Exhibit 10.4  EXECUTIVE EMPLOYMENT AGREEMENT  This EXECUTIVE EMPLOYMENT
AGREEMENT (the Agreement) dated March  11, 2009 by and between Synergy
Pharmaceuticals,, Inc., a company incorporated under the laws of Florida
(the Company), and Gary S. Jacob, Ph.D., an individual (the Executive) with
reference to the following facts:  Callisto
Pharmaceuticals, Inc., a Delaware corporation (Callisto) owns
approximately 68% of the outstanding common stock of the Company.  Executive
serves as the CEO of Callisto and has been appointed President and Acting Chief
Executive Officer of the Company.  Both
Callisto Research and Synergy are engaged in the business of developing and
marketing drug products.  Company
and Executive desire to enter into an agreement to provide for Executives
employment by the Company upon the terms and conditions set forth in this
Agreement.  NOW THEREFORE, in
consideration of the foregoing facts and mutual agreements set forth below, the
parties, intending to be legally bound, agree as follows:  1.Employment.   The
Company hereby agrees to employ Executive, and Executive hereby accepts such
employment and agrees to perform Executives duties and responsibilities in
accordance with the terms and conditions hereinafter set forth.  1.1Duties and
Responsibilities.   Executive shall serve as Acting
Chief Executive Officer and President. During the Employment Term, Executive
shall perform all duties and accept all responsibilities incident to such
positions and other appropriate duties as may be assigned to Executive by the
Companys Board of Directors from time to time, and by the Chief Executive
Officer, when a Chief Executive Officer is appointed. Executive shall also
serve as a director of the Company if requested by the Companys Board of Directors,
and as an officer of one or more of the Companys subsidiaries without any
additional compensation. The Company shall retain full direction and control of
the manner, means and methods by which Executive performs the services for
which he is employed hereunder and of the place or places at which such
services shall be rendered. The Executive also agrees that in the absence of a
Chief Accounting Officer, he will sign various federal and state securities
filings as the Companys principal accounting officer.  1.2Employment Term.   The
term of Executives employment under this Agreement shall commence as of August 1,
2008 (the Effective Date) and shall continue until December 31, 2011,
unless earlier terminated in accordance with Section 4 hereof. The term of
Executives employment shall be automatically renewed for successive one (1) year
periods until the Executive or the Company delivers to the other party a
written notice of their intent not to renew the Employment Term,


such written notice to be delivered at least sixty (60) days prior to
the expiration of the then-effective Employment Term as that term is defined
below. The period commencing as of the Effective Date and ending December 31,
2011 or such later date to which the term of Executives employment under the
Agreement shall have been extended Agreement is referred to herein as the Employment
Term and the end of the Employment Term is referred to herein as the Expiration
Date.  1.3Extent of
Service.    Except for
discharging his duties as Chief Executive Officer of Callisto, the Companys
corporate parent, during the Employment Term, Executive agrees to use Executives
best efforts to carry out the duties and responsibilities under Section 1.1
hereof and to devote substantially all Executives business time, attention and
energy thereto. Executive further agrees not to work either on a part-time or
independent contracting basis for any other business or enterprise during the
Employment Term without the prior written consent of the Companys Board of
Directors (the Board), which consent shall not be unreasonably withheld.  1.4Base Salary.  (a)The Company
shall pay Executive a base salary (the Base Salary) at the annual rate of
$300,000 (U.S.) payable at such times as the Company customarily pays its other
senior level executives (but in any event no less often than monthly). The Base
Salary shall be subject to all state, federal, and local payroll tax
withholding and any other withholdings required by law. The overall cap of
$300,000 shall not be diminished by any bonus or accelerated payment benefit
given to Executive by Callisto.  The
Executives Base Salary may be increased, but not decreased by the Compensation
Panel.  Once increased, such increased
amount shall constitute the Executives Base Salary and shall not be decreased.  (b)It is expressly
acknowledged that Executives Base Salary shall be allocated between the
Company and Callisto, so that the aggregate Base Salary payable to the
Executive during the Employment Term from the Company and Callisto will not
exceed $300,000 (or such higher amount as is determined by the committee of the
Companys and/or Callistos Board of Directors empowered to fix or review
compensation of the other executive officers of the Company (the Compensation
Panel).  The current estimate of such
allocation is that 75% of the Executives Base Salary shall be payable by the
Company and 25% of such Base Salary shall by payable by Callisto, however such
allocation may change, no more frequently than once each fiscal quarter as
determined in good faith by the Companys Chief Financial Officer.  At any time if Callisto is not obligated to
or does not pay its allocated share of Executives Base Salary, the Company
shall pay Executives Base Salary in full, irrespective of any  accounting allocation.  The overall cap of $300,000 shall not be


