Document:

EX-4.2

 Exhibit 4.2 

EXECUTION VERSION 
 THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 

STOCK SUBSCRIPTION WARRANT 

To Purchase 49,628 Shares of Common Stock of 

CARA THERAPEUTICS, INC. (the “Company”) 

DATE OF INITIAL ISSUANCE: September 25, 2007 

THIS CERTIFIES THAT for value received, CONNECTICUT INNOVATIONS, INCORPORATED or its registered assigns (the
“Holder”) is entitled to purchase from the Company, at any time during the Term of this Warrant, 49,628 shares of Common Stock of the Company (as defined and set forth below), at the Warrant Price (as defined below), payable in
lawful money of the United States of America to be paid upon the exercise hereof. This Warrant may be exercised, in whole or in part, subject to the provisions, limitations and restrictions herein contained. The exercise of this Warrant shall be
subject to the provisions, limitations and restrictions herein contained, and may be exercised in whole or in part. 
 SECTION 1. DEFINITIONS.

 For all purposes of this Warrant, the following terms shall have the meanings indicated: 

1.1 Common Stock means and include the Company’s authorized Common Stock, $0,001 par value. 

1.2 Current Market Price means, at any date and with respect to one share of Common Stock, the average of the daily closing
prices for the 30 consecutive business days ending five business days before the day in question (as adjusted for any stock dividend, split, combination or reclassification that took effect during such 30 business day period). The closing price for
each day shall be the last reported sales price or, in case no such reported sales took place on such day, the average of the last reported bid and asked prices, in either case on the principal national securities exchange on which the Common Stock
is listed or admitted to trading or as reported by Nasdaq (or if the Common Stock is not at the time listed or admitted for trading on any such exchange or if the prices of the Common Stock are not reported by Nasdaq then such price shall be equal
to the average of the last reported bid and asked prices on such day as reported by The National Quotation Bureau Incorporated or any similar reputable quotation and reporting service, if such quotation is

 
not reported by The National Quotation Bureau Incorporated); provided, however, that if the Common Stock is not traded in such manner that the quotations referred to herein are available for
the period required hereunder, the Current Market Price shall be determined in good faith by the Board of Directors of the Company or, if such determination cannot be made, by a nationally recognized independent investment banking firm selected by
the Board of Directors of the Company (or if such selection cannot be made, by a nationally recognized independent investment banking firm selected by the American Arbitration Association in accordance with its rules). 

1.3 Securities Act means the Securities Act of 1933, as amended. 

1.4 Term of this Warrant means the period beginning on the date hereof and ending on the earlier of: (i) the date on which
all Warrant Shares have been issued, and (ii) the seventh (7th) anniversary the date hereof. 

1.5 Warrant Price means $4.03 per Warrant Share, subject to adjustment as provided in Section 5 below. 

1.6 Warrant Shares means shares of Common Stock purchased or purchasable by the Holder of this Warrant upon the exercise hereof,
subject to adjustment as provided in Section 4 below, 
 SECTION 2. EXERCISE OF WARRANT. 

2.1. Procedure for Exercise of Warrant. To exercise this Warrant in whole or in part (but not as to any fractional share of
Common Stock), the Holder shall deliver to the Company at its office referred to in Section 13 hereof at any time and from time to time during the Term of this Warrant: (i) the Notice of Exercise in the form attached hereto,
(ii) cash, certified or official bank check payable to the order of the Company, wire transfer of funds to the Company’s account, or evidence of any indebtedness of the Company to the Holder (or any combination of any of the foregoing) in
the amount of the Warrant Price for each share being purchased, and (iii) this Warrant. Notwithstanding any provisions herein to the contrary, if the Current Market Price is greater than the Warrant Price (at the date of calculation, as set
forth below), in lieu of exercising this Warrant as hereinabove permitted, the Holder may elect to receive shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the office of the Company referred to in Section 13 hereof, together with the Notice of Exercise, in which event the Company shall issue to the Holder that number of shares of Common Stock computed using the following formula: 

CS = WCS x (CMP-WP) 

CMP 

  
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 where: 

“CS” equals the number of shares of Common Stock to be issued to the Holder; 

“WCS” equals the number of shares of Common Stock purchasable under the Warrant, or if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised (at the date of such calculation); 
 “CMP” equals the Current Market
Price (at the date of such calculation); and 
 “WP” equals the Warrant Price (as adjusted to the date of such calculation).

 In the event of any exercise of the rights represented by this Warrant, a certificate or certificates for the shares of Common Stock so purchased,
registered in the name of the Holder or such other name or names as may be designated by the Holder, shall be delivered to the Holder hereof within a reasonable time, not exceeding fifteen business days, after the rights represented by this Warrant
shall have been so exercised; and, unless this Warrant has expired, a new Warrant representing the number of shares (except a remaining fractional share), if any, with respect to which this Warrant shall not then have been exercised shall also be
issued to the Holder hereof within such time. The person in whose name any certificate for shares of Common Stock is issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such shares on the date
on which the Warrant was surrendered and payment of the Warrant Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. 

2.2. Transfer Restriction Legend. Each certificate for Warrant Shares shall bear the following legend (and any additional legend
required by (i) any applicable state securities laws and (ii) any securities exchange upon which such Warrant Shares may, at the time of such exercise, be listed) on the face thereof unless at the time of exercise such Warrant Shares shall
be registered under the Securities Act: 
 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE SOLD, OFFERED, PLEDGED, HYPOTHECATED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM UNDER SAID ACT. 

Any certificate issued at any time in exchange or substitution for any certificate bearing such legend (except a new certificate issued upon completion of a
public distribution under a registration statement of the securities represented thereby) shall also bear such legend unless, in the opinion of counsel for the holder thereof (which counsel shall be reasonably satisfactory to counsel for the
Company) the securities represented thereby are not, at such time, required by law to bear such legend. 

  
 -3- 

 SECTION 3. COMPANY COVENANTS. The Company covenants and agrees that all shares of Common Stock that
may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and nonassessable, and free from all taxes (other than income taxes that may be payable by the Holder), liens and charges
with respect to the issue thereof. Without limiting the generality of the foregoing, the Company covenants that it will from time to time take all such action as may be required to assure that the stated or par value per share, if any, of the Common
Stock is at all times equal to or less than the then Warrant Price. The Company further covenants and agrees that it will pay when due and payable any and all federal and state taxes which may be payable by the Company in respect of the issue of
this Warrant or any Common Stock or certificates therefor issuable upon the exercise of this Warrant (other than income taxes that may be payable by the Holder). The Company further covenants and agrees that the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. 
 SECTION
4. ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of the Warrant Price as provided in Section 5, the Holder shall thereafter be entitled to purchase, at the Warrant Price resulting from such adjustment, the number of shares
(calculated to the nearest tenth of a share) obtained by multiplying the Warrant Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Warrant Price resulting from such adjustment. 
 SECTION 5. ADJUSTMENT OF WARRANT PRICE. The Warrant Price shall be subject to
adjustment from time to time as follows: 
 5.1 Stock Dividends, Subdivisions, Split-Ups. If, at any time during the Term of
this Warrant, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock, then, following the record date fixed for the determination
of holders of Common Stock entitled to receive such stock dividend, subdivision or split-up, the Warrant Price shall be appropriately decreased so that the number of shares of Common Stock issuable upon the exercise hereof shall be increased in
proportion to such increase in outstanding shares. 
 5.2 Stock Combinations. If, at any time during the Term of this
Warrant, the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock, then, following the record date for such combination, the Warrant Price shall be appropriately increased so that the
number of shares of Common Stock issuable upon the exercise hereof shall be decreased in proportion to such decrease in outstanding shares. 

5.3 General. 

(a) All calculations of Warrant Price under this Section 5 shall be made to the nearest cent or to the nearest one-tenth
(1/10) of a share, as the case may be. 

  
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 (b) Adjustments made pursuant to Sections 5.1 or 5.2 above shall be made on the date such
dividend, subdivision, split-up or combination, as the case may be, is made, and shall become effective at the opening of business on the business day next following the record date for the determination of stockholders entitled to such dividend,
subdivision, split-up or combination. 
 (c) In the event the Company shall propose to take any action of the types described in
Sections 5.1 or 5.2 of this Section 5, the Company shall forward, at the same time and in the same manner, to the Holder of this Warrant such notice, if any, which the Company shall give to the holders of capital stock of the Company. 

(d) In any case in which the provisions of this Section 5 require that an adjustment become effective immediately after a record
date for an event, the Company may defer until the occurrence of such event issuing to the Holder of all or any part of this Warrant which is exercised after such record date and before the occurrence of such event the additional shares of capital
stock issuable upon such exercise by reason of the adjustment required by such event over and above the shares of capital stock issuable upon such exercise before giving effect to such adjustment exercise; provided, however, that the Company shall
deliver to such Holder a due bill or other appropriate instrument evidencing such Holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment. 

(e) Whenever the Warrant Price shall be adjusted as provided in this Section 5, the Company shall prepare a statement showing the
facts requiring such adjustment and the Warrant Price that shall be in effect after such adjustment. The Company shall mail a copy of such statement first class postage prepaid, to each Holder of this Warrant at its, his or her address appearing on
the Company’s records. Where appropriate, such copy may be given in advance and may be included as part of the notice required to be mailed under the provisions of Section 5.3(d). 

SECTION 6. OWNERSHIP. 
 6.1.
Ownership of This Warrant. The Company may deem and treat the person in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the contrary until presentation of this Warrant for registration of transfer as provided in this Section 6. 

