EXHIBIT 16
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 19
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAW. THIS WARRANT AND ANY
INTEREST HEREIN MAY BE OFFERED, TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF ONLY
IF REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR IF AN EXEMPTION
FROM REGISTRATION IS AVAILABLE, AND ONLY IN STRICT COMPLIANCE WITH APPLICABLE
STATE SECURITIES LAWS AND REGULATIONS.
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WARRANT
FOR THE PURCHASE OF
COMMON STOCK
OF
THE FEMALE HEALTH COMPANY
Warrant Number 11
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THIS CERTIFIES THAT, FOR VALUE RECEIVED, Xxxxxxx X. Xxxxxxxx, or
assigns, is entitled to subscribe for and purchase from The Female Health
Company, a Wisconsin corporation (the Company"), 280,000 shares of the fully
paid and non-assessable shares of Common Stock, $.01 par value per share, of the
Company, at the Purchase Price (as hereinafter defined) per share.
This Warrant and all warrants issued in substitution or exchange for
all or part hereof are herein individually called a "Warrant" and collectively
the "Warrants".
1. Definitions. When used in this Warrant, the following terms shall
-----------
have the meanings specified:
(a) "Affiliate" shall mean any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with
another Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such corporation, whether through the ownership
of voting securities, by contract or otherwise.
(b) "Common Shares" shall mean and include the Company's
presently authorized shares of Common Stock and shall also include any capital
stock of any class of the Company hereafter authorized which shall not be
limited to a fixed sum or
percentage of par value in respect of the rights of the holders thereof to
participate in dividends or in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding up of the Company; provided that
the shares purchasable pursuant to this Warrant shall include shares designated
as Common Stock of the Company on the date of original issue of this Warrant or,
in case of any reclassification of the outstanding shares thereof, the stock,
securities or assets provided for in Section 5(a) hereof.
(c) "Common Stock" shall mean the common stock, $.01 par value
per share, of the Company.
(d) "Expiration Date" shall mean the earliest to occur of the
following: (i) the exercise of all of the rights to purchase Common Stock
represented by this Warrant; or (ii) March 25, 2011.
(e) "Holder" shall mean Xxxxxxx X. Xxxxxxxx and any permitted
transferee or assignee of all or part of this Warrant and the rights hereunder;
provided that, as used in Section 12 hereof such term shall also include any
holder or holders of Common Stock (or Other Securities) issued on the exercise
of this Warrant other than Persons who received such Common Stock (or Other
Securities) in a public offering or pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended.
(f) "Holder Group" shall have the meaning assigned thereto in
Section 10 hereof.
(g) "Purchase Price" shall mean the per share purchase price of
$0.45 (subject to adjustment under Section 5) to be paid for shares of Common
Stock purchased pursuant to the exercise of this Warrant.
(h) "Other Securities", as used in Section 12 hereof, shall mean
any stock (other than Common Stock) and other securities of the Company or any
other Person (corporate or otherwise) which the Holder of this Warrant at any
time shall be entitled to receive, or shall have received, on the exercise of
this Warrant, in lieu of or in addition to Common Stock, or which at any time
shall be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 hereof or otherwise.
(i) "Person shall mean and include an individual, partnership,
corporation, trust, joint venture, incorporated organization and a government or
any department or agency thereof.
2. Exercise: Issuance of Certificates: Payment for Shares. This
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Warrant may be exercised by the Holder, in whole or in part, at any time and
from time to time on or after March 25,
2
2001, and prior to 5:00 p.m. (Central Time) on the Expiration Date, by the
surrender of this Warrant (properly endorsed if required), and payment by the
Holder to the Company of the Purchase Price for each share of Common Stock
purchased with respect to such exercise by wire transfer or certified or
cashiers check. Upon such surrender and payment, the Holder shall be entitled to
receive a certificate or certificates representing the shares of Common Stock so
purchased, which certificate(s) may contain a standard legend indicating that
such shares have not been registered under the Securities Act and prohibiting
resale thereof without registration or an opinion of counsel that an exemption
from registration is available. The Company agrees that the shares so purchased
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. Subject to the
Company's Amended and Restated Articles of Incorporation, certificates for the
shares of Common Stock so purchased shall be delivered to the Holder within a
reasonable time, not exceeding ten days, after the rights represented by this
Warrant shall have been so exercised. If the rights of the Holder of this
Warrant are exercised in part, the number of shares of Common Stock which
thereafter may be purchased pursuant to this Warrant shall be reduced
accordingly and the Company shall reissue a Warrant or Warrants of like tenor
representing in the aggregate the right to purchase the number of shares of
Common Stock as so reduced.
