EXHIBIT 12
STOCK ISSUANCE AGREEMENT
THIS AGREEMENT, is made as of March 25, 1999 between XXXXXXX X. XXXXXXXX,
an adult resident of the State of Wisconsin ("Lender") and THE FEMALE HEALTH
COMPANY a Wisconsin corporation (the "Company").
RECITALS
A. The Company desires to issue and sell its Promissory Note in the
principal amount of One Million Dollars ($1,000,000) (the "Note") to Lender
pursuant to a Note Purchase and Warrant Agreement of even date among the Lender
and the Company (the "Note Purchase and Warrant Agreement"), and in exchange for
and upon surrender of the rights and interests of Lender under the Stock
Issuance Agreement, dated as March 25, 1998, among the Lender and the Company
(the "1998 Stock Issuance Agreement").
B. Lender has required, as a condition of providing the loan to the
Company under the Note Purchase and Warrant Agreement that the Company enter
into this Agreement and undertake the obligations and liabilities set forth
herein.
C. It is necessary and in the business interests of the Company that the
Lender enter into the Note Purchase and Warrant Agreement.
COVENANTS:
IN CONSIDERATION OF these premises and other good and valuable
consideration receipt of which is hereby acknowledged, it is agreed that:
1. Issuance and Sale of Shares. (a) The Company agrees that in the event
the Company shall default in the payment of principal due on the Note and shall
fail to pay such principal amount within five (5) days of receipt of written
notice of default from the Lender, the Company shall issue to The Lender two
hundred thousand (200,000) fully paid and non-assessable shares of Common Stock,
$.01 par value per share, of the Company; provided that the Company shall issue
to the Lender a proportionately fewer or greater number of shares of such Common
Stock if the Company combines by reverse stock split or otherwise or subdivides
by stock split, stock dividend or otherwise its outstanding Common Stock. The
Company shall be obligated to issue, and the Lender shall have the right to
receive, all such shares without payment of any further consideration
whatsoever. Notwithstanding the foregoing, the Company shall remain liable for
all amounts remaining due under and in accordance with the terms of the Note.
(b) At such time, if any, as the Company shall become obligated to issue
shares of its Common Stock to the Lender pursuant to Section 1(a) of this
Agreement, the Lender shall be entitled to receive a certificate or certificates
representing such shares of Common Stock, which certificate(s) may contain a
standard legend indicating that such shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and prohibiting resale
thereof without registration or an opinion of counsel that an exemption from
registration is available. Subject to the Company's Amended and Restated
Articles of Incorporation, certificates for the shares of Common Stock required
to be issued hereunder shall be delivered to the Lender within a reasonable
time, not exceeding ten days, after the Company shall have become obligated to
issue such shares pursuant to Section 1(a) hereof.
2. Reservation of Shares. The Company covenants and agrees that the
shares of Common Stock issuable hereunder will, upon such 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. The Company further
covenants and agrees that, prior to the Termination Date (as
hereinafter defined) it will at all times have authorized and reserved a
sufficient number of shares of its Common Stock to provide for the issuance of
the shares required by this Agreement.
3. Issuance of Preferred Stock. Prior to the Termination Date, the
Company will not issue any 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.
4. 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 Lender shall hereafter have the right to receive upon
the basis and upon the terms and conditions specified in this Agreement and in
lieu of the shares of the Common Stock of the Company immediately theretofore
receivable hereunder, 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 receivable hereunder 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 Lender hereunder 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 issuable hereunder. 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 Lender at the last
address specified pursuant to Section 11 hereof, the obligation to issue and
deliver to the Lender such shares of stock, securities or assets as, in
accordance with the foregoing provisions, he may be entitled to receive.
5. Certain Events. If any event occurs as to which the provisions for the
issuance of Common Stock set forth in this Agreement are not strictly applicable
or, if strictly applicable would not fairly protect the rights of the Lender 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 Lender's rights as aforesaid.
6. Termination Date. The obligation of the Company to issue, and the
right of the Lender to receive, Common Stock pursuant to this Agreement shall
terminate at such time as the Company shall have made payment in full of the
Note, and such payments are not subject to any right of recovery (the
"Termination Date").
7. Issue Tax. The issuance of certificates for shares of Common Stock
pursuant to this Agreement shall be made without charge to the Lender for any
issuance tax in respect thereof.
8. Registration Rights. All references in this Section 8 to Common Stock
shall be deemed to include Other Securities as applicable.
8.1 Demand Registration. At any time following the issuance of Common
Stock pursuant to this Agreement, the Lender may demand registration under the
Securities Act of all or part of the Common Stock which has been issued pursuant
to this Agreement, 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. The written
request to be delivered by the Lender to the Company pursuant to this Section
8.1 shall (i) specify
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the number of shares intended to be offered and sold by the Lender, (ii)
express the present intent of the Lender 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 8.1 is referred to
herein as "Demand Registration".