6.2. Transfer and Replacement. Subject to compliance with applicable federal and state securities laws, this Warrant and all
rights hereunder are transferable in whole or in part upon the books of the Company by the Holder hereof (in its sole discretion) in person or by its duly authorized attorney without the prior written consent of the Company; and, upon any such
transfer, a new Warrant or Warrants, of the same tenor as this Warrant but registered in the name of the transferee or transferees (and in the name of the Holder, if a partial transfer is effected), shall be made and delivered by the Company upon
surrender of this Warrant duly endorsed, at the office of the Company referred to in Section 13 hereof. Notwithstanding the foregoing, the Company may refuse to transfer this Warrant or issue Warrant Shares to any person (whether legal or
natural) who is reasonably determined in good faith by the Company’s Board of Directors to be an actual or potential competitor of the Company, or an affiliate thereof. Upon receipt by the Company of

  
 -5- 

 
evidence reasonably satisfactory to it of the loss, theft or destruction, and, in such case, of indemnity or security reasonably satisfactory to it, and upon surrender of this Warrant if
mutilated, the Company will make and deliver a new Warrant of like tenor, in lieu of this Warrant; provided that if the Holder hereof is an instrumentality of a state or local government or an institutional holder or a nominee for such an
instrumentality or institutional holder an irrevocable agreement of indemnity by such Holder shall be sufficient for all purposes of this Section 6, and no evidence of loss or theft or destruction shall be necessary. This Warrant shall be
promptly cancelled by the Company upon the surrender hereof in connection with any transfer or replacement. Except as otherwise provided above, in the case of the loss, theft or destruction of a Warrant, the Company shall pay all expenses, taxes and
other charges payable in connection with any transfer or replacement of this Warrant, other than stock transfer taxes (if any) payable in connection with a transfer of this Warrant, which shall be payable by the Holder. Holder will not transfer this
Warrant and the rights hereunder except in compliance with federal and state securities laws. 
 SECTION 7. MERGERS, CONSOLIDATION, SALES.
In the case of any proposed consolidation or merger of the Company with another entity, or the proposed sale of all or substantially all of its assets to another person or entity, or any proposed reorganization or reclassification of the capital
stock of the Company, then, as a condition of such consolidation, merger, sale, reorganization or reclassification, lawful and adequate provision shall be made whereby the Holder of this Warrant shall thereafter have the right to receive upon the
basis and upon the terms and conditions specified herein, in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable hereunder, such shares of stock, securities or assets as may (by virtue of such consolidation,
merger, sale, reorganization or reclassification) be issued or payable with respect to or in exchange for the number of shares of such Common Stock purchasable hereunder immediately before such consolidation, merger, sale, reorganization or
reclassification. In any such case appropriate provision shall be made with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof shall thereafter be applicable as nearly as may be, in relation to
any shares of stock, securities or assets thereafter deliverable upon the exercise of this Warrant. In the case of any proposed consolidation or merger of the Company with another entity, or the proposed sale of all or substantially all of its
assets to another person or entity, or any proposed reorganization or reclassification of the capital stock of the Company in which the holders of the Company’s Common Stock are to receive assets in exchange for shares of such Common Stock,
then, as a condition of such consolidation, merger, sale, reorganization or reclassification, lawful and adequate provision shall be made whereby the Holder of this Warrant shall have the opportunity to exercise this Warrant at the time of such
consolidation, merger, sale, reorganization or reclassification and receive upon the basis and upon the terms and conditions specified herein, in lieu of the Warrant Shares of the Company immediately theretofore purchasable hereunder, such assets as
may (by virtue of such consolidation, merger, sale, reorganization or reclassification) be issued or payable with respect to or in exchange for the number of Warrant Shares purchasable hereunder immediately before such consolidation, merger, sale,
reorganization or reclassification. 

  
 -6- 

 SECTION 8. NOTICE OF DISSOLUTION OR LIQUIDATION. In case of any distribution of the assets of the
Company in dissolution or liquidation (except under circumstances when the foregoing Section 7 shall be applicable), the Company shall give notice thereof to the Holder hereof and shall make no distribution to shareholders until the expiration
of thirty (30) days from the date of mailing of the aforesaid notice and, in any case, the Holder hereof may exercise this Warrant within thirty (30) days from the date of the giving of such notice, and all rights herein granted not so
exercised within such 30-day period shall thereafter become null and void. 
 SECTION 9. NOTICE OF EXTRAORDINARY DIVIDENDS. If the Board of
Directors of the Company shall declare any extraordinary dividend (which, without limiting the foregoing, shall not include any dividend payable on any preferred stock of the Company in accordance with its terms) or other distribution on its Common
Stock or any other capital stock of the Company, except by way of a stock dividend payable in shares of its Common Stock or other class of capital stock of the Company, the Company shall mail notice thereof to the Holder hereof not less than thirty
(30) days prior to the record date fixed for determining shareholders entitled to participate in such dividend or other distribution, and the Holder hereof shall not participate in such dividend or other distribution unless this Warrant is
exercised prior to such record date. 
 SECTION 10. FRACTIONAL SHARES. Fractional shares shall not be issued upon the exercise of this Warrant
but in any case where the Holder would, except for the provisions of this Section 10, be entitled under the terms hereof to receive a fractional share upon the complete exercise of this Warrant, the Company shall, upon the exercise of this
Warrant for the largest number of whole shares then called for, pay a sum in cash equal to the excess of the value of such fractional share (determined in such reasonable manner as may be prescribed in good faith by the Board of Directors of the
Company) over the Warrant Price for such fractional share. 
 SECTION 11. SPECIAL ARRANGEMENTS OF THE COMPANY. The Company covenants and
agrees that during the Term of this Warrant, unless otherwise approved by the Holder of this Warrant: 
 11.1. Will Reserve Shares.
The Company will reserve and set apart and have available for issuance at all times the number of shares of authorized but unissued Common Stock deliverable upon the exercise of this Warrant. 

11.2. Will Not Amend Certificate. The Company will not amend its Certificate of Incorporation to eliminate as an authorized class
of capital stock that class denominated as “Common Stock” on the date hereof. 
 11.3. Will Bind Successors.
This Warrant shall be binding upon any corporation or other person or entity succeeding to the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets. 

SECTION 12. CONNECTICUT PRESENCE; PUT AGREEMENT. The Company agrees that this Warrant and the Warrant Shares are subject to that certain Put
Agreement between the Company and the Holder dated as of the date hereof. 

  
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 SECTION 13. NOTICES. Any notice or other document required or permitted to be given or delivered to
the Holder shall be delivered at, or sent by certified or registered mail to, the Holder at 200 Corporate Place, 3rd Floor, Rocky Hill, CT 06067, Attn: President or to such other address as shall
have been furnished to the Company in writing by the Holder. Any notice or other document required or permitted to be given or delivered to the Company shall be delivered at, or sent by certified or registered mail to, the Company at One Parrott
Drive, Shelton, CT 06484-4733, Attn: President or to such other address as shall have been furnished in writing to the Holder by the Company. Any notice so addressed and mailed by registered or certified mail shall be deemed to be given when so
mailed. Any notice so addressed and otherwise delivered shall be deemed to be given when actually received by the addressee. 
 SECTION 14. NO RIGHTS
AS STOCKHOLDER; LIMITATION OF LIABILITY. This Warrant shall not entitle the Holder to any of the rights of a stockholder of the Company. No provision hereof, in the absence of affirmative action by the Holder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the Warrant Price hereunder or as a stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company. 
 SECTION 15. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and warrants to the Holder hereof as
follows: 
 (a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of
Delaware, has the corporate power and authority to conduct its business as presently conducted, has the corporate power and authority to execute, issue and deliver this Warrant and to perform its obligations under this Warrant, has the corporate
power and authority and legal right to own and lease its properties and is duly qualified and in good standing as a foreign corporation in each jurisdiction in which it owns or leases real property or in which the conduct of its business requires
such qualification, except where failure to be so qualified could not be reasonably expected to have a material adverse effect on the Company and its subsidiaries taken as a whole. 

(b) The execution, delivery, issuance and performance by the Company of this Warrant and the issuance of the Warrant Shares upon
exercise of this Warrant have been duly authorized by all necessary corporate action and do not and will not violate, or result in a breach of, or constitute a default under, or require any consent under, or result in the creation of any lien,
charge or encumbrance upon the assets of the Company pursuant to, any law, statute, ordinance, rule, regulation, order or decree of any court, governmental body or regulatory authority or administrative agency having jurisdiction over the Company or
its subsidiaries or any material contract, mortgage, loan agreement, note, lease or other instrument binding upon the Company or its subsidiaries or by which their properties are bound. 

(c) This Warrant has been duly executed, issued and delivered by the Company and constitutes a legal, valid, binding and enforceable
obligation of the Company. The Warrant Shares, when issued upon exercise of this Warrant in accordance with the terms hereof, will be duly authorized, validly issued, fully paid and nonassessable shares of Common Stock, with no personal liability
attaching to the ownership thereof. 

  
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 (d) The Company has authorized capital stock consisting of (x) 23,000,000 shares of
Common Stock, $.001 par value, of which 7,955,000 shares are issued and outstanding, and (y) 12,111,935 shares of Preferred Stock, $.001 par value, of which 2,000,000 shares are designated as Series A Preferred Stock, all of which are issued
and outstanding, and of which 2,370,000 shares are designated as Series B Preferred Stock, all of which are issued and outstanding, and of which 7,741,935 shares are designated as Series C Preferred Stock, all of which are issued and outstanding.

 SECTION 16. LAW GOVERNING. This Warrant shall be governed by, and construed and enforced in accordance with, the laws of the State of New
York. 
 SECTION 17. MISCELLANEOUS. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party (or any predecessor in interest thereof) against which enforcement of the same is sought. The headings in this Warrant are for purposes of reference only and shall not affect the meaning or construction of
any of the provisions hereof 
 [intentionally left blank - signature page follows] 

  
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 [signature page to Warrant] 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the date first written above.

  

			
	CARA THERAPEUTICS, INC.
		
	By:	 	/s/ Josef C Schoell
		 	Name: Josef C Schoell
		 	Title: CFO

 FORM OF NOTICE OF EXERCISE 

[To be signed only upon exercise of the Warrant] 

TO BE EXECUTED BY THE REGISTERED HOLDER 

TO EXERCISE THE WITHIN WARRANT 

The undersigned hereby exercises the right to purchase
                shares of Common Stock which the undersigned is entitled to purchase by the terms of the within Warrant according to the conditions thereof, and herewith
makes payment of the Warrant Price of such shares in full. All shares to be issued pursuant hereto shall be issued in the name of, and the initial address of such person to be entered on the books of the Company shall be: 

__________________ 
 __________________ 

__________________ 
 The shares are to be issued
in certificates of the following denominations: 
  

			
	  
	
	[Type Name of Holder]
		
	By:	 	  

	Title:	 	  

Dated:                   
                        

 FORM OF ASSIGNMENT 

(ENTIRE) 
 [To be signed
only upon transfer of entire Warrant] 
 TO BE EXECUTED BY THE REGISTERED HOLDER 

TO TRANSFER THE WITHIN WARRANT 
 FOR
VALUE RECEIVED                         hereby sells, assigns and transfers unto
                    all rights of the undersigned under and pursuant to the within Warrant, and the undersigned does hereby irrevocably constitute
and appoint                     Attorney to transfer the said Warrant on the books of the Company, with full power of substitution. 

 

			
	  
	
	[Type Name of Holder]
		
	By:	 	  

	Title:	 	  

Dated:                   
                        
 NOTICE

 The signature to the foregoing Assignment must correspond to the name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change whatsoever.EX-10.2

 Exhibit 10.2 
  

 
  

CARA THERAPEUTICS, INC. 