diminished by any bonus or accelerated payment benefit given to
Executive by Callisto.  (c)In the event
Callisto is obligated to pay any item of compensation or reimburse expenses to
Executive under this Agreement, Callisto fails to do so and the Company makes
payment to the Executive pursuant to Section 1.4(b) of this
Agreement, the Company shall be subrogated to all claims of the Executive
against Callisto arising from Callistos failure to make payment to the extent
of such payments made to the Executive.  1.5Incentive
Compensation.  (a)Bonus.   Executive
shall be eligible to earn a cash bonus of up to 50% of his Base Salary per full
calendar year  during the Employment Term
(and a pro rated bonus for the period from August 1, 2008 to December 31,
2008) based on meeting performance objectives and bonus criteria to be mutually
identified by Executive and the Compensation Panel.  Bonuses, if any, shall be subject to all
applicable tax and payroll withholdings. 
The bonus shall be determined on or before March 1 of each year of
the Employment Term commencing March 1, 2009 and paid on or before April 14
of each year.  (b)Realization
Bonus.  (i)            In
the event during the Term of this Agreement the Company enters into either a
out-license agreement for any technology relating to the treatment of
gastrointestinal disorders that grants exclusive marketing rights to a third
party,  engages in a merger transaction
or a sale of substantially all of the assets of the Company that relate to the
treatment of gastrointestinal disorders or enters into a joint venture in which
the Company contributes such rights to the joint venture, in each case where
the Enterprise Value (defined below) equals or exceeds the minimum value of
$150 million, $200 million and $250 million in the first, second, third years
of the Term or any years beyond the third year of the Term, respectively,
(each, a  Realization Transaction), or the license fees the Company contracts
to receive (disregarding any contingencies to such payment) equals or exceeds
$50 million, the Company shall accrue  a
bonus  determined by multiplying the
Enterprise Value (defined below) in the case of a merger,  sale or 
the sum of the license fees actually received in the case of an out
license, as the case may be, by 0.5% (one half percent).  (ii)           The
accrued bonuses shall be payable to Executive (a) in cash in full 5
business days after the closing of any Realization Transaction involving a sale
or merger, notwithstanding that the consideration for such merger or sale
consists in whole or in part of securities of the acquiring company;  or (b) in cash 5 business days after the
Companys receipt of license fees at the rate of 0.5% of license fees actually
received.  The expiration or termination
of this Agreement shall not terminate or diminish the Executives right to
receive bonus payments with respect to out license fees collected after the
termination or expiration of this Agreement.


(iii) .   The Enterprise Value
in the case of a Change in Control in which consideration is payable to the
Company in respect of its assets or business, shall mean the total cash and
non-cash (including, without limitation, the assumption of debt) consideration
received by the Company or in the case of a Change in Control in which
consideration is payable to the Companys stockholders, the total cash and
non-cash (including, without limitation, the assumption of debt) consideration
payable to the Companys stockholders. Enterprise Value shall also include,
if applicable, any cash or non-cash consideration payable to the Company or to
the Companys stockholders on a contingent, earnout or deferred basis. To the
extent that any consideration in a transaction is not received in cash upon the
consummation of the Change in Control, the value of such non-cash consideration
for purposes of calculating the Enterprise Value will be determined by the
Board of Directors of the Company prior to the Change in Control in good faith.
In the event that less than 100% of the stock or assets of the Company is
purchased in the Change in Control transaction, the Enterprise Value shall be
extrapolated from the percentage of the Companys capital stock or assets
impacted in such Change in Control transaction to determine if the $400 million
threshold was exceeded, but the Transaction Fee shall be calculated based on
the actual consideration received by the Company or shareholders, as the case
may be. Section 4.2(b)(i), however, shall not apply to any event resulting
in a Change in Control in which neither the Company nor its stockholders
receives consideration either upon, or in connection with, the occurrence or
consummation of the event resulting in a Change in Control.  (c)Options.   The
Compensation Panel will consider grants of options to the Executive no less
frequently than annually commencing March 1, 2010.  (d)Executive
Benefits.   The Executive shall be entitled
to participate in all executive benefit or incentive compensation plans now
maintained or hereafter established by the Company for the purpose of providing
compensation and/or benefits to executives of the Company and any supplemental
retirement, salary continuation, stock option, deferred compensation,
supplemental medical or life insurance or other bonus or incentive compensation
plans. Unless otherwise provided herein, the Executives participation in such
plans shall be on the same basis and terms as other similarly situated
executives of the Company. No additional compensation provided under any of
such plans shall be deemed to modify or otherwise affect the terms of this
Agreement or any of the Executives entitlements hereunder.  1.6Other Benefits.   During
the Employment Term, Executive shall be entitled to participate in all employee
benefit plans and programs made available to the Companys senior level
executives as a group or to its employees generally, as such plans or programs
may be in effect from time to time (the Benefit Coverages), including,
without limitation, medical, dental, hospitalization, short-term and long-term
disability and life insurance plans, accidental death and dismemberment
protection and travel accident insurance. Executive shall be


