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EXHIBIT 10.27
FUND-RAISING AGREEMENT
THIS AGREEMENT made this 1st day of May, 1998 by and between HARTINVEST-MEDICAL
VENTURES ("HMV") with address at Xxxxxx Xxxx Xxxxx, Xxxxxxx Xxxxxx, Xx. Xxxxxx,
Xxxxxx XX0 0XX, Channel Islands hereafter "Corporate Financial Advisor"
and
THE FEMALE HEALTH COMPANY ("FHC") with address at 000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, hereafter "Company".
NOW, THEREFORE, in consideration of the covenants herein contained and on the
part of each party to be fully kept and performed, the parties have agreed and
do thereby agree with each other as follows:
1. SCOPE OF WORK.
1.1 For the consideration hereafter set forth, Company does hereby engage
Corporate Financial Advisor and Corporate Financial Advisor agrees to provide
Company up to $6.0 million under the Regulation D exemption to Section 4(2) of
the 1933 Securities Act, as outlined in the term sheet attached (see Attachment
1). FHC agrees to provide the documentation and complete all regulatory
submissions for the Regulation "D" financing.
1.2 If requested by FHC, the Corporate Financial Advisor agrees to complete
said financing provided that there are no delays caused by the Company in
providing additional requirested information or explanations of information
provided by the Company to Corporate Financial Advisor. Company will provide a
legal opinion from a securities attorney as presented in Attachment 2.
1.3 Corporate Financial Advisor represents that it is registered and qualified
to do corporate advisory business.
1.4 Corporate Financial Advisor and Conpany hereby agree the terms of the
Company hereby agree the terms of the Company's common stock to be offered
through a term sheet (see Attachment 1). Company's common stock to be offered
through a term sheet (see Attachment 1).
1.5 This agreement shall be exclusive for international funding sources and
non-exclusive for the United States. The Company at its discretion may accept
or reject proposed investors based on the terms in Attachment 1. If prior to
acceptance by the Company of any subscription agreement, the Company receives
what in its sole judgment is a creditable offer to provide significant funding
on substantially better terms than those presented in Attachment 1. It
reserves the right to accept such offer and terms in place of those presented
in Attachment 1. In order to have this right of rejection, Company agrees
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to pay to Corporate Financial Advisor a "break up fee" of US$ 100,000 or 25,000
shares, whichever is the greater.
2. PAYMENT TERMS.
2.1 For the private placement funds raised by Corporate Financial Advisor, the
Company agrees to pay Corporate Financial Advisor a SEVEN PERCENT (7%)
COMMISSION. Notwithstanding anything in this Agreement to the contrary, if the
Company enters into a Subscription Agreement with an investor proposed by
Corporate Financial Advisor during the term of this Agreement, the Company
shall be obligated to pay Corporate Financial Advisor the 7% commission on all
amounts thereafter received by the Company from the investor pursuant to the
Subscription Agreement whether or not such amounts are received before or after
the term of this Agreement. The commission will be paid based on the actual
drawdown amount per the Term Sheet (See Attachment 1). Corporate Financial
Advisor will be entitled to receive its 7% cash commission within five business
days after the closing of each Call under the Subscription Agreement.
2.2 Corporate Financial Advisor, at its sole option, take Company common stock
equal to and at a similar per share price as the investor. Any stock taken in
lieu of cash commission will be entitled to the same registration rights given
investors in the private placement.
2.3 Corporate Financial Advisor will receive distribution warrants to purchase
common shares equal to 10% of the actual stock purchased by the investor to the
Subscription Agreement contemplated on Attachment 1. The warrants will have a
term of three years. A pro rata portion of the warrants will be automatically
forfeited if investor breaches the Subscription Agreement as specified in
Attachment 1. The warrants will have an exercise price equal to the exercise
price for the warrants issued to investors pursuant to the term sheet.
3. CONTRACTED SERVICES.
3.1 Corporate Financial Advisor may utilize the fundraising services of any
third party registered SFA or NASD broker/dealer.
3.2 All commissions will be payable to Corporate Financial Advisor who will
then pay out any commission due third party SFA or NASD broker/dealers
participating in said above private placement. Corporate Financial Advisor
agrees to furnish Company copies of any third party fundraising agreements and
further agrees to hold the Company harmless with respect to commissions owed to
any third party SFA or NASD broker/dealers participating in the private
placement and for any actions taken by such third party SFA or NASD
broker/dealers in violation of law.
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4. TERM.
Unless extended by mutual written agreement of the parties hereto, this
Agreement will terminate and be of no further force or effect 90 day after the
date first above written.
5. MODIFICATIONS, ETC.
5.1 This written Agreement embodies the entire understanding of the parties and
all prior negotiations, writings and consultations are merged herein.
