1
EXHIBIT 10.61
PLACEMENT AGENT AGREEMENT
THIS PLACEMENT AGENT AGREEMENT ("Agreement") is made as of November
21, 1996 by and among Somanetics Corporation, a Michigan corporation (the
"Company"), Xxxxxxxx Xxxxxx & Xxxxx, Inc., an Ohio corporation ("Xxxxxxxx"),
and Xxxxxxxx Xxxxxx & Xxxxx Limited, a limited liability company organized and
existing under the laws of England ("RPC", and together with Xxxxxxxx, the
"Placement Agent").
WHEREAS, the Company has duly authorized the issuance, sale and
delivery of up to 5,500,000 shares (the "Shares") of its common shares, par
value $.01 per share (the "Common Shares") (the "Offering");
WHEREAS, the Company has prepared and delivered a Confidential
Offering Memorandum dated November 6, 1996, as amended by Amendment No. 1,
dated November 14, 1996 (the "Offering Memorandum"), describing, among other
things, the Common Shares and providing material information about the Company
and the terms of the Offering;
WHEREAS, the Shares are being offered and sold in the Offering to
investors who are not "U.S. persons" as defined in Regulation S ("Regulation
S"), which definition is set forth in Schedule 1 (a "U.S. person"), under the
United States Securities Act of 1933, as amended (the "Securities Act"),
pursuant to Purchase Agreements (the "Purchase Agreements") entered into by the
Company and each such investor (a "Purchaser"), in reliance upon, and in
conformity with, an exemption from the registration requirements of the
Securities Act pursuant to Regulation S; and
WHEREAS, the Placement Agent has agreed to use its best efforts to
assist the Company in the placement of the Shares, subject to the conditions
set forth in that certain letter dated October 23, 1996 from the Placement
Agent to the Company and an amendment thereto dated November 1, 1996, and
amendments thereto and restatements thereof (the "Engagement Letter").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, and intending to be legally bound, the
undersigned agree as follows:
1. Agreement to Assist in the Placement of the Shares. On the basis of
the representations, warranties and agreements contained in this Agreement and
subject to the terms and conditions set forth in this Agreement and the
Engagement Letter, the Company engages the Placement Agent to, and the
Placement Agent agrees to, (i) act as placement agent for the Company in
connection with the Offering as described in the Offering Memorandum, subject
to the terms and conditions of the Engagement Letter, and (ii) perform the
duties of the Placement Agent described in the Purchase Agreements. The
Placement Agent shall not, in fulfilling its obligations, act as underwriter
for the Shares, and is in no way obligated, directly or indirectly,
1
2
to advance its own funds to purchase any Shares. In exchange for such
services, the Placement Agent shall receive the compensation described in the
Engagement Letter.
2. Representations and Warranties of the Company. The Company represents
and warrants to the Placement Agent as follows:
2.1. Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Michigan and has all requisite corporate power and authority to own
and lease its properties and to conduct its business as presently conducted and
as described in, or by incorporation by reference in, the Offering Memorandum.
The Company is duly qualified to do business as a foreign corporation and is in
good standing in every jurisdiction where such qualification is required by
controlling law and where the failure to so qualify would have a material
adverse effect on the Company.
2.2. Authorized Capital Stock. The authorized and outstanding
capital stock of the Company are as described in, or by incorporation by
reference in, the Offering Memorandum, and all of the issued shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid and non-assessable.
2.3. Offering Memoranda.
(a) The Offering Memorandum, as of its date and at the
Closing Date, did not and will not as of such dates contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statement or
omission relating to matters of foreign law, any statement included in the
Offering Memorandum describing the Placement Agent, the statements in paragraph
3 on page 2 of the Offering Memorandum, the statements in the last paragraph on
page 45 and the fifth paragraph on page 46 under the heading "Plan of
Distribution and Restrictions on Resale" in the Offering Memorandum or any
other statement or omission made in reliance upon, and in conformity with,
information furnished in writing to the Company by the Placement Agent
expressly for use in the Offering Memorandum; and provided, however, that this
representation and warranty shall not apply to any statement contained in the
Offering Memorandum to the extent that a statement contained in any document
filed by the Company under the United States Securities Exchange Act of 1934,
as amended (the "Exchange Act"), with the United States Securities and Exchange
Commission (the "Commission") after the date of the Offering Memorandum which
also is incorporated by reference in the Offering Memorandum modifies, amends
or supersedes such statement.
(b) The documents incorporated by reference in the
Offering Memorandum, at the time they were filed (or, if any amendment with
respect thereto was filed, when such amendment was filed) with the Commission,
complied in all material respects with the applicable requirements of the
Exchange Act, and the rules and regulations of the Commission thereunder, and,
when filed with the Commission (or in the case of an amendment thereto, when
such
2
3
amendment was filed), did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(c) Except as otherwise disclosed in or by incorporation
by reference in or contemplated by the Offering Memorandum, including the
Independent Auditors' Report for the fiscal year ended November 30, 1995,
attached as part of Exhibit A thereto, the financial statements of the Company
for full fiscal years included or incorporated by reference in the Offering
Memorandum present fairly the financial condition of the Company as of the
respective dates thereof and the results of operations of the Company for the
respective periods covered thereby, all in conformity with accounting
principles generally accepted in the United States applied on a consistent
basis throughout the entire periods involved.
