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EXHIBIT 1.2
ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the __ day of
____________, 1997 by and between Maidstone Financial, Inc., a New York
corporation ("Maidstone"), 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 Maidstone 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 ______________, 1997 to
________________, 1999.
3. DUTIES OF MAIDSTONE: During the term of this
Agreement, Maidstone shall seek out Transactions (as hereinafter 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 Maidstone to the Company pursuant to this Agreement (and in
addition to the expenses provided for in Paragraph 5 hereof), the Company shall
compensate Maidstone as follows:
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(a) The Company shall pay Maidstone a fee of
$4,166 per month during the term of this Agreement. The sum of $99,984 shall
be payable in full on the date of this Agreement;
(b) In the event that any Transaction (as
hereinafter defined) occurs during the term of this Agreement or one year
thereafter, the Company shall pay fees to Maidstone as follows:
CONSIDERATION FEE
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$ - 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 holders in
connection with any Transaction. Any co-broker retained by Maidstone shall be
paid by Maidstone.
For the purposes of the Agreement, a "Transaction"
shall mean (a) any transaction originated by Maidstone, 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,
(b) any transaction originated by Maidstone whereby the Company acquires any
other company or the
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assets of any other company or an interest in any other company (an
"Acquisition") or (c) any sale or Acquisition in connection with which the
Company engages an investment banker other than Maidstone and pays such
investment banker a fee in respect of such Transaction.
In the event Maidstone originates a line of credit
with a lender, the Company and Maidstone 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 Maidstone 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 Maidstone 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%) 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
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 Maidstone
in cash at the closing or closings of any transaction specified in Paragraph 4
hereof. In the event that this Agreement shall not be
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renewed or if terminated for any reason, notwithstanding any such non-renewal
or termination, Maidstone 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 MAIDSTONE: 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
Maidstone for all fees and disbursements of Maidstone's counsel and Maidstone's
travel and out-of-pocket expenses incurred in connection with the services
performed by Maidstone pursuant to this Agreement, including without
limitation, hotels, food and associated expenses and long-distance telephone
calls.
6. LIABILITY OF MAIDSTONE:
(1) The Company acknowledges that all opinions and
advice (written or oral) given by Maidstone to the Company in connection with
Maidstone's 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 Maidstone to be given hereunder, and no
such opinion or advice shall be used for any other purpose or reproduced,
disseminated, quoted or
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referred to at any time, in any manner or for any purpose, nor may the Company
make any public references to Maidstone, or use Maidstone's name in any annual
reports or any other reports or releases of the Company without Maidstone's
prior written consent.
(2) The Company acknowledges that Maidstone 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 Maidstone
will, when and if prepared, be done solely on the merits or judgment of
analysis of Maidstone or any senior corporate finance personnel of Maidstone.
7. MAIDSTONE'S SERVICES TO OTHERS: The Company
acknowledges that Maidstone's 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 Maidstone 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, Maidstone will
use and rely on data, material and other information furnished to Maidstone by
the Company. The Company acknowledges and agrees that in performing its
services under this engagement, Maidstone may rely upon the data, material and
other information supplied by the Company without
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independently verifying the accuracy, completeness or veracity of same.
(b) Except as contemplated by the terms hereof or
as required by applicable law, Maidstone 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 Maidstone determines to have a need to know.
9. INDEMNIFICATION:
a. The Company shall indemnify and hold Maidstone
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 Maidstone 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 Maidstone. In addition, the Company shall
also indemnify and hold Maidstone harmless against any and all costs and
expenses, including reasonable counsel fees, incurred or relating to the
foregoing.
Maidstone shall give the Company prompt notice of any
such liability, claim or lawsuit which Maidstone contends is the subject matter
of the Company's indemnification and the Company thereupon shall be granted the
right to take any and all
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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.
Maidstone shall indemnify and hold the Company
harmless against any and all liabilities, claims and lawsuits, 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 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 Maidstone 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, Maidstone 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 Maidstone prompt notice of
any such liability, claim or lawsuit which the Company contends is the subject
matter of Maidstone's indemnification and Maidstone 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
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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.
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 Maidstone 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 Maidstone be required to contribute any amount in excess of 10% of the
public offering price of any securities to which such Prospectus applies; and
provided, that, in any such
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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.
10. MAIDSTONE AN INDEPENDENT CONTRACTOR : Maidstone shall
perform its services hereunder as an independent contractor and not as an
employee of the Company or an
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affiliate thereof. It is expressly understood and agreed to by the parties
hereto that Maidstone 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
Maidstone 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
If to Maidstone, to: Maidstone Financial Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to: XXX X. XXXXXXXXX
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Xxxxxxx, Savage, Kaplowitz,
Xxxxxxxxxx & Xxxxxx, 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 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 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.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
MAIDSTONE FINANCIAL, INC.
By:________________________________
ROCKWELL MEDICAL TECHNOLOGIES, INC.
By:________________________________
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