2004 STOCK INCENTIVE PLAN 

Adopted by the Board on September 7, 2004 

Approved by the Stockholders on September 7, 2004 
  

 
  

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 SECTION 1.
	 	 PURPOSE
	  	 	1	  
			
	 SECTION 2.
	 	 DEFINITIONS
	  	 	1	  
	 2.1
	 	 “Board”
	  	 	1	  
	 2.2
	 	 “Change in Control”
	  	 	1	  
	 2.3
	 	 “Code”
	  	 	2	  
	 2.4
	 	 “Committee”
	  	 	2	  
	 2.5
	 	 “Company”
	  	 	2	  
	 2.6
	 	 “Consultant”
	  	 	2	  
	 2.7
	 	 “Disability”
	  	 	2	  
	 2.8
	 	 “Employee”
	  	 	2	  
	 2.9
	 	 “Exchange Act”
	  	 	2	  
	 2.10
	 	 “Exercise Price”
	  	 	2	  
	 2.11
	 	 “Fair Market Value”
	  	 	2	  
	 2.12
	 	 “ISO”
	  	 	2	  
	 2.13
	 	 “NSO”
	  	 	2	  
	 2.14
	 	 “Option”
	  	 	2	  
	 2.15
	 	 “Optionee”
	  	 	2	  
	 2.16
	 	 “Outside Director”
	  	 	3	  
	 2.17
	 	 “Parent”
	  	 	3	  
	 2.18
	 	 “Plan”
	  	 	3	  
	 2.19
	 	 “Purchase Price”
	  	 	3	  
	 2.20
	 	 “Purchaser”
	  	 	3	  
	 2.21
	 	 “Restricted Share Agreement”
	  	 	3	  
	 2.22
	 	 “Securities Act”
	  	 	3	  
	 2.23
	 	 “Service”
	  	 	3	  
	 2.24
	 	 “Share”
	  	 	3	  
	 2.25
	 	 “Stock”
	  	 	3	  
	 2.26
	 	 “Stock Option Agreement”
	  	 	3	  
	 2.27
	 	 “Subsidiary”
	  	 	3	  
	 2.28
	 	 “Ten-Percent Stockholder”
	  	 	4	  
			
	 SECTION 3.  
	 	 ADMINISTRATION
	  	 	4	  
	 3.1
	 	 General Rule
	  	 	4	  
	 3.2
	 	 Board Authority and Responsibility
	  	 	4	  
			
	 SECTION 4.
	 	 ELIGIBILITY
	  	 	4	  
	 4.1
	 	 General Rule
	  	 	4	  
			
	 SECTION 5.
	 	 STOCK SUBJECT TO PLAN
	  	 	4	  
	 5.1
	 	 Share Limit
	  	 	4	  
	 5.2
	 	 Additional Shares
	  	 	4	  

  
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	 SECTION 6.
	 	 RESTRICTED SHARES
	  	 	4	  
	 6.1
	 	 Restricted Share Agreement
	  	 	5	  
	 6.2
	 	 Duration of Offers and Nontransferability of Purchase Rights
	  	 	5	  
	 6.3
	 	 Purchase Price
	  	 	5	  
	 6.4
	 	 Vesting, Repurchase Rights and Transfer Restrictions
	  	 	5	  
			
	 SECTION 7.
	 	 STOCK OPTIONS
	  	 	5	  
	 7.1
	 	 Stock Option Agreement
	  	 	5	  
	 7.2
	 	 Number of Shares; Kind of Option
	  	 	5	  
	 7.3
	 	 Exercise Price
	  	 	5	  
	 7.4
	 	 Term
	  	 	6	  
	 7.5
	 	 Exercisability
	  	 	6	  
	 7.6
	 	 Vesting
	  	 	6	  
	 7.7
	 	 Repurchase Rights and Transfer Restrictions
	  	 	6	  
	 7.8
	 	 Transferability of Options
	  	 	6	  
	 7.9
	 	 Exercise of Options on Termination of Service
	  	 	6	  
	 7.10
	 	 No Rights as a Stockholder
	  	 	6	  
	 7.11
	 	 Modification, Extension and Renewal of Options
	  	 	7	  
			
	 SECTION 8.
	 	 PAYMENT FOR SHARES
	  	 	7	  
	 8.1
	 	 General
	  	 	7	  
	 8.2
	 	 Surrender of Stock
	  	 	7	  
	 8.3
	 	 Services Rendered
	  	 	7	  
	 8.4
	 	 Promissory Notes
	  	 	7	  
	 8.5
	 	 Exercise/Sale
	  	 	7	  
	 8.6
	 	 Exercise/Pledge
	  	 	8	  
	 8.7
	 	 Other Forms of Payment
	  	 	8	  
			
	 SECTION 9.
	 	 ADJUSTMENT OF SHARES
	  	 	8	  
	 9.1
	 	 General
	  	 	8	  
	 9.2
	 	 Dissolution or Liquidation
	  	 	8	  
	 9.3
	 	 Mergers and Consolidations
	  	 	8	  
	 9.4
	 	 Reservation of Rights
	  	 	8	  
			
	 SECTION 10.
	 	 REPURCHASE RIGHTS
	  	 	9	  
	 10.1
	 	 Company’s Right To Repurchase Shares
	  	 	9	  
			
	 SECTION 11.
	 	 WITHHOLDING TAXES
	  	 	9	  
	 11.1
	 	 General
	  	 	9	  
	 11.2
	 	 Share Withholding
	  	 	9	  
	 11.3
	 	 Cashless Exercise/Pledge
	  	 	9	  
	 11.4
	 	 Other Forms of Payment
	  	 	9	  
			
	 SECTION 12.
	 	 SECURITIES LAW REQUIREMENTS
	  	 	9	  
	 12.1
	 	 General
	  	 	9	  
	 12.2
	 	 Voting and Dividend Rights
	  	 	9	  
	 12.3
	 	 Financial Reports
	  	 	10	  
			
	 SECTION 13.
	 	 NO RETENTION RIGHTS
	  	 	10	  

  
 -ii- 

							
	 SECTION 14.
	 	 DURATION AND AMENDMENTS
	  	 	10	  
	 14.1
	 	 Term of the Plan
	  	 	10	  
	 14.2
	 	 Right to Amend or Terminate the Plan
	  	 	10	  
	 14.3
	 	 Effect of Amendment or Termination
	  	 	10	  
			
	 SECTION 15.
	 	 EXECUTION
	  	 	11	  

  
 -iii- 

 CARA THERAPEUTICS, INC. 

2004 STOCK INCENTIVE PLAN 
 SECTION 1.
PURPOSE. 
 The Plan was adopted by the Board of Directors effective September 7, 2004. The purpose of the Plan is to offer
selected service providers the opportunity to acquire equity in the Company through awards of Options (which may constitute incentive stock options or nonstatutory stock options) and the award or sale of Shares. 

The award of Options and the award or sale of Shares under the Plan is intended to be exempt from the securities qualification requirements of
the California Corporations Code by satisfying the exemption under section 25102(o) of the California Corporations Code. However, awards of Options and the award or sale of Shares may be made in reliance upon other state securities law exemptions.
To the extent that such other exemptions are relied upon, the terms of this Plan which are included only to comply with section 25102(o) shall be disregarded to the extent provided in the Stock Option Agreement or Restricted Share Agreement. 

SECTION 2. DEFINITIONS. 
  

	2.1	“Board” shall mean the Board of Directors of the Company, as constituted from time to time. 

  

	2.2	“Change in Control” shall mean the occurrence of any of the following events: 

  

	 	(a)	The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger,
consolidation or other reorganization own immediately after such merger, consolidation or other reorganization fifty percent (50%) or more of the voting power of the outstanding securities of each of (A) the continuing or surviving entity
and (B) any direct or indirect parent corporation of such continuing or surviving entity; 

  

	 	(b)	The consummation of the sale, transfer or other disposition of all or substantially all of the Company’s assets or the stockholders of the Company approve a plan of complete liquidation of the Company; or

  

	 	(c)	Any “person” (as defined below) who, by the acquisition or aggregation of securities, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to
vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding
shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any
securities of the Company. 

  
 -1- 

 For purposes of Section 2.2(c), the term “person” shall have the same meaning as when used in
sections 13(d) and 14(d) of the Exchange Act but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary and (2) a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Stock. 
 Notwithstanding the foregoing, the
term “Change in Control” shall not include a transaction the sole purpose of which is (a) to change the state of the Company’s incorporation, (b) to form a holding company that will be owned in substantially the same
proportions by the persons who held the Company’s securities immediately before such transaction; or (c) to make an initial public offering of the Company’s Stock. 

 

	2.3	“Code” shall mean the Internal Revenue Code of 1986, as amended. 

  

	2.4	“Committee” shall mean the committee designated by the Board, which is authorized to administer the Plan, as described in Section 3 hereof. 

 

	2.5	“Company” shall mean Cara Therapeutics, Inc., a Delaware corporation. 

  

	2.6	“Consultant” shall mean a consultant or advisor who is not an Employee or Outside Director and who performs bona fide services for the Company, a Parent or Subsidiary. 

 

	2.7	“Disability” shall mean a condition that renders an individual unable to engage in substantial gainful activity by reason of any medically determinable physical or mental impairment. 

 

	2.8	“Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary and who is an “employee” within the meaning of section 3401(c) of the Code and
regulations issued thereunder. 

  

	2.9	“Exchange Act” shall mean the U.S. Securities and Exchange Act of 1934, as amended. 

  

	2.10	“Exercise Price” shall mean the amount for which one Share may be purchased upon the exercise of an Option, as specified in a Stock Option Agreement. 

 

	2.11	“Fair Market Value” means, with respect to a Share, the market price of one Share of Stock, determined by the Board in good faith. Such determination shall be conclusive and binding on all persons.

  

	2.12	“ISO” shall mean an incentive stock option described in section 422(b) of the Code. 

  

	2.13	“NSO” shall mean a stock option that is not an ISO. 

  

	2.14	“Option” shall mean an ISO or NSO granted under the Plan and entitling the holder to purchase Shares. 

  

	2.15	“Optionee” shall mean an individual or estate that holds an Option. 

  
 -2- 

	2.16	“Outside Director” shall mean a member of the Board of the Company, a Parent or a Subsidiary who is not an Employee. 

 

	2.17	“Parent” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a
Parent commencing as of such date. 

  

	2.18	“Plan” shall mean the Cara Therapeutics, Inc. 2004 Stock Incentive Plan. 

  

	2.19	“Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option). 

 

	2.20	“Purchaser” shall mean a person to whom the Board has offered the right to acquire Shares under the Plan (other than upon exercise of an Option). 

