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EXHIBIT 10.1
[GRUNTAL CAPITAL MARKETS LETTERHEAD]
September 9, 1996
Xx. Xxxxxxx X. Xxxx
Executive Vice President & Chief Financial Officer
Somanetics Corporation
0000 Xxxx Xxxxx Xxxx,
Xxxx, XX 00000-0000
Dear Xx. Xxxx:
This is to acknowledge and confirm the terms of our agency agreement
("Agreement"). Gruntal & Co., Incorporated ("GCI") hereby agrees to render
services to Somanetics Corporation (the "Company") as its exclusive selling
agent for the terms and transactions specified herein.
1. GCI shall act as selling agent for the Company in connection with the
Company's intention to secure financing, via a private placement as more fully
set forth on Exhibit A, which shall be conducted pursuant to Regulation S under
the Securities Act of 1933. Either party shall have the right to terminate this
Agreement if the contemplated financing is not completed within 60 days from
the date of this Agreement.
2. In the event that GCI raises financing for or on behalf of the Company
during the period of this engagement, the Company shall pay to GCI, at the
closing of such transaction, a success fee of eight percent (8.0%) of the gross
proceeds received by the Company. The Company has the right to reject any and
all prospective investors in the contemplated financing as well as the terms,
amounts and provisions which may be proposed for the contemplated financing in
the exercise of its sole and arbitrary discretion. Any use or disclosure of any
offering brochure or similar materials must be approved by the Company in
advance.
3. The Company agrees to reimburse GCI for its reasonable actual and
accountable out-of-pocket expenses related to the transaction including,
without limitation, transportation, lodging, meals, postage, telephone expenses
and legal fees incurred in connection with the transaction up to $25,000;
provided that any single expense in excess of $1,000 shall be approved in
advance in writing by the Company. Such expenses shall be billed and payable as
and when incurred, regardless of whether the transaction is consummated.
4. In the event this engagement is terminated and a transaction is closed
with any party introduced by GCI to the Company pursuant to this Agreement and
not otherwise known to the Company, is closed within twelve months from the
date of termination, then the above fee arrangement will prevail; provided that
such fees shall not be payable in connection with any of the following: (i) the
issuance, sale, exercise or redemption of options or warrants to or from
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September 9, 1996 [GRUNTAL LOGO]
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employees, executives, officers, directors of or to the Company, or (ii) the
issuance or sale of capital stock upon the exercise of outstanding or
authorized option or warrants, the redemption of such options or warrants, or
the adjustment of such options or warrants pursuant to anti-dilution provisions
of such options or warrants.
5. The Company shall:
a. indemnify GCI, its parents, affiliates and/or subsidiaries and
each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") and hold them
harmless against any losses, claims, damages, expenses or
liabilities to which the Indemnified Parties may become subject
arising in any manner out of or in connection with the rendering
of services by GCI hereunder, unless it is judicially determined
by final order, without any further right to appeal, that such
losses, claims, damages, expenses or liabilities resulted
primarily from the gross negligence, bad faith or willful
misconduct of GCI; and
b. reimburse GCI immediately for any legal or other expenses
reasonably incurred by it in connection with investigating,
preparing to defend or defending any lawsuits, claims or other
proceedings arising in any manner out of or in connection with
the rendering of services by GCI hereunder; provided, however,
that in the event a final judicial determination is made to the
effect specified in paragraph 5(a) above, the Indemnified
Parties will remit to the Company any amount reimbursed under
this paragraph 5(b).
The Company agrees that the indemnification and reimbursement
commitments set forth in this paragraph shall apply whether or not the
Indemnified Parties are a formal party to any such lawsuits, claims or other
proceedings and that in the event the Indemnified Parties are a formal party to
any such lawsuits, claims or other proceedings, the Indemnified Parties are
entitled to retain one separate counsel of their choice for all Indemnified
Parties in connection with any of the matters to which such commitments relate
and that such commitments shall extend upon the terms set forth in this
paragraph to any Indemnified Party.
6. The Company and GCI agree that if any indemnification or reimbursement
sought pursuant to the preceding paragraph is judicially determined by final
order, without any further right to appeal, to be unavailable then, whether or
not GCI is entitled to indemnification or reimbursement, the Company and GCI
shall contribute to the losses, claims, damages, liabilities and expenses for
which such indemnification or reimbursement is held unavailable in such
proportion as is appropriate to reflect the relative benefits to the Company on
the one hand, and GCI on the other, in connection with the transaction to which
such indemnification or reimbursement is related, and other equitable
considerations; provided, however, that in no event shall the amount to be
contributed by GCI or any other Indemnified Party exceed the amount of the fee
actually received by GCI hereunder.
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7. This 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 relating to
the subject matter of this Agreement. This Agreement cannot be modified, or
changed, nor can any of its provisions be waived, except by written agreement
signed by all parties.
8. This Agreement shall be governed by the laws of the State of New York.
The Company and GCI each hereby agrees that service of process upon it by
registered mail at the address shown in this Agreement shall be deemed adequate
and lawful.
9. The Company represents that the undersigned is authorized to sign on
behalf of and legally bind the Company.
Please confirm that the foregoing correctly sets forth our understanding by
signing the enclosed copy of this letter where provided and returning it to us.
Very truly yours,
GRUNTAL & CO., INCORPORATED
By: Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
Managing Director
Gruntal Capital Markets
Xxxxxx and accepted on the 10 day
of September, 1996
SOMANETICS CORPORATION
By: Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Executive Vice President & Chief Financial Officer
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[GRUNTAL LOGO]
EXHIBIT A
SOMANETICS CORPORATION
PROPOSED TERMS - REGULATION S
SEPTEMBER 9, 1996
ISSUER: Somanetics Corporation (the "Company").
SYMBOL: SMTS.
REGULATION S OFFERING: Common Shares to be issued under an exemption
from registration, pursuant to Regulation S.
AMOUNT: $2 million.
SECURITIES TO BE PURCHASED: Common Shares.
OFFERING PRICE: Expected to be a 25% discount to the 5 day
average closing sale price.
INVESTORS: Institutional.
USE OF PROCEEDS: Working capital and operating expenses to
market INVOS Cerebral Oximeter, and redeem
Class B Warrants not to exceed $205,000.
CLOSING DATE: Four weeks from the Company's approval to
proceed with offering.
DOCUMENTS: Legal papers to be provided by Company and
reviewed by xxxxx's securities counsel.
GRUNTAL'S FEES: a) A fee of 8% on gross proceeds raised.
b) The Company shall reimburse Gruntal for up to
$25,000 of its reasonable out-of-pocket
expenses, including the fees and expenses of
its counsel. Such expenses shall be payable
whether or not the offering closes.
