THE FEMALE HEALTH COMPANY
COMMON STOCK PURCHASE WARRANT
The Female Health Company, a Wisconsin corporation (the "Company"), hereby
agrees that, for value received, X. X. XXXXXXXX & COMPANY, Minneapolis,
Minnesota, or its assigns, is entitled, subject to the terms set forth below,
to purchase from the Company, at any time or from time to time, from May 17,
2000, and before 5:00 p.m., Minneapolis, Minnesota time, on May 16, 2004, Three
Hundred Thirty-Seven Thousand Five Hundred (337,500) shares of the common stock
of the Company (the "Common Stock"), at an exercise price of $1.00 per share,
subject to adjustment as provided herein.
1. Exercise of Warrant. The purchase rights granted by this Warrant
shall be exercised (in minimum quantities of 100 shares) by the holder
surrendering this Warrant with the form of exercise attached hereto duly
executed by such holder, to the Company at its principal office, accompanied by
payment, in cash or by cashier's check payable to the order of the Company, of
the purchase price payable in respect of the Common Stock being purchased. If
less than all of the Common Stock purchasable hereunder is purchased, the
Company will, upon such exercise, execute and deliver to the holder hereof a
new Warrant (dated the date hereof) evidencing the number of shares of Common
Stock not so purchased. As soon as practicable after the exercise of this
Warrant and payment of the purchase price, the Company will cause to be issued
in the name of and delivered to the holder hereof, or as such holder may
direct, a certificate or certificates representing the shares purchased upon
such exercise. The Company may require that such certificate or certificates
contain on the face thereof a legend substantially as follows:
"The transfer of the shares represented by this certificate is restricted
pursuant to the terms of a Common Stock Purchase Warrant dated
June 3 , 1999, issued by The Female Health Company, a copy of which is
available for inspection at the offices of The Female Health Company.
Transfer may not be made except in accordance with the terms of the Common
Stock Purchase Warrant. In addition, no sale, offer to sell or transfer of
the shares represented by this certificate shall be made unless a
registration statement under the Securities Act of 1933, as amended, with
respect to such shares is then in effect or an exemption from registration
is then in fact applicable to such shares."
_________________________
THIS WARRANT IS SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH ON PAGE 7
HEREOF.
2. Negotiability and Transfer. This Warrant is issued upon the
following terms, to which each holder hereof consents and agrees:
(a) Until this Warrant is duly transferred on the books of the Company,
the Company may treat the registered holder of this Warrant as absolute owner
hereof for all purposes without being affected by any notice to the contrary.
(b) Each successive holder of this Warrant, or of any portion of the
rights represented thereby, shall be bound by the terms and conditions set
forth herein.
(c) This Warrant is immediately assignable, notwithstanding anything
herein to the contrary, to officers, directors, employees and registered
representatives of X. X. Xxxxxxxx & Company, sub-agent(s) of X. X. Xxxxxxxx &
Company, and officers, directors, employees and registered representatives of
the sub-agent(s) of X. X. Xxxxxxxx & Company.
3. Antidilution Adjustments. If the Company shall at any time hereafter
subdivide or combine its outstanding shares of Common Stock, or declare a
dividend payable in Common Stock, the exercise price in effect immediately
prior to the subdivision, combination or record date for such dividend payable
in Common Stock shall forthwith be proportionately increased, in the case of
combination, or proportionately decreased, in the case of subdivision or
declaration of a dividend payable in Common Stock, and each share of Common
Stock purchasable upon exercise of this Warrant, immediately preceding such
event, shall be changed to the number determined by dividing the then current
exercise price by the exercise price as adjusted after such subdivision,
combination or dividend payable in Common Stock.
No fractional shares of Common Stock are to be issued upon the exercise of
the Warrant, but the Company shall pay a cash adjustment in respect of any
fraction of a share which would otherwise be issuable in an amount equal to the
same fraction of the market price per share of Common Stock on the day of
exercise as determined in good faith by the Company.