2.4. No Other Offers or Sales. Neither the Company nor any
affiliate of the Company nor anyone acting on the behalf of the Company or any
such affiliate, other than the Placement Agent and its agents and affiliates,
has, directly or indirectly, offered or sold, or attempted to offer, sell or
dispose of, any of the Shares, or solicited any offer to buy any Shares from,
or otherwise approached or negotiated with respect thereto with, any person,
except for any of the foregoing arranged by, or conducted with, the Placement
Agent, including, without limitation, the Company's preparation and
distribution of the Offering Memorandum, negotiation of, and entry into, this
Agreement, the Purchase Agreements, the Engagement Letter and the agreements
and documents referred to in those agreements, and the Company's discussions
with prospective investors arranged by the Placement Agent.
2.5. Due Execution, Delivery and Performance of this Agreement.
The execution, delivery and performance of this Agreement and the Engagement
Letter by the Company (i) have been duly authorized by all requisite corporate
action of the Company, and (ii) will not (a) violate the Restated Articles of
Incorporation or the Amended and Restated Bylaws of the Company or (b) violate
any law applicable to the Company or any rule, regulation or order of any court
or governmental agency or body having jurisdiction over the Company or (c)
cause a breach of any provision of any indenture, mortgage, agreement, contract
or other instrument to which the Company is a party or by which the Company is
bound or to which any of the properties or assets of the Company are subject,
or constitute (upon notice or lapse of time or both) a default under any such
indenture, mortgage, agreement, contract or other instrument or result in the
creation or imposition of any lien, security interest, pledge, charge or other
encumbrance of any nature whatsoever (each a "Lien" and, collectively, "Liens")
upon any of the properties or assets of the Company (except for such
violations, breaches, defaults or Liens which would not have a material adverse
effect on the Company's performance of its obligations under this Agreement).
Upon execution and delivery by the Company and the Placement Agent, the
Engagement Letter constituted and this Agreement will constitute legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as the enforceability thereof
may be limited by (i) any applicable bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization or other similar laws now or hereafter
in effect relating to or affecting the enforcement of creditors' rights
generally, and (ii) general equitable principles,
3
4
now or hereafter in effect, regardless of whether such enforceability is
considered in an action at law or a proceeding in equity, and except as rights
to indemnity or contribution may be limited under applicable law.
2.6. Legal Proceedings. Except as otherwise described in or by
incorporation by reference in or contemplated by the Offering Memorandum, there
are no actions, suits, investigations or proceedings pending to which the
Company is a party before or by any court or governmental agency or body, which
in the opinion of the Company's officers would result, individually or in the
aggregate, in any material adverse change in the financial condition or results
of operations of the Company, or which would materially and adversely affect
the properties or assets thereof; and, except as otherwise described in or by
incorporation by reference in or contemplated by the Offering Memorandum to the
actual knowledge of the Company's officers, no such actions, suits,
investigations or proceedings are threatened by any person, corporation or
governmental agency or body.
2.7. No Material Change. Except as disclosed in or by
incorporation by reference in or contemplated by the Offering Memorandum, there
has been no material adverse change or, to the actual knowledge of the
Company's officers, any development which will result in a material adverse
change, in or affecting the business, operations, management, financial
condition, shareholders' equity or results of operations of the Company since
August 31, 1996.
2.8. Properties and Assets. The Company has good title to all
properties and assets described in the Offering Memorandum as owned by it, free
and clear of all Liens except as disclosed in or by incorporation by reference
in or contemplated by the Offering Memorandum or which are not material to the
business of the Company. The Company has a valid and enforceable lease for the
real property described in or by incorporation by reference in the Offering
Memorandum as leased by it, with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property
by the Company. Except as otherwise disclosed in or by incorporation by
reference in or contemplated by the Offering Memorandum, the Company owns or
possesses or is the valid licensee of all patents, trademarks, service marks
and trade names necessary to carry on its business as described in the Offering
Memorandum, and the Company has not received any notice of infringement of, or
conflict with, asserted rights of others with respect to any of the foregoing
which, if the subject of an unfavorable decision, ruling or finding, would
result, individually or in the aggregate, in any material adverse change in the
business, operations or financial condition of the Company.
2.9. Compliance with Applicable Regulations. Except as disclosed
in or by incorporation by reference in or contemplated by the Offering
Memorandum, the Company (a) has all material governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to carry on its
business as described in the Offering Memorandum (collectively, "Licenses"),
except that the Company does not have all of the necessary Licenses to sell its
products in certain foreign countries or in places where it does not have
distributors or where it is "marketing", but not selling in violation of any
law, (b) complies in all material
4
5
respects with, and conducts its business in substantial conformity with (except
for failures to conform which would not have a material adverse effect on the
Company), all laws, regulations and orders applicable to it or its business,
and (c) complies in all material respects with, and conducts its business in
substantial conformity with (except for failures to conform which would not
have a material adverse effect on the Company), all Licenses issued to the
Company by, and all agreements of the Company with, any governmental agency or
body having jurisdiction over the Company.