provided office space and staff assistance appropriate for Executives
position and adequate for the performance of his duties.  1.7Reimbursement
of Expenses; Vacation; Sick Days and Personal Days.   Executive
shall be provided with reimbursement of expenses related to Executives
employment by the Company on a basis no less favorable than that which may be
authorized from time to time by the Board, in its sole discretion, for senior
level executives as a group. Executive shall be entitled to vacation and
holidays in accordance with the Companys normal personnel policies for senior
level executives, but not less than three (3) weeks of vacation per
calendar year, provided Executive shall not utilize more than ten (10) consecutive
business days without the express consent of the Board of Directors. Unused
vacation time will be forfeited as of December 31 of each calendar year of
the Employment Term. Executive shall be entitled to no more than an aggregate
of ten (10) sick days and personal days per calendar year.  1.8No Other Compensation.   Except
as expressly provided in Sections 1.4 through 1.8, Executive shall not be
entitled to any other compensation or benefits.  2.             Confidential
Information.   Executive recognizes and acknowledges that by
reason of Executives employment by and service to the Company before, during
and, if applicable, after the Employment Term, Executive will have access to
certain confidential and proprietary information relating to the Companys
business, which may include, but is not limited to, trade secrets, trade know-how,
product development techniques and plans, formulas, customer lists and
addresses, financing services, funding programs, cost and pricing information,
marketing and sales techniques, strategy and programs, computer programs and
software and financial information (collectively referred to as Confidential
Information). Executive acknowledges that such Confidential Information is a
valuable and unique asset of the Company and Executive covenants that he will
not, unless expressly authorized in writing by the Company, at any time during
the course of Executives employment use any Confidential Information or
divulge or disclose any Confidential Information to any person, firm or
corporation except in connection with the performance of Executives duties for
the Company and in a manner consistent with the Companys policies regarding
Confidential Information. Executive also covenants that at any time after the
termination of such employment, directly or indirectly, he will not use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation, unless such information is in the public
domain through no fault of Executive or except when required to do so by a
court of law, by any governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative body (including
a committee thereof) with apparent jurisdiction to order Executive to divulge,
disclose or make accessible such information. All written Confidential
Information (including, without limitation, in any computer or other electronic
format) which comes into Executives possession during the course of Executives
employment shall remain the property of the Company. Except as required in the
performance of Executives duties for the Company, or unless expressly
authorized in writing by the Company, Executive shall not remove any written
Confidential Information from the Companys premises, except in connection with
the performance of Executives duties for the Company and in a manner
consistent with the Companys policies regarding Confidential Information. Upon
termination of Executives employment, the Executive


