Document:

Exhibit
10.1

 

SYNERGY
PHARMACEUTICALS, INC.

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement “) is dated as of
          , 2009 among
Synergy Pharmaceuticals, Inc., a Florida corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “ Investor “ and collectively
the “ Investors”).

 

WHEREAS, subject to the
terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”) and Rule 506 promulgated thereunder, the Company desires
to issue and sell to each Investor (the “Offering”), and each Investor,
severally and not jointly, desires to purchase from the Company, securities of
the Company as more fully described in this Agreement.

 

NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each Investor agree as follows:

 

SECTION 1.

 

1.1                                 Subscription. 
The Company is offering a maximum of 20,000,000 shares of common stock,
$.0001 par value, of the Company (the “Common Stock”).  The Investor, intending to be legally bound,
hereby irrevocably subscribes for and agrees to purchase the number of shares
(the “Shares”) of the Common Stock, indicated on the signature
page hereof, on the terms and conditions described herein.  All fractional shares will be rounded up or
down to the nearest whole number.

 

1.2                                 Purchase of Shares. 
The Investor understands and acknowledges that the purchase price per
Share to be remitted to the Company in exchange for the Shares is $0.70.  The Investor or the Investor’s agent has
deposited the Subscription Amount (defined below) in an interest bearing escrow
account. There is a minimum investment of $50,000 or such smaller amount in the
sole discretion of the Company.

 

SECTION 2.

 

2.1                                 Acceptance or Rejection.

 

(a)                                  The Investor understands and agrees that
the Company reserves the right to reject this subscription for the Shares in
whole or part in any order, if, in its reasonable judgment, it deems such
action in the best interest of the Company, at any time prior to the Closing,
notwithstanding prior receipt by the Investor of notice of acceptance of the
Investor’s subscription.

 

 

(b)                                 The Investor understands and agrees that
subscriptions may be revoked provided that written notice of revocation is sent
by certified or registered mail, return receipt requested, and is received by
the Company at least two business days prior to the Closing.

 

(c)                                  In the event (i) of rejection of
this subscription, or (ii) the sale of the Shares subscribed for by the
Investor is not consummated by the Company for any reason by March 31,
2009, which date may be extended by the Company, this Subscription Agreement
and any other agreement entered into between the Investor and the Company
relating to this subscription shall thereafter have no force or effect and the
Company shall promptly return or cause to be returned to the Investor the
purchase price remitted in accordance with clause 1.2 by the Investor, without
interest thereon or deduction therefrom, in exchange for the Shares.

 

2.2                                 Closing.  The closing
(the “Closing”) of the purchase and sale of any of the Shares, following the
acceptance by the Company of the Investors’ subscriptions for not less than the
Minimum Offering has, as evidenced by the Company’s execution of this
Subscription Agreement, shall take place at the principal offices of Sichenzia
Ross Friedman Ference LLP, counsel to the Company, at 61 Broadway, 32nd Floor, New
York, New York 10006, or such other place as determined by the Company, on such
date (the “Closing Date”) as is determined by the Company. At the Closing of
the purchase and sale of the Shares subscribed to by the Investors, the Company
shall prepare for delivery to the Investors the certificates for the securities
to be issued and sold to the Investors, duly registered in the Investor’s name
against payment in full by the Investor in accordance with clause 1.2.  Additional Closings will be held until the
Maximum Offering has been achieved or the Offering has terminated.

 

SECTION 3.

 

3.1                                 Investor Representations and Warranties.

 

The Investor hereby
acknowledges, represents and warrants to, and agrees with, the Company and its
affiliates as follows:

 

(a)                                  The Investor is acquiring the Shares for
his or its own account as principal, not as a nominee or agent, for investment
purposes only, and not with a view to, or for, resale, distribution or
fractionalization thereof in whole or in part and no other person has a direct
or indirect beneficial interest in such Shares or any of the components of the
Shares.  Further, the Investor does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Shares for which the Investor is subscribing.

 

(b)                                 The Investor has full power and authority
to enter into this Agreement, the execution and delivery of this Agreement has
been duly authorized, if applicable, and this Agreement constitutes a valid and
legally binding obligation of the Investor.

