EXHIBIT 10.5

 

CELLEGY PHARMACEUTICALS, INC.

 

NOTICE OF ASSUMPTION OF BIOSYN OPTIONS

 

Dear Anne-Marie Corner:

 

As you know, on October 22, 2004, Cellegy Pharmaceuticals, Inc. (“Cellegy”)
acquired all the outstanding shares of capital stock of Biosyn, Inc. (“Biosyn”)
and assumed all outstanding options and warrants to purchase Biosyn common stock
in an exchange transaction (the “Exchange”).  This letter confirms the
information set forth in the Stock Option Assumption Agreement (“Option
Assumption Agreement”) that was previously sent to you regarding one or more
outstanding options to purchase Biosyn common stock (“Biosyn Options”) held by
you prior to the Exchange.  As a result of the Exchange, your Biosyn Options are
no longer exercisable for Biosyn common stock.  Instead, your Biosyn Options are
exercisable for shares of Cellegy common stock under the terms set forth in the
Option Assumption Agreement.

 

The tables below summarize your Biosyn Options immediately before and after the
Exchange.  These options may have been granted to you pursuant to Biosyn’s 1999
Stock Option Plan (the “Plan”) or they may have been granted to you other than
pursuant to the Plan.

 

 

 

 

BIOSYN PLAN OPTION

 

 

 

ASSUMED BIOSYN OPTION

 

 

 

 

 

 

Grant Date

 

Option
Expiration Date

 

No. of Shares of
Biosyn Common
Stock

 

Exercise Price
per share

 

No. of Shares of Cellegy
Common Stock

 

Exercise Price
Per Share

 

1/1/00

 

12/31/09

 

15,000

 

$

2.50

 

2,570

 

$

14.60

 

1/1/01

 

12/31/10

 

15,000

 

$

3.00

 

2,570

 

$

17.52

 

2/20/02

 

2/19/12

 

20,000

 

$

1.50

 

3,426

 

$

8.76

 

1/6/03

 

1/5/13

 

50,000

 

$

.05

 

8,564

 

$

0.29

 

1/5/04

 

1/4/14

 

40,000

 

$

.05

 

6,851

 

$

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BIOSYN NON-PLAN OPTION

 

 

 

ASSUMED BIOSYN OPTION

 

 

 

 

 

 

Grant Date

 

Option
Expiration Date

 

No. of Shares of
Biosyn Common
Stock

 

Exercise Price
per share

 

No. of Shares of Cellegy
Common Stock

 

Exercise Price
Per Share

 

6/1/95

 

5/31/05

 

60,000

 

$

0.01

 

10,277

 

$

0.06

 

6/1/96

 

5/31/06

 

12,000

 

$

0.01

 

2,056

 

$

0.06

 

12/31/97

 

12/30/07

 

10,000

 

$

0.01

 

1,713

 

$

0.06

 

12/31/98

 

12/30/08

 

10,000

 

$

3.00

 

1,713

 

$

17.52

 

12/31/98

 

12/30/08

 

20,000

 

$

0.01

 

3,426

 

$

0.06

 

 

--------------------------------------------------------------------------------

 

To exercise your assumed Biosyn Option(s), you must send to Cellegy at the
address listed on the attached Exercise Notice (i) an executed and completed
Exercise Notice for each Biosyn Option that you intend to exercise and (ii) the
full purchase price of the Cellegy common stock that you wish to acquire upon
exercise of the Biosyn Option in accordance with the Exercise Notice.

 

                Please note that pursuant to the terms of the Exchange, you will
not be able to sell any shares of Cellegy common stock that you acquire upon
exercise of your assumed Biosyn Options until January 20, 2005.

 

                If you have any questions about your assumed Biosyn Option(s),
please call Virginia Alsup at Cellegy at 650-616-2200.

 

CELLEGY PHARMACEUTICALS, INC.