(a) Number of Registrations. Notwithstanding any contrary provision
contained in this Agreement (except the last sentence of this Section 8.1(a)
which shall continue to apply), the Note Purchase and Warrant Agreement between
the Company and Xxxxxxx X. Xxxxxxxx of even date, the Warrant issued by the
Company to Xxxxxxx X. Xxxxxxxx as of even date, and such other documents,
agreements and warrants under which the Lender may demand registration under the
Securities Act, the Lender shall be entitled to one or more Demand Registration
under all such documents, and shall be entitled to include all of the stock
received under all of such documents in any Demand Registration; provided,
however, that any such Demand Registration shall include at least two hundred
thousand (200,000) shares of Common Stock (subject to adjustment pursuant to
Section 4(a)). A registration initiated as a Demand Registration may be
withdrawn at any time at the request of the Lender; provided that in the event a
registration initiated as a Demand Registration is so withdrawn, all
registration expenses in connection with such withdrawn registration shall be
paid by the Lender. In the event the Lender shall pledge or assign his rights
and interests to all or part of the Common Stock issued to him hereunder as
collateral pursuant to a borrowing, the rights to Demand Registrations hereunder
may be assigned and transferred to a lender (and only one lender at any given
time) in connection therewith and said lender shall be entitled to request such
Demand Registration at any time notwithstanding the provisions of clauses (i)
and (ii) of Section 8.1(c) below.
(b) Priority on Demand Registration. The Company will not include in
the Demand Registration any securities which are not Common Stock owned by the
Lender, without the written consent of the Lender. If the Demand 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, prior to the
inclusion of any securities which are not shares of Common Stock owned by the
Lender, the number of shares of Common Stock owned by the Lender 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 the Lender
requested to be included in such offering shall be withheld from sale for a
period of time requested by the underwriters, but not to exceed one hundred
twenty (120) days.
(c) Restrictions on Demand Registration. Subject to the last sentence
of Section 8.1(a), the Company will not be obligated to effect a Demand
Registration (i) within one hundred twenty (120) days after the effective date
of a registration in which the Lender was given an opportunity to participate in
a registered offering pursuant to Section 8.2 or (ii) within twelve (12) months
of a Demand Registration given to the Lender pursuant to any other warrants or
agreements between the Company and the Lender. 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 Lender 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
Lender's approval (which will not be unreasonably withheld) of such investment
banker(s) and managers(s).
8.2 Participation in Registered Offerings. If the Company at any time or
times proposes or is required to register 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
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the Securities Act or any applicable state securities law, it will each such
time give written notice to the Lender of its intention to do so. Upon the
written request of the Lender 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 expects to receive upon such
disposition), the Company shall use all reasonable efforts to cause all such
Common Stock issued hereunder which the Lender so requested to be registered
(which request will not be for less than fifty percent (50%) of the number of
shares of Common Stock issued under this Agreement and all other agreements
giving registration rights) 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 Lender for a
period not to exceed one hundred twenty (120) days, the Lender will withhold
from sale for such period of time such number of shares of Common Stock as the
underwriter may specify; provided further that a pro rata number of shares owned
by 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 the Lender requests to participate in the registration, the
Lender must commit to sell through the underwriter. The Company may, in its sole
discretion, withdraw any registration contemplated by this Section 8.2 and
abandon the proposed offering in which the Lender had requested to participate
without any further obligation to the Lender with respect to such registration
statement or offering; provided however that the Lender 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 the Lender.
8.3 Obligations of The Lender. It shall be a condition precedent to the
obligation of the Company to register any Common Stock pursuant to Sections 8.1
and 8.2 hereof that the Lender shall (i) furnish to the Company such information
regarding the Common Stock held by him and the intended method of disposition
thereof and other information concerning the Lender as the Company shall
reasonably request and as shall be required in connection with the registration
statement to be filed by the 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 8.1 and 8.2 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 the Lender.
8.4 Registration Proceedings. If and whenever the Company is required by
the provisions of Sections 8.1 and 8.2 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 8.2 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;
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(c) Furnish to the Lender 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 Lender 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;
(e) Notify the Lender, promptly after it 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 the Lender 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 the
Lender, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for the Lender 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 the Lender;
(h) Prepare and promptly file with the SEC and promptly notify the
Lender 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 the Lender or any underwriter for the Lender 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 the Lender, 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 the Lender 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 thereof at least
two (2) business days prior to the filing thereof; and
(l) At the request of the Lender (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 the Lender, which shall
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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 the Lender, 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 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 the Lender
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 the Lender may reasonably request.
8.5 Expenses. With respect to each inclusion of Common Stock of the Lender
in a registration statement pursuant to Sections 8.1 and 8.2 hereof, all
registration expenses, fees, costs and expenses of and incidental to such
registration, including any pubic offering in connection therewith, shall be
borne by the Company (including the fees and disbursements of advisors retained
by the Lender and counsel acting solely on behalf of the Lender); provided,
however, that the Lender shall bear his pro rata share of the underwriting
discount and commissions. 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.
