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EXHIBIT 10.5
March 29, 2001
Mr. Xxxxx Xxxxxxx
President & Chief Executive Officer
Somanetics Corporation
0000 Xxxx Xxxxx Xxxx
Xxxx, XX 00000
Re: Private Placement of Common Shares
Dear Xxxxx:
This letter agreement (the "Letter Agreement") confirms the agreement
of Somanetics Corporation (the "Company") to retain Xxxxx Xxxxxx & Co., Inc.
("Xxxxx Xxxxxx") as the Company's exclusive placement agent in connection with
the proposed private placement of the Company's Common Shares.
1. The Retainer. The Company hereby retains Xxxxx Xxxxxx as its exclusive
placement agent in connection with the Placement (defined in paragraph 2)
effective as of the date of the Company's acceptance of this Letter Agreement
(the "Retainer").
2. The Placement. Pursuant to the Retainer, Xxxxx Xxxxxx hereby agrees to
assist the Company in arranging a private placement or similar financing
transaction (the "Placement") of up to 1,325,000 of the Company's Common Shares
(the "Stock"). Final terms and conditions of the Placement will be subject to,
among other things, the satisfactory completion by Xxxxx Xxxxxx of such inquiry
and investigation of the transactions contemplated hereby and of the Company as
Xxxxx Xxxxxx deems reasonably appropriate and to the absence in Xxxxx Xxxxxx'x
reasonable determination of a material adverse change in the conditions in the
markets for the Bridge or the Placement or the financial markets generally.
3. Compensation. In consideration of Xxxxx Xxxxxx'x services in connection
with the Placement, the Company hereby agrees to pay to Xxxxx Xxxxxx at the
closing of the Placement, in immediately available funds, a cash fee equal to
five Percent (5%) of the aggregate gross proceeds (the "Placement Fee") except
in regards to monies received from the Xxxxx Xxxxxx & Co. Profit Sharing Plan
and Xxxxxx Xxxxx for which there shall be no fee. The Company will also sell to
Xxxxx Xxxxxx for $100 a five- year warrant (the "Warrant"), with cashless
exercise and customary anti-dilution provisions (similar to the warrant granted
in 1997), to purchase at a price equal to 120% of the purchase price of the
Stock, 25,000 shares of common stock.
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4. Costs. In addition to the consideration payable to Xxxxx Xxxxxx
pursuant to paragraph 3 hereof, the Company hereby agrees to reimburse Xxxxx
Xxxxxx from time to time for its reasonable and actual documented out-of-pocket
expenses incurred by it in connection with the Placement including, but not
limited to, accounting and legal expenses, payable upon Xxxxx Xxxxxx'x request
and regardless of whether the Placement shall be consummated. However, any
expenses in excess of $1,000 will be reimbursed by the Company only if the
Company approved the incurrence of such expenses by Xxxxx Xxxxxx. In addition,
the Company shall pay all fees and expenses relating to Blue Sky matters,
printing costs, Company counsel and accounting costs and any other costs
incurred by the Company in connection with the Placement.
5. Indemnification. The Company and Xxxxx Xxxxxx hereby agree to the terms
and conditions of the Indemnification Agreement attached hereto as Exhibit A and
incorporated herein by reference.
6. Termination. This Letter Agreement shall terminate Two (2) months after
the Company's acceptance hereof, unless extended by mutual consent in writing.
Notwithstanding the foregoing, it is agreed that the provisions of paragraphs 3
through 7 and paragraph 9 hereof will survive any such termination. In the event
that this Letter Agreement terminates and no closing of the Placement occurs,
Xxxxx Xxxxxx will be entitled to the Placement Fee and the Warrant with respect
to any financing transaction (whether equity, debt or a combination) with any
prospective investor that was specifically introduced to the Company by Xxxxx
Xxxxxx for the purposes of the Placement and that is consummated within twelve
(12) months following the termination of this Letter Agreement. The Company
shall have the absolute right at any time to terminate this Agreement and to
refrain from selling any Stock to prospective investors.
7. Due Authorization. Each of the parties represents that it is duly
authorized to execute this Letter Agreement.
8. Counterparts. This Letter Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be the same agreement.
9. Governing Law; Jurisdiction. This Letter Agreement shall be governed by
the laws of the State of New York governing contracts made and to be performed
in such state without giving effect to the principles of conflicts of laws.