In case of any capital reorganization or any reclassification of the
shares of Common Stock of the Company, or in the case of any consolidation with
or merger of the Company into or with another corporation, or the sale of all
or substantially all of its assets to another corporation, which is effected in
such a manner that the holders of Common Stock shall be entitled to receive
stock, securities or assets with respect to or in exchange for Common Stock,
then, as a part of such reorganization, reclassification, consolidation, merger
or sale, as the case may be, lawful provision shall be made so that the holder
of the Warrant shall have the right thereafter to receive, upon the exercise
hereof, the kind and amount of shares of stock or other securities or property
which the holder would have been entitled to receive if, immediately prior to
such reorganization, reclassification, consolidation, merger or sale, the
holder had held the number of shares of Common Stock which were then
purchasable upon the exercise of the Warrant. In any such case, appropriate
adjustment (as determined in good faith by the Board of Directors of the
Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interest thereafter of the holder of the
Warrant, to the end that the provisions set forth herein (including provisions
with respect to adjustments of the exercise price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other property thereafter deliverable upon the exercise of the Warrant.
When any adjustment is required to be made in the exercise price, initial
or adjusted, the Company shall forthwith determine the new exercise price, and
(a) prepare and retain on file a statement describing in reasonable
detail the method used in arriving at the new exercise price; and
(b) cause a copy of such statement to be mailed to the holder of the
Warrant as of a date within ten (10) days after the date when the circumstances
giving rise to the adjustment occurred.
4. Transferability; Registration Rights. Prior to making any
disposition of the Warrant or of any Common Stock purchased upon exercise of
the Warrant, the holder will give written notice to the Company describing
briefly the manner of any such proposed disposition. The holder will not make
any such disposition until (i) the Company has notified the holder that, in the
opinion of its counsel, registration under the Act is not required with respect
to such disposition, or (ii) a registration statement covering the proposed
distribution has been filed by the Company and has become effective. The
holder then will make any disposition only pursuant to the conditions of such
opinion or registration. The Company agrees that, upon receipt of written
notice from the holder hereof with respect to such proposed distribution, it
will use its reasonable best efforts, in consultation with the holder's
counsel, to ascertain as promptly as possible whether or not registration is
required, and will advise the holder promptly with respect thereto, and the
holder will cooperate in providing the Company with information necessary to
make such determination.
If, at any time one (1) year after the date hereof and prior to the
expiration of seven (7) years from the date hereof, the Company shall propose
to file any registration statement under the Securities Act of 1933, as
amended, (the "Act") covering a public offering of the Company's Common Stock
(other than a registration on Form S-4, Form S-8 or any registration form that
does not permit secondary sales), it will notify the holder hereof at least
thirty (30) days prior to each such filing and will include in the registration
statement (to the extent permitted by applicable regulation) the Common Stock
purchased by the holder or purchasable by the holder upon the exercise of the
Warrant to the extent requested by the holder hereof. Notwithstanding the
foregoing, the number of shares of the holders of the Warrants proposed to be
registered thereby shall be reduced pro rata with any other selling shareholder
(other than the Company) upon the request of the managing underwriter of such
offering. If the registration statement or offering statement filed pursuant
to such forty-five (45) day notice has not become effective within six months
following the date such notice is given to the holder hereof, the Company must
again notify such holder in the manner provided above.
At any time one (1) year after the date hereof and prior to the expiration
of five (5) years from the date hereof, and provided that a registration
statement on Form S-3 (or its equivalent) is then available to the Company, and
on a one-time basis only, if the holders of 51% or more of the warrants and the
shares acquired upon exercise of the Warrants request the registration of the
shares on Form S-3 (or its equivalent), the Company shall promptly thereafter
use its reasonable best efforts to effect the registration under the Act of all
such shares which such holders request in writing to be so registered, and in a
manner corresponding to the methods of distribution described in such holders'
request.
All expenses of any such registrations referred to in this Section 4,
except the fees of counsel to such holders and underwriting commissions or
discounts shall be borne by the Company.
The Company will mail to each record holder, at the last known post office
address, written notice of any exercise of the rights granted under this
Section 4, by certified or registered mail, return receipt requested, and each
holder shall have thirty (30) days from the date of deposit of such notice in
the U.S. Mail to notify the Company in writing whether such holder wishes to
join in such exercise.
The Company will furnish the holder hereof with a reasonable number of
copies of any prospectus included in such filings and will amend or supplement
the same as required during the period of required use thereof. The Company
will maintain the effectiveness of any registration statement or the offering
statement filed by the Company, whether or not at the request of the holder
hereof, for at least six (6) months following the effective date thereof.
