STOCK OPTION AGREEMENT
ASSEMBLY PHARMACEUTICALS, INC.
|Name of Optionee:
||Xxxxx Small (the “Optionee”)|
|No. of Shares:
||1,500,000 Shares of Common Stock|
||May 16, 2014 (the “Grant Date”)|
||May 15, 2024 (the “Expiration Date”)|
|Option Exercise Price/Share:
||$0.689 (the “Option Exercise Price”)|
|Vesting Commencement Date:
||January 1, 2014|
This Non-Qualified Stock Option Agreement (this
“Agreement”) is entered into by and between the Optionee named above and Assembly Pharmaceuticals, Inc. (the
“Company”). Pursuant to this Agreement, the Company hereby grants to the Optionee, who is an officer, employee,
director, or consultant of the Company, an option (the “Stock Option”) to purchase on or prior to the Expiration
Date, or such earlier date as is specified herein, all or any part of the number of shares of Common Stock (“Common Stock”)
of the Company indicated above (the “Shares”), at the Option Exercise Price per share, subject to the terms
and conditions set forth in this Agreement. This Stock Option is not intended to qualify as an “incentive stock option”
as defined in Section 422(b) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”).
This Agreement is intended to constitute a compensatory benefit plan for purposes of Rule 701 of the Securities Act.
1. Definitions. For
the purposes of this Agreement, the following terms shall have the following respective meanings:
of any Person means a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with the first mentioned Person. A Person shall be deemed to control another Person if such first Person possesses
directly or indirectly the power to direct, or cause the direction of, the management and policies of the second Person, whether
through the ownership of voting securities, by contract or otherwise.
“Board” means the Board of
Directors of the Company.
shall mean (i) the Optionee’s dishonest statements or acts with respect to the Company or any Affiliate of the Company, or
any current or prospective customers, suppliers vendors or other third parties with which such entity does business; (ii) the Optionee’s
commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) the Optionee’s
failure to perform his assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues,
in the reasonable judgment of the Company, after written notice given to the Optionee by the Company; (iv) the Optionee’s
gross negligence, willful misconduct or insubordination with respect to the Company or any Affiliate of the Company; or (v) the
Optionee’s material violation of any provision of any agreement(s) between the Optionee and the Company relating to noncompetition,
nonsolicitation, nondisclosure and/or assignment of inventions.
means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.
means “disability” as defined in Section 422(c) of the Code.
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
Market Value” of the Stock
on any given date means the fair market value of the Stock determined in good faith by the Board based on the reasonable application
of a reasonable valuation method not inconsistent with Section 409A of the Code. If the Stock is admitted to trade on a national
securities exchange, the determination shall be made by reference to the closing price reported on such exchange. If there is no
closing price for such date, the determination shall be made by reference to the last date preceding such date for which there
is a closing price. If the date for which Fair Market Value is determined is the first day when trading prices for the Stock are
reported on a national securities exchange, the Fair Market Value shall be the “Price to the Public” (or equivalent)
set forth on the cover page for the final prospectus relating to the Company’s Initial Public Offering.
means, with respect to the Shares, the Person holding the Shares, including the Purchaser or any Permitted Transferee.
Public Offering” means the consummation of the first firm commitment underwritten
public offering pursuant to an effective registration statement under the Securities Act covering the offer and sale by the Company
of its equity securities, as a result of or following which the Stock shall be publicly held.
Transferees” shall mean any of the following to whom a Holder may transfer Shares hereunder (as set forth in Section
6): the Holder’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing the Holder’s household (other than a tenant or employee), a trust in which these persons have more than
fifty percent of the beneficial interest, a foundation in which these persons control the management of assets, and any other entity
in which these persons own more than fifty percent of the voting interests; provided, however, that any such trust does
not require or permit distribution of any Shares during the term of this Agreement unless subject to its terms. Upon the death
of the Holder, the term Permitted Transferees shall also include such deceased Holder’s estate, executors, administrators,
personal representatives, heirs, legatees and distributees, as the case may be.
shall mean any individual, corporation, partnership (limited or general), limited liability company, limited liability partnership,
association, trust, joint venture, unincorporated organization or any similar entity.