 

	2.21	“Restricted Share Agreement” shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining to the
acquisition of such Shares. 

  

	2.22	“Securities Act” shall mean the U.S. Securities Act of 1933, as amended. 

  

	2.23	“Service” shall mean service as an Employee, a Consultant or an Outside Director. Service shall be deemed to continue during a bona fide leave of absence approved by the Company in writing if and to the
extent that continued crediting of Service for purposes of the Plan is expressly required by the terms of such leave or by applicable law, as determined by the Company. However, for purposes of determining whether an Option is entitled to ISO
status, and to the extent required under the Code, an Employee’s Service will be treated as terminating ninety (90) days after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or
by a contract or such Employee immediately returns to active work. 

  

	2.24	“Share” shall mean one share of Stock, as adjusted in accordance with Section 9 (if applicable). 

  

	2.25	“Stock” shall mean the common stock of the Company. 

  

	2.26	“Stock Option Agreement” shall mean the agreement between the Company and an Optionee which contains the terms, conditions and restrictions pertaining to the Optionee’s Option. 

 

	2.27	“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken
chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the
adoption of the Plan shall be considered a Subsidiary commencing as of such date. 

  
 -3- 

	2.28	“Ten-Percent Stockholder” means an individual who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its
Subsidiaries. In determining stock ownership for purposes of this Section 2.28, the attribution rules of section 424(d) of the Code shall be applied. 

SECTION 3. ADMINISTRATION. 
  

	3.1	General Rule. The Plan shall be administered by the Board. However, the Board may delegate any or all administrative functions under the Plan otherwise exercisable by the Board to one or more Committees. Each
Committee shall consist of two (2) or more members of the Board who have been appointed by the Board. Each Committee shall have the authority and be responsible for such functions as the Board has assigned to it. If a Committee has been
appointed, any reference to the Board in the Plan shall be construed as a reference to the Committee to whom the Board has assigned a particular function. 

  

	3.2	Board Authority and Responsibility. Subject to the provisions of the Plan, the Board shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the
Plan. All decisions, interpretations and any other actions of the Board with respect to the Plan shall be final and binding on all persons deriving rights under the Plan. 

SECTION 4. ELIGIBILITY. 
  

	4.1	General Rule. Only Employees shall be eligible for the grant of ISOs. Only Employees, Consultants and Outside Directors shall be eligible for the grant of NSOs or the award or sale of Shares. 

SECTION 5. STOCK SUBJECT TO PLAN. 
  

	5.1	Share Limit. Subject to Sections 5.2 and 9, the aggregate number of Shares which may be issued under the Plan shall not exceed one million (1,000,000) Shares. The number of Shares which are subject to
Options or other rights outstanding at any time shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares
to satisfy the requirements of the Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. 

  

	5.2	Additional Shares. In the event that any outstanding Option or other right expires or is canceled for any reason, the Shares allocable to the unexercised portion of such Option or other right shall remain
available for issuance pursuant to the Plan. If a Share previously issued under the Plan is reacquired by the Company pursuant to a forfeiture provision, right of repurchase or right of first refusal, then such Share shall again become available for
issuance under the Plan. 

  
 -4- 

 SECTION 6. RESTRICTED SHARES. 
  

	6.1	Restricted Share Agreement. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Restricted Share Agreement between the Purchaser and the Company. Such award
or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions imposed by the Board, as set forth in the Restricted Share Agreement, that are not inconsistent with the Plan. The
provisions of the various Restricted Share Agreements entered into under the Plan need not be identical. 

  

	6.2	Duration of Offers and Nontransferability of Purchase Rights. Any right to acquire Shares (other than an Option) shall automatically expire if not exercised by the Purchaser within thirty (30) days after the
Company communicates the grant of such right to the Purchaser. Such right shall be nontransferable and shall be exercisable only by the Purchaser to whom the right was granted. 

 

	6.3	Purchase Price. The Purchase Price of Shares offered under the Plan shall be determined by the Board in its sole discretion. The Purchase Price shall be payable in a form described in Section 8.

  

	6.4	Vesting, Repurchase Rights and Transfer Restrictions. Each award or sale of Shares shall be subject to such vesting, forfeiture conditions, rights of repurchase, rights of first refusal and other transfer
restrictions as the Board may determine, subject to the requirements of Section 10. Such restrictions shall be set forth in the applicable Restricted Share Agreement and shall apply in addition to any restrictions otherwise applicable to
holders of Shares generally. A Restricted Share Agreement may provide for accelerated vesting in the event of the Purchaser’s death, Disability or retirement or other events. The Board may determine, at the time of the award or sale of Shares
or thereafter, that all or part of such Shares shall become vested in the event that a Change in Control occurs with respect to the Company. 

SECTION 7. STOCK OPTIONS. 
  

	7.1	Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. The Option shall be subject to all applicable terms and
conditions of the Plan and may be subject to any other terms and conditions imposed by the Board, as set forth in the Stock Option Agreement, which are not inconsistent with the Plan. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical. 

  

	7.2	Number of Shares; Kind of Option. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with
Section 9. The Stock Option Agreement shall also specify whether the Option is intended to be an ISO or an NSO. 

  

	7.3	Exercise Price. Each Stock Option Agreement shall set forth the Exercise Price, which shall be payable in a form described in Section 8. The Exercise Price per Share of an ISO shall not be less than one
hundred percent (100%) of the Fair Market Value of a Share on the date of grant; provided, however, that the Exercise Price per Share of an ISO granted to a Ten-Percent Stockholder shall not be less than one hundred ten percent
(110%) of the Fair Market Value of a Share on the date of grant. Subject to the foregoing requirements, the Exercise Price under any Option shall be determined by the Board in its sole discretion. 

  
 -5- 

	7.4	Term. Each Stock Option Agreement shall specify the term of the Option. The term of an Option shall in no event exceed ten (10) years from the date of grant. The term of an ISO granted to a Ten-Percent
Stockholder shall not exceed five (5) years from the date of grant. Subject to the foregoing, the Board in its sole discretion shall determine when an Option shall expire. 

 

	7.5	Exercisability. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable; provided, however, that no Option shall be exercisable unless
the Optionee has delivered to the Company an executed copy of the Stock Option Agreement. The Board in its sole discretion shall determine when all or any installment of an Option is to become exercisable and may, in its discretion, provide for
accelerated exercisability in the event of a Change in Control or other events. A Stock Option Agreement may permit the Optionee to exercise the Option as to Shares that are subject to a right of repurchase by the Company in accordance with the
requirements of Section 10.1. 

  

	7.6	Vesting. Each Stock Option Agreement shall specify the date or dates when the Option or the Shares subject to the Option shall be vested. The Board in its sole discretion shall determine when all or any portion
of the Option or the Shares subject to an Option shall be vested and may, in its discretion, provide for accelerated vesting in the event of the Optionee’s death, Disability or retirement or other events and may provide for the cessation of
vesting prior to the end of its term in the event of the termination of the Optionee’s Service. 

  

	7.7	Repurchase Rights and Transfer Restrictions. Shares purchased on exercise of Options shall be subject to such forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions
as the Board may determine, subject to the requirements of Section 10. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any restrictions otherwise applicable to holders of Shares
generally. 

  

	7.8	Transferability of Options. During an Optionee’s lifetime, his or her Options shall be exercisable only by the Optionee, and shall not be transferable other than by will or the laws of descent and
distribution. Notwithstanding the foregoing, however, to the extent that a Stock Option Agreement so provides, an NSO may be transferred by the Optionee to one or more family members or a trust established for the benefit of the Optionee and/or one
or more family members to the extent permitted by Rule 701 of the Securities Act. 

  

	7.9	Exercise of Options on Termination of Service. Each Option shall set forth the extent to which the Optionee shall have the right to exercise the Option following termination of the Optionee’s Service. Such
provisions shall be determined in the sole discretion of the Board, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service. 

 

	7.10	No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by the Option until such person becomes entitled to receive such
Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of the Option. No adjustments shall be made, except as provided in Section 9. 

  
 -6- 

	7.11	Modification, Extension and Renewal of Options. Within the limitations of the Plan, the Board may modify, extend or renew outstanding Options or may accept the cancellation of outstanding Options (to the extent
not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price. The foregoing notwithstanding, no modification of an
Option shall, without the consent of the Optionee, impair his or her rights or increase the Optionee’s obligations under such Option. 

SECTION 8. PAYMENT FOR SHARES. 
  

	8.1	General. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash, cash equivalents or one of the other forms provided in this Section 8. 

 

	8.2	Surrender of Stock. To the extent that a Stock Option Agreement so provides, payment may be made in whole or in part by surrendering, or attesting to ownership of, Shares which have already been owned by the
Optionee; provided, however, that payment may not be made in such form if such action would cause the Company to recognize any (or additional) compensation expense with respect to the Option for financial reporting purposes. Such
Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date of Option exercise. 

  

	8.3	Services Rendered. As determined by the Board in its discretion, Shares may be awarded under the Plan in consideration of past services rendered to the Company, a Parent or Subsidiary. 

 

	8.4	Promissory Notes. To the extent that a Stock Option Agreement or Restricted Share Agreement so provides, payment may be made in whole or in part with a full-recourse promissory note executed by the Optionee or
Purchaser. The interest rate payable under the promissory note shall not be less than the minimum rate required to avoid the imputation of income for U.S. federal income tax purposes. Shares shall be pledged as security for payment of the principal
amount of the promissory note, and interest thereon; provided, that if the Optionee or Purchaser is a Consultant, such note must be collateralized with such additional security as required by applicable laws. In no event shall the
stock certificate(s) representing such Shares be released to the Optionee or Purchaser until such note is paid in full. Subject to the foregoing, the Board shall determine the term, interest rate and other provisions of the note. 

 

	8.5	Exercise/Sale. To the extent that a Stock Option Agreement so provides and a public market for the Shares exists, payment may be made in whole or in part by delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 

  
 -7- 

	8.6	Exercise/Pledge. To the extent that a Stock Option Agreement so provides and a public market for the Shares exists, payment may be made in whole or in part by delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker or lender approved by the Company to pledge Shares, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any
withholding taxes. 

  

	8.7	Other Forms of Payment. To the extent provided in the Stock Option Agreement or Restricted Share Agreement, payment may be made in any other form that is consistent with applicable laws, regulations and rules.

 SECTION 9. ADJUSTMENT OF SHARES. 
  

