Exhibit 10.3


 


SYNERGY PHARMACEUTICALS INC.


 


RESTRICTED STOCK PURCHASE AGREEMENT


 


THIS AGREEMENT is made as of July      
2008 at New York, New York, between Synergy Pharmaceuticals Inc. a Delaware
corporation (the “Company”), and                                                                            
(the “Purchaser”).


 


WHEREAS the Purchaser is a
service provider of the Company, and the Purchaser’s continued participation is
considered by the Company to be important for the Company’s continued growth; and


 


WHEREAS in order to give the
Purchaser an opportunity to acquire an equity interest in the Company as an
incentive for the Purchaser to participate in the affairs of the Company, the
Company has agreed to sell the Purchaser shares of its Common Stock as set
forth in this Restricted Stock Purchase Agreement (the “Agreement”).


 


THEREFORE, the parties agree as
follows:


 


1.                                       Sale
of Stock. The Company hereby agrees to sell to the Purchaser and the
Purchaser hereby agrees to purchase                   shares of the
Company’s Common Stock (the “Shares”), at a price of $0.001 per share.


 


2.                                       Payment
of Purchase Price. The purchase price for the Shares is payable on or
before 5:30PM New York Time on the third business days following the date of
this Agreement by delivery of a check to the Company.  The failure to make payment by that date and
time will void the sale of the Shares and relieve the Company of any
obligations under this Agreement.


 


3.                                       Repurchase
Option.


 


(a)                                  In
the event the Purchaser ceases to be an employee, officer, director or
consultant of or to the Company (any such position constituting a “Service
Provider”) for any reason, except the termination of Purchaser’s position by
the Company, or no reason (including death or disability) before all of the
Shares are released from the Company’s repurchase option (see Section 4),
the Company shall, upon the date of such termination (as reasonably fixed and
determined by the Company) have an irrevocable, exclusive option for a period
of sixty (60) days from such date to repurchase up to that number of shares
which constitute the Unreleased Shares (as defined in Section 4) at the
original purchase price per share (the “Repurchase Price”). Said option shall
be exercised by the Company by delivering written notice to the Purchaser or
the Purchaser’s executor (with a copy to the Escrow Holder (as defined in Section 6))
AND, at the Company’s option, by delivering to the Purchaser or the Purchaser’s
executor a check in the amount of the aggregate Repurchase Price. Upon delivery
of such notice and the payment of the aggregate Repurchase Price in any of the
ways described above, the Company shall become the legal and beneficial owner
of the Shares being repurchased and all rights and interests therein or
relating thereto, and the Company shall have the right to retain and transfer
to its own name the number of Shares being repurchased by the Company.


 

















 


(b)                                   Whenever
the Company shall have the right to repurchase Shares hereunder, the Company
may designate and assign one or more employees, officers, directors of the
Company or other persons or organizations to exercise all or a part of the
Company’s purchase rights under this Agreement and purchase all or a part of
such Shares.


 


4.                                       Release
of  Shares From Repurchase Option.


 


(a)                                    50% of the Shares shall be released
from the Company’s repurchase option one year after the date of this Agreement;
and the remaining 50% of the Shares shall be released from the repurchase
option two years after such date, subject to Purchaser continuing to be a
Service Provider on such dates.


 


(b)                                   In
the event of a “Change of Control” of the Company, all of the Shares shall be
released from the Company’s repurchase option, unless the transaction
constituting a Change in Control includes an exchange of Shares for Shares of
another company and the Company assigns and such other Company assumes this
Agreement.  For this purpose, a “Change
of Control” is defined as:


 


(i)                                       Any
“person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (other than a group consisting of
the Company’s shareholders as of the date of the Closing and their Parents and
Subsidiaries) becomes the “beneficial owner” (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company’s
then outstanding voting securities; or


 


(ii)                                    The
consummation of a merger, consolidation, reorganization, sale of stock or
similar transaction in which the shareholders of the Company before such
transaction (and their Parents and Subsidiaries) own less than 50% of the
voting stock or voting power of the surviving entity immediately after such
transaction; or


 


(iii)                                 The
consummation of the sale or disposition of all or substantially all of the
Company’s assets.