agrees
to return immediately to the Company all written Confidential Information
(including, without limitation, in any computer or other electronic format) in
Executives possession. As a condition of Executives continued employment with
the Company and in order to protect the Companys interest in such proprietary
information, the Company shall require Executives execution of a
Confidentiality Agreement and Inventions Agreement in the form attached hereto
as Exhibit B, and incorporated herein by this reference.  3.Non-Competition;
Non-Solicitation.  3.5Non-Compete.   The
Executive hereby covenants and agrees that during the term of this Agreement
and for a period of one year following the end of the Employment Term, the
Executive will not, without the prior written consent of the Company, directly
or indirectly, on his own behalf or in the service or on behalf of others,
whether or not for compensation, engage in any business activity, or have any
interest in any person, firm, corporation or business, through a subsidiary or
parent entity or other entity (whether as a shareholder, agent, joint venturer,
security holder, trustee, partner, Executive, creditor lending credit or money
for the purpose of establishing or operating any such business, partner or
otherwise) with any Competing Business in the Covered Area. For the purpose of
this Section 3.1, (i) Competing Business means any biotechnology or
pharmaceutical company, any contract manufacturer, any research laboratory or
other company or entity (whether or not organized for profit) that has, or is
seeking to develop, one or more products or therapies that is related to
azaspiranes and guanylyl cyclase receptor agonists and (ii) Covered Area
means all geographical areas of the United States and  foreign jurisdictions where the Company then
has offices and/or sells its products directly or indirectly through
distributors and/or other sales agents. Notwithstanding the foregoing, the
Executive may own shares of companies whose securities are publicly trades, so
long as such securities do not constitute more than one percent (1%) of the
outstanding securities of any such company.  3.6Non-Solicitation.   The
Executive further agrees that as long as the Agreement remains in effect and
for a period of one (1) year from its termination, the Executive will not
divert any business of the Company and/or its affiliates or any customers or
suppliers of the Company and/or the Companys and/or its affiliates business
to any other person, entity or competitor, or induce or attempt to induce,
directly or indirectly, any person to leave his or her employment with the
Company.  3.7Remedies.   The
Executive acknowledges and agrees that his obligations provided herein are
necessary and reasonable in order to protect the Company and its affiliates and
their respective business and the Executive expressly agrees that monetary
damages would be inadequate to compensate the Company and/or its affiliates for
any breach by the Executive of his covenants and agreements set forth herein.
Accordingly, the Executive agrees and acknowledges that any such violation or
threatened violation of this Section 3 will cause irreparable injury to
the Company and that, in addition to any other remedies that may be available,
in


law, in equity or otherwise, the Company and its affiliates shall be
entitled to obtain injunctive relief against he threatened breach of this Section 3
or the continuation of any such breach by the Executive without the necessity
of proving actual damages.  4.             Termination.  4.5Termination
Without Cause or for Good Reason.  (c)If this
Agreement is terminated by the Company other than for Cause (as defined in Section 10.4
hereof) or as a result of Executives death or Permanent Disability (as defined
in Section  hereof), or if Executive terminates his employment for Good
Reason (as defined in Section  hereof) prior to the Expiration Date,
Executive shall receive or commence receiving as soon as practicable in
accordance with the terms of this Agreement:  (i)a severance
payment (the Severance Payment), which amount shall be paid in a cash lump
sum within ten (10) days of the date of termination, in an amount equal to
the higher of the aggregate amount of the Executives Base Salary for the then
remaining term of this Agreement or twelve times the average monthly Base
Salary paid or accrued during the three 
full calendar months immediately preceding such termination;  (ii)expense
compensation, which shall be paid in a lump sum payment within ten (10) days
of the date of termination, in an amount equal to twelve times the sum of average
Base Salary during the three  full months
immediately preceding such termination of providing the services to Executive
set forth in Section  and Executives reimbursed expenses set forth in Section ;  (iii)immediate
vesting of all unvested stock options and the extension of the exercise period
of such options to the later of the longest period permitted by the Companys
stock option plans or ten years following the Termination Date;  (iv)payment in
respect of compensation earned but not yet paid (the Compensation Payment)
which amount shall be paid in a cash lump sum within ten (10) days of the
date of termination; and  (v)payment of the
cost of comprehensive medical insurance for Executive for a period of  twelve months following the termination.  (d)For purposes of
this Agreement, Good Reason shall mean any of the following (without
Executives express prior written consent):


