Strategic Relationships Engagement Continuation Agreement - Ultrafem Inc. and The Elliott Co.
THE ELLIOTT COMPANY
5 Burlington Woods Drive - Suite 203 Burlington, Massachusetts 01803-4542 U.S.A.
617-270-5380 Fax 617-270-5375
April 14, 1997
MR. JOHN W. ANDERSEN cc: MS. DORI REAP
Chairman of the Board Chief Financial Officer
& Chief Executive Officer
Ultrafem, Inc.
805 Third Avenue, 17th Floor
New York, NY 10022
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 March 14, 1996.
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).
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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 professional time billed at full value (for boutique
activity, professional billing rates range form $120 to $285 per
hour, less for project orientation), less 20% venture courtesy
invoice reduction for Ultrafem. Satisfactory progress must be
mutually 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
an 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 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
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by Ultrafem as to when and to the extent such proceeds
are received (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,
1997 through January 31, 1998 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 I)
- Are determined by Ultrafem to be reasonably 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.
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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 the internal
laws of New York State.
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 Competition 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: /s/ John W. Anderson Date: 4/25/97
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John W. Andersen
CHAIRMAN & CHIEF EXECUTIVE OFFICER
ULTRAFEM, INC.
Acceptance: /s/ Roger S. Elliott Date: 5/06/97
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Roger S. Elliott
PRESIDENT
THE ELLIOTT COMPANY