 

/s/ A. Richard Juelis

A. Richard Juelis,

Chief Financial Officer

 

--------------------------------------------------------------------------------

 

 

EXHIBIT A

 

NOTICE OF EXERCISE

(For Employees of Cellegy Pharmaceuticals, Inc.)

 

CELLEGY PHARMACEUTICALS, INC.

 

Address:        349 Oyster Point Boulevard, Suite 200

                        South San Francisco, CA 94080

 

Attention: Corporate Secretary

 

I hereby elect to purchase the number of shares of Common Stock of CELLEGY
PHARMACEUTICALS, INC. (the “Company”) as set forth below:

 

Option Holder:

 

 

 

Number of Shares Purchased:

 

 

Social Security Number:

 

 

 

Purchase Price per Share:

 

 

Address:

 

 

 

Aggregate Purchase Price:

 

 

 

 

Date of Option Agreement:

 

 

 

Type of Option:

                o Incentive Stock Option

                o Non-qualified Stock Option

 

1.                                       Delivery of Purchase Price.  Option
Holder hereby delivers to the Company the Aggregate Purchase Price, to the
extent permitted in the Stock Option Agreement (the “Option Agreement”) as
follows (check as applicable and complete):

 

o                                    in cash (by check) in the amount of
$                         , receipt of which is acknowledged by the Company;

 

o                                    through a “same-day-sale” commitment,
delivered herewith, from Option Holder and the NASD Dealer named therein, in the
amount of $                             .

 

2.                                       Lock-Up; Legend.  Option Holder hereby
agrees that the Shares are subject to a lock-up agreement between the Company
and Option Holder and that Option Holder may not sell or otherwise transfer, or
enter into any agreement to sell or transfer, or enter into any other economic
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Shares (other than to donees of Option Holder
who agree to be similarly bound) prior to January 20, 2005.  Option Holder
hereby agrees that the Company may place appropriate restrictive legends on any
stock certificates representing the Shares and may impose stop-transfer
instructions with respect to the Shares to effect the foregoing.

 

3.                                       Tax Consequences.  OPTION HOLDER
UNDERSTANDS THAT OPTION HOLDER MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT
OF OPTION

 

--------------------------------------------------------------------------------

 

                                                HOLDER’S PURCHASE OR DISPOSITION
OF THE SHARES.  OPTION HOLDER REPRESENTS THAT OPTION HOLDER HAS CONSULTED WITH
ANY TAX CONSULTANT(S) OPTION HOLDER DEEMS ADVISABLE IN CONNECTION WITH THE
PURCHASE OR DISPOSITION OF THE SHARES AND THAT OPTION HOLDER IS NOT RELYING ON
THE COMPANY FOR ANY TAX ADVISE.

 

4.                                       Entire Agreement.  The Option Agreement
and the Stock Option Assumption Agreement that was previously delivered to
Option Holder in connection with the Company’s acquisition of Biosyn, Inc.
(“Option Assumption Agreement”) are incorporated herein by reference.  This
Exercise Notice, the Option Agreement and the Option Assumption Agreement
constitute the entire agreement and understanding of the parties and supersede
in their entirety all prior understandings and agreements of the Company and
Option Holder with respect to the subject matter hereof.

 

 

 

 

 

Date

 

Signature of Option Holder

 

--------------------------------------------------------------------------------

 

Spousal Consent

 

 

I acknowledge that I have read the foregoing Notice of Exercise (the “Notice”)
and that I know its contents.  I hereby consent to and approve all of the
provisions of the Notice, and agree that the shares of the Common Stock of
Cellegy Pharmaceuticals, Inc. purchased thereunder (the “Shares”) and any
interest I may have in such Shares are subject to all the provisions of the
Notice.  I will take no action at any time to hinder operation of the Agreement
on these Shares or any interest I may have in or to them.

 

 

 

 

Date

 

Signature of Optionee’s Spouse

 

 

 

 

 

 

 

 

Spouse’s Name typed or printed

 

 

 

 

 

 

 

 

Optionee’s Name typed or printed

 

--------------------------------------------------------------------------------