 


(c)                                    Any
of the Shares which have not yet been released from the Company’s repurchase
option are referred to herein as “Unreleased Shares.”


 


(d)                                   The
Shares which have been released from the Company’s repurchase option shall be
delivered to the Purchaser at the Purchaser’s request (see Section 6).


 


5.                                     Restriction
on Transfer. Except for the escrow described in Section 6 or transfer
of the Shares to the Company or its assignees contemplated by this Agreement,
none of the Shares or any beneficial interest therein shall be transferred,
encumbered or otherwise disposed of in any way until the release of such Shares
from the Company’s repurchase option in


 

















 


accordance
with the provisions of this Agreement, other than by will or the laws of
descent and distribution.


 


6.                                     Escrow
of Shares.


 


(a)                                    To
ensure the availability for delivery of the Purchaser’s Unreleased Shares upon
repurchase by the Company pursuant to the Company’s repurchase option under Section 3
above, the Purchaser shall, upon execution of this Agreement, deliver and
deposit with the Secretary of the Company (the “Escrow Holder”) the share
certificates representing the Unreleased Shares, together with the stock
assignment duly endorsed in blank, attached hereto as Exhibit A-1. The
Unreleased Shares and stock assignment shall be held by the Escrow Holder,
pursuant to the Joint Escrow Instructions of the Company and Purchaser attached
as Exhibit A-2 hereto, until such time as the Company’s repurchase option
expires. As a further condition to the Company’s obligations under this
Agreement, the spouse of Purchaser, if any, shall execute and deliver to the
Company the Consent of Spouse attached hereto as Exhibit A-3.


 


(b)                                   The
Escrow Holder shall not be liable for any act it may do or omit to do with
respect to holding the Unreleased Shares in escrow and while acting in good
faith and in the exercise of its judgment.


 


(c)                                    If
the Company or any assignee exercises its repurchase option hereunder, the Escrow
Holder, upon receipt of written notice of such option exercise from the
proposed transferee, shall take all steps necessary to accomplish such
transfer.


 


(d)                                   When
the repurchase option has been exercised or expires unexercised or a portion of
the Shares has been released from such repurchase option, upon Purchaser’s
request the Escrow Holder shall promptly cause a new certificate to be issued
for such released Shares and shall deliver such certificate to the Company or
the Purchaser, as the case may be.


 


(e)                                    Subject
to the terms hereof, the Purchaser shall have all the rights of a shareholder
with respect to such Shares while they are held in escrow, including without
limitation, the right to vote the Shares and receive any cash dividends
declared thereon. If, from time to time during the term of the Company’s
repurchase option, there is (i) any stock dividend, stock split or other
change in the Shares, or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of the Purchaser’s ownership of the Shares shall be immediately subject
to this escrow, deposited with the Escrow Holder and included thereafter as “Shares”
for purposes of this Agreement and the Company’s repurchase option.


 


7.                                     Legends.


 


(a)                                    The
Shares are being issued to the Purchaser in reliance on certain exemptions from
the registration requirements of state and federal securities laws, and as a
condition of the Company selling the Shares to the Purchaser the Purchaser will
execute and deliver to the Company the Investor Representation Statement in the
form annexed hereto as Exhibit B.


 

















 


(b)                                   Purchaser
understands and agrees that the Company shall cause the legends set forth below
or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing
ownership of the Shares together with any other legends that may be required by
the Company or by applicable state or federal securities laws:


 


THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”)
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH, THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER, INCLUDING A REPURCHASE OPTION HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS
SET FORTH IN THE RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE
ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST
REFUSAL AND REPURCHASE OPTION ARE BINDING ON TRANSFEREES OF THESE SHARES.


 


(c)                                    Stop-Transfer
Notices. Purchaser agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate “stop
transfer” instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.


 


(d)                                   Refusal
to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement or (ii) to treat as owner of such
Shares or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such Shares shall have been so transferred.