3. Affirmative Covenants.
---------------------
(a) The Company covenants and agrees that the shares of Common
Stock issuable upon exercise of the rights represented by this Warrant will,
upon such exercise and issuance in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable (except as set forth in Section
180.0622(2)(b), Wis. Stats., as amended and interpreted) and free from all
taxes, liens and charges with respect to the issue. The Company further
covenants and agrees that, until the Expiration Date, the Company will at all
times have authorized, and reserved for the purpose of issue upon total or
partial exercise of the rights represented by this Warrant, a sufficient number
of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
(b) The Company further covenants and agrees that, until the
Expiration Date, the Company will deliver to the Holder copies of all reports
and information filed by the Company with the Securities and Exchange Commission
("SEC") pursuant to the Securities Exchange Act of 1934, as amended, within 10
days after receiving a written request from the Holder.
4. Issuance of Preferred Stock. So long as this Warrant remains
---------------------------
outstanding, the Company will not issue any
3
capital stock of any class preferred as to dividends or as to the distribution
of assets upon voluntary or involuntary liquidation, dissolution or winding up,
unless the rights of the holders thereof shall be limited to a fixed sum or
percentage of par value in respect of participation in dividends and in the
distribution of such assets.
5. Anti-Dilution Provisions. The above provisions are, however,
------------------------
subject to the following:
(a) If any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that 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 condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the Holder hereof shall hereafter have the right to
purchase and receive upon the basis and upon the terms and conditions specified
in this Warrant and in lieu of the shares of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interests of the Holder
of this Warrant to the end that the provisions hereof shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof, together with such
adjustment in the Purchase Price as may be applicable with respect thereto so
that the aggregate price to be paid for shares issued pursuant to this Warrant
shall be neither increased nor decreased. The Company shall not effect any such
consolidation, merger or sale, unless prior to the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall assume
by written instrument executed and mailed to the Holder hereof at the last
address of such Holder appearing on the books of the Company, the obligation to
deliver to such Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to
purchase.
(b) In case any time:
4
(1) the Company shall declare any cash dividend on its Common
Stock at a rate in excess of the rate of the last cash dividend theretofore
paid;
(2) the Company shall pay any dividend payable in stock upon its
Common Stock, make any distribution (other than regular cash dividends) to the
holders of its Common Stock or redeem any shares of its Common Stock;
(3) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights;
(4) there shall be any capital reorganization, reclassification
of the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to another corporation;
or
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give written notice,
by first class mail, postage prepaid, addressed to the Holder of this Warrant at
the address of such Holder as shown on the books of the Company, of the date on
which (aa) the books of the Company shall close or a record shall be taken for
such dividend, distribution or subscription rights, or (bb) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also specify
the date as of which the holders of Common Stock of record shall participate in
such dividend distribution or subscription rights, or shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be. Such written notice shall be
given at least 15 days prior to the action in question and not less than 15 days
prior to the record date or the date on which the Company's transfer books are
closed in respect thereto.
6. Certain Events. If any event occurs as to which the provisions of
--------------
this Warrant are not strictly applicable or, if strictly applicable would not
fairly protect the rights of the Holder in accordance with the essential intent
and principles of such provisions, then the Board of Directors of the Company
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect the Holder's rights
as aforesaid.
7. Term of Warrant. This Warrant shall remain outstanding and
---------------
exercisable until the Expiration Date. To the extent not previously exercised,
the rights to purchase Common Stock represented by this Warrant shall thereupon
terminate.
