Document:

Exhibit
10.3

CELLEGY PHARMACEUTICALS, INC.

STOCK OPTION ASSUMPTION AGREEMENT

(Non-Plan Options)

 

Dear
Anne-Marie Corner:

 

As you know, on October 7, 2004, Cellegy Pharmaceuticals, Inc. (“Cellegy”) and Biosyn, Inc. (“Biosyn”) entered into an Agreement
and Plan of Shares Exchange (the “Exchange Agreement”)
pursuant to which all the outstanding shares of Biosyn capital stock will be
exchanged for shares of Cellegy common stock and all outstanding options and
warrants to purchase Biosyn common stock will be assumed by Cellegy (the “Exchange”).  The number of shares of Cellegy common stock
into which each share of Biosyn common stock will be converted is based on the
exchange ratio for the Biosyn common stock, as defined in the Exchange
Agreement (the “Exchange Ratio”).  The closing of the transactions contemplated
by the Exchange Agreement is contemplated to occur on or about October 22, 2004
(“Closing Date”).

 

You hold one or more outstanding options to purchase Biosyn common
stock.  Pursuant to the Exchange Agreement,
Cellegy will assume as of the Closing Date all obligations of Biosyn under your
outstanding option (or options).  This
Stock Option Assumption Agreement (the “Agreement”)
evidences the terms of Cellegy’s assumption of one or more options (the “Biosyn Non-Plan Options”) to
purchase Biosyn common stock granted to you other than pursuant to Biosyn’s
1999 Stock Option Plan (the “Plan”),
which Biosyn Non-Plan Options are documented by one or more stock option
agreements entered into by and between you and Biosyn or by resolutions of the
Board of Directors of Biosyn (collectively, the “Option Agreements”). 
The table below lists the Biosyn Non-Plan Options that you currently
hold:

 

 

	
   

  	
  BIOSYN NON-PLAN OPTION

  	
   

  	
   

  
	
   

  	
   

  
	
  Grant Date

  	
   

  	
  Option Expiration

  Date

  	
   

  	
  No. of Shares of Biosyn

  Common Stock

  	
   

  	
  Exercise Price

  per share

  	
   

  
	
  6/1/95

  	
   

  	
  5/31/05

  	
   

  	
  60,000

  	
   

  	
  $

  	
  0.01

  	
   

  
	
  6/1/96

  	
   

  	
  5/31/06

  	
   

  	
  12,000

  	
   

  	
  $

  	
  0.01

  	
   

  
	
  12/31/97

  	
   

  	
  12/30/07

  	
   

  	
  10,000

  	
   

  	
  $

  	
  0.01

  	
   

  
	
  12/31/98

  	
   

  	
  12/30/08

  	
   

  	
  10,000

  	
   

  	
  $

  	
  3.00

  	
   

  
	
  12/31/98

  	
   

  	
  12/30/08

  	
   

  	
  20,000

  	
   

  	
  $

  	
  0.01

  	
   

  
												

 

 

After the Exchange, your Biosyn Non-Plan Options will no longer give
you the right to purchase Biosyn Common Stock. 
Instead, your Biosyn Non-Plan Options will give you the right to
purchase shares of Cellegy common stock, with the number of shares of Cellegy
common stock calculated based on the Exchange Ratio for the Biosyn Common Stock
as provided in the Exchange Agreement and the exercise price per share
proportionately adjusted.  As described 

 

 

below,
Cellegy will separately provide you with information regarding the number of
Cellegy shares underlying your Biosyn Options.

 

The grant date and expiration date of your assumed Biosyn Non-Plan
Options will remain the same after the Exchange as set forth in the Option
Agreements, but the number of shares subject to your assumed Biosyn Non-Plan
Options and the exercise price per share will be adjusted to reflect the effect
of the Exchange as described in Section 1.6(b) of the Exchange Agreement.  In addition, by signing below, you agree that
your Biosyn Non-Plan Options will be governed by the change of control
provisions set forth in Section 9 (Change of Control) of the Biosyn 1999 Stock
Option Plan (the “Plan”) after the
Exchange.  In addition, if you are a
Biosyn employee, then the provisions of the Plan governing the exercisability
of your Biosyn Non-Plan Options following a termination of employment will
apply to your Biosyn Non-Plan Options. 
The other provisions of your Biosyn Non-Plan Options will remain the
same as set forth in the Option Agreements, and the provisions of the Option
Agreements (except as expressly modified by this Agreement and the Exchange
Agreement) will govern and control your rights to purchase shares of Cellegy
common stock.

 

Unless the context otherwise requires, after the Exchange any
references in the Plan and the Option Agreements to: (i) the “Company” or the “Corporation” means Cellegy, (ii) “Stock,” “Common Stock”
or Shares” means shares of Cellegy Common
Stock, (iii) the “Board of Directors”
or the “Board” means the Board of
Directors of Cellegy and (iv) the “Committee”
means the Compensation Committee of the Board of Directors of Cellegy (or any
other committee that the Board may designate as administrator of the
Plan).  All provisions references in the
Option Agreements relating to your status as an employee of Biosyn will, after
the Exchange, refer to your status as an employee of Cellegy or any present or
future Cellegy subsidiary.