2.10. Investment Company Act of 1940. The Company is not an
"investment company" or an "affiliated person" of an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
2.11. Compliance with Regulation S. The Company is a "reporting
issuer" (as defined in Regulation S). The Company, its affiliates and any
person acting on behalf of, or as agent of, any of the foregoing (other than
the Placement Agent, as to which no representation, warranty or covenant is
made), (a) have offered and sold the Shares to the Purchasers only in "offshore
transactions" (as defined in Regulation S), (b) have not made with respect to
the Shares any "directed selling efforts" (as defined in Regulation S) in the
United States of America, its territories and possessions, any State of the
United States or the District of Columbia (the "United States"), (c) have
implemented all "offering restrictions" (as defined in Regulation S) in respect
of the Shares, (d) have not delivered the Offering Memorandum or any revision
or amendment thereof or supplement thereto to any "U.S. person" (as defined in
Regulation S) (other than directors, officers, employees and agents of the
Company, the Placement Agent, affiliates of the Placement Agent and its
directors, officers, employees and agents, and professional advisers), (e) have
not made any offers or sales of any of the Shares or any interest therein in
the United States or to, or for the account or benefit of, any "U.S. person"
(as defined in Regulation S), and (f) have not made any sales of any of the
Shares or any interest therein in connection with the Offering to any person
other than the Purchasers; provided, however, that insofar as this
representation and warranty involves any "distributor" (as defined in
Regulation S), any broker-dealer participating in the offering, any affiliate
of such broker-dealer or any officer, director, employee or agent of such
distributor or broker-dealer, to the extent such broker-dealer or distributor
is acting as placement agent for the offering of the Shares, such
representation and warranty is made by the Company solely on the basis of, and
in reliance upon, the representations and warranties of such broker-dealer or
distributor and such broker-dealer or distributor complying with Regulation S
with respect to offers and sales of Shares.
2.12. Representations and Warranties at the Closing. Each of the
representations and warranties contained in this Section 2 is true and correct
in all material respects as of the date of this Agreement and will be true and
correct in all material respects as of the Closing Date (as defined in the
Purchase Agreements), except to the extent such representations and warranties
expressly relate to an earlier date.
3. Representations, Warranties and Covenants of the Placement Agent. The
Placement Agent hereby represents and warrants to, and covenants with, the
Company as follows:
5
6
3.1. Due Execution, Delivery and Performance of this Agreement and
Other Obligations. The Placement Agent has full right, power, authority and
capacity to enter into this Agreement and the Engagement Letter and to
consummate the transactions contemplated by this Agreement and the Engagement
Letter. The execution, delivery and performance of this Agreement and the
Engagement Letter by the Placement Agent have been duly authorized by all
requisite corporate action of the Placement Agent. This Agreement and the
Engagement Letter have been validly executed and delivered by or on behalf of
the Placement Agent. Upon the execution and delivery of this Agreement and the
Engagement Letter by the Company, each of this Agreement and the Engagement
Letter shall constitute the legal, valid and binding obligation of the
Placement Agent, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by (i) any applicable bankruptcy,
insolvency, fraudulent conveyance, moratorium, reorganization or other similar
laws now or hereafter in effect relating to or affecting the enforcement of
creditors' rights generally, and (ii) general equitable principles, now or
hereafter in effect, regardless of whether such enforceability is considered in
an action at law or a proceeding in equity, and except as rights to
indemnification and contribution may be limited by applicable law.
3.2. Organization; Lack of Conflict. The Placement Agent is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. The execution, delivery and performance of
this Agreement and the Engagement Letter by the Placement Agent will not
violate (i) the organizational documents of the Placement Agent, (ii) any law
applicable to the Placement Agent or any rule, regulation or order of any court
or governmental agency or body having jurisdiction over the Placement Agent or
(iii) any provision of any indenture, mortgage, agreement, contract or other
instrument to which the Placement Agent is a party, or by which the Placement
Agent is bound or to which any of the properties or assets of the Placement
Agent are subject, or result in a breach of, or constitute (upon notice or
lapse of time or both) a default under, any such indenture, mortgage,
agreement, contract or other instrument or result in the creation or imposition
of any Lien upon any of the properties or assets of the Placement Agent (except
for any violation, breach or default described in this sentence which would not
have a material adverse effect on the Placement Agent's performance of its
obligations under this Agreement and the Engagement Letter).
3.3. Governmental Consents. The Placement Agent is not aware of
any authorization, approval or consent of any governmental body which is
legally required for the issuance and sale of the Shares as contemplated by the
Purchase Agreements and which has not been obtained.