5
8. Issue Tax. The issuance of certificates for shares of Common
---------
Stock upon the total or partial exercise of this Warrant shall be made without
charge to the Holder for any issuance tax in respect thereof.
9. Closing of Books. The Company will at no time close its transfer
----------------
books against the transfer of this Warrant or act in any manner which interferes
with the timely exercise of the rights represented by this Warrant.
10. Transfer of Warrant. Subject to any registration or qualification
-------------------
requirements under the Securities Act and applicable state securities laws, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the Holder, by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant to the Company properly endorsed; provided that
the Company may require in connection with such transfer an opinion of counsel
to the effect that such transfer qualifies for an exemption from the
registration requirements of the Securities Act. If this Warrant is transferred
in part in accordance with the terms hereof, the Company shall reissue a Warrant
or Warrants of like tenor representing in the aggregate the right to purchase
the number of shares of Common Stock represented by this Warrant immediately
prior to such transfer and thereafter the Holder and all transferees and
assignees shall constitute the "Holder Group" for purposes of Section 12 hereof.
11. No Voting Rights. This Warrant shall not entitle the Holder to
----------------
any voting rights as a shareholder of the Company.
12. Registration Rights. All references in this Section 12 to Common
-------------------
Stock shall be deemed to include Other Securities as applicable.
12.1 Demand Registration. At any time (whether before or after the
-------------------
Expiration Date) following the exercise of the right to purchase Common Stock
pursuant to this Warrant, a Holder may demand registration under the Securities
Act of 1933, as amended (the "Securities Act") of the resale of all or part of
the Common Stock issuable or which has been issued upon exercise of this
Warrant, on Form S-1 or any similar long-form registration or, in the Company's
sole discretion, on Form S-2 or S-3 or any similar short-form registration, if
available under applicable rules of the SEC. If such request is made by less
than all Holders, the Company shall send written notice of such registration
request to the remaining Holders within 15 days of receipt of the initial
registration request. Unless a remaining Holder shall deliver to the Company,
within 20 days after such notice is sent by the Company, a written request for
inclusion in the registration demanded by the initial request of all or part of
the Common Stock issuable or which has been issued upon exercise of the Warrant
held by such remaining Holder, all rights of such remaining Holder under this
Section 12.1 shall be terminated. The
6
written request to be delivered by a Holder to the Company pursuant to this
Section 12.1 shall (i) specify the number of shares intended to be offered and
sold by the Holder, (ii) express the present intent of the Holder to offer such
shares for distribution, and (iii) describe the nature and method of the
proposed offer and sale thereof. The registration requested pursuant to this
Section 12.1 is referred to herein as "Demand Registration", which term shall
also include any Demand Registration as defined in any of the Dearholt Stock
Documents referenced in Section 12.1(a) hereof.
(a) Number of Registrations. Notwithstanding any contrary
-----------------------
provision contained in this document, the Note Purchase and Warrant Agreement
between the Company and Xxxxxxx X. Xxxxxxxx dated March 25, 1999, the Stock
Issuance Agreement between such parties dated March 25, 1999 (the "1999 Stock
Issuance Agreement"), and such other documents, agreements and warrants that the
Holder may demand registration under the Securities Act (collectively, the
"Dearholt Stock Documents"), the Holder Group shall be entitled to an unlimited
number of Demand Registrations under all such Dearholt Stock Documents, and
shall be entitled to include all or part of the stock received under any or all
of such Dearholt Stock Documents in any Demand Registration, as the Holder Group
shall request from time to time; provided, however, that, except for Demand
Registrations requested pursuant to the last sentence of this Section 12.1(a),
any such Demand Registration shall include at least two hundred thousand
(200,000) shares of Common Stock (subject to adjustment pursuant to Section
5(a). A registration initiated as a Demand Registration may be withdrawn at any
time at the request of the Holders of a majority of the shares of the Common
Stock requested to be included in such Demand Registration (the "Required
Percentage"); provided that in the event a registration initiated as a Demand
Registration is so withdrawn, all expenses in connection with such withdrawn
registration (including, without limitation, reasonable fees of counsel and
accountants for the Company) shall be paid by the participating Holders, pro
rata. In the event Xxxxxxx X. Xxxxxxxx shall pledge or assign his rights and
interests to all or part of the Common Stock issued to him upon exercise of this
Warrant, or upon exercise of his rights under any of the Dearholt Stock
Documents, as collateral pursuant to a borrowing, the rights to Demand
Registrations hereunder may be assigned and transferred to said lender (and only
one lender at any given time) in connection therewith, and said lender shall be
entitled to request such Demand Registrations at any time, without regard to the
two hundred thousand (200,000) share minimum under the first sentence of this
Section 12.1(a), and notwithstanding the provisions of the first sentence of
Section 12.1(c) below.