	9.1	General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has
a material effect on the Fair Market Value of the Stock, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a spin-off, a reclassification, or a similar occurrence, the Board shall make
appropriate adjustments to one or more of the following: (i) the number of Shares available for future awards under Section 5; (ii) the number of Shares covered by each outstanding Option; (iii) the Exercise Price under each
outstanding Option; or (iv) the price of Shares subject to the Company’s right of repurchase. 

  

	9.2	Dissolution or Liquidation. To the extent not previously exercised or settled, Options shall terminate immediately prior to the dissolution or liquidation of the Company. 

 

	9.3	Mergers and Consolidations. In the event that the Company is a party to a merger or other consolidation, or in the event of a transaction providing for the sale of all or substantially all of the Company’s
stock or assets, outstanding Options shall be subject to the agreement of merger, consolidation or sale. Such agreement may provide for one or more of the following: (i) the continuation of the outstanding Options by the Company, if the Company
is a surviving corporation; (ii) the assumption of the Plan and outstanding Options by the surviving corporation or its parent; (iii) the substitution by the surviving corporation or its parent of options with substantially the same terms
for such outstanding Options; (iv) immediate exercisability of such outstanding Options followed by the cancellation of such Options; or (v) settlement of the full value of the outstanding Options (whether or not then exercisable) in cash
or cash equivalents followed by the cancellation of such Options; in each case without the Optionee’s consent. 

  

	9.4	Reservation of Rights. Except as provided in this Section 9, an Optionee or offeree shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any
dividend or any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment
by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. 

  
 -8- 

 SECTION 10. REPURCHASE RIGHTS. 
  

	10.1	Company’s Right To Repurchase Shares. The Company shall have the right to repurchase Shares that have been acquired through an award or sale of Shares or exercise of an Option upon termination of the
Purchaser’s or Optionee’s Service if provided in the applicable Restricted Share Agreement or Stock Option Agreement. 

 SECTION 11.
WITHHOLDING TAXES. 
  

	11.1	General. An Optionee or Purchaser or his or her successor shall make arrangements satisfactory to the Board for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise
in connection with the Plan. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied. 

  

	11.2	Share Withholding. The Board may permit an Optionee or Purchaser to satisfy all or part of his or her withholding or income tax obligations by having the Company withhold all or a portion of any Shares that
otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired; provided, however, that in no event may an Optionee or Purchaser surrender Shares in excess of the legally
required withholding amount. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. Any payment of taxes by assigning Shares to the Company may be subject to restrictions, including any
restrictions required by rules of any federal or state regulatory body or other authority. 

  

	11.3	Cashless Exercise/Pledge. The Board may provide that if Company Shares are publicly traded at the time of exercise, arrangements may be made to meet the Optionee’s or Purchaser’s withholding obligation
by cashless exercise or pledge. 

  

	11.4	Other Forms of Payment. The Board may permit such other means of tax withholding as it deems appropriate. 

SECTION 12. SECURITIES LAW REQUIREMENTS. 
  

	12.1	General. Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the
Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be listed.

  

	12.2	Voting and Dividend Rights. The holders of Shares acquired under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Restricted Share Agreement, however, may
require that the holders of Shares invest any cash dividends received in additional Shares. Such additional Shares shall be subject to the same conditions and restrictions as the award with respect to which the dividends were paid.

  
 -9- 

	12.3	Financial Reports. At least annually, the Company shall furnish its financial statements, including a balance sheet regarding the Company’s financial condition and results of operations, to Optionees,
Purchasers and stockholders who have received Shares under the Plan, unless such persons are key employees whose duties at the Company assure them access to equivalent information. Financial statements need not be audited. 

SECTION 13. NO RETENTION RIGHTS. 
 No
provision of the Plan, or any right or Option granted under the Plan, shall be construed to give any Optionee or Purchaser any right to become an Employee, to be treated as an Employee, or to continue in Service for any period of time, or restrict
in any way the rights of the Company (or Parent or subsidiary to whom the Optionee or Purchaser provides Service), which rights are expressly reserved, to terminate the Service of such person at any time and for any reason, with or without cause,
without thereby incurring any liability to him or her. 
 SECTION 14. DURATION AND AMENDMENTS. 

 

	14.1	Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board, subject to the approval of the Company’s stockholders. In the event that the stockholders
fail to approve the Plan within twelve (12) months after its adoption by the Board, any grants, exercises or sales that have already occurred under the Plan shall be rescinded, and no additional grants, exercises or sales shall be made under
the Plan after such date. The Plan shall terminate automatically ten (10) years after its adoption by the Board. The Plan may be terminated on any earlier date pursuant to Section 14.2 below. 

 

	14.2	Right to Amend or Terminate the Plan. The Board may amend, suspend, or terminate the Plan at any time and for any reason. An amendment of the Plan shall not be subject to the approval of the Company’s
stockholders unless it (i) increases the number of Shares available for issuance under the Plan (except as provided in Section 9) or (ii) materially changes the class of persons who are eligible for the grant of Options or the award
or sale of Shares. 

  

	14.3	Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the
Plan, or any amendment thereof, shall not adversely affect any Shares previously issued or any Option previously granted under the Plan without the holder’s consent. 

  
 -10- 

 SECTION 15. EXECUTION. 

To record the adoption of the Plan by the Board on September 7, 2004, effective on such date, the Company has caused its authorized
officer to execute the same. 
  

			
	CARA THERAPEUTICS, INC.
		
	 By
	 	
		 	  

	 Name:
	 	Derek Chalmers
	 Title:
	 	Chairman, President and Chief
		 	Executive Officer, and Treasurer

  
 -11- 

 Amendments to 2004 Stock Incentive Plan 

Effective February 24, 2005, the 2004 Stock Incentive Plan was amended by the Board and stockholders to increase the number of shares of
Common Stock reserved for issuance from 1,000,000 to 1,045,000. 
 Effective November 17, 2006, the 2004 Stock Incentive Plan was
amended by the Board and stockholders to increase the number of shares of Common Stock reserved for issuance from 1,045,000 to 2,045,000. 

Effective July 19, 2010, the 2004 Stock Incentive Plan was amended by the Board and stockholders to increase the number of shares of
Common Stock reserved for issuance from 2,045,000 to 3,341,501. 

 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933
OR THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS OR IF THE COMPANY IS
PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER U.S. FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS IS NOT REQUIRED. 

CARA THERAPEUTICS, INC. 

2004 STOCK INCENTIVE PLAN 

NOTICE OF STOCK OPTION GRANT 

CARA THERAPEUTICS, INC. (the “Company”) hereby grants you the following Option to purchase shares of its common stock
(“Shares”). The terms and conditions of this Option are set forth in the Stock Option Agreement and the Cara Therapeutics, Inc. 2004 Stock Incentive Plan (the “Plan”), both of which are attached to and made a part of this
document. 
 Date of Grant: 
 Name of Optionee:

 Number of Option Shares: 
  

	Exercise Price per Share:	$0. per Share 

 Vesting Start Date: 

 

	Type of Option:	ISO 

  

	Vesting Schedule:	The Option vests with respect to the first 25% of the Shares when the Optionee completes 12 months of continuous Service after the Vesting Start Date and with respect to an additional 1/48th of the Shares when the Optionee completes each full month of continuous Service thereafter. 

  

	Payment Forms:	By cash, cash equivalents, or Shares owned by the Optionee for at least six months, and if the Company’s Shares become publicly traded, by “cashless” exercise, as set forth in the Stock Option Agreement.

 By signing this document, you acknowledge receipt of a copy of the Plan, and agree that (a) you have carefully
read, fully understand and agree to all of the terms and conditions described in the attached Stock Option Agreement, the Plan document and “Notice of Exercise and Common Stock Purchase Agreement” (the “Exercise Notice”);
(b) you hereby make the purchaser’s investment representations contained in the Exercise Notice with respect to the grant of this Option; (c) you understand and agree that this Stock Option 

 

  
 CARA
THERAPEUTICS, INC. 
 NOTICE OF STOCK OPTION
GRANT 
 -1- 

 Agreement, including its cover sheet and attachments, constitutes the entire understanding between you and the
Company regarding this Option, and that any prior agreements, commitments or negotiations concerning this Option are replaced and superseded; and (d) you have been given an opportunity to consult legal counsel with respect to all matters
relating to this Option prior to signing this cover sheet and that you have either consulted such counsel or voluntarily declined to consult such counsel. 
  

							
		 		 	CARA THERAPEUTICS, INC.
		 		 	
	 	 		 	
		 		 	By:	 	 
		 		 		 	
		 		 	Its:	 	 

  

  
 CARA
THERAPEUTICS, INC. 
 NOTICE OF STOCK OPTION
GRANT 
 -2- 

 CARA THERAPEUTICS, INC. 

2004 STOCK INCENTIVE PLAN 

STOCK OPTION AGREEMENT 
 SECTION
1. KIND OF OPTION. 
 This Option is intended to be either an Incentive Stock Option intended to meet the requirements of
section 422 of the Internal Revenue Code (an “ISO”) or a Non-Statutory Option (an “NSO”), which is not intended to meet the requirements of an ISO, as indicated in the Notice of Stock Option Grant. Even if this Option is
designated as an ISO, it shall be deemed to be an NSO to the extent required by the $100,000 annual limitation under Section 422(d) of the Code. 

SECTION 2. VESTING. 

Subject to the terms and conditions of the Plan and this Stock Option Agreement (the “Agreement”), your Option will be exercisable
with respect to the Shares that have become vested in accordance with the schedule set forth in the Notice of Stock Option Grant. After your Service terminates for any reason, vesting of your Shares immediately stops and your Option expires
immediately as to the number of Shares that are not vested as of your Service termination date. 
 SECTION 3. TERM. 

Your Option will expire in any event at the close of business at Company Headquarters ten (10) years after the Date of Grant; provided,
however, that if your Option is an ISO it will expire five (5) years after the Date of Grant if you are a Ten-Percent Stockholder of the Company (the “Expiration Date”). Also, your Option will expire earlier if your Service
terminates, as described below. 
 SECTION 4. REGULAR TERMINATION. 

 

	 	(a)	If your Service terminates for any reason except death or disability, the vested portion of your Option will expire at the close of business at Company Headquarters on the date three (3) months after your
termination of Service. During that three (3) month period, you may exercise the portion of your Option that was vested on your termination date. Notwithstanding the foregoing, the Option may not be exercised after the Expiration Date
determined under Section 3 above. 

  

	 	(b)	If your Option is an ISO and you exercise it more than three months after termination of your Service as an Employee for any reason other than death or Disability expected to result in death or to last for a continuous
period of at least twelve (12) months, your Option will cease to be eligible for ISO tax treatment. 

