Strategic Relationships Engagement Continuation Agreement - Elliott Co. and Ultrafem Inc.
THE ELLIOTT COMPANY
5 BURLINGTON WOODS DRIVE - SUITE 203 BURLINGTON, MASSACHUSETTS 01803-4542 U.S.A.
617-270-538 FAX 617-270-5375
March 14, 1996
MR. JOHN W. ANDERSEN
Chairman of the Board
& Chief Executive Officer
Ultrafem Inc.
500 Fifth Avenue, Suite 3620
New York, New York 10110
STRATEGIC RELATIONSHIPS
ENGAGEMENT CONTINUATION AGREEMENT
Dear John:
This letter serves to extend our previous engagement by Ultrafem to assist in
pursuing strategic relationships. The following outlines the very same
specific elements, details and terms for this engagement that have been
employed under the Agreement drawn by your lawyers and Dori Reap, dated July
12, 1995.
I PROJECT SCOPE / RESPONSIBILITY OF THE ELLIOTT COMPANY
The following activities reflect continuation and ongoing refinement of
what The Elliott Company had previously been engaged to undertake:
A. CORPORATE RELATIONSHIPS STRATEGY DEVELOPMENT AND PURSUIT
* Co-define relationship opportunities with Ultrafem management in
conjunction with the relevant Medical and International feminine
protection market
* Identify and prioritize target companies as prospects for Ultrafem
relationships
* Create a relevant approach and presentation tailored for each target
company
* Review the approaches and presentation materials with Ultrafem for
approval prior to meetings with/distribution to target companies
B. LEAD THE CONTACT WITH TARGET RELATIONSHIP COMPANIES. PARTICIPATE FULLY
WITH ULTRAFEM MANAGEMENT IN PRESENTATIONS AND NEGOTIATIONS WITH TARGET
COMPANIES. SUCCESSFULLY CONCLUDE STRATEGIC RELATIONSHIP DEAL(S)
The Elliott Company will not make contact with any target Strategic
Relationships without the prior approval of Ultrafem. The approved list
of target Strategic Relationships presently being pursued, and hence
applicable to the terms & conditions of this Continuation Agreement, is
provided in Exhibit I. Companies may be added, deleted, and/or
reintroduced to this list only through the written submission by The
Elliott Company and approval by Ultrafem, or through the sole direction
of Ultrafem. Nothing herein obligates Ultrafem to enter into a Strategic
Relationships Agreement with any person or entity.
II THE ELLIOTT COMPANY COMPENSATION
SEGMENT I.A. & SEGMENT I.B.
* Advance profession time billed at full value (for boutique activity,
professional billing rates range from $120 to $285 per hour, less for
project orientation), less 20% venture courtesy invoice reduction for
Ultrafem. Satisfactory progress must be mutually
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acknowledged by both parties prior to invoicing being accepted by
Ultrafem and supported with weekly and/or monthly progress reports
* This portion of The Elliott Company compensation will be deducted from
the Deal Completion Award payable to The Elliott Company upon the
successful conclusion of a Strategic Partner Agreement that has been
signed-off by both Ultrafem and the Strategic Partner
OUT-OF-POCKET EXPENSES
* For Business travel, lodging, telephone, special report production,
courier, etc. charged at cost to Ultrafem, (currency exchange, if
applicable, at date of expenditure), supported with appropriate
documentation and receipts.
* Out-of-pocket expenses cannot exceed $1,000 per month without the
consent of Ultrafem
DEAL COMPLETION AWARD TO THE ELLIOTT COMPANY
* 5% of the first $10 Million proceeds to Ultrafem (in the aggregate)
* 3% of the proceeds above $10 Million to Ultrafem
* Maximum Deal Completion Award Payable to The Elliott Company = $800,000
- AWARD BASIS - PROCEEDS
.. The Deal Completion Award is only payable upon the completion of a
Strategic Relationship Agreement and the receipt of cash proceeds by
Ultrafem (e.g. for licensure, etc.). Proceeds may be any combination
of: (1) Up-front cash payments or cash equivalent in the form of
common equity stock in the Strategic Relationship Partner;
(2) Deferred cash payments associated with milestone events; and/or
(3) Royalty payments, all of which may be structured as part of the
initial deal closure
- AWARD BASIS - STRATEGIC RELATIONSHIP PARTNERS
.. Only applicable for companies introduced by The Elliott Company
that have been agreed upon and are listed (Exhibit I herein) as
approved target Strategic Relationship Partners.
.. Companies previously on a list that may have been eliminated shall
NOT remain candidates for award basis. Companies may be added,
deleted, and/or reintroduced to this list only through the written
submission by The Elliott Company and approval by Ultrafem, or
through the sole direction of Ultrafem
III ENGAGEMENT TERM
The term of this Continuation Agreement is twelve (12) months (February 1,
1996 through January 31, 1997 inclusive). The term may be extended by the
mutual agreement of both parties.
* ENGAGEMENT CANCELLATION - With thirty (30) days written notice by
either party.
* DEAL COMPLETION AWARD AFTER ENGAGEMENT CANCELLATION - May be earned
under the following terms/conditions,
- Applicable only to Strategic Relationship Partners introduced to
Ultrafem that are on an approved list of targets (presently Exhibit 1)
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- Are determined by Ultrafem to be reasonable active at the time of
engagement cancellation
- A Strategic Relationship Agreement is completed within one (1) year
of the date of cancellation of this engagement with The Elliott Company
IV OTHER TERMS AND CONDITIONS
ADVANCE WORK - Basic professional fees and out-of-pocket expenses to be
billed monthly and payable by Ultrafem in thirty (30) days, within context
of agreed schedule and invoice amount courtesy reduction.
DEAL COMPLETION AWARD - Will be paid to The Elliott Company thirty (30)
days after the receipt of cash proceeds from the closure date of a
strategic relationship. In the case of deferred cash payments associated
with milestone events and/or royalty payments, The Elliott Company
similarly will be paid thirty (30) days after the actual receipt of the
cash payment by Ultrafem.
LAW - This Engagement Continuation Agreement is governed by New York
State law.
CURRENCY & SETTLEMENT - All figures in this Agreement, whether for
Advance Fees, Out-of-pocket expenses, and/or definition of Proceeds as well
as the Deal Completion Award, are stated in United States currency, and are
all-inclusive of taxes and surcharges.
ACCEPTANCE OF THIS LETTER OF ENGAGEMENT CONTINUATION AGREEMENT REQUIRES BOTH
SIGNATURES BELOW IN ORIGINAL FORM, AND EXCHANGE OF SIGNED DOCUMENTS.
ACCEPTANCE: DATE: 4/4/96
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John W. Andersen
CHAIRMAN & CHIEF EXECUTIVE OFFICER
ULTRAFEM, INC.
ACCEPTANCE: DATE: 3/14/96
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Roger S. Elliott
PRESIDENT
THE ELLIOTT COMPANY