(i)Any material
breach by Company of any provision of this Agreement, including any material
reduction by Company of Executives duties or responsibilities (except in
connection with the termination of Executives employment for Cause, as a
result of Permanent Disability, as a result of Executives death or by
Executive other than for Good Reason);  (ii)A reduction by
the Company in Executives Base Salary or any 
failure of the Company to reimburse Executive for material expenses
described in Section 1.7;  (iii)The failure by
the Company to obtain the specific assumption of this Agreement by any
successor or assign of Company as provided for in Section 11
hereof;  (iv)Moving the
principal offices of Company to a location outside of the Metropolitan New York
Area; or  (v)Upon a Change
of Control of Company (as such term is hereinafter defined).  (e)The following
provisions shall apply in the event compensation provided in Section  becomes payable to the Executive:  (i)if the
severance compensation provided for in subsection   above 
cannot be finally determined on or before the tenth day following such
termination, the Company shall pay to the Executive on such day an estimate, as
determined in good faith by the Company of the minimum amount of such compensation
and shall pay the remainder of such compensation (together with interest at the
Federal short-term rate provided in Section 1274(d)(7)(C)(1) of the Code) as
soon as the amount thereof can be determined but in no event later than the
thirtieth day after the Date of Termination. In the event the amount of the
estimated payment exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive payable on
the fifth day after demand by the Company (together with interest at the
Federal short-term rate provided in Section 1274(d)(7)(C)(1) of the Code).  (ii)If the payment
of the Total Payments (as defined below) will be subject to the tax (the Excise
Tax) imposed by Section 4999 of the Code, the Company shall pay the Executive
on or before the tenth day following the Date of Termination, an additional
amount (the Gross-Up Payment) such that the net amount retained by the
Executive, after deduction of any Excise Tax on Total Payments and any federal
and state and local income tax and Excise Tax


upon the payment provided for by this paragraph, shall be equal to the
Total Payments. For purposes of determining whether any of the payments will be
subject to the Excise Tax and the amount of such Excise Tax, (A) any payments
or benefits received or to be received by the Executive in connection with a
Change in Control of the Company or the Executives termination of employment,
whether payable pursuant to the terms of Section 10 of this Agreement or any
other plan, arrangement or agreement with the Company, its successors, any
person whose actions result in a Change in Control of the Company or any
corporation affiliated (or which, as a result of the completion of transaction
causing such a Change in control, will become affiliated) with the Company
within the meaning of Section 1504 of Code (the Total Payments) shall be
treated as parachute payments within the meaning of Section 28OG(b)(2) of the
Code, and all excess parachute payments within the meaning of Section 28OG(b)(1)
shall be treated as subject to the Excise Tax, unless, in the opinion of tax
counsel selected by the Companys independent auditors and acceptable to the
Executive, the Total Payments (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of Section
28OG(b)(4) of the Code either in their entirety or in excess of the base amount
within the meaning of Section 28OG(b)(3) of the Code, or are otherwise not
subject to the Excise Tax, (B) the amount of the Total Payments that shall be
treated as subject to the Excise Tax shall be equal to the lesser of (I) the
total amount of the Total Payments or (II) the amount of excess parachute
payments or benefit shall be determined by the Companys independent auditors
in accordance with the principles of Section 28OG(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment, the Executive
shall be deemed to pay federal income taxes at the highest marginal rate of
federal income taxation in the calendar year in which the Gross-Up Payment is
to be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executives residence an the Date of
Termination, net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes. In the event the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of the Executives employment, the
Executive shall repay to the Company at the time the amount of such reduction
in Excise Tax is finally determined the portion of the Gross-Up Payment that
can be repaid such that the Executive remains whole on an after-tax basis
following such repayment (taking into account any reduction in income or excise


taxes to the Executive from such repayment) plus interest on the amount
of such repayment at the Federal short-term rate provided in Section 1274(d)(1)(C)(i)
of the Code. In the event the Excise Tax is determined to exceed the amount
taken into account hereunder at the time of the termination of the Executives
employment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional gross-up payment in respect of such excess (plus any
interest payable with respect to such excess) at the time that the amount of
such excess is finally determined.  4.6Permanent
Disability.   If Executive becomes totally and
permanently disabled (as defined in the Companys disability benefit plan
applicable to senior executive officers as in effect on the date thereof) (Permanent
Disability), Company or Executive may terminate this Agreement on written
notice thereof, and Executive shall receive or commence receiving, as soon as
practicable:  (c)amounts payable
pursuant to the terms of the disability insurance policy or similar arrangement
which Company maintains for the Executive, if any, during the term hereof;  (d)the
Compensation Payment which shall be paid to Executive as a cash lump sum within
30 days of such termination; and  (e)immediate
vesting of all unvested stock options.  4.7Death.   In
the event of Executives death during the term of his employment hereunder,
Executives estate or designated beneficiaries shall receive or commence
receiving, as soon as practicable in accordance with the terms of this
Agreement:  (c)compensation
equal to one years Base Salary (calculate by multiplying the average monthly
Base Salary paid or accrued for the three full calendar months immediately such
event, which shall be paid within 30 days of such termination;  (d)any death
benefits provided under the Executive benefit programs, plans and practices in
which the Executive has an interest, in accordance with their respective terms;  (e)the
Compensation Payment which shall be paid to Executives estate as a cash lump
sum within 30 days of such termination; and  (f)such other
payments under applicable plans or programs to which Executives estate or
designated beneficiaries are entitled pursuant to the terms of such plans or
programs.