means the consummation of (i) the dissolution or liquidation of the Company, (ii) the sale of all or substantially all of
the assets of the Company on a consolidated basis to an unrelated person or entity, (iii) a merger, reorganization or consolidation
pursuant to which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own
a majority of the outstanding voting power of the surviving or resulting entity (or its ultimate parent, if applicable), (iv) the
acquisition of all or a majority of the outstanding voting stock of the Company in a single transaction or a series of related
transactions by a Person or group of Persons, or (v) any other acquisition of the business of the Company, as determined by the
Board; provided, however, that the Company’s Initial Public Offering, any subsequent public offering or another capital
raising event, or a merger effected solely to change the Company’s domicile shall not constitute a “Sale Event”;
and provided, further, that the acquisition of the Company by Ventrus Biosciences, Inc. as contemplated pursuant to that
certain Agreement and Plan of Merger and Reorganization by and among the Company, Ventrus Biosciences, Inc. and Assembly Acquisition,
Inc. dated May 16, 2014, as amended, shall not constitute a “Sale Event.”
409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
Relationship” means the Purchaser’s relationship as a part-time
employee, director or other key person (including a Consultant) of the Company or any Subsidiary or any successor entity (e.g.,
a Service Relationship shall be deemed to continue without interruption in the event an individual’s status change from part-time
employee to Consultant).
means the Common Stock, par value $0.00001 per share, of the Company.
means any corporation or other entity (other than the Company) in which the Company has more than a 50 percent interest, either
directly or indirectly.
Event” means the termination of the Purchaser’s Service Relationship
with the Company and its Subsidiaries for any reason whatsoever, regardless of the circumstances thereof, and including, without
limitation, upon death, disability, retirement, discharge or resignation for any reason, whether voluntarily or involuntarily.
The following shall not constitute a Termination Event: (i) a transfer to the service of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another Subsidiary or (ii) an approved leave of absence for military service
or sickness, or for any other purpose approved by the Board, if the individual’s right to re-employment is guaranteed either
by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Board otherwise so
provides in writing.
2. Vesting, Exercisability and Termination.
(a) No portion of this Stock Option may be
exercised until such portion shall have vested and become exercisable.
(b) Except as set forth below, and subject
to the determination of the Board in its sole discretion to accelerate the vesting schedule hereunder, this Stock Option shall
be vested and exercisable on the respective dates indicated below:
(i) This Stock Option shall vest
and become exercisable in accordance with the following schedule:
of the Shares underlying this Stock Option shall vest on a monthly basis beginning on the date one month after the Vesting
Commencement Date such that all Shares will be fully vested on the date three (3) years after the Vesting Commencement Date; provided,
that the Optionee continues to have a Service Relationship with the Company at such time; and provided, further, that all unvested
Shares underlying this Stock Option will vest in full immediately prior to the consummation of a Sale Event so long as the Optionee
continues to have a Service Relationship with the Company at such time.
(c) Termination. Except as may otherwise
be provided by the Board, if the Optionee’s Service Relationship is terminated, the period within which to exercise this
Stock Option will be subject to earlier termination as set forth below (and if not exercised within such period, shall thereafter
terminate subject, in each case, to Section 4 below):
(i) Termination Due to Death or
Disability. If the Optionee’s Service Relationship terminates by reason of such Optionee’s death or Disability,
this Stock Option may be exercised, to the extent exercisable on the date of such termination, by the Optionee, the Optionee’s
legal representative or legatee for a period of 12 months from the date of death or Disability or until the Expiration Date, if
(ii) Other Termination. If
the Optionee’s Service Relationship terminates for any reason other than death or Disability, and unless otherwise determined
by the Board, this Stock Option may be exercised, to the extent exercisable on the date of termination, for a period of 90 days
from the date of termination or until the Expiration Date, if earlier; provided however, if the Optionee’s
Service Relationship is terminated for Cause, this Stock Option shall terminate immediately upon the date of such termination.
For purposes hereof, the Board’s determination
of the reason for termination of the Optionee’s Service Relationship shall be conclusive and binding on the Optionee and
his or her representatives or legatees and any Permitted Transferee. Any portion of this Stock Option that is not vested and exercisable
on the date of termination of the Service Relationship shall terminate immediately and be null and void.