10. Miscellaneous. This Letter Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof and
supersedes and cancels any prior communications, understandings and agreements
between the parties. Neither this Letter Agreement nor its substance shall be
disclosed except to those who are in a confidential relationship with the
Company or where the same is required by law or Nasdaq rules. This Letter
Agreement may not be amended, nor may any of its provisions be waived, except by
written agreement signed by both parties. This Letter Agreement shall be binding
upon and inure to the benefit of any successors and assigns of the Company and
Xxxxx Xxxxxx.
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We appreciate the opportunity to provide this Letter Agreement to you
and look forward to working with you toward a successful completion of the
financing. If the foregoing is in accord with your understanding of our
agreement, please sign in the space provided on the duplicate original hereof
and return a signed duplicate to Xxxxx Xxxxxx, whereupon it shall constitute our
binding agreement.
Very truly yours,
XXXXX XXXXXX & CO., INC.
By:/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Vice President
Accepted this 29 day of March 2001.
SOMANETICS CORPORATION
By:/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
President & Chief Executive Officer
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SCHEDULE A
INDEMNIFICATION AGREEMENT
Exhibit A to the Letter Agreement (the "Letter Agreement") dated March
29, 2001 by and between Somanetics Corporation (the "Company") and Xxxxx Xxxxxx
& Co., Inc. ("BMC").
The Company agrees to indemnify and hold BMC and its affiliates,
control persons, directors, officers, advisors, representatives, employees and
agents (each an "Indemnified Person") harmless from and against all losses,
claims, damages, liabilities, costs or expenses, including those resulting from
any threatened or pending investigation, action, proceeding or dispute, whether
or not BMC or any such other Indemnified Person is a party to such
investigation, action, proceeding or dispute, arising out of BMC's entering into
or performing services under this Letter Agreement, or arising out of any matter
including, without limitation, any material misstatement or omission of a
material fact in any information provided to BMC or any prospective investor
referred to in this Letter Agreement. This indemnity shall also include BMC
and/or any such other Indemnified Person's reasonable attorneys' and
accountants' fees and out-of-pocket expenses incurred in connection with such
investigation, actions, proceedings or disputes, which fees and expenses shall
be periodically reimbursed to BMC and/or to any such other Indemnified Person as
they are incurred; provided, however, that the indemnity set forth herein shall
not apply where a court of competent jurisdiction has made a final determination
that BMC acted in a grossly negligent manner or engaged in gross misconduct in
the performance of its services hereunder which gave rise to the loss, claim,
damage, liability, cost or expense sought to be recovered hereunder (but pending
any such final determination, the indemnification and reimbursement provisions
herein above set forth shall apply and the Company shall perform its obligations
hereunder or reimburse BMC and/or such other Indemnified Person periodically for
its, his or their fees and expenses as they are incurred). The Company also
agrees that neither BMC nor any Indemnified Person shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Company
for, or in connection with, any act or omission to act by BMC as a result of its
engagement under this Letter Agreement, except for any such liability for
losses, claims, damages, liabilities or expenses incurred that is found in a
final determination by a court of competent jurisdiction to have resulted from
BMC's gross negligence or gross misconduct.
If for any reason the foregoing indemnification is unavailable to BMC
or any such other Indemnified Person or insufficient to hold it harmless, then
the Company shall contribute to the amount paid or payable by BMC or any such
other Indemnified Person as a result of such loss, claim, damage, liability,
cost or expense in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand, but also the relative
fault of the Company and BMC or any such other Indemnified Person, on the other
hand, as well as any relevant equitable considerations; provided that in no
event will the aggregate contribution by BMC and any such other Indemnified
Person hereunder exceed the amount of fees actually
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received by BMC pursuant to this Letter Agreement. The reimbursement, indemnity
and contribution obligations of the Company herein above set forth shall be in
addition to any liability which the Company may otherwise have and these
obligations and the other provisions hereinabove set forth shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, BMC and any other Indemnified Person.
The terms and conditions herein above set forth in this Exhibit A shall
survive the termination or expiration of this Letter Agreement and shall
continue indefinitely thereafter.
Somanetics Corporation
By:/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
President and Chief Executive Officer
Xxxxx Xxxxxx & Co., Inc.
By:/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Vice President