 


8.                                     Adjustment
for Stock Split. All references to the number of Shares and the purchase
price of the Shares in this Agreement shall be appropriately adjusted to
reflect any stock split, stock dividend or other change in the Shares which may
be made by the Company after the date of this Agreement or the proportionate
amount of another issuer’s shares that have been exchanged in a transaction
constituting a Change in Control.


 


9.                                     Tax
Consequences. The Purchaser has reviewed with the Purchaser’s own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. The Purchaser
is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents. The Purchaser understands that the
Purchaser (and not the Company) shall be responsible for the Purchaser’s own
tax liability that may arise as a result of this investment or the transactions
contemplated by this Agreement. The Purchaser understands that Section 83
of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as
ordinary income the difference between the purchase price for the Shares and
the Fair Market Value of the Shares as of the date any restrictions on the


 

















 


Shares lapse. In this context, “restriction”
includes the right of the Company to buy back the Shares pursuant to its
repurchase option. The Purchaser understands that the Purchaser may elect to be
taxed at the time the Shares are purchased rather than when and as the Company’s
repurchase option expires by filing an election under Section 83(b) of
the Code with the I.R.S. within thirty (30) days from the date of purchase. The
form for making this election is attached as Exhibit A-5 hereto.  In connection with such decisions, the
Company will make available to the Purchaser and the Purchaser’s tax advisor,
in each case on a confidential basis, the most recent final report of experts
determining the fair market value of the Company nearest the date of this
Agreement.


 


THE PURCHASER ACKNOWLEDGES THAT
IT IS THE PURCHASER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY
THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER’S BEHALF.


 


10.                               General
Provisions.


 


(a)                                  This
Agreement shall be governed by the laws of the State of Deleware. This
Agreement represents the entire agreement between the parties with respect to
the purchase of Common Stock by the Purchaser.


 


(b)                                 Any
notice, demand or request required or permitted to be given by either the
Company or the Purchaser pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered personally or deposited in the
U.S. mail, First Class with postage prepaid, and addressed to the parties
at the addresses of the parties set forth at the end of this Agreement or such
other address as a party may request by notifying the other in writing.


 


(c)                                  The
rights and benefits of the Company under this Agreement shall be transferable
to any one or more persons or entities, and all covenants and agreements
hereunder shall inure to the benefit of, and be enforceable by the Company’s
successors and assigns. The rights and obligations of the Purchaser under this
Agreement may only be assigned with the prior written consent of the Company.


 


(d)                                 Either
party’s failure to enforce any provision or provisions of this Agreement shall
not in any way be construed as a waiver of any such provision or provisions,
nor prevent that party from thereafter enforcing each and every other provision
of this Agreement. The rights granted both parties herein are cumulative and
shall not constitute a waiver of either party’s right to assert all other legal
remedies available to it under the circumstances.


 


(e)                                  The
Purchaser agrees upon request to execute any further documents or instruments
necessary or desirable to carry out the purposes or intent of this Agreement.


 


(f)                                    PURCHASER
ACKNOWLEDGES AND AGREES THAT THE RELEASE OF SHARES FROM THE REPURCHASE OPTION
OF THE COMPANY PURSUANT TO SECTION 4 HEREOF IS EARNED ONLY BY CONTINUING
AS A


 

















 


SERVICE
PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED OR
PURCHASING SHARES HEREUNDER). PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH PURCHASER’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE PURCHASER’S RELATIONSHIP AS A SERVICE PROVIDER AT
ANY TIME, WITH OR WITHOUT CAUSE.


 


By Purchaser’s signature below,
Purchaser represents that he is familiar with the terms and provisions of this
Agreement and hereby accepts this Agreement subject to all of the terms and
provisions thereof Purchaser has reviewed this Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Agreement and fully understands all provisions of this Agreement. Purchaser
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Company upon any questions arising under this Agreement.
Purchaser further agrees to notify the Company upon any change in the residence
indicated in below.