3. Exercise of Stock Option.
(a) The Optionee may exercise this Stock Option
only in the following manner: Prior to the Expiration Date, the Optionee may deliver a Stock Option exercise notice (an “Exercise
Notice”) in the form of Appendix A hereto indicating his or her election to purchase some or all of the Shares
with respect to which this Stock Option is then exercisable. Such notice shall specify the number of Shares to be purchased. Payment
of the purchase price may be made by one or more of the methods described in this Section 4, subject to the limitations contained
(b) Notwithstanding any other provision hereof,
no portion of this Stock Option shall be exercisable after the Expiration Date.
(c) Payment of the purchase price upon exercise
may be made by one or more of the following methods (or any combination thereof):
(i) In cash, by certified or bank
check, by wire transfer of immediately available funds, or other instrument acceptable to the Board;
(ii) If the Initial Public Offering
has occurred (or the Stock otherwise becomes publicly-traded), through the delivery (or attestation to the ownership) of Shares
that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject
to restrictions. To the extent required to avoid variable accounting treatment under ASC 718 or other applicable accounting rules,
such surrendered Shares if originally purchased from the Company shall have been owned by the Optionee for at least six months.
Such surrendered Shares shall be valued at Fair Market Value on the exercise date;
(iii) If the Initial Public Offering
has occurred (or the Stock otherwise becomes publicly-traded), by the Optionee delivering to the Company a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable
to the Company for the purchase price; provided that in the event the Optionee chooses to pay the purchase price as so provided,
the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements
as the Board shall prescribe as a condition of such payment procedure; or
(iv) By a “net exercise”
arrangement pursuant to which the Company will reduce the number of Shares issuable upon exercise by the largest whole number of
Shares with a Fair Market Value that does not exceed the aggregate exercise price
Payment instruments will be received subject
to collection. No certificates for Shares so purchased will be issued to the Optionee or, with respect to uncertificated Stock,
no transfer to the Optionee on the records of the Company will take place, until the Company has completed all steps it has deemed
necessary to satisfy legal requirements relating to the issuance and sale of the Shares, which steps may include, without limitation,
(i) receipt of a representation from the Optionee at the time of exercise of the Stock Option that the Optionee is purchasing the
Shares for the Optionee’s own account and not with a view to any sale or distribution of the Shares or other representations
relating to compliance with applicable law governing the issuance of securities, (ii) the legending of the certificate (or notation
on any book entry) representing the Shares to evidence the foregoing restrictions, and (iii) obtaining from Optionee payment or
provision for all withholding taxes due as a result of the exercise of the Stock Option. The delivery of certificates representing
the shares of Stock (or the transfer to the Optionee on the records of the Company with respect to uncertificated Stock) to be
purchased pursuant to the exercise of the Stock Option will be contingent upon (A) receipt from the Optionee (or a purchaser acting
in his or her stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such Shares
and the fulfillment of any other requirements contained in this Agreement or applicable provisions of laws and (B) if required
by the Company, the Optionee shall have entered into any stockholders agreements or other agreements with the Company and/or certain
other of the Company’s stockholders relating to the Stock. In the event the Optionee chooses to pay the purchase price by
previously-owned Shares through the attestation method, the number of Shares transferred to the Optionee upon the exercise of the
Stock Option shall be net of the number of Shares attested to.
4. Mergers and Other Transactions.
(a) Changes in Stock. If, as a result
of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change
in the Company’s capital stock, the Shares are increased or decreased or are exchanged for a different number or kind of
shares or other securities of the Company, or additional shares of capital stock or new or different shares or other securities
of the Company or other non-cash assets are distributed with respect to the Shares, in each case, without the receipt of consideration
by the Company, or, if, as a result of any merger or consolidation, or sale of all or substantially all of the assets of the Company,
the Shares are converted into or exchanged for other securities of the Company or any successor entity (or a parent or subsidiary
thereof), the Board shall make an appropriate and proportionate adjustment in (i) the number and kind of securities subject to
the Shares and (ii) the repurchase price per Share.