(b) Priority on Demand Registrations. The Company will not
--------------------------------
include in the Demand Registration any securities which are not Common Stock
owned by a Holder, without the written consent of the Required Percentage of
Holders, if the Demand
7
Registration is an underwritten offering, and the managing underwriters advise
the Company in writing that in their opinion the number of shares of Common
Stock requested to be included exceeds the number of shares of Common Stock
which can be sold in such offering without adversely affecting the market price
of the Company's Common Stock, the Company will include in such registration
(pro rata from shares of Common Stock requested to be included by each
participating Holder), prior to the inclusion of any securities which are not
shares of Common Stock owned by a Holder, the number of shares of Common Stock
owned by the Holders requested to be included which in the opinion of such
underwriters can be sold without such adverse affect; and the balance of the
shares of Common Stock which Holder requested to be included in such offering
shall be withheld from sale for a period of time requested by the underwritten,
but not to exceed one hundred twenty (120) days.
(c) Restrictions on Demand Registration. Subject to the next
-----------------------------------
following sentence and the last sentence of Section 12.1(a) above, the Company
will not be obligated to effect a Demand Registration within one hundred twenty
(120) days after the effective date of a registration in which the Holder was
given an opportunity to participate in a registered offering pursuant to Section
12.2 hereof. In the event that a Holder requests to participate in a
registration under Section 12.2 hereof and satisfies the conditions of Section
12.3, and for whatever reason all of the shares of Common Stock which such
Holder so requests to be registered are not registered or are not permitted to
be offered for sale and sold prior to shares of Common Stock or other equity
securities being registered and offered by the Company in such registration,
then the provisions of the first sentence of this Section 12.1(c) shall not
apply, and the Company shall be obligated to effect a Demand Registration
requested by such Holder as soon as practicable in accordance with the terms
hereof. The Company may postpone for up to ninety (90) days the filing or the
effectiveness of a registration statement for a Demand Registration if the
Company and the Required Percentage of Holders reasonably and in good faith
agree that such Demand Registration might have an adverse effect on any proposal
or plan by the Company to engage in any financing, acquisition of assets (other
than in the ordinary course of business) or any corporate reorganization,
merger, consolidation, tender offer or similar transaction.
(d) Selection of Underwriters. If the Demand Registration
-------------------------
involves an underwritten public offering, the Company will have the right to
select the investment banker(s) and manager(s) to administer the offering,
subject to the approval of the Required Percentage of Holders (which will not be
unreasonably withheld) of such investment banker(s) and manager(s).
