid fifteen (15) days, the Contributing Party will be
entitled to participate therein with the notifying party and any other
Contributing Party similarly notified. Any such Contributing Party shall not
be liable to any party seeking contribution on account of any settlement of any
claim, action or proceeding effected by such party seeking contribution without
the written consent of the Contributing Party. The indemnification provisions
contained in this Section 10 are in addition to any other rights or remedies
which either party hereto may have with respect to the other or hereunder.
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10. XXXXX XXXX AN INDEPENDENT CONTRACTOR : Xxxxx Xxxx shall perform its
services hereunder as an independent contractor and not as an employee of the
Company or an affiliate thereof. It is expressly understood and agreed to by
the parties hereto that Xxxxx Xxxx shall have no authority to act for,
represent or bind the Company or any affiliate thereof in any manner, except as
may be agreed to expressly by the Company in writing from time to time.
11. MISCELLANEOUS:
(1) This Agreement between the Company and Xxxxx Xxxx constitutes
the entire agreement and understanding of the parties hereto, and supersedes
any and all previous agreements and understandings, whether oral or written,
between the parties with respect to the matters set forth herein.
(2) Any notice or communication permitted or required hereunder
shall be in writing and shall be deemed sufficiently given if hand-delivered or
sent (i) postage prepaid by registered mail, return receipt requested, or (ii)
by facsimile, to the respective parties as set forth below, or to such other
address as either party may notify the other in writing:
If to the Company, to: Rockwell Medical Technologies, Inc.
00000 Xxxxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
with a copy to: Xxxxxxx X. Xxxxx
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx
0000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
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If to Xxxxx Xxxx, to: Xxxxx Xxxx & Co., Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to: XXX X. XXXXXXXXX
Gersten, Savage, Xxxxxxxxx
& Xxxxxxxxxx, LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(3) This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors, legal
representatives and assigns.
(4) This Agreement may be executed in any number of
counterparts, each of which together shall constitute one and the same original
document.
(5) No provision of this Agreement may be amended, modified or
waived, except in a writing signed by all of the parties hereto.
(6) This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, without giving effect to
conflict of law principles. The parties hereby agree that any dispute which
may arise between them arising out of or in connection with this Agreement
(except for disputes relating to any Transactions covered by this Agreement or
fees relating thereto for which a suit may be brought in the appropriate
jurisdiction) shall be adjudicated before a court located in New York City, and
they hereby submit to the exclusive jurisdiction of the courts of the State of
New York located in New York, New York and of the federal courts in the
Southern District of New York with respect to any action or legal
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proceeding commenced by any party, and irrevocably waive any objection they now
or hereafter may have respecting the venue of any such action or proceeding
brought in such a court or respecting the fact that such court is an
inconvenient forum, relating to or arising out of this Agreement, and consent
to the service of process in any such action or legal proceeding by means of
registered or certified mail, return receipt requested, in care of the address
set forth in Paragraph 11(b) hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
XXXXX XXXX & CO., INC.
By:________________________________
ROCKWELL MEDICAL TECHNOLOGIES, INC.
By:________________________________
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