 

Notwithstanding any other provision of this Agreement: (i) your assumed
Biosyn Non-Plan Options shall not form any part of any contract of employment
between Cellegy, or any subsidiary, and you, and it shall not confer on you any
legal or equitable rights (other than those constituting your assumed Biosyn
Non-Plan Options themselves) against Cellegy or any subsidiary, directly or
indirectly, or give rise to any cause of action in law or in equity against
Cellegy or any subsidiary; and (ii) your benefits under your assumed Biosyn
Non-Plan Options shall not form any part of your wages or remuneration or count
as pay or remuneration for pension fund or other purposes.

 

After the Closing Date, Cellegy will send to you a notice that will set
forth the exact number of shares of Cellegy common stock that will underlie
your Biosyn Non-Plan Options as a result of the Exchange and the new per share
exercise price of the Biosyn Non-Plan Options. 
The notice will be accompanied by a form of Exercise Notice that you
will be able to use in order to exercise the Biosyn Non-Plan Options after the
Exchange.

 

Nothing in this Agreement or the Option Agreements interferes in any
way with your right, Biosyn’s right or Cellegy’s right, which rights are
expressly reserved, to terminate your employment (if you are employed by Biosyn
or Cellegy) at any time for any reason. 
Any future options, if any, you may receive from Cellegy will be
governed by the terms of the Cellegy’s 

 

 

equity
incentive plans, and such terms may be different from the terms of your assumed
Biosyn Non-Plan Options.

[Remainder
of page intentionally left blank]

 

 

 

Please sign and date this Agreement on the following page and return it
promptly to Cellegy at the following address:

 

Cellegy Pharmaceuticals, Inc.

349 Oyster Point Boulevard, Suite 200

South San Francisco, CA 94080

Attn:  A. Richard Juelis

 

 

 

	
  CELLEGY
  PHARMACEUTICALS, INC.

  
	
   

  
	
  /s/
  A. Richard Juelis

  
	
  A.
  Richard Juelis, 

  
	
  Chief
  Financial Officer

  

 

 

 [ACKNOWLEDGMENT PAGE
FOLLOWS]

 

 

ACKNOWLEDGMENT

 

The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands and agrees that all rights and liabilities
with respect to the assumed Biosyn Non-Plan Options listed on the table above
will be assumed by Cellegy on the Closing Date and are as set forth in the
Option Agreements for such assumed Biosyn Non-Plan Options and this Stock
Option Assumption Agreement (and the Plan to the extent set forth in this
Agreement).

 

DATED:  October 20, 2004

 

 

	
  /s/
  Anne-Marie Corner

  
	
  Anne-Marie
  Corner

  
	
  Mailing
  Address:Exhibit 10.4

 

CELLEGY PHARMACEUTICALS, INC.

 

STOCK OPTION ASSUMPTION AGREEMENT

(1999 Stock Option Plan)

 

Dear
Anne-Marie Corner:

 

As you know, on October 7, 2004, Cellegy Pharmaceuticals, Inc. (“Cellegy”) and Biosyn, Inc. (“Biosyn”) entered into an Agreement
and Plan of Shares Exchange (the “Exchange Agreement”)
pursuant to which all the outstanding shares of Biosyn capital stock will be
exchanged for shares of Cellegy common stock and all outstanding options and
warrants to purchase Biosyn common stock will be assumed by Cellegy (the “Exchange”).  The number of shares of Cellegy common stock
into which each share of Biosyn common stock will be converted is based on the
exchange ratio for the Biosyn common stock, as defined in the Exchange
Agreement (the “Exchange Ratio”).  The closing of the transactions contemplated
by the Exchange Agreement is contemplated to occur on or about October 22, 2004
(“Closing Date”).

 

You hold one or more outstanding options to purchase Biosyn common
stock granted to you under Biosyn’s 1999 Stock Option Plan (the “Plan”).  Pursuant to the Exchange Agreement, Cellegy
will assume all obligations of Biosyn under your outstanding option (or
options) on the Closing Date.  This Stock
Option Assumption Agreement (the “Agreement”)
evidences the terms of Cellegy’s assumption of the option(s) to purchase Biosyn
common stock granted to you under the Plan (the “Biosyn Options”), which Biosyn Options are documented by
one or more stock option agreements entered into between you and Biosyn (the “Option Agreements”).