(b) Sale Events.
(i) Acceleration of Unvested Shares
in Sale Event. In the case of and subject to the consummation of a Sale Event, 100% of the Shares that are unvested shall automatically
be deemed vested in full immediately prior to the consummation of such Sale Event.
(ii) In the case of and subject to
the consummation of a Sale Event, the Stock Option shall terminate upon the effective time of any such Sale Event unless assumed
or continued by the successor entity, or a new stock option or other award of the successor entity or parent thereof is substituted
therefor, with an equitable or proportionate adjustment
as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree (after taking
into account any acceleration hereunder).
(iii) In the event of the termination
of the Stock Option, the Holder shall be permitted, within a period of time prior to the consummation of the Sale Event as specified
by the Board, to exercise all the Stock Option that is then exercisable or will become exercisable as of the effective time of
the Sale Event; provided, however, that the exercise of the Stock Option not exercisable prior to the Sale Event shall be
subject to the consummation of the Sale Event.
(iv) Notwithstanding anything to
the contrary in Section 4(b)(ii), in the event of a Sale Event, the Company shall have the right, but not the obligation,
to make or provide for a cash payment to the Holder, without any consent of the Holder, in exchange for the cancellation thereof,
in an amount equal to the difference between (A) the value as determined by the Board of the consideration payable per share of
Stock pursuant to the Sale Event (the “Sale Price”) times the number of Shares subject to outstanding Stock
Option being cancelled (to the extent then vested and exercisable, including by reason of acceleration in connection with such
Sale Event, at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding vested and
5. Transferability of Stock Option.
This Stock Option is personal to the Optionee and is not transferable by the Optionee in any manner other than by will or by the
laws of descent and distribution. The Stock Option may be exercised during the Optionee’s lifetime only by the Optionee (or
by the Optionee’s guardian or personal representative in the event of the Optionee’s incapacity). The Optionee may
elect to designate a beneficiary by providing written notice of the name of such beneficiary to the Company, and may revoke or
change such designation at any time by filing written notice of revocation or change with the Company; such beneficiary may exercise
the Optionee’s Stock Option in the event of the Optionee’s death to the extent provided herein. If the Optionee does
not designate a beneficiary, or if the designated beneficiary predeceases the Optionee, the legal representative of the Optionee
may exercise this Stock Option to the extent provided herein in the event of the Optionee’s death.
6. Transfer Restrictions; Company Right
of First Refusal.
(a) Restrictions on Transfer.
(i) Non-Transferability of Stock
Options. The Stock Option and, prior to exercise, the Shares issuable upon exercise of the Stock Option, shall not be transferable
by the Optionee otherwise than by will, or by the laws of descent and distribution, and the Stock Option shall be exercisable,
during the Optionee’s lifetime, only by the Optionee, or by the Optionee’s legal representative or guardian in the
event of the Optionee’s incapacity. Notwithstanding the foregoing, the Optionee may transfer by gift, without consideration
for the transfer, his or her Non-Qualified Stock Options to his or her family members (as defined in Rule 701 of the Securities
Act), to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners (to
the extent such trusts or partnerships are considered “family members” for purposes of Rule 701 of the Securities Act),
provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Agreement,
including the execution of a stock power upon the issuance of Shares. The Stock Option, and the Shares issuable upon exercise of
the Stock Option, shall be restricted as to any pledge, hypothecation, or other transfer, including any short position, any “put
equivalent position” (as defined in the Exchange Act) or any “call equivalent position” (as defined in the Exchange
Act) prior to exercise.