 


	
  PURCHASER

  	
   

  	
  SYNERGY PHARMACEUTICALS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed Name

  	
   

  	
  Printed Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of Purchaser

  	
   

  	
   

  



 

















 


EXHIBIT A-1


 


ASSIGNMENT SEPARATE
FROM CERTIFICATE


 


FOR VALUE RECEIVED I,                                                          ,
hereby sell, assign and transfer unto                               
( ) shares of the Common Stock of Synergy Pharmaceuticals Inc. standing in my
name of the books of said corporation represented by Certificate No.                       
herewith and do hereby irrevocably constitute and appoint                                                   
to transfer the said stock on the books of the within named corporation with
full power of substitution in the premises.


 


This Stock Assignment may be
used only in accordance with the Restricted Stock Purchase Agreement between
said corporation and the undersigned dated July             ,
2008.


 


 


	
  Dated:
                                                  ,
  2008

  
	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  



 


 


INSTRUCTIONS:
Please do not fill in any blanks other than the signature line. The purpose of
this assignment is to enable the Company to exercise its “repurchase option,”
as set forth in the Agreement, without requiring additional signatures on the
part of the Purchaser.


 

















 


EXHIBIT
A-2


 


JOINT
ESCROW INSTRUCTIONS


 


                             ,
20   


 


SYNERGY PHARMACEUTICALS INC.


 


Attn:         Secretary


 


Dear                        :


 


As Escrow Agent for both SYNERGY
PHARMACEUTICALS INC., a Delaware corporation (the “Company”), and the
undersigned purchaser of stock of the Company (the “Purchaser”), you are hereby
authorized and directed to hold the documents delivered to you pursuant to the
terms of that certain Restricted Stock Purchase Agreement (“Agreement”) between
the Company and the undersigned, in accordance with the following instructions:


 


1.                                     In
the event the Company and/or any assignee of the Company (referred to
collectively for convenience herein as the “Company”) exercises the Company’s
repurchase option set forth in the Agreement, the Company shall give to
Purchaser and you a written notice specifying the number of shares of stock to
be purchased, the purchase price, and the time for a closing hereunder at the
principal office of the Company. Purchaser and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice
in accordance with the terms of said notice.


 


2.                                     At
the closing, you are directed (a) to date the stock assignments necessary
for the transfer in question, (b) to fill in the number of shares being
transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company’s repurchase option.


 


3.                                     Purchaser
irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of stock to be held by you hereunder and any additions and
substitutions to said shares as defined in the Agreement Purchaser does hereby
irrevocably constitute and appoint you as Purchaser’s attorney-in-fact and
agent for the term of this escrow to execute with respect to such securities
all documents necessary or appropriate to make such securities negotiable and
to complete any transaction herein contemplated, including but not limited to
the filing with any applicable state blue sky authority of any required
applications for consent to, or notice of transfer of; the securities. Subject
to the provisions of this paragraph 3, Purchaser shall exercise all rights and
privileges of a of the Company while the stock is held by you.


 

















 


4.                                     Upon
written request of the Purchaser, but no more than once per calendar year,
unless the Company’s repurchase option has been exercised, you will deliver to
Purchaser a certificate or certificates representing so many shares of stock as
are not then subject to the Company’s repurchase option. Within ninety (90)
days after cessation of Purchaser’s continuous employment by or services to the
Company, or any parent or subsidiary of the Company, you will deliver to
Purchaser a certificate or certificates representing the aggregate number of
shares held or issued pursuant to the Agreement and not purchased by the
Company or its assignees pursuant to exercise of the Company’s repurchase
option.


 


5.                                     If
at the time of termination of this escrow you should have in your possession
any documents, securities, or other property belonging to Purchaser, you shall
deliver all of the same to Purchaser and shall be discharged of all further
obligations hereunder.


 


6.                                     Your
duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.


 


7.                                     You
shall be obligated only for the performance of such duties as are specifically
set forth herein and may rely and shall be protected in relying or refraining
from acting on any instrument reasonably believed by you to be genuine and to
have been signed or presented by the proper party or parties. You shall not be
personally liable for any act you may do or omit to do hereunder as Escrow
Agent or as attorney-in-fact for Purchaser while acting in good faith, and any
act done or omitted by you pursuant to the advice of your own attorneys shall
be conclusive evidence of such good faith.