  
 CARA
THERAPEUTICS, INC. 
 STOCK OPTION AGREEMENT 

-1- 

	 	(c)	Your Option will cease to be eligible for ISO tax treatment if you exercise it more than three months after the 90th day of a bona fide leave of absence approved by the Company, unless your right to reemployment after
your leave was guaranteed by statute or contract. 

 SECTION 5. DEATH. 

If you die while in Service with the Company, the vested portion of your Option will expire at the close of business at Company headquarters on
the date twelve (12) months after the date of your death. During that twelve (12) month period, your estate, legatees or heirs may exercise that portion of your Option that was vested on the date of your death. Notwithstanding the
foregoing, the Option may not be exercised after the Expiration Date determined under Section 3 above. 
 SECTION 6. DISABILITY.

  

	 	(a)	If your Service terminates because of a Disability, the vested portion of your Option will expire at the close of business at Company headquarters on the date six (6) months after your termination date. During that
six (6) month period, you may exercise that portion of your Option that was vested on the date of your Disability. “Disability” means that you are unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment. Notwithstanding the foregoing, the Option may not be exercised after the Expiration Date determined under Section 3 above. 

 

	 	(b)	If your Option is an ISO and your Disability is not expected to result in death or to last for a continuous period of at least twelve (12) months, your Option will be eligible for ISO tax treatment only if it is
exercised within three (3) months following the termination of your Service as an Employee. 

 SECTION 7. EXERCISING YOUR
OPTION. 
 To exercise your Option, you must execute the Notice of Exercise and Common Stock Purchase Agreement (the “Exercise
Notice”), attached as Exhibit A. You must submit this form, together with full payment, to the Company. Your exercise will be effective when it is received by the Company. If someone else wants to exercise your Option after your death,
that person must prove to the Company’s satisfaction that he or she is entitled to do so. 
 SECTION 8. PAYMENT FORMS. 

When you exercise your Option, you must include payment of the Exercise Price for the Shares you are purchasing in one of the payment forms
indicated in the cover sheet. To the extent that a public market for the Shares exists and to the extent permitted by applicable law, in each case as determined by the Company, you also may exercise your Option by delivery (on a form prescribed by
the Company) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price. The Company will provide the forms necessary to make such a
cashless exercise. 

  
 CARA
THERAPEUTICS, INC. 
 STOCK OPTION AGREEMENT 

-2- 

 SECTION 9. TAX WITHHOLDING AND REPORTING. 

 

	 	(a)	You will not be allowed to exercise this Option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the Option exercise or the sale of Shares acquired upon
exercise of this Option. 

  

	 	(b)	If you sell or otherwise dispose of any of the Shares acquired pursuant to an ISO on or before the later of (i) two years after the grant date, or (ii) one year after the exercise date, you shall immediately
notify the Company in writing of such disposition. 

 SECTION 10. RIGHT OF FIRST REFUSAL. 

In the event that you propose to sell, pledge or otherwise transfer to a third party any Shares acquired under this Agreement, or any interest
in such Shares, the Company shall have a “Right of First Refusal” with respect to such Shares in accordance with the provisions of the Exercise Notice. 

SECTION 11. RESALE RESTRICTIONS/MARKET STAND-OFF. 

In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement
filed under the U.S. Securities Act of 1933, as amended, including the Company’s initial public offering, you may be prohibited from engaging in any transaction with respect to any of the Company’s common stock without the prior written
consent of the Company or its underwriters in accordance with the provisions of the Exercise Notice. 
 SECTION 12. TRANSFER OF OPTION.

 Prior to your death, only you may exercise this Option. This Option and the rights and privileges conferred hereby cannot be sold,
pledged or otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process. For instance, you may not sell this Option or use it as security for a loan. If you
attempt to do any of these things, this Option will immediately become invalid. You may, however, dispose of this Option in your will. Regardless of any marital property settlement agreement, the Company is not obligated to honor an Exercise Notice
from your spouse or former spouse, nor is the Company obligated to recognize such individual’s interest in your Option in any other way. 

SECTION 13. RETENTION RIGHTS. 

This Agreement does not give you the right to be retained by the Company in any capacity. The Company reserves the right to terminate your
Service at any time and for any reason without thereby incurring any liability to you. 

  
 CARA
THERAPEUTICS, INC. 
 STOCK OPTION AGREEMENT 

-3- 

 SECTION 14. STOCKHOLDER RIGHTS. 

Neither you nor your estate or heirs have any rights as a stockholder of the Company until a certificate for the Shares acquired upon exercise
of this Option has been issued. No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued, except as described in the Plan. 

SECTION 15. ADJUSTMENTS. 

In the event of a stock split, a stock dividend or a similar change in the Company’s Stock, the number of Shares covered by this Option
and the Exercise Price per share may be adjusted pursuant to the Plan. Your Option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity as set forth in
the Plan. 
 SECTION 16. LEGENDS. 

All certificates representing the Shares issued upon exercise of this Option shall, where applicable, have endorsed thereon the following
legends: 
 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS OR IF THE COMPANY
IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER U.S. FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS IS NOT REQUIRED. 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL HOLDER HEREOF. SUCH AGREEMENT PROVIDES FOR CERTAIN TRANSFER RESTRICTIONS, INCLUDING RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SECURITIES. THE SECRETARY OF THE
COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE. 

  
 CARA
THERAPEUTICS, INC. 
 STOCK OPTION AGREEMENT 

-4- 

 If the Option is an ISO, then the following legend should be included: 

THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED UPON EXERCISE OF AN INCENTIVE STOCK OPTION, AND THE COMPANY MUST BE NOTIFIED IF THE
SHARES SHALL BE TRANSFERRED BEFORE THE LATER OF THE TWO (2) YEAR ANNIVERSARY OF THE DATE OF GRANT OF THE OPTION OR THE ONE (1) YEAR ANNIVERSARY OF THE DATE ON WHICH THE OPTION WAS EXERCISED. THE REGISTERED HOLDER MAY RECOGNIZE ORDINARY
INCOME IF THE SHARES ARE TRANSFERRED BEFORE SUCH DATE. 
 SECTION 17. APPLICABLE LAW AND TAX DISCLAIMER. 

This Agreement will be interpreted and enforced under the laws of the State of New York (without regard to their choice of law provisions). You
agree that you are responsible for consulting your own tax advisor as to the tax consequences associated with your Option. The tax rules governing options are complex, change frequently and depend on the individual taxpayer’s situation.
Although the Company will make available to you general tax information about stock options, you agree that the Company shall not be held liable or responsible for making such information available to you and any tax or financial consequences that
you may incur in connection with your Option. 
 SECTION 18. THE PLAN AND OTHER AGREEMENTS. 

The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan.
The Notice of Stock Option Grant, this Agreement, including its attachments, and the Plan constitute the entire understanding between you and the Company regarding this Option. Any prior agreements, commitments or negotiations concerning this Option
are superseded. 

  
 CARA
THERAPEUTICS, INC. 
 STOCK OPTION AGREEMENT 

-5- 

 EXHIBIT A 

CARA THERAPEUTICS, INC. 2004 STOCK INCENTIVE PLAN 

NOTICE OF EXERCISE AND COMMON STOCK PURCHASE AGREEMENT 

THIS AGREEMENT is dated as of
                    ,         , between CARA THERAPEUTICS, INC. (the “Company”), and XXX
(“Purchaser”). 
 W I T N E S E T H: 

WHEREAS, the Company and Purchaser are parties to a stock option agreement dated as of
                    ,          (the “Option Agreement”) under which Purchaser has the right to
purchase up to XXXX shares of the Company’s common stock (the “Option Shares”); and 
 WHEREAS, the Option is exercisable
with respect to certain of the Option Shares as of the date hereof; and 
 WHEREAS, pursuant to the Option Agreement, Purchaser desires to
purchase shares of the Company as herein described, on the terms and conditions set forth in this Agreement, the Option Agreement and the Cara Therapeutics, Inc. 2004 Stock Incentive Plan (the “Plan”). Certain capitalized terms used in
this Agreement are defined in the Plan. 
 NOW, THEREFORE, it is agreed between the parties as follows:  

SECTION 1. PURCHASE OF SHARES. 

(i) Pursuant to the terms of the Option Agreement, Purchaser hereby agrees to purchase from the Company and the Company agrees to sell and
issue to Purchaser             shares of the Company’s common stock (the “Common Stock”) for the Exercise Price per share specified in the Option Agreement payable by
personal check, cashier’s check, money order or otherwise as permitted by the Option Agreement. Payment shall be delivered at the Closing, as such term is defined below. 

(ii) The closing (the “Closing”) under this Agreement shall occur at the offices of the Company as of the date hereof, or such other
time and place as may be designated by the Company (the “Closing Date”). 
 SECTION 2. ADJUSTMENT OF SHARES. 

Subject to the provisions of the Certificate of Incorporation of the Company, if (a) there is any stock dividend or liquidating dividend
of cash and/or property, stock split or other change in the character or amount of any of the outstanding securities of the Company, or (b) there is any consolidation, merger or sale of all or substantially all of the assets of the Company,
then, in such event, any and all new, substituted or additional securities or other property to which Purchaser is entitled by reason of Purchaser’s ownership of the shares shall be immediately subject to the Right of First Refusal, as defined
below, with the same force and effect as the shares subject to the Right of First Refusal. Appropriate adjustments shall be made to the 

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT A TO STOCK OPTION
AGREEMENT 
 NOTICE OF EXERCISE AND COMMON
STOCK PURCHASE AGREEMENT 
 A-1 

 number and/or class of shares subject to the Right of First Refusal to reflect the exchange or distribution of
such securities. In the event of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, the Right of First Refusal may be exercised by the Company’s successor. 

SECTION 3. THE COMPANY’S RIGHT OF FIRST REFUSAL. 

Before any shares of Common Stock registered in the name of Purchaser may be sold or transferred, such shares shall first be offered to the
Company as follows (the “Right of First Refusal”): 
 (i) Purchaser shall promptly deliver a notice (“Notice”) to the
Company stating (i) Purchaser’s bona fide intention to sell or transfer such shares, (ii) the number of such shares to be sold or transferred, and the basic terms and conditions of such sale or transfer, (iii) the price for which
Purchaser proposes to sell or transfer such shares, (iv) the name of the proposed purchaser or transferee, and (v) proof satisfactory to the Company that the proposed sale or transfer will not violate any applicable U.S. federal, state or
foreign securities laws. The Notice shall be signed by both Purchaser and the proposed purchaser or transferee and must constitute a binding commitment subject to the Company’s Right of First Refusal as set forth herein. 