3.4. Acknowledgement. The Placement Agent acknowledges that the
Shares are being offered and sold in reliance on specific exemptions from the
registration requirements of the Securities Act and that the Company is relying
upon the truth and accuracy of the representations, warranties, agreements,
acknowledgements and understandings of the Placement Agent set forth in this
Agreement to determine the applicability of such exemptions and the suitability
of the Purchasers to acquire the Shares. The Placement Agent also acknowledges
that no federal or state agency has passed on or made any recommendation or
endorsement of the Shares.
6
7
3.5. Compliance with Regulation S.
(a) In connection with the offer and sale of Shares or
any interest therein, the Placement Agent will (i) not make an offer or sale to
a person in the United States or to an identifiable group of U.S. citizens
abroad, such as members of the U.S. armed forces serving overseas, and (ii)
take all appropriate action so that at the time the buy order is originated, it
reasonably believes that the buyer is outside the United States.
(b) For a period beginning on the date of the Engagement
Letter and ending forty days following the Closing Date (as defined in the
Purchase Agreements) or, if there is more than one Closing Date, the latest
Closing Date (the "Restricted Period"), the Placement Agent, its affiliates and
any person acting on its behalf shall not make any directed selling efforts (as
defined in Regulation S) in the United States in connection with any offer or
sale of the Shares and shall not engage in any activity undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the Shares.
(c) The Placement Agent agrees that all offers and sales
of Shares made by the Placement Agent prior to the expiration of the Restricted
Period shall be made only in accordance with the provisions of Section 903 or
904 of Regulation S, pursuant to registration of the Shares under the
Securities Act, or pursuant to an available exemption from the registration
requirements of the Securities Act.
(d) The Placement Agent understands, acknowledges and
agrees that (a) the Shares have not been, and will not be, registered under the
Securities Act or under any state or foreign securities or blue sky laws, and
may not be offered, sold, transferred, pledged or otherwise disposed of in the
United States or to, or for the account or benefit of, any "U.S. person",
unless such securities are registered under the Securities Act and any
applicable state and foreign securities or blue sky laws or exemptions from the
registration requirements of the Securities Act and any applicable state and
foreign securities or blue sky laws are available, and (b) the Shares are being
offered and sold pursuant to the terms of Regulation S under the Securities
Act, which permits securities to be sold to persons who are not "U.S. persons"
in "offshore transactions" (as defined in Regulation S), subject to certain
terms and conditions.
(e) All offering materials and documents used by the
Placement Agent, its affiliates and any person acting on its behalf in
connection with offers and sales of the Shares prior to the expiration of the
Restricted Period shall include statements to the effect that the securities
have not been registered under the Securities Act and may not be offered or
sold in the United States or to "U.S. persons" (other than distributors) unless
the securities are registered under the Securities Act, or an exemption from
the registration requirements of the Securities Act is available. Such
statements shall appear in any advertisement made or issued by the Placement
Agent, any of its affiliates or any person acting on its behalf.
7
8
(f) No offer, sale, transfer, pledge or other disposition
of the Shares or any interest therein made prior to the expiration of the
Restricted Period shall be made by the Placement Agent, its affiliates and any
person acting on its behalf to a "U.S. person" or for the account or benefit of
a "U.S. person" (other than a distributor).
(g) If the Placement Agent sells Shares to a distributor,
a dealer (as defined in Section 2(12) of the Securities Act), or a person
receiving a selling concession, fee or other remuneration in respect of the
securities sold, prior to the expiration of the Restricted Period, the
Placement Agent shall send a confirmation or other notice to the purchaser
stating that the purchaser is subject to the same restrictions on offers and
sales that apply to a distributor.
(h) The Placement Agent shall advise the Company of any
legends or restrictions required by foreign countries, if any, pertaining to
the Shares, and the Placement Agent shall otherwise take all steps necessary to
ensure that any offers and sales made pursuant to the Purchase Agreements or
this Agreement comply with the laws and regulations of all foreign regulatory
and/or self-regulatory authorities, including, without limitation, the
Financial Services Xxx 0000 and the Public Offers of Securities Regulations
1995.
3.6. Representations and Warranties at the Closing. Each of the
representations and warranties contained in this Section 3 is true and correct
as of the date of this Agreement and will be true and correct as of the Closing
Date, except to the extent such representations and warranties expressly relate
to an earlier date.
4. Representations, Warranties and Agreements to Survive Delivery.
Notwithstanding any investigation made by or on behalf of the Placement Agent
or any controlling person, director, officer or agent of the Placement Agent or
by or on behalf of the Company or any controlling person, director, officer or
agent of the Company, all representations, warranties, covenants and agreements
made by either party in this Agreement shall survive the execution of this
Agreement, the delivery of the Shares to the Purchasers and the receipt by the
Company of payment for the Shares.