4.8Voluntary
Termination by Executive: Discharge for Cause.   The
Company shall have the right to terminate this Agreement for Cause (as
hereinafter defined). In the event that Executives employment is terminated by
Company for Cause, as hereinafter defined, or by Executive other than for Good
Reason or other than as a result of the Executives Permanent Disability or
death, prior to the Termination Date, Executive shall be entitled only to
receive, as a cash lump sum within 30 days of such termination, the
Compensation Payment.  As used herein,
the term Cause shall be limited to (a) willful malfeasance or willful
misconduct by Executive in connection with the services to the Company in a
matter of material importance to the conduct of the Companys affairs which has
a material adverse affect on the business of the Company, or (b) the conviction
of Executive for commission of a felony. 
For purposes of this subsection, no act or failure to act on the
Executives part shall be considered willful unless done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company.  Termination of this Agreement for Cause
pursuant to this Section  shall be made
by delivery to Executive of a copy of a resolution duly adopted by the
affirmative vote of all of the members of the Board of Directors called and
held for such purpose (after 30 days prior written notice to Executive and
reasonable opportunity for Executive to be heard before the Board of Directors
prior to such vote), finding that in the good faith business judgment of such
Board of Directors, Executive was guilty of conduct set forth in any of clauses
(a) through (b) above and specifying the particulars thereof.  5.Change In
Control.  5.5Definition.   For
purposes of this Agreement, a Change in Control shall be deemed to have
occurred if (i) there shall be consummated (A) any consolidation or merger of
the Company in which the Company is not the continuing or surviving corporation
or pursuant to which shares of the Companys Common Stock would be converted
into cash, securities or other property, other than a merger of the Company in
which the holders of the Companys Common Stock immediately prior to the merger
have substantially the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (B) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company, or (ii) the
stockholders of the Company shall approve any plan or proposal for the
liquidation or dissolution of the Company, or (iii) any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the
Exchange Act)), other than the Company or any executive benefit plan
sponsored by the Company, or such person on the Effective Date hereof is a 20%
or more beneficial owner, shall become the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act) of securities of the Company representing
20% or more of the combined voting power of the Companys then outstanding
securities ordinarily (and apart from rights accruing in special circumstances)
having the right to vote in the election of directors, as a result of a tender
or exchange offer, open market purchases, privately negotiated purchases or


