Share Pledge And Escrow Agreement

SHARE PLEDGE AND ESCROW AGREEMENT


THIS SHARE PLEDGE AND ESCROW AGREEMENT (this "Agreement"), dated as of July 22, 1997, is made by and among GARY D. LEWIS ("Mr. Lewis"), MICHAEL J. XIRINACHS ("Mr. Xirinachs"), ROBERT L. CHIOINI ("Mr. Chioini" and together with Mr. Lewis and Mr. Xirinachs, the "Pledgors"), ROCKWELL MEDICAL SUPPLIES, LLC, a Michigan limited liability company ("Creditor"), ROCKWELL MEDICAL TECHNOLOGIES, INC., a Michigan corporation (the "Company") and HONIGMAN MILLER SCHWARTZ AND COHN ("Escrow Agent").


RECITALS:


A. Pledgors are the legal and beneficial owners of an aggregate of 2,000,000 shares of the issued and outstanding common stock ("Common Stock") of the Company.


B. Pursuant to an Asset Purchase Agreement dated as of November 1, 1996, as amended (the "Asset Purchase Agreement"), by and among Creditor, Transportation Company (as defined therein), the Family Partnerships (as defined therein), the Members (as defined therein) and the Company, the Company has purchased substantially all of Creditor's and the Transportation Company's assets (the "Purchase Transaction").


C. In connection with the Purchase Transaction and pursuant to the terms of a Letter Agreement, dated as of April 4, 1997 among the parties to the Asset Purchase Agreement, the Company has issued to Creditor 1,416,664 Series A Preferred Shares, $1.00 par value per share (the "Preferred Shares"). Under the terms of the Company's Articles of Incorporation, the Company has an obligation to redeem the outstanding Preferred Shares, at a redemption price of $1.00 per share plus accumulated and unpaid dividends, on January 31, 1998 (the "Mandatory Redemption Date").


D. Pursuant to the terms of a Non-Recourse Guaranty (the "Guaranty"), dated as of the date hereof, made by the Pledgers in favor of Creditor, the Pledgors have guaranteed, on a non-recourse basis, the obligation of the Company to redeem the Series A Preferred Shares on or before the Mandatory Redemption Date. The Pledgors desire to pledge 1,478,260 shares (the "Shares") of Common Stock owned by them (554,348 of which Shares are owned by Mr. Lewis, 554,347 of which Shares are owned by Mr. Xirinachs, and 369,565 of which Shares are owned by Mr. Chioini).


E. The Pledgors and Creditor desire to have Escrow Agent hold the Shares as escrow agent, to receive Redemption Payments (as defined in Section 8) as agent for Creditor, and to release the Shares in accordance with the terms and conditions of this Agreement.


NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:


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1. Definitions. In addition to the terms defined above or elsewhere in this Agreement, the following terms shall have the following meanings, unless the context otherwise requires:


"Collateral" shall have the meaning assigned to it in Section 2(c).


"Proceeds" shall have the meaning assigned to it under the UCC and, in any event, shall include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Pledgors from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to the Pledgors from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental body, authority, bureau or agency (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral, including, without limitation, any and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, or in exchange for, any of the Shares.


"UCC" shall mean the Uniform Commercial Code as in effect on the date hereof in the State of Michigan.


2. Pledgor's Pledge. As security for the obligations of the Pledgors under the Guaranty (the "Obligations"), the Pledgors hereby pledge and grant to Creditor, for its benefit, a continuing security interest in the following:


(a) the Shares, as evidenced by the stock certificates concurrently delivered to Escrow Agent (the "Certificates"), including all other types or items of property arising in respect of the Shares which are to be pledged to Creditor and held as Collateral under this Agreement;


(b) stock powers ("Powers") duly executed in blank; and


(c) the Proceeds of each of the foregoing (the Shares, the Powers and the Proceeds are collectively referred to as the "Collateral").