5. Covenants of the Company.
5.1. No Other Offers of Sales. Until the end of the Restricted
Period, neither the Company or any affiliate of the Company nor anyone acting
on behalf of the Company or any such affiliate, other than the Placement Agent
and its agents and affiliates, shall directly or indirectly, offer or sell, or
attempt to offer, sell or dispose of, any of the Shares, or solicit any offer
to buy any Shares from, or otherwise approach or negotiate with respect thereto
with, any person, except for any of the foregoing arranged by, or conducted
with, the Placement Agent, or about which the Placement Agent otherwise has
knowledge, including, without limitation, the Company's preparation and
distribution of the Offering Memorandum, negotiation of, and entry into, this
Agreement, the Purchase Agreements and the agreements and documents referred to
in those agreements, and the Company's discussions with prospective investors
arranged by the Placement Agent.
8
9
5.2. Updating Disclosures. The Company shall promptly notify the
Placement Agent if, because of the occurrence of any event or condition, the
passing of time or otherwise, the Offering Memorandum as of its date or as of
the Closing Date contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements in Offering Memorandum,
in light of the circumstances under which they were made, not misleading. In
such an event, the Offering Memorandum shall be amended or supplemented in form
and substance satisfactory to the Placement Agent and the Company so that after
giving effect to such amendment or supplement, the Offering Memorandum will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements, in light of the circumstances under
which they were made, not misleading.
5.3. Foreign Securities Qualification. The Company shall furnish
such information, execute such instruments and take such action, if any, as may
be reasonably requested by the Placement Agent to effect the placement of the
Shares under the securities laws of each jurisdiction in which the Company
agrees that the Shares may be offered or sold; provided, however, that the
Company shall not be required to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would subject it to
general or unlimited service of process or taxation in any jurisdiction where
it is not now so subject.
5.4. Press Release; Form 8-K. The Company will not at any time
issue a press release to announce the Offering of the Shares (i) without the
prior consent of the Placement Agent, (ii) prior to having furnished the
Placement Agent with a copy of the proposed form of the press release and
giving the Placement Agent a reasonable opportunity to review and comment upon
the same, or (iii) in a manner to which the Placement Agent or its counsel
shall reasonably object, unless the Company is required to do so by applicable
law. The Company will not file a Form 8-K reporting the Offering of the Shares
with the Securities and Exchange Commission prior to having furnished the
Placement Agent with a copy of the proposed form of the Form 8-K and giving the
Placement Agent a reasonable opportunity to review and comment upon the same.
The Placement Agent acknowledges receipt of the proposed form of press release
and the proposed form of Form 8-K attached as Exhibit A, acknowledges that it
had a reasonable opportunity to review and comment on the same and consents to,
and does not (nor does its counsel) object to, their issuance and filing.
5.5. Company Lock Up. During the period beginning on the Closing
Date and ending 60 days after the Closing Date, the Company will not, without
the prior written consent of the Placement Agent, offer, issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any of its Common Shares or any
other securities or obligations convertible into or exchangeable for, or giving
any person any right to acquire from it, any Common Shares (hereinafter, with
the exceptions described below, collectively referred to as "Stock Issuances"),
except for (i) the issuance and sale of the Shares, (ii) the issuance of
options or warrants pursuant to any employee, executive, officer, director,
agent, advisor or consultant benefit, incentive, stock option, or profit
sharing plan of the Company, (iii) the issuance or sale by the Company of any
Common Shares pursuant to the exercise of any such options or warrants, (iv)
the issuance or sale by the Company of any options
9
10
or warrants to any employee, executive, officer, director, agent, advisor or
consultant of the Company or the issuance or sale of any Common Shares upon
exercise of any such options or warrants, (v) the issuance or sale by the
Company of any Common Shares pursuant to (A) the exercise of any options or
warrants previously issued and outstanding or authorized on the Closing Date,
or (B) the conversion of any convertible preferred shares previously issued and
outstanding or authorized on the Closing Date, or (vi) the issuance or sale by
the Company of options, warrants, convertible preferred shares, or Common
Shares pursuant to anti-dilution provisions applicable to the Company or its
securities (collectively, the "Permitted Transactions"). During the period
from the Closing Date until 60 days thereafter, the Company will not, without
the prior written consent of the Placement Agent, file a registration statement
containing a preliminary or final prospectus for a Stock Issuance in a
transaction involving a public offering under the Securities Act pursuant to
such registration statement, except for (i) any filing of a registration
statement containing a preliminary or final prospectus which is required to be
filed by the Company pursuant to the provisions of any agreement between the
Company and any holder of its securities which is in effect on the date of this
Agreement, or (ii) any filing of a post-effective amendment or a supplement to
a registration statement which has become effective on or before the date of
this Agreement.
5.6. Director and Officer Lock-Up. Unless the Placement Agent
shall consent in writing, which consent shall not be unreasonably withheld,
during the period beginning on the Closing Date and ending 60 days thereafter,
the Company will use its best efforts to ensure that none of the directors or
officers of the Company offer, sell or deliver (whether through the exercise of
warrants, options or otherwise) any Common Shares or any other securities or
obligations convertible into or exchangeable for any Common Shares.