 

The table below lists the Biosyn Option(s) that you currently hold:

 

 

	
   

  	
  BIOSYN OPTION

  	
   

  	
   

  
	
   

  	
   

  
	
  Grant Date

  	
   

  	
  Option Expiration

  Date

  	
   

  	
  No. of Shares of Biosyn

  Common Stock

  	
   

  	
  Exercise Price

  per share

  	
   

  
	
  1/1/00

  	
   

  	
  12/31/09

  	
   

  	
  15,000

  	
   

  	
  $

  	
  2.50

  	
   

  
	
  1/1/01

  	
   

  	
  12/31/10

  	
   

  	
  15,000

  	
   

  	
  $

  	
  3.00

  	
   

  
	
  2/20/02

  	
   

  	
  2/19/12

  	
   

  	
  20,000

  	
   

  	
  $

  	
  1.50

  	
   

  
	
  1/6/03

  	
   

  	
  1/5/13

  	
   

  	
  50,000

  	
   

  	
  $

  	
  .05

  	
   

  
	
  1/5/04

  	
   

  	
  1/4/14

  	
   

  	
  40,000

  	
   

  	
  $

  	
  .05

  	
   

  
												

 

 

After the Exchange, your Biosyn Options will no longer give you the
right to purchase Biosyn Common Stock. 
Instead, your Biosyn Options will give you the right to purchase shares
of Cellegy common stock, with the number of shares of Cellegy common stock
calculated based on the Exchange Ratio for the Biosyn common stock as provided
in the Exchange Agreement, 

 

 

and
the exercise price per share proportionately adjusted.  As described further below, Cellegy will
separately provide you information regarding the number of Cellegy shares
underlying your Biosyn Options.

 

The grant date and expiration date of your assumed Biosyn Option(s)
will remain the same after the Exchange as set forth in your Option Agreements,
but the number of shares subject to your assumed Biosyn Options and the
exercise price per share will be adjusted to reflect the effect of the Exchange
as described in Section 1.6(b) of the Exchange Agreement.  The other provisions of the Option Agreements
(except as expressly modified by this Agreement and the Exchange Agreement)
will govern and control your rights to purchase shares of Cellegy common stock.  Upon termination of your employment with
Cellegy, you will have the limited post-termination exercise period specified
in the Plan for your assumed Biosyn Options, generally three months (except in
the case of death or permanent disability, in which case such period is twelve
months), after which time your assumed Biosyn Options will expire and NOT be
exercisable for Cellegy common stock.

 

Unless the context otherwise requires, after the Exchange any
references in the Plan and the Option Agreements to: (i) the “Company” or the “Corporation” means Cellegy, (ii) “Stock,” “Common Stock”
or Shares” means shares of Cellegy Common
Stock, (iii) the “Board of Directors”
or the “Board” means the Board of
Directors of Cellegy and (iv) the “Committee”
means the Compensation Committee of the Board of Directors of Cellegy (or any
other committee that the Board may designate as administrator of the
Plan).  All references in the Option
Agreements and the Plan relating to your status as an employee of Biosyn will,
after the Exchange, refer to your status as an employee of Cellegy or any
present or future Cellegy subsidiary.

 

Notwithstanding any other provision of this Agreement: (i) your assumed
Biosyn Options shall not form any part of any contract of employment between Cellegy,
or any subsidiary, and you, and it shall not confer on you any legal or
equitable rights (other than those constituting your assumed Biosyn Options
themselves) against Cellegy or any subsidiary, directly or indirectly, or give
rise to any cause of action in law or in equity against Cellegy or any
subsidiary; and  (ii) your benefits under
your assumed Biosyn Options shall not form any part of your wages or
remuneration or count as pay or remuneration for pension fund or other
purposes.

 

After the Closing Date, Cellegy will send to you a notice that will set
forth the exact number of shares of Cellegy common stock that will underlie
your Biosyn Options as a result of the Exchange and the new per share exercise
price of the Biosyn Options.  The notice
will be accompanied by a form of Exercise Notice that you will be able to use
in order to exercise the Biosyn Options after the Exchange.

 

Nothing in this Agreement or the Option Agreements interferes in any
way with your right, Biosyn’s right or Cellegy’s right, which rights are
expressly reserved, to terminate your employment (if you are employed by Biosyn
or Cellegy) at any time for any reason. 
Any future options, if any, you may receive from Cellegy will be governed
by the terms of the Cellegy equity incentive plan under which such options are
granted, and such terms may be different from the terms of your assumed Biosyn
Options.

 

 

 

 

[Remainder
of page intentionally left blank]

 

 

Please sign and date this Agreement on the following page and return it
promptly to Cellegy at the following address:

 

	
   

  	
   

  	
  Cellegy
  Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  349
  Oyster Point Boulevard, Suite 200

  
	
   

  	
   

  	
  South
  San Francisco, CA 94080

  
	
   

  	
   

  	
  Attn:
  A. Richard Juelis

  

 

 

 

	
   

  	
   

  	
  CELLEGY
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  A. Richard Juelis

  
	
   

  	
   

  	
  A.
  Richard Juelis, 

  
	
   

  	
   

  	
  Chief
  Financial Officer

  

 

 

 [ACKNOWLEDGMENT PAGE
FOLLOWS]

 

 

ACKNOWLEDGMENT

 

The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands and agrees that all rights and liabilities
with respect to the assumed Biosyn Options listed on the table above will be
assumed by Cellegy on the Closing Date and are as set forth in the Option
Agreements for such assumed Biosyn Options, the Plan and this Stock Option
Assumption Agreement.

 

DATED:  October 20, 2004

 

 

	
   

  	
   

  	
  /s/
  Anne-Marie Corner

  
	
   

  	
   

  	
  Anne-Marie
  Corner

  
	
   

  	
   

  	
  Mailing
  Address:

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