3. Appointment of Escrow Agent. Escrow Agent hereby agrees to act as escrow agent pursuant to this Agreement and acknowledges receipt of the Certificates and the Powers from the Pledgors. In addition, any additional Collateral which Escrow Agent shall receive shall be held by Escrow Agent pursuant to the terms of this Agreement. The parties acknowledge that Escrow Agent is acting as escrow agent under this Agreement as an accommodation to the parties and that Escrow Agent is legal counsel to the Company and Mr. Lewis (and not to any of the other parties to this Agreement) in connection with the Asset Purchase Agreement and the related transactions and represents Mr. Lewis and the Company in various other matters from time to time and may continue to act as legal counsel to Mr.


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Lewis and the Company. The parties consent (i) to Escrow Agent acting as escrow agent under this Agreement and as legal counsel to Mr. Lewis and the Company and (ii) to Escrow Agent also representing the Pledgors and the Company and not any of the other parties to this Agreement, including, without limitation, in connection with any dispute or litigation between any of the parties to the Asset Purchase Agreement, this Agreement and any related agreement.


4. Preservation of Collateral. Except as provided in Section 10 below, Creditor shall not be required to insure or take any steps to collect or realize upon the Collateral or any dividends or other distributions on or in respect of the Shares. The Pledgors shall keep the Collateral free from all liens, claims and encumbrances other than those created by this Agreement (collectively, "Liens"), and pay and discharge, when due, all taxes, levies and other charges upon the Collateral.


5. Voting Rights; Dividends; Etc. During the term of this Agreement:


(a) So long as the Shares are held by Escrow Agent under this Agreement, the Pledgors shall be entitled to exercise any and all voting and other consensual rights pertaining to their respective Shares or any part thereof and Creditor shall execute and deliver (or cause to be executed and delivered) to the applicable Pledgor all such proxies and other instruments as such Pledgor may request for the purpose of enabling such Pledgor to exercise those voting and other rights which he is entitled to exercise pursuant to the foregoing.


(b) If the Pledgors shall become entitled to receive or shall receive any stock certificate (including, without limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital, or issued in connection with any reorganization), option or rights, whether as an addition to, in substitution of, or in exchange for any Shares, or otherwise, the applicable Pledgor agrees to accept the same as agent for Creditor and to deliver the same forthwith to Escrow Agent in the exact form received, with the endorsement of such Pledgor when necessary or appropriate and undated stock powers duly executed in blank, to be held by Escrow Agent as additional Collateral for the Obligations.


(c) So long as the Shares are held by Escrow Agent under this Agreement, the Pledgors shall not be entitled to receive or retain any dividends or distributions paid in respect of such Shares whether paid or payable in cash or other property, whether in redemption of, or in exchange for such Shares, whether in connection with a partial or total liquidation or dissolution of the Company, or whether in connection with a reduction of capital, capital surplus or paid-in surplus of the Company or otherwise, and any and all such dividends or distributions shall be forthwith delivered to Escrow Agent to hold as Collateral and shall, if received by a Pledgor, be received in trust for delivery to Escrow Agent, be segregated from the other property or funds of such Pledgor, and be forthwith delivered to Escrow Agent as Collateral in the same form as so received (with any necessary endorsement).


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6. Pledgor Representations. Each of the Pledgors represents, warrants and agrees severally, and not jointly, that:


(a) Such Pledgor is the legal and beneficial owner of such Pledgor's Shares and there are no outstanding options, warrants, convertible securities or other rights to acquire such Pledgor's Shares or any other capital stock of the Company.


(b) There are no restrictions upon the transfer of any of such Pledgor's Shares and such Pledgor has the right to pledge and grant a security interest in or otherwise transfer such Shares free of any Liens.


(c) This Agreement, and the transfer to Creditor of such Pledgor's Shares, creates a valid and perfected first priority security interest in such Shares in favor of Creditor, and all actions necessary or desirable to such perfection have been duly taken.


(d) Such Pledgor has made his own arrangements for keeping informed of changes or potential changes affecting the Collateral (including, but not limited to, rights to convert, rights to subscribe, payment of dividends, reorganization or other exchanges, tender offers and voting rights) and such Pledgor agrees that Creditor shall not have any responsibility or liability under this Agreement for informing such Pledgor of any such changes or potential changes or for taking any action or omitting to take any action with respect thereto.


(e) ...