(ii) Shares. No Shares shall
be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of or encumbered, whether voluntarily
or by operation of law, unless (i) the transfer is in compliance with the terms of this Agreement and all applicable securities
laws (including, without limitation, the Securities Act), (ii) the transfer does not cause the Company to become subject to the
reporting requirements of the Exchange Act, and (iii) the transferee consents in writing to be bound by the provisions of this
Agreement, including this Section 6. In connection with any proposed transfer, the Board may require the transferor to provide
at the transferor’s own expense an opinion of counsel to the transferor, satisfactory to the Board, that such transfer is
in compliance with all foreign, federal and state securities laws (including, without limitation, the Securities Act). Any attempted
transfer of Shares not in accordance with the terms and conditions of this Section 6 shall be null and void, and the Company shall
not reflect on its records any change in record ownership of any Shares as a result of any such transfer, shall otherwise refuse
to recognize any such transfer and shall not in any way give effect to any such transfer of Shares. The Company shall be entitled
to seek protective orders, injunctive relief and other remedies available at law or in equity including, without limitation, seeking
specific performance or the rescission of any transfer not made in strict compliance with the provisions of this Section 6. Subject
to the foregoing general provisions, Shares may be transferred pursuant to the following specific terms and conditions:
(A) Transfers to Permitted Transferees.
The Holder may transfer any or all of the Shares to one or more Permitted Transferees; provided, however, that following
such transfer, such Shares shall continue to be subject to the terms of this Agreement (including this Section 6) and such Permitted
Transferee(s) shall, as a condition to any such transfer, deliver a written acknowledgment to that effect to the Company and shall
deliver a stock power to the Company with respect to the Shares. Notwithstanding the foregoing, the Holder may not transfer any
of the Shares to a Person whom the Company reasonably determines is a direct competitor or a potential competitor of the Company
or any of its Subsidiaries.
(B) Transfers Upon Death. Upon
the death of the Holder, any Shares then held by the Holder at the time of such death and any Shares acquired after the Holder’s
death by the Holder’s legal representative shall be subject to the provisions of this Agreement, and the Holder’s estate,
executors, administrators, personal representatives, heirs, legatees and distributees shall be obligated to convey such Shares
to the Company or its assigns under the terms contemplated by this Agreement.
(b) Right of First Refusal. In the event
that a Holder desires at any time to sell or otherwise transfer all or any part of his or her Shares, the Holder first shall give
written notice to the Company of the Holder’s intention to make such transfer. Such notice shall state the number of Shares
that the Holder proposes to sell (the “Offered Shares”), the price and the terms at which the proposed sale
is to be made and the name and address of the proposed transferee. At any time within 30 days after the receipt of such notice
by the Company, the Company or its assigns may elect to purchase all or any portion of the Offered Shares at the price and on the
terms offered by the proposed transferee and specified in the notice. The Company or its assigns shall exercise this right by mailing
or delivering written notice to the Holder within the foregoing 30-day period. If the Company or its assigns elect to exercise
its purchase rights under this Section 6(b), the closing for such purchase shall, in any event, take place within 45 days after
the receipt by the Company of the initial notice from the Holder. In the event that the Company or its assigns do not elect to
exercise such purchase right, or in the event that the Company or its assigns do not pay the full purchase price within such 45-day
period, the Holder shall be required to pay a transaction processing fee of $10,000 to the Company (unless waived by the Board)
and then may, within 60 days thereafter, sell the Offered Shares to the proposed transferee and at the same price and on the same
terms as specified in the Holder’s notice. Any Shares not sold to the proposed transferee shall remain subject to this Agreement.
If the Holder is a party to any stockholders agreements or other agreements with the Company and/or certain other of the Company’s
stockholders relating to the Shares, (i) the transferring Holder shall comply with the requirements of such stockholders agreements
or other agreements relating to any proposed transfer of the Offered Shares, and (ii) any proposed transferee that purchases Offered
Shares shall enter into such stockholders agreements or other agreements with the Company and/or certain of the Company’s
stockholders relating to the Offered Shares on the same terms and in the same capacity as the transferring Holder.
(c) Lockup Provision. If requested by
the Company, a Holder shall not sell or otherwise transfer or dispose of any Shares (including, without limitation, pursuant to
Rule 144 under the Securities Act) held by him or her for such period following the effective date of a public offering by the
Company of Shares as the Company shall specify reasonably and in good faith. If requested by the underwriter engaged by the Company,
each Holder shall execute a separate letter confirming his or her agreement to comply with this Section.
(d) Adjustments for Changes in Capital Structure.
If, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or
other similar change in the Common Stock, the outstanding Shares are increased or decreased or are exchanged for a different number
or kind of securities of the Company, the restrictions contained in this Section 6 shall apply with equal force to additional
and/or substitute securities, if any, received by Holder in exchange for, or by virtue of his or her ownership of, Shares.