In the case of the filing of any registration statement, and to the extent
permissible under the Act and controlling precedent thereunder, the Company and
the holder hereof shall provide cross indemnification agreements to each other
in customary scope covering the accuracy and completeness of the information
furnished by each.
The holder of the Warrant agrees to cooperate with the Company in the
preparation and filing of any such registration statement or offering
statement, and in the furnishing of information concerning the holder for
inclusion therein, or in any efforts by the Company to establish that the
proposed sale is exempt under the Act as to any proposed distribution.
5. Cashless Exercise Option.
(a) The holder of this Warrant shall have the right to require the
Company to convert this Warrant (the "Conversion Right"), at any time after it
is exercisable, but prior to its expiration, into shares of Common Stock as
provided for in this Section 5. Upon exercise of the Conversion Right, the
Company shall deliver to the holder (without payment by the holder of any
exercise price) that number of shares of Common Stock equal to the quotient
obtained by dividing (x) the value of the Warrant at the time the Conversion
Right is exercised (determined by subtracting the aggregate exercise price for
the Warrant in effect immediately prior to the exercise of the Conversion Right
from the aggregate Fair Market Value (as determined below) for the Warrant
immediately prior to the exercise of the Conversion Right) by (y) the Fair
Market Value of one share of Common Stock immediately prior to the exercise of
the Conversion Right. No fractional shares shall be issuable upon exercise of
the Conversion Right, and if the number of shares to be issued in accordance
with the foregoing formula is other than a whole number, the Company shall pay
to the holder of this Warrant an amount in cash equal to the fair market value
of the resulting fractional share.
(b) The Conversion Right may be exercised by the holder, at any time or
from time to time after this Warrant is exercisable, prior to its expiration,
on any business day, by delivering a written notice in the form attached hereto
(the "Conversion Notice") to the Company at the offices of the Company
exercising the Conversion Right and specifying (i) the total number of shares
of Stock the holder of this Warrant will purchase pursuant to such conversion,
and (ii) a place, and a date not less than one (1) nor more than twenty (20)
business days from the date of the Conversion Notice for the closing of such
purchase.
(c) At any closing under Section 5(b) hereof, (i) the holder will
surrender the Warrant, (ii) the Company will deliver to the holder a
certificate or certificates for the number of shares of Common Stock issuable
upon such conversion, together with cash, in lieu of any fraction of a share,
and (iii) the Company will deliver to the holder a new Warrant representing the
number of shares, if any, with respect to which the Warrant shall not have been
converted.
(d) "Fair Market Value" of a share of Common Stock as of a particular
date (the "Determination Date") shall mean:
(i) If the Company's Common Stock is traded on an exchange or is
quoted on the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") National Market System, or The SmallCap Market, then the
average closing or last sale prices, respectively, reported for the ten (10)
business days immediately preceding the Determination Date.
(ii) If the Company's Common Stock is not traded on an exchange or on
The NASDAQ National Market System, or The SmallCap Market, but is traded in the
over-the-counter market, then the average of the closing bid and asked prices
reported for the ten (10) business days immediately preceding the Determination
Date.
(iii) If the Company's Common Stock is not publicly traded and
there has been a bona fide sale for cash on an arm's-length basis within 45
days prior to the Determination Date of such Common Stock by the Company
privately to one or more investors unaffiliated with the Company (a "Qualifying
Sale"), then the most recent such sales price.
(iv) If the Company's Common Stock is not publicly traded and there
has been no Qualifying Sale, then the appraised fair market value of such
stock, as determined by mutual agreement of the Company and the holder of the
Warrant; or if the parties cannot agree to such valuation, then each of the
Company and the holder shall select an arbitrator and such arbitrators shall
select a third, and such three arbitrators shall determine (in accordance with
the Commercial Arbitration Rules of the American Arbitration Association, such
expenses to be borne equally by the parties) the fair market value (without any
discount for lack of marketability or minority interest) of a share of Common
Stock of the Company.
6. Notices. The Company shall mail to the registered holder of the
Warrant, at his last known post office address appearing on the books of the
Company, not less than fifteen (15) days prior to the date on which (a) a
record will be taken for the purpose of determining the holders of Common Stock
entitled to dividends (other than cash dividends) or subscription rights, or
(b) a record will be taken (or in lieu thereof, the transfer books will be
closed) for the purpose of determining the holders of Common Stock entitled to
notice of and to vote at a meeting of stockholders at which any capital
reorganization, reclassification of shares of Common Stock, consolidation,
merger, dissolution, liquidation, winding up or sale of substantially all of
the Company's assets shall be considered and acted upon.