12.2 Participation in Registered Offerings. If the Company at any time
-------------------------------------
or times proposes or is required to register
8
any of its Common Stock or other equity securities for public sale in an
underwritten public offering for cash (other than in connection with any stock
option, bonus or other employee benefit plan or arrangement) under the
Securities Act or any applicable state securities law, it will each such time
give written notice to each Holder of its intention to do so. Upon the written
request of a Holder given within thirty (30) business days after receipt of any
such notice (which request shall state the intended method of disposition of
such equity securities and shall state in reasonable detail, to the extent
practicable, the net consideration, after all commissions and discounts which
the prospective seller or sellers expect to receive upon such disposition), the
Company shall use all reasonable efforts to cause all such Common Stock which
the Holder so requested to be registered (which request will not be for less
than two hundred thousand (200,000) shares of Common Stock) to be registered
under the Securities Act and any applicable state securities laws (provided,
that if the managing underwriter advises that less than all of the registered
shares of equity securities should be offered for sale so as not to materially
and adversely affect the price or salability of the offering being registered by
the Company or the participating Holders for a period not to exceed one hundred
twenty (120) days, the participating Holders will, if requested by the Company,
withhold from sale for such period of time such number of shares of Common Stock
(pro rata from the shares of Common Stock requested to be included by the
participating Holders) as the underwriter may specify; provided further that in
such event a pro rata number of shares proposed to be offered by the Company and
all other shareholders of the Company also shall be similarly withheld from
sale), all to the extent requisite to permit the sale or other disposition (in
accordance with the intended method of disposition thereof as aforesaid) by the
prospective seller or sellers of the securities so registered. In the event an
underwriter is involved with a registration initiated by the Company of the
Common Stock, and a Holder requests to participate in the registration, the
Holder must commit to sell through the underwriter. The Company may, in its sole
discretion, withdraw any registration contemplated by this Section 12.2 and
abandon the proposed offering in which a Holder had requested to participate
without any further obligation to such Holder with respect to such registration
statement or offering; provided however that such Holder shall be indemnified by
the Company for any fees, costs and expense of and incidental to such
registration, excluding the fees and disbursements of counsel acting solely on
behalf of such Holder.
12.3 Obligations of the Holder. It shall be a condition precedent to
-------------------------
the obligation of the Company to register any Common Stock of a Holder pursuant
to Sections 12.1 and 12.2 hereof that such Holder shall (i) furnish to the
Company such information regarding the Common Stock hold by it and the intended
method of disposition thereof and other information concerning such Holder as
the Company shall reasonably request and as shall be required in connection with
the registration statement to be filed by the
9
Company; (ii) agree to abide by such additional or customary terms affecting the
proposed offering as reasonably may be requested by the managing underwriter of
such offering, including a requirement, if applicable, to withhold (on a pro-
rata basis) from the public market for a period of at least one hundred twenty
(120) days after any such offering, any shares excluded from the offering at the
instance of the underwriter as permitted under Sections 12.1 and 12.2 hereof;
and (iii) agree in writing in form satisfactory to the Company to pay the
underwriting discounts and commissions applicable to the Common Stock being sold
by such Holder (subject to the maximum amounts set forth in Section 12.5
hereof).
12.4 Registration Proceedings. If and whenever the Company is required
------------------------
by the provisions of Sections 12.1 and 12.2 hereof to effect the registration of
the Common Stock under the Securities Act, until the securities covered by such
registration statement have been sold or for six (6) months after effectiveness,
whichever is the shorter period of time, the Company shall:
(a) Promptly prepare and file with the SEC a registration
statement with respect to such Common Stock and use all reasonable efforts to
cause such registration statement to become effective as soon as practicable
after the filing thereof and to remain effective, subject to the Company's right
to withdraw any registration contemplated by Section 12.2 hereof;
(b) Prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective;
(c) Furnish to each participating Holder and to the underwriters
of the securities being registered such reasonable number of copies of the
registration statement, preliminary prospectus, final prospectus and such other
documents as such underwriters may reasonably request in order to facilitate the
public offering of such securities;
(d) Use all reasonable efforts to register or qualify the
securities covered by such registration statement under such state securities or
"Blue Sky" laws of such jurisdictions as the participating Holders may
reasonably request within twenty (20) days prior to the original filing of such
registration statement, except that the Company shall not for any purpose be
required to qualify to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, and except that the Company shall not be
required to so register or qualify in more than twenty (20) such jurisdictions
if in the good faith judgment of the managing underwriter such additional