(e) Termination. The terms and provisions
of Section 6(b) shall terminate upon the closing of the Company’s Initial Public Offering or upon consummation of any Sale
Event, in either case as a result of which Shares are registered under Section 12 of the Exchange Act and publicly-traded
on any national security exchange.
7. Miscellaneous Provisions.
(a) Equitable Relief. The parties hereto
agree and declare that legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief,
including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement.
(b) Adjustments for Changes in Capital Structure.
If, as a result of any reorganization, recapitalization, reincorporation, reclassification, stock dividend, stock split, reverse
stock split or other similar change in the Common Stock, the outstanding shares of Common Stock are increased or decreased or are
exchanged for a different number or kind of securities of the Company, the restrictions contained in this Agreement shall apply
with equal force to additional and/or substitute securities, if any, received by the Optionee in exchange for, or by virtue of
his or her ownership of, this Stock Option or Shares acquired pursuant thereto.
(c) Change and Modifications. This Agreement
may not be orally changed, modified or terminated, nor shall any oral waiver of any of its terms be effective. This Agreement may
be changed, modified or terminated only by an agreement in writing signed by the Company and the Optionee.
(d) Governing Law. This Agreement shall
be governed by and construed in accordance with the General Corporation Law of the State of Delaware as to matters within the scope
thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of Indiana, without
regard to conflict of law principles that would result in the application of any law other than the law of the state of Indiana.
(e) Headings. The headings are intended
only for convenience in finding the subject matter and do not constitute part of the text of this Agreement and shall not be considered
in the interpretation of this Agreement.
(f) Saving Clause. If any provision(s)
of this Agreement shall be determined to be illegal or unenforceable, such determination shall in no manner affect the legality
or enforceability of any other provision hereof.
(g) Notices. All notices, requests,
consents and other communications shall be in writing and be deemed given when delivered personally, by telex or facsimile transmission
or when received if mailed by first class registered or certified mail, postage prepaid. Notices to the Company or the Optionee
shall be addressed as set forth underneath their signatures below, or to such other address or addresses as may have been furnished
by such party in writing to the other.
(h) Benefit and Binding Effect. This
Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors, assigns, and
legal representatives. The Company has the right to assign this Agreement, and such assignee shall become entitled to all the rights
of the Company hereunder to the extent of such assignment.
(i) Counterparts. For the convenience
of the parties and to facilitate execution, this Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same document.
(j) Integration. This Agreement constitutes
the entire agreement between the parties with respect to this Stock Option and supersedes all prior agreements and discussions
between the parties concerning such subject matter.
8. Dispute Resolution.
(a) Except as provided below, any dispute arising
out of or relating to the Stock Option, this Agreement, or the breach, termination or validity of the Stock Option or this Agreement,
shall be finally settled by binding arbitration conducted expeditiously in accordance with the J.A.M.S./Endispute Comprehensive
Arbitration Rules and Procedures (the “J.A.M.S. Rules”). The arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. Sections 1-16, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction
thereof. The place of arbitration shall be Indianapolis, Indiana.
(b) The arbitration shall commence within 60
days of the date on which a written demand for arbitration is filed by any party hereto. In connection with the arbitration proceeding,
the arbitrator shall have the power to order the production of documents by each party and any third-party witnesses. In addition,
each party may take up to three depositions as of right, and the arbitrator may in his or her discretion allow additional depositions
upon good cause shown by the moving party. However, the arbitrator shall not have the power to order the answering of interrogatories
or the response to requests for admission. In connection with any arbitration, each party to the arbitration shall provide to the
other, no later than seven business days before the date of the arbitration, the identity of all persons that may testify at the
arbitration and a copy of all documents that may be introduced at the arbitration or considered or used by a party’s witness
or expert. The arbitrator’s decision and award shall be made and delivered within six months of the selection of the arbitrator.
The arbitrator’s decision shall set forth a reasoned basis for any award of damages or finding of liability. The arbitrator
shall not have power to award damages in excess of actual compensatory damages and shall not multiply actual damages or award punitive
damages, and each party hereby irrevocably waives any claim to such damages.