5.7. Legal Opinions Regarding Subsequent Transactions. The Company
shall not offer or sell any securities of the same class as the Shares until a
period of three (3) months has elapsed from the Closing Date of the Offering,
unless the Company shall have provided the Placement Agent with a satisfactory
opinion from the Company's legal counsel to the effect that the proposed offer
or sale will not result in any violation of the Securities Act, any state
securities or blue sky laws or any rules or regulations promulgated thereunder.
5.8. Expenses. Subject to the provisions of the Engagement Letter,
regardless of whether the transactions described in this Agreement are
consummated, the Company shall pay all costs and expenses in connection with
(i) the preparation and reproduction of the Offering Memorandum and the
certificates representing the Shares, (ii) the reproduction of the Purchase
Agreements, (iii) the Company's performance of and compliance with all
agreements and conditions contained in this Agreement, the Engagement Letter
and the Purchase Agreements on its part to be performed or complied with, (iv)
all of the Company's expenses incident to the issuance and delivery of the
Shares, and (v) the fees, disbursements and expenses of the Company's legal
counsel and accountants.
10
11
6. Indemnification and Contribution.
6.1. Indemnification by the Company The Company agrees to defend,
indemnify, and hold the Placement Agent and its respective officers, directors,
agents, employees, and controlling persons (each in the context of this Section
6.1 an "Indemnified Party") harmless from and against any losses, claims,
damages, or liabilities (including, without limitation, court costs and
reasonable attorneys' fees and expenses) to which any Indemnified Party may
become subject insofar as the same arises from an action which alleges or is
based upon any alleged untrue statement of a material fact, or omission of a
material fact, or any other violation of applicable securities or other laws,
rules or regulations by the Company or its officers, agents, employees or
controlling persons irrespective of the role or concurrent negligence of any
such Indemnified Party and to reimburse each Indemnified Party for any legal or
other expenses reasonably incurred by them in connection with investigating,
settling, or defending any action or claim in connection therewith (including,
without limitation, court costs and reasonable attorneys' fees); provided,
however, that the Company shall not be liable to so indemnify, defend or hold
harmless any Indemnified Party in any such case to the extent that any such
loss, claim, damage, or liability is found in a final judgment of a court of
competent jurisdiction to have resulted from an Indemnified Party's gross
negligence or bad faith in performing their services hereunder.
If for any reason the foregoing indemnification is unavailable to any
Indemnified Party or insufficient to hold such Indemnified Party harmless, then
the Company shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, claim, damage, or liability in such proportion
as is appropriate to reflect not only the relative benefits received by the
Company on the one hand and the Indemnified Party on the other hand but also
the relative fault of the Company and the Indemnified Party, as well as any
other relevant equitable considerations. The Company agrees to reimburse the
Indemnified Party within ten days after presentation of any statement by the
Indemnified Party of all reasonable expenses (including, without limitation of
the generality of the foregoing, reasonable fees and expenses of attorneys
selected by each Indemnified Party) incurred in connection with any testimony
the Indemnified Party or its employees are required to give (in court, before a
regulatory agency, by deposition, or otherwise) in any regulatory or court
proceeding (including depositions), whether or not the Indemnified Party is a
party, and which related directly or indirectly to the Offering.
6.2. Reasonable Reliance. With respect to Section 6.1, the Company
agrees that no Indemnified Party shall be deemed to have been grossly negligent
for reasonably relying upon any written untrue statement or alleged omission of
a material fact necessary to make the statements, in light of the circumstances
in which made, not misleading, contained in or omitted from any information
provided to any Indemnified Party by or on behalf of the Company (including,
without limitation of the generality of the foregoing, any accountant or
attorney employed or retained by the Company). The indemnification provided in
Section 6.1 shall extend upon the same terms and conditions to each person, if
any, who may be deemed to control any Indemnified Party.
11
12
6.3. Indemnification Procedures. In the event any action (with
respect to which indemnity or reimbursement from the Company may be sought by
any Indemnified Party pursuant to the provisions of Section 6.1) shall be
brought or threatened against an Indemnified Party, prompt notice of such
action shall be given by such Indemnified Party to the Company in writing,
together with a copy of all papers served on, or received by, such Indemnified
Party in connection with such action; provided, however, that failure to give
such notice shall not affect the Indemnified Party's rights under these
indemnification provisions, unless, and only to the extent that, such failure
results in the Company's forfeiture of substantive rights or defenses. If such
an event occurs, the Company shall assume the defense of such action, including
the employment of counsel and the payment of all expenses. Each Indemnified
Party shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Indemnified Party unless (a) the employment
thereof has been specifically authorized by the Company in writing, (b) the
Company has failed to assume the defense and employ counsel, or (c) the named
parties, or parties threatened to be named, to any such action (including any
impleaded parties or parties threatened to be impleaded) include both such
Indemnified Party and the Company, and the Indemnified Party has been advised
by such counsel that there may be one or more legal defenses available to such
Indemnified Party which are different from or additional to those available to
the Company (in which cases each Indemnified Party with a different legal
defense from those of other Indemnified Parties with their own counsel shall
have the right to employ its own counsel and in such cases any reasonable fees
and expenses of such counsel shall be paid by the Company). The Company shall
not be liable for any such action or proceeding effected without its written
consent.