(ii) Within thirty (30) days after receipt of the Notice, the Company may elect to purchase all or any portion of the shares to which the
Notice refers, at the price per share specified in the Notice. If the Company elects not to purchase all or any portion of the shares, the Company may assign its right to purchase all or any portion of the shares. The assignees may elect within
thirty (30) days after receipt by the Company of the Notice to purchase all or any portion of the shares to which the Notice refers, at the price per share specified in the Notice. An election to purchase shall be made by written notice to
Purchaser. Payment for shares purchased pursuant to this Section 3 shall be made within thirty (30) days after receipt of the Notice by the Company and, at the option of the Company, may be made by cancellation of all or a portion of
outstanding indebtedness, if any, or in cash or both. 
 (iii) If all or any portion of the shares to which the Notice refers are not elected
to be purchased, as provided in subparagraph 3(b), Purchaser may sell those shares to any person named in the Notice at the price specified in the Notice, provided that such sale or transfer is consummated within sixty (60) days of the date of
said Notice to the Company, and provided, further, that any such sale is made in compliance with applicable U.S. federal, state and foreign securities laws and not in violation of any other contractual restrictions to which Purchaser is bound. The
third-party purchaser shall be bound by, and shall acquire the shares of stock subject to, the provisions of this Agreement, including the Company’s Right of First Refusal. 

(iv) Any proposed transfer on terms and conditions different from those set forth in the Notice, as well as any subsequent proposed transfer
shall again be subject to the Company’s Right of First Refusal and shall require compliance with the procedures described in this Section 3. 

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT A TO STOCK OPTION
AGREEMENT 
 NOTICE OF EXERCISE AND COMMON
STOCK PURCHASE AGREEMENT 
 A-2 

 (v) Purchaser agrees to cooperate affirmatively with the Company, to the extent reasonably
requested by the Company, to enforce rights and obligations pursuant to this Agreement. 
 (vi) Notwithstanding the above, neither the
Company nor any assignee of the Company under this Section 3 shall have any right under this Section 3 at any time subsequent to the closing of a public offering of the common stock of the Company pursuant to a registration statement
declared effective under the U.S. Securities Act of 1933, as amended (the “Securities Act”). 
 (vii) This Section 3 shall not
apply to (i) a transfer by will or intestate succession, or (ii) a transfer to one or more members of Purchaser’s Immediate Family (defined below) or to a trust established by Purchaser for the benefit of Purchaser and/or one or more
members of Purchaser’s Immediate Family, provided that the transferee agrees in writing on a form prescribed by the Company to be bound by all of the provisions of this Agreement to the same extent as they apply to Purchaser. The transferee
shall execute a copy of the attached Exhibit B and file the same with the Secretary of the Company. For purposes of this Agreement, Immediate Family means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, and shall include adoptive relationships. 
 SECTION
4. PURCHASER’S RIGHTS AFTER EXERCISE OF RIGHT OF FIRST REFUSAL. 
 If the Company makes available, at the time and place
and in the amount and form provided in this Agreement, the consideration for the Common Stock to be repurchased in accordance with the provisions of Section 3 of this Agreement, then from and after such time the person from whom such shares are
to be repurchased shall no longer have any rights as a holder of such shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such shares shall be deemed to have been repurchased in accordance with
the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement. 
 SECTION 5.
LEGEND OF SHARES. 
 All certificates representing the Common Stock purchased under this Agreement shall, where applicable, have
endorsed thereon the following legends and any other legends required by applicable securities laws: 
 THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT
PROVISIONS OF U.S. FEDERAL AND STATE OR APPLICABLE FOREIGN SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER U.S. FEDERAL AND STATE OR APPLICABLE FOREIGN
SECURITIES LAWS IS NOT REQUIRED. 

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT A TO STOCK OPTION
AGREEMENT 
 NOTICE OF EXERCISE AND COMMON
STOCK PURCHASE AGREEMENT 
 A-3 

 THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, ENCUMBERED OR IN ANY
MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL HOLDER HEREOF. SUCH AGREEMENT PROVIDES FOR CERTAIN TRANSFER RESTRICTIONS, INCLUDING RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER
OF THE SECURITIES. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE. 

If the Option is an ISO, then the following legend should be included: 

THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED UPON EXERCISE OF AN INCENTIVE STOCK OPTION, AND THE COMPANY MUST BE NOTIFIED IF THE
SHARES SHALL BE TRANSFERRED BEFORE THE LATER OF THE TWO (2) YEAR ANNIVERSARY OF THE DATE OF GRANT OF THE OPTION OR THE ONE (1) YEAR ANNIVERSARY OF THE DATE ON WHICH THE OPTION WAS EXERCISED. THE REGISTERED HOLDER MAY RECOGNIZE ORDINARY
INCOME IF THE SHARES ARE TRANSFERRED BEFORE SUCH DATE. 
 SECTION 6. PURCHASER’S INVESTMENT REPRESENTATIONS. 

(i) This Agreement is made with Purchaser in reliance upon Purchaser’s representation to the Company, which by Purchaser’s acceptance
hereof Purchaser confirms, that the Common Stock which Purchaser will receive will be acquired with Purchaser’s own funds for investment for an indefinite period for Purchaser’s own account, not as a nominee or agent, and not with a view
to the sale or distribution of any part thereof, and that Purchaser has no present intention of selling, granting participation in, or otherwise distributing the same, but subject, nevertheless, to any requirement of law that the disposition of
Purchaser’s property shall at all times be within Purchaser’s control. By executing this Agreement, Purchaser further represents that Purchaser does not have any contract, understanding or agreement with any person to sell, transfer, or
grant participation to such person or to any third person, with respect to any of the Common Stock. 
 (ii) Purchaser understands that the
Common Stock will not be registered or qualified under applicable U.S. federal, state or foreign securities laws on the ground that the sale provided for in this Agreement is exempt from registration or qualification under applicable U.S. federal,
state or foreign securities laws and that the Company’s reliance on such exemption is predicated on Purchaser’s representations set forth herein. 

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT A TO STOCK OPTION
AGREEMENT 
 NOTICE OF EXERCISE AND COMMON
STOCK PURCHASE AGREEMENT 
 A-4 

 (iii) Purchaser agrees that in no event shall Purchaser make a disposition of any of the Common
Stock (including a disposition under Section 3 of this Agreement), unless and until (i) Purchaser shall have notified the Company of the proposed disposition and shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition and (ii) Purchaser shall have furnished the Company with an opinion of counsel satisfactory to the Company to the effect that (A) such disposition will not require registration or qualification of such
Common Stock under applicable U.S. federal, state or foreign securities laws or (B) appropriate action necessary for compliance with the applicable U.S. federal, state or foreign securities laws has been taken or (iii) the Company shall
have waived, expressly and in writing, its rights under clauses (i) and (ii) of this Section. 
 (iv) With respect to a transaction
occurring prior to such date as the Plan and Common Stock there-under are covered by a valid Form S-8 or similar U.S. federal registration statement, this Subsection shall apply unless the transaction is covered by an exemption. In connection with
the investment representations made herein, Purchaser represents that Purchaser is able to fend for himself or herself in the transactions contemplated by this Agreement, has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of Purchaser’s investment, has the ability to bear the economic risks of Purchaser’s investment and has been furnished with and has had access to such information as would be made available in the
form of a registration statement together with such additional information as is necessary to verify the accuracy of the information supplied and to have all questions answered by the Company. 

(v) Purchaser understands that if the Company does not register with the U.S. Securities and Exchange Commission pursuant to section 12 of the
U.S. Securities Exchange Act of 1934, as amended, or if a registration statement covering the Common Stock (or a filing pursuant to the exemption from registration under Regulation A of the Securities Act) under the Securities Act is not in effect
when Purchaser desires to sell the Common Stock, Purchaser may be required to hold the Common Stock for an indeterminate period. Purchaser also acknowledges that Purchaser understands that any sale of the Common Stock which might be made by
Purchaser in reliance upon Rule 144 under the Securities Act may be made only in limited amounts in accordance with the terms and conditions of that Rule. 

SECTION 7. NO DUTY TO TRANSFER IN VIOLATION OF THIS AGREEMENT. 

The Company shall not be required (a) to transfer on its books any shares of Common Stock of the Company which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement or (b) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares shall have been so
transferred. 
 SECTION 8. RIGHTS OF PURCHASER. 

(i) Except as otherwise provided herein, Purchaser shall, during the term of this Agreement, exercise all rights and privileges of a
stockholder of the Company with respect to the Common Stock. 
 (ii) Nothing in this Agreement shall be construed as a right by Purchaser to
be retained by the Company, or a parent or subsidiary of the Company in any capacity. The Company reserves the right to terminate Purchaser’s Service at any time and for any reason without thereby incurring any liability to Purchaser. 

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT A TO STOCK OPTION
AGREEMENT 
 NOTICE OF EXERCISE AND COMMON
STOCK PURCHASE AGREEMENT 
 A-5 

 SECTION 9. RESALE RESTRICTIONS/MARKET STAND-OFF. 

Purchaser hereby agrees that in connection with any underwritten public offering by the Company of its equity securities pursuant to an
effective registration statement filed under the Securities Act, including the Company’s initial public offering, Purchaser shall not, directly or indirectly, engage in any transaction prohibited by the underwriter, or sell, make any short sale
of, contract to sell, transfer the economic risk of ownership in, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any
Common Stock without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or such underwriters. Such period of time shall not
exceed one hundred eighty (180) days and may be required by the underwriter as a market condition of the offering; provided, however, that if either (a) during the last seventeen (17) days of such one hundred eighty (180) day
period, the Company issues an earnings release or material news or a material event relating to the Company occurs or (b) prior to the expiration of such one hundred eighty (180) day period, the Company announces that it will release
earnings results during the sixteen (16) day period beginning on the last day of the one hundred eighty (180) day period, then the restrictions imposed during such one hundred eighty (180) day period shall continue to apply until the
expiration of the eighteen (18) day period beginning on the issuance of the earnings release or the occurrence of the material news or material event; provided, further, that in the event the Company or the underwriter requests that the one
hundred eighty (180) day period be extended or modified pursuant to then-applicable law, rules, regulations or trading policies, the restrictions imposed during the one hundred eighty (180) day period shall continue to apply to the extent
requested by the Company or the underwriter to comply with such law, rules, regulations or trading policies. Purchaser hereby agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which
are consistent with the foregoing or which are necessary to give further effect thereto. To enforce the provisions of this Section, the Company may impose stop-transfer instructions with respect to the Common Stock until the end of the applicable
stand-off period. 
 SECTION 10. OTHER NECESSARY ACTIONS. 

The parties agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of
this Agreement. 
 SECTION 11. NOTICE. 

Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon the earliest of
personal delivery, receipt or the third full day following deposit in the United States Post Office with postage and fees prepaid, addressed to the other party hereto at the address last known or at such other address as such party may designate by
ten (10) days’ advance written notice to the other party hereto. 

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT A TO STOCK OPTION
AGREEMENT 
 NOTICE OF EXERCISE AND COMMON
STOCK PURCHASE AGREEMENT 
 A-6 

 SECTION 12. SUCCESSORS AND ASSIGNS. 

This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer herein set
forth, be binding upon Purchaser and Purchaser’s heirs, executors, administrators, successors and assigns. The failure of the Company in any instance to exercise the Right of First Refusal described herein shall not constitute a waiver of any
other Right of First Refusal that may subsequently arise under the provisions of this Agreement. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of a like
or different nature. 
 SECTION 13. APPLICABLE LAW. 

This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, as such laws are applied to contracts
entered into and performed in such state. 
 SECTION 14. NO ORAL MODIFICATION. 

No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto. 

SECTION 15. ENTIRE AGREEMENT. 

This Agreement, the Option Agreement and the Plan constitute the entire complete and final agreement between the parties hereto with regard to
the subject matter hereof. 
 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. 

CARA THERAPEUTICS, INC. 
  

							
		  		  	(PURCHASER)
	By	  	 	  		  	
		  		  		  	
		  		  		  	Signature
	Its	  	 	  		  	

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT A TO STOCK OPTION
AGREEMENT 
 NOTICE OF EXERCISE AND COMMON
STOCK PURCHASE AGREEMENT 
 A-7 

 EXHIBIT B 

ACKNOWLEDGMENT OF AND AGREEMENT TO BE BOUND 

BY THE NOTICE OF EXERCISE AND COMMON STOCK PURCHASE AGREEMENT 

OF 
 CARA THERAPEUTICS,
INC. 
 The undersigned, as transferee of shares of Cara Therapeutics, Inc. hereby acknowledges that he or she has read and reviewed the
terms of the Notice of Exercise and Common Stock Purchase Agreement of Cara Therapeutics, Inc. and hereby agrees to be bound by the terms and conditions thereof, as if the undersigned had executed said Agreement as an original party thereto. 

Dated:
                                        ,
            . 
  

			
		  	
		  	(Signature of Transferee)
		
		  	
		  	(Printed Name of Transferee)

  

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT B TO STOCK OPTION
AGREEMENT 
 ACKNOWLEDGEMENT OF AND AGREEMENT TO
BE BOUND BY THE NOTICE OF EXERCISE AND COMMON STOCK PURCHASE
AGREEMENT 
 B-1 

 EXHIBIT C 

U.S. FEDERAL TAX INFORMATION 

(Current as of July 2008) 
 The
following memorandum briefly summarizes current U.S. federal income tax law. The discussion is intended to be used solely for general information purposes and does not make specific representations to any participant. A taxpayer’s particular
situation may be such that some variation of the basic rules is applicable to him or her. In addition, the U.S. federal income tax laws and regulations are revised frequently and may change again in the future. Each participant is urged to consult a
tax advisor, both with respect to U.S. federal income tax consequences as well as any foreign, state or local tax consequences, before exercising any option or before disposing of any shares of stock acquired under the Plan. 

Initial Grant of Options 
 The grant of an
option, whether a nonqualified or nonstatutory stock option (“NSO”) or an incentive stock option (“ISO”), is not a taxable event for the Optionee, and the Company obtains no deduction for the grant of the option. Note, however,
that under new Section 409A of the Internal Revenue Code, which is generally effective January 1, 2005, options granted at a discount from fair market value may be considered “deferred compensation” subject to adverse tax
consequences, including immediate income tax upon the vesting of the option (whether or not exercised) and a 20% tax penalty. 
 Nonqualified or
Nonstatutory Stock Options 
 The exercise of an NSO is a taxable event to the Optionee. The amount by which the fair market value of the
shares on the date of exercise exceeds the exercise price (the “spread”) will be taxed to the Optionee as ordinary income. The spread will also be considered “wages” for purposes of FICA taxes. The Company will be entitled to a
deduction in the same amount as the ordinary income recognized by the Optionee from the exercise of the option that is reported to the IRS by the Optionee or the Company. In general, the Optionee’s tax basis in the shares acquired by exercising
an NSO is equal to the fair market value of such shares on the date of exercise. Upon a subsequent sale of any such shares in a taxable transaction, the Optionee will realize capital gain or loss (long-term or short-term, depending on whether the
shares were held for the required holding period before the sale) in an amount equal to the difference between his or her basis in the shares and the sale price. 

 

Internal Revenue Service regulations generally provide that, for the purpose of avoiding federal tax penalties, a taxpayer may
rely only on formal written advice meeting specific requirements. The tax discussion in this document does not meet those requirements. Accordingly, the tax discussion was not intended or written to be used, and it cannot be used, for the purpose of
avoiding federal tax penalties that may be imposed on you. Further, the tax discussion in this document could be considered to support the promotion or marketing of the transaction or matter discussed herein. You and any other person reading the tax
discussion should seek advice based on his, her or its particular circumstances from an independent tax advisor. 

  
 C-1 

 The capital gains holding periods are complex. If shares are held for more than one year, the
maximum tax rate on the gain has been reduced from twenty percent (20%) to fifteen percent (15%) for gain recognized on or after May 6, 2003, and before January 1, 2011. Because the rules are complex and can vary in individual
circumstances, each participant should consider consulting his or her own tax advisor. 
 If an Optionee exercises an NSO and pays the
exercise price with previously acquired shares of stock, special rules apply. The transaction is treated as a tax-free exchange of the old shares for the same number of new shares, except as described below with respect to shares acquired pursuant
to ISOs. The Optionee’s basis in the new shares is the same as his or her basis in the old shares, and the capital gains holding period runs without interruption from the date when the old shares were acquired. The value of any new shares
received by the Optionee in excess of the number of old shares surrendered minus any cash the Optionee pays for the new shares will be taxed as ordinary income. The Optionee’s basis in the additional shares is equal to the fair market value of
such shares on the date the shares were transferred, and the capital gain holding period commences on the same date. The effect of these rules is to defer recognition of any gain in the old shares when those shares are used to buy new shares. Stated
differently, these rules allow an Optionee to finance the exercise of an NSO by using shares of stock that he or she already owns, without paying current tax on any unrealized appreciation in those old shares. 

Incentive Stock Options 
 The holder of an
ISO will not be subject to U.S. federal income tax upon the exercise of the ISO, and the Company will not be entitled to a tax deduction by reason of such exercise, provided that the holder is employed by the Company on the exercise date (or the
holder’s employment terminated within the three (3) months preceding the exercise date). Exceptions to this exercise timing requirement apply in the event the Optionee dies or becomes disabled. A subsequent sale of the shares received upon
the exercise of an ISO will result in the realization of long-term capital gain or loss in the amount of the difference between the amount realized on the sale and the exercise price for such shares, provided that the sale occurs more than one
(1) year after the exercise of the ISO and more than two (2) years after the grant of the ISO. In general, if a sale or disposition of the shares occurs prior to satisfaction of the foregoing holding periods (referred to as a
“disqualifying disposition”), the Optionee will recognize ordinary income and the Company will be entitled to a corresponding deduction, generally equal to the amount of ordinary income recognized by the Optionee from the disqualifying
disposition that is reported to the IRS by the Optionee or the Company. 
 Favorable tax treatment is accorded to an Optionee only to the
extent that the value of the shares (determined at the time of grant) covered by an ISO first exercisable in any single calendar year does not exceed one hundred thousand dollars ($100,000). If ISOs for shares whose aggregate value exceeds one
hundred thousand dollars ($100,000) become exercisable in the same calendar year, the excess will be treated as NSOs. 
 A special rule
applies if an Optionee pays all or part of the exercise price of an ISO by surrendering shares of stock that he or she previously acquired by exercising any other ISO. If the Optionee has not held the old shares for the full duration of the
applicable holding periods, then the surrender of such shares to fund the exercise of the new ISO will be treated as a disqualifying disposition of the old shares. As described above, the result of a disqualifying disposition is the loss of
favorable tax treatment with respect to the acquisition of the old shares pursuant to the previously exercised ISO. 

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT C TO STOCK OPTION
AGREEMENT 
 U.S. FEDERAL TAX INFORMATION 

C-2 

 Where the applicable holding period requirements have been met, the use of previously acquired
shares of stock to pay all or a portion of the exercise price of an ISO may offer significant tax advantages. In particular, a deferral of the recognition of any appreciation in the surrendered shares is available in the same manner as discussed
above with respect to NSOs. 
 Alternative Minimum Tax 

Alternative minimum tax is paid when such tax exceeds a taxpayer’s regular U.S. federal income tax. Alternative minimum tax is calculated
based on alternative minimum taxable income, which is taxable income for U.S. federal income tax purposes, modified by certain adjustments and increased by tax preference items. 

The “spread” under an ISO—that is, the difference between (a) the fair market value of the shares of stock at exercise and
(b) the exercise price—is classified as alternative minimum taxable income for the year of exercise. Alternative minimum taxable income may be subject to the alternative minimum tax. However, if the shares of stock purchased upon the
exercise of an ISO are sold in the same taxable year in which they are acquired, then the amount includible in the taxpayer’s alternative minimum taxable income will in no event exceed the amount realized upon such sale less the option exercise
price paid for those shares. 
 In general, when a taxpayer sells stock acquired through the exercise of an ISO, only the difference between
the fair market value of the shares on the date of exercise and the date of sale is used in computing any alternative minimum tax for the year of the sale. The portion of a taxpayer’s alternative minimum tax attributable to certain items of tax
preference (including the spread upon the exercise of an ISO) can be credited against the taxpayer’s regular liability in later years subject to certain limitations. 

Withholding Taxes 
 Exercise of an NSO
produces taxable income which is subject to withholding. The Company will not deliver shares to the Optionee unless the Optionee has agreed to satisfactory arrangements for meeting all applicable U.S. federal, state and local withholding tax
requirements. 
 U.S. federal tax law does not require unrecognized gain on exercise of an ISO to be treated as “wages” for the
purposes of FICA taxes. 
 THIS TAX SUMMARY IS GENERAL IN NATURE AND SHOULD NOT BE RELIED UPON BY ANY PERSON IN DECIDING WHETHER OR WHEN
TO EXERCISE AN OPTION. EACH PERSON SHOULD CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THESE MATTERS. 

  
 CARA
THERAPEUTICS, INC. 
 EXHIBIT C TO STOCK OPTION
AGREEMENT 
 U.S. FEDERAL TAX INFORMATION 

C-3

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