(c) The Company, the Optionee, each party to
the Agreement and any other holder of Shares issued pursuant to this Agreement (each, a “Party”) covenants and
agrees that such party will participate in the arbitration in good faith. This Section 8 applies equally to requests for temporary,
preliminary or permanent injunctive relief, except that in the case of temporary or preliminary injunctive relief any party may
proceed in court without prior arbitration for the limited purpose of avoiding immediate and irreparable harm.
(d) Each Party (i) hereby irrevocably submits
to the jurisdiction of any United States District Court of competent jurisdiction for the purpose of enforcing the award or decision
in any such proceeding, (ii) hereby waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such
suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above named courts, that its
property is exempt or immune from attachment or execution (except as protected by applicable law), that the suit, action or proceeding
is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court, and (iii) hereby waives and agrees not to seek any review by any
court of any other jurisdiction which may be called upon to grant an enforcement of the judgment of any such court. Each Party
hereby consents to service of process by registered mail at the address to which notices are to be given. Each Party agrees that
its, his or her submission to jurisdiction and its, his or her consent to service of process by mail is made for the express benefit
of each other Party. Final judgment against any Party in any such action, suit or proceeding may be enforced in other jurisdictions
by suit, action or proceeding on the judgment, or in any other manner provided by or pursuant to the laws of such other jurisdiction.
[SIGNATURE PAGE FOLLOWS]
The foregoing Agreement is hereby accepted and
the terms and conditions thereof hereby agreed to by the undersigned as of the date first above written.
||ASSEMBLY PHARMACEUTICALS, INC.|
||/s/ Xxxxx Xxxxxx|
||Name: Xxxxx Xxxxxx|
||Title: Chief Financial Officer|
||/s/ Xxxxx Small|
||Name: Xxxxx Small|
STOCK OPTION EXERCISE NOTICE
Assembly Pharmaceuticals, Inc.
Pursuant to the terms of the stock option agreement
between the undersigned and Assembly Pharmaceuticals, Inc. (the “Company”) dated __________ (the “Agreement”),
I, [Insert Name] ________________, hereby [Circle One] partially/fully exercise such option by including herein payment in the
amount of $______ representing the purchase price for [Fill in number of Shares] _______ Shares. I have chosen the following form(s)
||Certified or bank check payable to Assembly Pharmaceuticals, Inc.|
||Other (as referenced in the Agreement (please describe))|
In connection with my exercise of the option
as set forth above, I hereby represent and warrant to the Company as follows:
(i) I am purchasing the Shares for
my own account for investment only, and not for resale or with a view to the distribution thereof.
(ii) I have had such an opportunity
as I have deemed adequate to obtain from the Company such information as is necessary to permit me to evaluate the merits and risks
of my investment in the Company and have consulted with my own advisers with respect to my investment in the Company.
(iii) I have sufficient experience
in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make
an informed investment decision with respect to such purchase.
(iv) I can afford a complete loss
of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period of time.
(v) I understand that the Shares
may not be registered under the Securities Act of 1933 (it being understood that the Shares are being issued and sold in reliance
on the exemption provided in Rule 701 thereunder) or any applicable state securities or “blue sky” laws and may not
be sold or otherwise transferred or disposed of in the absence of an effective registration statement under the Securities Act
of 1933 and under any applicable state securities or “blue sky” laws (or exemptions from the registration requirement
thereof). I further acknowledge that certificates representing Shares will bear restrictive legends reflecting the foregoing and/or
that book entries for uncertificated Shares will include similar restrictive notations.
(vi) I have read and understand the
stock option agreement and acknowledge and agree that the Shares are subject to all of the relevant terms of the stock option agreement,
including without limitation, the transfer restrictions set forth in Section 6 of the Agreement.
(vii) I understand and agree that
the Company has a right of first refusal with respect to the Shares pursuant to Section 6(b) of the Agreement.
(viii) I understand and agree that
I may not sell or otherwise transfer or dispose of the Shares for a period of time following the effective date of a public offering
by the Company as described in Section 6(c) of the Agreement.