6.4. Indemnification by the Placement Agent. The Placement Agent
shall indemnify, defend and save and hold the Company, any controlling person
of the Company, and its officers, directors, employees, agents and advisors
(each, a "Company Party") harmless from and against any losses, claims, damages
or liabilities (including, without limitation, court costs and reasonable
attorneys' fees and expenses) to which any Company Party may become subject
insofar as the same arises from an action which alleges or is based upon, (i)
any breach by the Placement Agent of any term, provision, condition,
representation, warranty or covenant contained in this Agreement, or (ii) any
actions of the Placement Agent, its agents or representatives inconsistent with
such terms, provisions, conditions, representations, warranties or covenants,
or (iii) any untrue or alleged untrue statement of a material fact contained in
the offering materials relating to the Shares, including, without limitation,
the Offering Memorandum, as amended or supplemented, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in such offering materials or in any other
offering documentation in reliance upon and in conformity with written
information furnished to the Company by the Placement Agent specifically for
use therein, or (iv) any other violation of applicable securities or other
laws, rules or regulations by the Placement Agent or its officers, agents,
employees or controlling persons, and to reimburse any such Company Party for
any legal or other expenses reasonably incurred by them in
12
13
connection with investigating, settling, or defending any action or claim in
connection therewith (including, without limitation, court costs and reasonable
attorneys' fees).
If for any reason the foregoing indemnification is unavailable to any
Company Party or insufficient to hold such Company Party harmless, then the
Placement Agent shall contribute to the amount paid or payable by such Company
Party as a result of such loss, claim, damage, or liability in such proportion
as is appropriate to reflect not only the relative benefits received by the
Company Party on the one hand and the Placement Agent on the other hand but
also the relative fault of the Company Party and the Placement Agent, as well
as any other relevant equitable considerations. The Placement Agent agrees to
reimburse the Company Party within ten days after presentation of any statement
by the Company Party of all reasonable expenses (including, without limitation
of the generality of the foregoing, reasonable fees and expenses of attorneys
selected by each Company Party) incurred in connection with any testimony the
Company Party or its employees are required to give (in court, before a
regulatory agency, by deposition, or otherwise) in any regulatory or court
proceeding (including depositions), whether or not the Company Party is a
party, and which related directly or indirectly to the Offering.
7. Notices. All notices, demands, consents or other communications under
this Agreement shall be given or made in writing and shall be given or made in
writing and shall be delivered personally, or sent by certified or registered
airmail, postage prepaid, or sent by overnight courier or sent by facsimile
transmission with a confirmation copy sent by mail, and shall be deemed given
when so personally delivered, or if mailed, ten days after the same shall have
been posted or if sent by overnight courier, one business day after the date
such courier confirms in writing that delivery has been made or if sent by
facsimile transmission, at the earlier of (i) as soon as written or telephonic
confirmation is received from the party to whom it was sent that the message
has been received, or (ii) ten days after the confirmation is posted: (a) if
to the Placement Agent, addressed to the Placement Agent at 00 Xxxxx Xxxxxx,
Xxxxxx X0X 0XX, Xxxxxxx, Attention: Xxxx X. Xxxx, or to such other address as
the Placement Agent may designate in writing to the Company, or (b) if to the
Company, addressed to the Company at 0000 Xxxx Xxxxx Xxxx, Xxxx, Xxxxxxxx
00000-0000, Xxxxxx Xxxxxx of America, Attention: Xxxxx X. Xxxxxxx, President
and Chief Executive Officer, or to such other address as the Company may
designate in writing to RPC.
8. Parties. This Agreement shall inure to the benefit of and be binding
upon the Placement Agent, the Company and their respective permitted successors
and assigns. This Agreement may not be assigned by any party without the
consent of the other parties. This Agreement and all conditions and provisions
of this Agreement are intended to be for the sole and exclusive benefit of the
parties to this Agreement and their respective permitted successors and assigns
and for the benefit of no other person.
9. Entire Agreement and Incorporation by Reference. This Agreement
constitutes the entire agreement and understanding of the parties with respect
to the matters and transactions contemplated by this Agreement and supersedes
all prior agreements and understandings whatsoever relating to such matters and
transactions, except for the Engagement Letter. All of
13
14
the terms and conditions of the Engagement Letter, including all amendments
thereto and restatements thereof, are specifically incorporated by reference
into this Agreement.
10. Amendments. No termination, amendment, interpretation or waiver of
any of the provisions of this Agreement shall be effective unless made in
writing and signed by the parties to this Agreement.
11. Headings. The headings of the sections and subsections of this
Agreement are used for convenience only and shall not affect the meaning or
interpretation of the contents of this Agreement.