8.6 Indemnification of The Lender. Subject to the conditions set forth
below, in connection with any registration of securities pursuant to Sections
8.1 or 8.2 hereof, the Company agrees to indemnify and hold harmless the Lender
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
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registration statement), the registration statement or the 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 8.6(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 Lender expressly for use in connection therewith;
(b) Subject to the proviso contained in the last sentence of Section
8.6(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 Lender 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 Lender unless the Company
shall be notified, by letter or by telegram confirmed by letter, of any claim
made or action commenced against him, 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 the Lender shall have received notice of such claim or been
served with the summons or other legal process 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 Lender. In the event the Company elects to assume the defense of any such
suit and retain such counsel, the Lender shall, after the date the Lender is
notified of such election, bear the fees and expenses of any counsel thereafter
retained by the Lender as well as any other expenses thereafter incurred by the
Lender 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 Lender if the counsel representing the Company has a conflict of interest
(which is not waived) with the Lender which would prohibit such counsel from
representing the Lender.
8.7 Indemnification of Company. In connection with any registered offering
pursuant to Section 8.1 and 8.2 above, the Lender 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 8.6 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 Lender 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,
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written information furnished in respect of the Lender, by or on behalf of the
Lender 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 the Lender, 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 the Lender, by the provisions of Section 8.6(c) hereof. The Company
agrees to notify the Lender promptly after the assertion of any claim against
the Company in connection with the sale of securities covered by this Agreement.
8.8 Future Registration Rights. The Company may agree with its
shareholders other than the Lender to allow their participation in any
registered offering which may be requested pursuant to Section 8.1 hereof,
provided all such rights of participation under Section 8.1 hereof shall be
subordinated to the rights of the Lender herein, in a manner reasonably
satisfactory to the Lender and his counsel.
9. Definitions. When used in this Agreement, 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 issuable pursuant to this Agreement shall include
shares designated as Common Stock of the Company on the date hereof or, in case
of any reclassification of the outstanding shares thereof, the stock, securities
or assets provided for in Section 4(a) hereof.
(c) "Common Stock" shall mean the common stock, $.01 par value per
share, of the Company.
(d) "Other Securities", as used in Section 8 hereof, shall mean any
stock (other than Common Stock) and other securities of the Company or any other
Person (corporate or otherwise) which the Lender at any time shall be entitled
to receive, or shall have received, under this Agreement, 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 4 hereof or otherwise.
(e) "Person" shall mean and include an individual, partnership,
corporation, trust, joint venture, incorporated organization and a government or
any department or agency thereof.
(f) "Termination Date" shall have the meaning assigned thereto in
Section 6 hereof.
10. Descriptive Headings. The descriptive headings of the several sections
of this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
11. Notices. Any notice or other communication pursuant to this Agreement
shall be in writing and shall be deemed sufficiently given upon receipt, if
personally delivered or telecopied (with receipt acknowledged), or if
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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 Lender.
(b) If to the Lender, to Xxxxxxx Xxxxxxxx, c/o Response Marketing,
000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxxxx 00000 or to such other address
as The Lender has designated in writing to the Company.
12. Governing Law: Consent to Jurisdiction. The Company and the Lender
each hereby consents to the exclusive jurisdiction of any state or federal court
situated in Milwaukee County, Wisconsin, and waives any objection based on lack
of personal jurisdiction, improper venue or forum non conveniens, with regard to
any actions, claims, disputes or proceedings relating to this Agreement, or any
document delivered hereunder or in connection herewith, or any transaction
arising from or connected to any of the foregoing. Nothing herein shall affect
either party's right to serve process in any manner permitted by law, or limit
either party's right to bring proceedings against the other or their property or
assets in the competent courts of any other jurisdiction or jurisdictions. This
Agreement shall be construed and interpreted in accordance with the internal
laws of the State of Wisconsin.
13. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns.
14. Further Assurances. The Company agrees that it will execute and record
such documents as the Lender shall reasonably request to secure for the Lender
any of the rights represented by this Agreement.
15. 1998 Stock Issuance Agreement. This Agreement supersedes and replaces
the 1998 Stock Issuance Agreement in its entirety, which shall be of no further
force or effect as of the date hereof.
16. Entire Agreement: Amendment and Modifications. This Agreement
constitutes the entire agreement between the Lender and the Company with respect
to the subject matter hereof, superseding all previous communications and
negotiations, and no representation, understanding, promise or condition
concerning the subject matter hereof shall be binding upon either party unless
expressed herein. This Agreement may be amended, modified or supplemented only
by written agreement of the Company and the Lender.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE FEMALE HEALTH COMPANY
By:/s/ X. X. Xxxxxxx
-----------------
Chairman of the Board and
Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
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