5.2 This Agreement shall be construed and interpreted in accord with the laws
of the United Kingdom.
5.3 At the option of Corporate Financial Advisor any disagreement may be
settled by an ARBITRATION PANEL rather than the appropriate court and the
findings of the arbitration panel shall be binding on both parties. Any such
arbitration shall occur in London, England.
5.4 This Agreement shall be binding upon the parties hereto, their successors
and assigns.
5.5 This Agreement may be executed in two counterparts each of which shall be
deemed to be an original but both of which together shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the parties hereto, intending to bind themselves, their
successors and assigns, have hereunto set their hands the day and year first
above written.
Corporate Financial Advisor
HARTINVEST-MEDICAL VENTURES
/s/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
Company
THE FEMALE HEALTH COMPANY
/s/ X.X. Xxxxxxx
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X.X. XXXXXXX
Chairman and C.E.O.
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ATTACHMENT 1
HMV TERM SHEET
THE FEMALE HEALTH COMPANY
DEFINITIONS
Market Price: The lowest Trade Bid Price of The Female Health
Company's (the "Company") shares for the two
trading days preceding the Call the day of the
call, and for the two trading days following the
Call.
Subscription Date: The date which Kingsbridge (the "Investor")
executes the Subscription Agreement.
Effective Date: The date the SEC declares the registration
statement, registering the Common Shares and
Common Shares underlying the Warrants, effective.
Call: Draw down by the Company of a portion of the
Subscription Agreement following registration of
the Common Shares, which Calls, together with all
prior Calls and any stock issued as commissions
in connection with such Calls, shall not exceed
19.9% of the Company's outstanding stock as of
the date of the first sale.
Symbol: FHC
Amount: $6,000,000
Securities Offered: Common Shares and Warrants.
Commitment: The Investor, subject only to the conditions set
forth in this term sheet, will irrevocably commit
to purchase up to $6,000,000 of restricted Common
Shares over the course of 24 months
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following the Effective Date. The Company
will irrevocably commit to draw down a minimum
of $1,000,000.
The Company will have sole discretion as to
the amount and timing of each Call subject to
the restrictions below.
Purchase Price of
Common Shares: 88% of the Market Price at each Call. The maximum
purchase price will be set at 150% of the last
sale price of the Company's common stock on the
Subscription Date.
Restrictions on Calls: (a) Each Call cannot be for less than $200,000 nor
more than $1,000,000. According to Annex A.
(b) There will be a
minimum of 20 trading days between Calls.
(c) The above
restrictions may be waived on any individual
Call upon agreement of both parties.
Restrictions on Short Sales: The Investor agrees not to sell any common stock
of the Company short during the term of the
Subscription Agreement unless the Company agrees
to such sale.
Warrants: 200,000 with a three-year life beginning six
months after the Subscription Date. The exercise
price of the warrants shall be 120% of the last
sale price of the Company's common stock on the
Subscription Date.
Registration: The Company will file a registration statement
under the Securities Act of 1933, as amended,
with respect to the Common Shares within 45 days
of the Subscription Date. Such registration
statement must be declared effective within 120
days of the Subscription Date. The registration
statement will remain effective for the duration
of the Warrants.
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Legal Fees: The Company will pay the reasonable legal costs
associated with an investment, not to exceed
$20,000.
Commission: 7% plus warrants to purchase such number of
shares of the Company's common stock as is equal
to 10% of the number of shares of such common
stock actually purchased by the Investor pursuant
to the Subscription Agreement.. The exercise
price of the warrants shall be 120% of the last
sale price of the Company's common stock as of
the Subscription Date. Commissions will be
payable within five business days after each
closing of a Call under the Subscription
Agreement.
Closing: April 1998 or agreed date.
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ANNEX A
MAXIMUM CALL AMOUNT
The Maximum Call Amount with respect to a Call shall be determined based upon
the Average Daily Trading Volume of Shares of Common Stock for the 20-trading
day period ending on the date prior to the relevant Call and the Market Price
as of such Call Date of shares of Common Stock as follows:
Average Daily Trading Volume
for 20 Days Prior to Call
Market Price
($ per share) 17,000-22,000 22,001-30,000 30,001-45,000 45,001-60,000
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$2.00 - 2.50 $200,000 $300,000 $400,000 $ 500,000
2.50 - 3.00 250,000 350,000 450,000 600,000
3.00 - 3.50 300,000 400,000 450,000 600,000
3.50 - 4.00 350,000 450,000 500,000 600,000
4.00 - 4.50 350,000 450,000 550,000 650,000
4.50 - 5.00 400,000 500,000 600,000 750,000
5.00 - above 450,000 600,000 750,000 1,000,000
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