registrations or qualifications would be unreasonably expensive or harmful to
the consummation of the proposed offering;
10
(e) Notify each participating Holder, promptly after the Company
shall receive notice thereof, of the time when such registration statement has
become effective or a supplement to any prospectus forming a part of such
registration statement has been filed;
(f) Notify each participating Holder promptly of any request by
the SEC for the amending or supplementing of such registration statement or
prospectus or for additional information;
(g) Prepare and file with the SEC, promptly upon the request of
a participating Holder, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for such Holder and
counsel for the underwriter or manager of the offering, are required under the
Securities Act or the rules and regulations thereunder in connection with the
distribution of Common Stock by such Holder;
(h) Prepare and promptly file with the SEC and promptly notify
each participating Holder of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities Act, any event shall
have occurred as the result of which any such prospectus or any other prospectus
as then in effect would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading;
(i) In case a participating Holder or any underwriter for a
Holder is required to deliver a prospectus at a time when the prospectus then in
circulation is not in compliance with the Securities Act, the Company will
prepare and file such supplements or amendments to such registration statement
and such prospectus or prospectuses as may be necessary to permit compliance
with the requirements of the Securities Act;
(j) Advise each participating Holder, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the SEC suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and promptly use
all reasonable efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such stop order should be issued;
(k) Not file any amendment or supplement to such registration
statement or prospectus to which a participating Holder shall reasonably have
objected on the grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or the rules and
regulations thereunder, after having been furnished with a copy
11
thereof at least two (2) business days prior to the filing thereof; and
(l) At the request of a participating Holder (i) use all
reasonable efforts to obtain and furnish on the effective date of the
registration statement or, if such registration includes an underwritten public
offering, at the closing provided for in the underwriting agreement, an opinion,
dated such date, of the counsel representing the Company for the purposes of
such registration, addressed to the underwriters, if any, and to each
participating Holder, which shall contain such opinions as are customary in an
underwritten public offering, or, if the offering is not underwritten, shall
state that such registration statement has become effective under the Securities
Act and that (or substantially to the effect that): (a) to the best of such
counsel's knowledge, no stop order suspending the effectiveness thereof has been
issued and no proceedings for that purpose have been instituted or are pending
or contemplated under the Securities Act; (b) the registration statement,
related prospectus and each amendment or supplement thereto comply as to form in
all material respects with the requirements of the Securities Act and applicable
rules and regulations of the SEC thereunder (except that such counsel need
express no opinion as to financial statements, schedules or other financial or
statistical data contained therein); (c) such counsel has no reason to believe
that either the registration statement or the prospectus or any amendment or
supplement thereto (other than financial statements and schedules or financial
and statistical data, as to which such counsel need not comment) contains any
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
(d) the description in the registration statement or prospectus or any amendment
or supplement thereto of all legal and governmental matters and all contracts
and other legal documents or instruments described therein are accurate in all
material respects; and (e) such counsel does not 'know of any legal or
governmental proceedings, pending or threatened, required to be described in the
registration statement or prospectus or any amendment or supplement thereto
which are not described as required, nor of any contracts or documents or
instruments of the character required to be described in the registration
statement or prospectus or amendment or supplement thereto or to be filed as
exhibits to the registration statement, which are not described and filed as
required; and (ii) use all reasonable efforts to obtain letters dated on such
effective date, and such closing date, if any, from the independent certified
public accountants of the Company, addressed to the underwriters, if any, and to
each participating Holder, stating that they are independent certified public
accountants within the meaning of the Securities Act and dealing with such
matters as the underwriters may request, or, if the offering is not
underwritten, stating that in the opinion of-such accountants, the financial
statements and other financial data pertaining to the Company included in the
12
registration statement or the prospectus or any amendment or supplement thereto
comply in all material respects with the applicable accounting requirements of
the Securities Act; such opinion of counsel shall additionally cover such legal
matters with respect to the registration and with respect to which such opinion
is being given as a participating Holder may reasonably request; such letter
from the independent certified public accountants shall additionally cover such
other financial matters, including information as to the period ending not more
than five (5) business days prior to the date of such letter, with respect to
the registration statement and prospectus as a participating Holder may
reasonably request.