 


8.                                     You
are hereby expressly authorized to disregard any and all warnings given by any
of the parties hereto or by any other person or corporation, excepting only
orders or process of courts of law and are hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court. In case you
obey or comply with any such order, judgment or decree, you shall not be liable
to any of the parties hereto or to any other person, firm or corporation by
reason of such compliance, notwithstanding any such order, judgment or decree
being subsequently reversed, modified, annulled, set aside, vacated or found to
have been entered without jurisdiction.


 


9.                                     You
shall not be liable in any respect on account of the identity, authorities or
rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for
hereunder.


 


10.                               You
shall not be liable for the outlawing of any rights under the Statute of
Limitations with respect to these Joint Escrow Instructions or any documents
deposited with you.


 


11.                               You
shall be entitled to employ such legal counsel and other experts as you may
deem necessary properly to advise you in connection with your obligations
hereunder, may rely upon the advice of such counsel, and may pay such counsel
reasonable compensation therefor.


 

















 


12.                               Your
responsibilities as Escrow Agent hereunder shall terminate if you shall cease
to be an officer or agent of the Company or f you shall resign by written
notice to each party. In the event of any such termination, the Company shall
appoint a successor Escrow Agent.


 


13.                               If
you reasonably require other or further instruments in connection with these
Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.


 


14.                               It
is understood a d agreed that should any dispute arise with respect to the
delivery and/or ownership or right of possession of the securities held by you
hereunder, you are authorized and directed to retain in your possession without
liability to an one all or any part o said securities until such disputes shall
have been settled either by mutual written agreement of the parties concerned
or by a final order, decree or judgment of a court of competent jurisdiction
after the time for appeal has expired and no appeal has been perfected, but you
shall be under no duty whatsoever to institute or def d any such proceedings.


 


15.                               Any
notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given upon personal delivery or upon deposit in the United
States Post Office, by registered or certified mail with postage and fees
prepaid, addressed each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten (10) days’
advance written notice to each of the other parties hereto.


 


	
  COMPANY:

  	
   

  	
  Synergy Pharmaceutical, Inc.

  
	
   

  	
   

  	
  420 Lexington Avenue, Suite 1609

  
	
   

  	
   

  	
  New York, New York 10170

  
	
   

  	
   

  	
  Attention: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  PURCHASER:

  	
   

  	
                                               

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ESCROW AGENT:

  	
   

  	
  Synergy Pharmaceutical Inc.

  
	
   

  	
   

  	
  420 Lexington Avenue, Suite 1609

  
	
   

  	
   

  	
  New York, New York 10170

  
	
   

  	
   

  	
  Attention: Corporate Secretary

  



 


16.                               By
signing these Joint Escrow Instructions, you become a party hereto only for the
purpose of said Joint Escrow Instructions; you do not become a party to the
Agreement.


 


17.                               This
instrument shall be binding upon and inure to the benefit of the parties
hereto, and their respective successors and permitted assigns.


 


18.                               These
Joint Escrow Instructions shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.


 

















 


Very truly yours,


 


SYNERGY PHARMACEUTICALS INC.


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PURCHASER:

  	
   

  	
  Escrow Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Corporate Secretary

  
	
   

  	
   

  	
   

  
	
  (Signature)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Typed or
  Printed Name)

  	
   

  	
   

  
					



 

















 


EXHIBIT A-4


 


CONSENT OF SPOUSE


 


I,                                                               spouse
of                                                    
have read and approve the foregoing Agreement. In consideration of granting of
the right to my spouse to purchase shares of Synergy Pharmaceuticals Inc., as
set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact
in respect to the exercise of any rights under the Agreement and agree to be
bound by the provisions of the Agreement insofar as I may have any rights in
said Agreement or any shares issued pursuant thereto under the community
property laws or similar laws relating to marital property in effect in the
state of our residence as of the date of the signing of the foregoing
Agreement.