otherwise, or (iv) at any time during a period of two consecutive
years, individuals who at the beginning of such period, constituted the Board
of Directors of the Company shall cease for any reason to constitute at least a
majority thereof, unless the election or the nomination for election by the
Companys stockholders of each new director during such two-year period was
approved by a vote of at least two-thirds of the directors then still in
office, who were directors at the beginning of such two-year period.  5.6Rights and
Obligations.   If a Change in Control of the
Company shall have occurred while the Executive is director of the Company, the
Executive shall be entitled to the compensation provided in Section  of this Agreement upon the subsequent
termination of this Agreement by either the Company, or the Executive within
two years of the date upon which the Change in Control shall have occurred,
unless such termination is a result of (i) the Executives death; (ii) the
Executives Disability; (iii) the Executives Retirement; or (iv) the Executives
termination for Cause.  6.Assignment.This
Agreement shall be binding upon and inure to the benefit of the heirs and
representatives of Executive and the assigns and successors of Company, but
neither this Agreement nor any rights or obligations hereunder shall be
assignable or otherwise subject to hypothecation by Executive (except by will
or by operation of the laws of intestate succession or by Executive notifying
the Company that cash payment be made to an affiliated investment partnership
in which Executive is a control person) or by Company, except that Company may
assign this Agreement to any successor (whether by merger, purchase or
otherwise) to all or substantially all of the stock, assets or businesses of
Company, if such successor expressly agrees to assume the obligations of
Company hereunder.  7.Indemnification.  Executive, as such and as a
Director of the Company, shall be indemnified by the Company against all
liability incurred by the Executive in connection with any proceeding,
including, but not necessarily limited to, the amount of any judgment obtained
against Executive, the amount of any settlement entered into by the Executive
and any claimant with the approval of the Company, attorneys fees, actually
and necessarily incurred by him in connection with the defense of any action,
suit, investigation or proceeding or similar legal activity, regardless of
whether criminal, civil, administrative or investigative in nature (Claim),
to which he is made a party or is otherwise subject to, by reason of his being
or having been a director, officer, agent or employee of the Company, to the
full extent permitted by applicable law and the Certificate of Incorporation of
the Company..  Such right of
indemnification will not be deemed exclusive of any other rights to which Executive
may be entitled under Companys Certificate of Incorporation or By-laws, as in
effect from time to time, any agreement or otherwise.  8.General
Provisions.  8.5Modification:
No Waiver.   No modification, amendment or
discharge of this Agreement shall be valid unless the same is in writing and
signed by all parties hereto. Failure of any party at any time to enforce any
provisions of this


Agreement or any rights or to exercise any elections hall in no way be
considered to be a waiver of such provisions, rights or elections and shall in
no way affect the validity of this Agreement. The exercise by any party of any
of its rights or any of this elections under this Agreement shall not preclude
or prejudice such party from exercising the same or any other right it may have
under this Agreement irrespective of any previous action taken.  8.6Notices.   All
notices and other communications required or permitted hereunder or necessary
or convenient in connection herewith shall be in writing and shall be deemed to
have been given when hand delivered or mailed by registered or certified mail
as follows (provided that notice of change of address shall be deemed given
only when received):  If
to the Company, to:  Synergy Pharmaceuticals, Inc. 420 Lexington Avenue, Suite 60 New
York, NY 10070  If
to Executive, to: Gary
S. Jacob, Ph.D.  Or to such other names or
addresses as the Company or Executive, as the case may be, shall designate by
notice to each other person entitled to receive notices in the manner specified
in this Section.  8.7Governing Law.   This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.  8.8Further
Assurances.   Each party to this Agreement
shall execute all instruments and documents and take all actions as may be
reasonably required to effectuate this Agreement.  8.9Severability.   Should
any one or more of the provisions of this Agreement or of any agreement entered
into pursuant to this Agreement be determined to be illegal or unenforceable,
then such illegal or unenforceable provision shall be modified by the proper
court or arbitrator to the extent necessary and possible to make such provision
enforceable, and such modified provision and all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement
shall be given effect separately from the provisions or portion thereof
determined to be illegal or unenforceable and shall not be affected thereby.  8.10Successors and
Assigns.   Executive may not assign this Agreement without the
prior written consent of the Company. The Company may assign its rights without
the written consent of the executive, so long as the Company or its assignee
complies with the other material terms of this Agreement. The rights and
obligations of the Company under this Agreement shall inure to the benefit of
and


be binding upon the successors and permitted assigns of the Company,
and the Executives rights under this Agreement shall inure to the benefit of
and be binding upon his heirs and executors. The Companys subsidiaries and
controlled affiliates shall be express third party beneficiaries of this
Agreement.  8.11Entire
Agreement.   This Agreement supersedes all prior agreements and
understandings between the parties, oral or written. No modification, termination
or attempted waiver shall be valid unless in writing, signed by the party
against whom such modification, termination or waiver is sought to be enforced.  8.12Counterparts;
Facsimile.   This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be deemed to be
an original, and all of which taken together shall constitute one and the same
instrument. This Agreement may be executed by facsimile with original
signatures to follow.  IN WITNESS WHEREOF, the
undersigned, intending to be legally bound, have executed this Agreement as of
the date first written above.  EXECUTIVE:
  
  SYNERGY
  PHARMACEUTICALS, INC./s/
  Gary S. Jacob
  
  /s/ Bernard DenoyerGary
  S. Jacob, Ph.D.
  
  Bernard
  Denoyer, Senior Vice President, Finance