12.5 Expenses. With respect to each inclusion of Common Stock of a
--------
Holder in a registration statement pursuant to Sections 12.1 and 12.2 hereof,
all registration expenses, fees, costs and expenses of and incidental to such
registration, including any public offering in connection therewith shall be
borne by the Company (excluding the fees and disbursements of advisors retained
by the Holder and counsel acting solely on behalf of the Holder); provided,
however, that the Holder shall bear the Holder's pro rata share of the
underwriting discount and commissions (up to a maximum aggregate amount equal to
8% of the offering price of the Holder's shares so offered). The fees, costs and
expenses of registration to be borne by the Company shall include, without
limitation, all registration, filing and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company (including the cost of
any special audit requested in order to effect such registration) , fees and
disbursements of counsel for the underwriter or underwriters of such securities
(if the Company and/or selling security holders are required to bear such fees
and disbursements), all legal fees and disbursements and other expenses of
complying with state securities or blue Sky laws of any jurisdiction in which
the securities to be offered are to be registered or qualified.
12.6 Indemnification of Holders. Subject to the conditions set forth
--------------------------
below, in connection with any registration of securities pursuant to Sections
12.1 or 12.2 hereof, the Company agrees to indemnify and hold harmless each
Holder and each person, if any, who controls the Holder (and the respective
officers, directors and agents of Holders), within the meaning of Section 15 of
the Securities Act, as follows:
(a) Against any and all loss, claim, damage and expense
whatsoever arising out or based upon (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing or defending
any litigation, commenced or threatened, or any claim whatsoever based upon) any
untrue or alleged untrue statement of a material fact contained in any
preliminary prospectus (if used prior to the effective date of the registration
statement), the registration statement or the
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final prospectus (as from time to time amended and supplemented if the Company
shall have filed with the SEC any amendment thereof or amendment thereto) if
used within the period during which the Company is required to keep the
registration statement or prospectus current, or in any application or other
document executed by the Company or based upon written information furnished by
the Company filed in any jurisdiction in order to qualify the Company's
securities under the securities laws thereof; 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 under which they
were made, not misleading; or any other violation of applicable federal or state
statutory or regulatory requirements or limitations relating to action or
inaction by the Company in the course of preparing, filing, or implementing such
registered offering; provided, however, that the indemnity agreement contained
in this Section 12.6(a) shall not apply to any loss, claim, damage, liability or
action arising out of or based upon any untrue or alleged untrue statement or
omission made in reliance upon and in conformity with any information furnished
in writing to the Company by or on behalf of the Holder expressly for use in
connection therewith;
(b) Subject to the proviso contained in the last sentence of
Section 12.6(a) above, against any and all loss, liability, claim, damage and
expense whatsoever to the extent of the aggregate amount paid in settlement of
any litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any such alleged untrue statement or
omission (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against any such
litigation or claim) if such settlement is effected with the written consent of
the Company and no indemnity shall inure to the benefit of the Holder or any
controlling person thereof if the person asserting the claim failed to receive a
copy of the final prospectus at or prior to the written confirmation of the sale
of shares of Common Stock to such person if the untrue statement or omission had
been corrected in such final prospectus and the failure to receive such final
prospectus is not a necessary element of such person's claim;
(c) In no case shall the Company be liable under this indemnity
agreement with respect to any claim made against the Holder or any such
controlling person (or its respective officers, directors and agents) unless the
Company shall be notified, by letter or by telegram confirmed by letter, of any
claim made or action commenced against such persons, reasonably promptly (but in
any event within twenty (20) days of receipt of such claim or, in the event that
any summons or other service of process requires a responsive pleading within
thirty (30) days or less time, within ten (10) days after receipt of such
summons or other process) after such person shall have received notice of such
claim or been served with the summons or other legal process
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giving information as to the nature and basis of the claim, but failure to so
notify the Company shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. The Company shall be
entitled to participate at its own expense in the defense of any suit brought to
enforce any such claim, but if the Company elects to assume the defense, such
defense shall be conducted by counsel chosen by it, provided that such counsel
is reasonably satisfactory to the Holder. In the event the Company elects to
assume the defense of any such suit and retain such counsel, the Holder shall,
after the date the Holder is notified of such election, bear the fees and
expenses of any counsel thereafter retained by the Holder as well as any other
expenses thereafter incurred by the Holder in connection with the defense
thereof; provided, however, that the Company shall bear the fees and expenses of
any such separate counsel retained by the Holder if the counsel representing the
Company has a conflict of interest (which is not waived) with the Holder which
would prohibit such counsel from representing the Holder.