7. Reservation of Common Stock. A number of shares of Common Stock
sufficient to provide for the exercise of the Warrant upon the basis herein set
forth shall at all times be reserved for the exercise thereof.
8. Miscellaneous. Whenever reference is made herein to the issue or
sale of shares of Common Stock, the term "Common Stock" shall include any stock
of any class of the Company other than preferred stock with a fixed limit on
dividends and a fixed amount payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company.
The Company will not, by amendment of its Articles of Incorporation or
through reorganization, consolidation, merger, dissolution or sale of assets,
or by any other voluntary act or deed, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be observed
or performed hereunder by the Company, but will, at all times in good faith,
assist, insofar as it is able, in the carrying out of all provisions hereof and
in the taking of all other action which may be necessary in order to protect
the rights of the holder hereof against dilution.
Upon written request of the holder of this Warrant, the Company will
promptly provide such holder with a then current written list of the names and
addresses of all holders of warrants originally issued under the terms of, and
concurrent with, this Warrant.
The representations, warranties and agreements herein contained shall
survive the exercise of this Warrant. References to the "holder of" include
the immediate holder of shares purchased on the exercise of this Warrant, and
the word "holder" shall include the plural thereof. This Common Stock Purchase
Warrant shall be interpreted under the laws of the State of Minnesota.
All shares of Common Stock or other securities issued upon the exercise of
the Warrant shall be validly issued, fully paid and non-assessable except that
under Wisconsin law, shareholders of the Company may be personally liable for
unpaid wages due employees for up to six (6) months' services, but not in an
amount greater than the consideration paid for such Securities, and the Company
will pay all taxes in respect of the issuer thereof.
Notwithstanding anything contained herein to the contrary, the holder of
this Warrant shall not be deemed a stockholder (including, no right to vote on
any matters coming before the shareholders) of the Company for any purpose
whatsoever until and unless this Warrant is duly exercised.
IN WITNESS WHEREOF, this Warrant has been duly executed by The Female Health
Company, this 3rd day of June , 1999.
THE FEMALE HEALTH COMPANY
By: ___________________________________
Title: _________________________________
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, OR APPLICABLE STATE SECURITIES LAW. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF
THE SECURITIES WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT, IN THE
ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT EXERCISE FORM
To be signed only upon exercise of Warrant.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, __________________ of the shares of Common Stock of The
Female Health Company to which such Warrant relates and herewith makes payment
of $___________ therefor in cash or by certified check, and requests that such
shares be issued and be delivered to, _________________________, the address
for which is set forth below the signature of the undersigned.
Dated: ______________________
_____________________________ _______________________________________
(Taxpayer's I.D. Number) (Signature)
_______________________________________
_______________________________________
(Address)
________________________________
ASSIGNMENT FORM
To be signed only upon authorized transfer of Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
____________________________________ the right to purchase shares of Common
Stock of The Female Health Company to which the within Warrant relates and
appoints ____________________________, attorney, to transfer said right on the
books of The Female Health Company with full power of substitution in the
premises.
Dated: ______________________ _______________________________________
(Signature)
_______________________________________
_______________________________________
(Address)
CASHLESS EXERCISE FORM
(To be executed upon exercise of Warrant pursuant to Section 5)
TO: THE FEMALE HEALTH COMPANY
The undersigned hereby irrevocably elects a cashless exercise of the right
of purchase represented by the within Common Stock Purchase Warrant for, and to
purchase thereunder, ______________________ shares of Common Stock, as provided
for in Section 5 therein.
If said number of shares shall not be all the shares purchasable under the
within Common Stock Purchase Warrant, a new Warrant is to be issued in the name
of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher number of shares.
Please issue a certificate or certificates for such Common Stock in the
name of, and pay any cash for any fractional shares to:
NAME __________________________________________
(Please Print Name)
ADDRESS __________________________________________
__________________________________________
SOCIAL SECURITY NO. __________________________________________
SIGNATURE __________________________________________
NOTE: The above signature should correspond
exactly with the name on the first page of
this Common Stock Purchase Warrant or with
the name of the assignee appearing in the
assignment form on the preceding page.