12. Enforcement. The failure to enforce or to require the performance at
any time of any of the provisions of this Agreement or the Engagement Letter
shall in no way be construed to be a waiver of such provisions, and shall not
affect either the validity of this Agreement or the Engagement Letter or any
part of this Agreement or the Engagement Letter or the right of any party
thereafter to enforce each and every provision in accordance with the terms of
this Agreement or the Engagement Letter.
13. Governing Law. The laws of the State of Michigan, in the United
States of America, applicable to agreements made and to be performed entirely
therein, without regard to the conflict of law provisions thereof, shall govern
this Agreement and the Engagement Letter, its construction, the relationships
of the parties in connection with the subject matter of this Agreement and the
Engagement Letter and the determination of any rights, duties or remedies of
the parties arising out of, or relating to, this Agreement and the Engagement
Letter.
14. Severability. If any provision of this Agreement or the Engagement
Letter is held to be invalid or unenforceable by any judgment of a tribunal of
competent jurisdiction, the remainder of this Agreement and the Engagement
Letter shall not be affected by such judgment, and this Agreement and the
Engagement Letter shall be carried out as nearly as possible according to its
original terms and intent.
15. Counterparts. This Agreement may be executed in counterparts, all of
which shall constitute one agreement, and each such counterpart shall be deemed
to have been made, executed and delivered on the date set forth in the
introductory paragraph of this Agreement without regard to the dates or times
when such counterparts may actually have been made, executed or delivered.
14
15
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized representatives as of the
day and year set forth in the introductory paragraph of this Agreement.
XXXXXXXX XXXXXX & XXXXX, INC. SOMANETICS CORPORATION
By: /s/ XXXX XXXX By: /s/ XXXXXXX XXXX
-------------------------- ----------------------------
Its: Vice President Its: EVP and CFO
----------------- --------------------
Attest: Attest:
/s/ XXXXX X XXXXXXX
------------------------------- ---------------------------------
XXXXXXXX XXXXXX & XXXXX LIMITED
By: /s/ XXXX XXXX
--------------------------
Its: Director
----------------
Attest:
-------------------------------
15
16
SCHEDULE 1
TO THE
PLACEMENT AGENT AGREEMENT
DEFINITION OF U.S. PERSON UNDER REGULATION S
1. U.S. PERSON
(a) "U.S. person" means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or
incorporated under the laws of the United States;
(iii) Any estate of which any executor or administrator is
a U.S. person;
(iv) Any trust of which any trustee is a U.S. person;
(v) Any agency or branch of a foreign entity located in
the United States;
(vi) Any non-discretionary account or similar account
(other than an estate or trust) held by a dealer or
other fiduciary for the benefit or account of a U.S.
person;
(vii) Any discretionary account or similar account (other
than an estate or trust) held by a dealer or other
fiduciary organized, incorporated, or (if an
individual) resident in the United States; and
(viii) Any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign
jurisdiction; and (B) formed by a U.S. person
principally for the purpose of investing in
securities not registered under the Securities Act,
unless it is organized or incorporated, and owned, by
accredited investors (as defined in Rule 501(a) of
the Securities Act) who are not natural persons,
estates or trusts.
(b) Notwithstanding paragraph (1)(a) of this rule, any discretionary
account or similar account (other than an estate or trust) held for
the benefit or account of a non-U.S. person by a dealer or other
professional fiduciary organized, incorporated, or (if an individual)
resident in the United States shall not be deemed a "U.S. person."
(c) Notwithstanding paragraph (1)(a) of this rule, any estate of which any
professional fiduciary acting as executor or administrator is a U.S.
person shall not be deemed a U.S. person if:
(i) An executor or administrator of the estate who is not
a U.S. person has sole or shared investment
discretion with respect to the assets of the estate;
and
(ii) The estate is governed by foreign law.
16
17
(d) Notwithstanding paragraph (1)(a) of this rule, any trust of which any
professional fiduciary acting as a trustee is a U.S. person shall not
be deemed a U.S. person if a trustee who is not a U.S. person has sole
or shared investment discretion with respect to the trust assets, and
no beneficiary of the trust (and no settlor if the trust is revocable)
is a U.S. person.
(e) Notwithstanding paragraph (1)(a) of this rule, an employee benefit
plan established and administered in accordance with the law of a
country other than the United States and customary practices and
documentation of such country shall not be deemed a U.S. person.
(f) Notwithstanding paragraph (1)(a) of this rule, any agency or branch of
a U.S. person located outside the United States shall not be deemed a
"U.S. person" if:
(i) The agency or branch operates for valid business
reasons; and
(ii) The agency or branch is engaged in the business of
insurance or banking and is subject to substantive
insurance or banking regulation, respectively, in the
jurisdiction where located.
(g) The International Monetary Fund, the International Bank for
Reconstruction and development, the Inter-American Development Bank,
the Asian Development Bank, the African Development Bank, the United
Nations, and their agencies, affiliates and pension plans and any
other similar international organizations, their agencies, affiliates
and pension plans shall not be deemed "U.S. persons."
2. UNITED STATES. "United States" means the United States of America,
its territories and possessions, any State of the United States, and the
District of Columbia.
17