12.7 Indemnification of Company. Each Holder participating in any
--------------------------
registered offering pursuant to Section 12.1 or 12.2 above agrees to indemnify
and hold harmless the Company and each of the officers and directors and agents
of it and each other person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act against any and all such losses,
liabilities, claims, damages and expenses as are indemnified against by the
Company under Section 12.6 hereof; provided, however, that such indemnification
shall be limited to statements or omissions, if any, made (or in settlement of
any litigation effected with the written consent of the Holder alleged to have
been made) in any preliminary prospectus, the registration statement or
prospectus or any amendment or supplement thereof or any application or other
document in reliance upon, and in conformity with, written information furnished
in respect of the Holder, by or on behalf of the Holder expressly for use in any
preliminary prospectus, the registration statement or prospectus or any
amendment or supplement thereof or in any such application or other document. In
case any action shall be brought against the Company, or any other person so
indemnified based on any preliminary prospectus, the registration statement or
prospectus or any amendment or supplement thereof or any such application or
other documents, in respect of which indemnity may be sought against a Holder,
it shall have the rights and duties given to the Company, and each other person
so indemnified shall have the rights and duties given to a Holder, by the
provisions of Section 12.6(c) hereof. The Company agrees to notify the Holder
promptly after the assertion of any claim against the Company in connection with
the sale of securities covered by this Warrant.
12.8 Future Registration Rights. The Company may agree with its
--------------------------
shareholders other than the Holders to allow their
15
participation in any registered offering which may be requested pursuant to
Section 12.1 hereof, provided all such rights of participation by shareholders
other than the Holders shall be subordinated to the rights of the participating
Holders herein, in a manner reasonably satisfactory to the Required Percentage
of such Holders and their counsel.
13. Descriptive Headings. The descriptive headings of the several
--------------------
sections of this Warrant are inserted for convenience only and do not constitute
a part of this Warrant.
14. Notices. Any notice or other communication pursuant to this
-------
Warrant shall be in writing and shall be deemed sufficiently given upon receipt,
if personally delivered or telecopied (with receipt acknowledged), or if mailed,
upon deposit with the United States Postal Service by first class, certified or
registered mail, postage prepaid, return receipt requested, addressed as
follows:
(a) If to the Company, to The Female Health Company, 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Secretary, or
such other address as the Company has designated in writing to the Holder.
(b) If to the Holder, to Xxxxxxx X. Xxxxxxxx, Insurance
Processing Center, 000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 or to
such other address as the Holder has designated in writing to the Company.
15. Replacement of Warrant. Upon receipt of evidence satisfactory to
----------------------
the Company of the loss, theft, destruction or mutilation of this Warrant, and
upon receipt of written indemnification of the Company by the Holder in form and
substance reasonably satisfactory to the Company, the Company shall execute and
deliver to the Holder a new Warrant of like date, tenor and denomination.
16. Governing Law. This Warrant shall be construed and interpreted in
-------------
accordance with the internal laws of the State of Wisconsin.
17. Successors and Assigns The provisions of this Warrant shall be
----------------------
binding upon and inure to the benefit of the Company and the Holder and their
respective successors, assigns and transferees.
18. Further Assurances. The Company agrees that it will execute and
------------------
record such documents as the Holder shall reasonably request to secure for the
Holder any of the rights represented by this Warrant.
19. Amendment and Modifications. This Warrant may be amended,
---------------------------
modified or supplemented only by written agreement of the Company and the
Holder.
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IN WITNESS WHEREOF, The Female Health Company has caused this Warrant
to be signed by its duly authorized officer and this Warrant to be dated as of
March 25, 2001.
THE FEMALE HEALTH COMPANY
By: /s/ X. X. Xxxxxxx
-----------------------------------
X.X. Xxxxxxx
Chairman of the Board
and Chief Executive Officer
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