 


	
  Dated:                            ,2008

  	
  Signed:

  	
   

  



 

















 


EXHIBIT
B


 


INVESTMENT
REPRESENTATION STATEMENT


 


	
  PURCHASER:

  	
                                                                    

  
	
   

  	
   

  
	
  COMPANY:

  	
  SYNERGY PHARMACEUTICALS INC.

  
	
   

  	
   

  
	
  SECURITY:

  	
  COMMON STOCK

  
	
   

  	
   

  
	
  AMOUNT:

  	
                    Shares

  
	
   

  	
   

  
	
  DATE:

  	
                                       ,20    

  



 


In connection with the purchase
of the above Securities (exercising a “Stock Purchase Right”), the undersigned
Purchaser represents to the Company the following:


 


(a)                                Purchaser
is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. Purchaser is acquiring these
Securities for investment for Purchaser’s own account only and not with a view
to, or for resale in connection with, any “distribution” thereof within the
meaning of the Securities Act of 1933, as amended (the “Securities Act”).


 


(b)                               Purchaser
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Purchaser’s
investment intent as expressed herein. In this connection, Purchaser
understands that, in the view of the Securities and Exchange Commission, the
statutory basis for such exemption may be unavailable if Purchaser’s
representation was predicated solely upon a present intention to hold these
Securities for the minimum capital gains period specified under tax statutes,
for a deferred sale, for or until an increase or decrease in the market price
of the Securities, or for a period of one (1) year or any other fixed
period in the future. Purchaser further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Purchaser further
acknowledges and understands that the Company is under no obligation to
register the Securities. Purchaser understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, and any other legend
required under applicable state securities laws.


 

















 


(c)                                Purchaser
is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited
public resale of “restricted securities” acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701
at the time of the grant of the Stock Purchase Right to the Purchaser, the exercise
will be exempt from registration under the Securities Act. In the event the
Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, ninety (90) days thereafter (or such longer period as any market
stand-off agreement may require) the Securities exempt under Rule 701 may
be resold, subject to the satisfaction of certain of the conditions specified
by Rule 144, including: (1)(A) the Securities being held and the full
purchase price paid not less that six months before such resale but only if
certain public information about the Company is available or (B) the
Securities being held and the full purchase price paid not less that one year
before such resale; and, in the case of an affiliate, (A) the resale being
made through a broker in an unsolicited “broker’s transaction” or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934), (B) certain public information about the
Company is available, (3) the amount of Securities being sold during any
three (C) month period not exceeding the limitations specified in Rule 144,
and (D) the timely filing of a Form 144, if applicable.


 


In the event that the Company
does not qualify under Rule 701 at the time of grant of the Stock Purchase
Right, then the Securities may be resold in certain limited circumstances
subject to the provisions of Rule 144, which requires the resale to occur
not less than one (1) year after the later of the date the Securities were
sold by the Company or the date the Securities were sold by an affiliate of the
Company, within the meaning of Rule 144; and, in the case of acquisition
of the Securities by an affiliate, or by a non-affiliate who subsequently holds
the Securities less than two years, the satisfaction of the conditions set
forth in sections (1), (2), (3) and (4) of the paragraph immediately
above.


 


(d)                               Purchaser
hereby agrees that if so requested by the Company or any representative of the
underwriters in connection with any registration of the offering of any
securities of the Company under the Securities Act, Purchaser shall not sell or
otherwise transfer any Shares or other securities of the Company during the
180-day period following the effective date of a registration statement of the
Company filed under the Securities Act; provided, however, that such
restriction shall only apply to the first registration statement of the Company
to become effective under the Securities Act which include securities to be
sold on behalf of the Company to the public in an underwritten public offering
under the Securities Act. The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restrictions until the end
of such 180-day period.


 


(e)                                Purchaser
further understands that in the event all of the applicable requirements of Rule 701
or 144 are not satisfied, registration under the Securities Act, compliance
with Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for


 

















 


such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk. Purchaser understands that no
assurances can be given that any such other registration exemption will be
available in such event.


 


	
  Signature of
  Purchaser:

  	
   

  	
   

  
	
   

  
	
  Date:
                                      ,
  20