The
Sage
Group
October 28, 1996 Healthcare Business Strategy
Xxxxxx X. Xxxxxxxx 000 Xxxxx 00 Xxxx
President/CEO Suite 304
Acute Therapeutics, Inc. Bridgewater, NJ 08807
0000 Xxxxxx Xxxxxx Xxxxx Phone: 000-000-0000
Doylestown, PA Fax: 000-000-0000
Dear Bob,
As discussed I am revising our Valere agreement of June 25, 1996 to reflect the
changes anticipated given the Castle Group (Discovery Labs) financing and
corporate name change to Acute Therapeutics, Inc. (ATI).
This letter sets out some of the key aspects of a proposed arrangement between
ATI and The Sage Group and addresses more specifically some of the issues we
discussed. The objective of working closely with ATI is to play a key role in
helping to establish the company via a J & J license and subsequently to
assisting management in the strategic, product development and commercialization
aspects required to successfully develop and grow the business. We view the role
of The Sage Group essentially as serving the Business Development Department of
ATI with at least the general activities shown below included in our
responsibilities:
(bullet) Develop a formal business plan in conjunction with management and
assist in implementation.
(bullet) Design corporate development plan in conjunction with company and
direct implementation of partnering activities.
(bullet) Assist management in operational business activities as needed.
To provide ATI flexibility and reduced risk, we propose the term be 18 months,
renewable upon mutual agreement, and that this agreement be non-cancelable, by
ATI, during the first term except for non-performance by The Sage Group.
Non-performance would be defined as failure of The Sage Group to carry out the
above activities in a reasonably due diligent fashion. We suggest that there be
formalized quarterly reviews to track performance.
In recognition of our past efforts on behalf of the founders and in anticipation
of The Sage Group future involvement with ATI, Sage Partners has been fully
vested in equity in the newly formed company, i.e., 15,000 total shares @ $0.01
per share, plus each of Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxxx, X.
Xxxxxxx Xxxxx and Xxxxxxx X. Xxxxx has received options to purchase 1,000 shares
of ATI Common Stock exercisable six (6) months after October 28, 1996
and options to purchase 1,120 shares of ATI stock Common Stock exercisable upon
certain acceleration events as defined in the Notice of Grant to the stock
option agreements entered into by the Company and each of Messrs. Xxxxxxxxxx,
Ramseier, Hulse, Power and Xxxxxxx as of October 10, 1996.
In addition, The Sage Group will receive a monthly management fee of $7500
payable on the first of each month beginning November 1, 1996. ATI also will
reimburse The Sage Group for all out-of-pocket expenses with significant travel
and related expenses pre-approved by ATI.
Bob, I trust that this revised letter of agreement reflects the general
discussions we have had and that it is acceptable to you. If it meets with your
approval, kindly countersign this letter and return it to me.
We look forward to a successful endeavor with Xxxxxx.
Nov. 4, 1996 /s/ Xxxxxxx X. Power
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Date Xxxxxxx X. Xxxxx
Executive Director
THE SAGE GROUP
/s/ Xxxxxx Xxxxxxxx
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Date Xxxxxx Xxxxxxxx
President/CEO
Acute Therapeutics, Inc.