 

(c)                                  The Investor acknowledges its
understanding that the offering and sale of the Shares is intended to be exempt
from registration under the Securities Act of 1933, as amended (the “Securities
Act”) by virtue of Section 4(2) of the Securities Act and the
provisions of Regulation D promulgated thereunder (“Regulation D”).  In furtherance thereof, the Investor
represents and warrants to and agrees with the Company and its affiliates as
follows:

 

 

(i)                                     The Investor realizes that the basis for
the exemption may not be present if, notwithstanding such representations, the
Investor has in mind merely acquiring Shares for a fixed or determinable period
in the future, or for a market rise, or for sale if the market does not
rise.  The Investor does not have any
such intention.

 

(ii)                                  The Investor has the financial ability to
bear the economic risk of his investment, has adequate means for providing for
his current needs and personal contingencies and has no need for liquidity with
respect to his investment in the Company;

 

(iii)                                                                                     
(insert name of Investor Representative: if none, so state) has acted as
the Investor’s Investor Representative for purposes of the private placement
exemption under the Securities Act.  If
the Investor has appointed a Investor Representative (which term is used herein
with the same meaning as given in Rule 501(h) of Regulation D), the
Investor has been advised by his Investor Representative as to the merits and
risks of an investment in the Company in general and the suitability of an
investment in the Shares for the Investor in particular; and

 

(iv)                              The Investor (together with his Investor
Representative(s), if any) has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the prospective
investment in the Shares.  If other than
an individual, the Investor also represents it has not been organized for the
purpose of acquiring the Shares.

 

(d)                                 The information in the Accredited
Investor Questionnaire completed and executed by the Investor is substantially
in the form of the Accredited Investor Questionnaire (the “Accredited Investor
Questionnaire”) and is accurate and true in all respects and the Investor is an
“accredited investor,” as that term is defined in Rule 501 of Regulation D.

 

(e)                                  The Investor and his Investor
Representative, if any, have:

 

(i)                                     had access to and carefully reviewed the
Company’s SEC Documents and other public filings, the Schedules and Exhibits to
this Agreement and has had on opportunity for a reasonable period of time prior
to the date hereof to obtain additional information concerning the offering of
the Shares, the Company, and all other information to the extent the Company
possesses such information or can acquire it without unreasonable effort or
expense;

 

(iii)                               been given the opportunity for a
reasonable period of time prior to the date hereof to ask questions of, and
receive answers from, the Company or its representatives concerning the terms
and conditions of the offering of the Shares and other matters pertaining to
this investment, and have been given the opportunity for a reasonable period of
time prior to the date hereof to obtain such additional information necessary
to verify the accuracy of the information provided in order for him to evaluate
the merits and risks of purchase of the 

 

 

Shares to the extent the
Company possesses such information or can acquire it without unreasonable
effort or expense;

 

(iv)                              not been furnished with any oral
representation or oral information in connection with the offering of the
Shares which is not contained herein; and

 

(v)                                 determined that the Shares are a suitable
investment for the Investor and that at this time the Investor could bear a
complete loss of such investment.

 

(f)                                    The Investor is not relying on the
Company, or its affiliates with respect to economic considerations involved in
this investment.  The Investor has relied
on the advice of, or has consulted with only those persons, if any, named as
Investor Representative(s) herein and in the Accredited Investor
Questionnaire.  Each Investor
Representative is capable of evaluating the merits and risks of an investment
in the Shares on the terms and conditions set forth herein and each Investor
Representative has disclosed to the Investor in writing (a copy of which is
annexed to this Agreement) the specific details of any and all past, present or
future relationships, actual or contemplated, between himself and the Company
or any affiliate or subsidiary thereof.

 

(g)                                 The Investor represents, warrants and agrees
that he will not sell or otherwise transfer the Shares without registration
under the Securities Act or an exemption therefrom and fully understands and
agrees that he must bear the economic risk of his purchase because, among other
reasons, the Shares have not been registered under the Securities Act or under
the securities laws of any state and, therefore, cannot be resold, pledged,
assigned or otherwise disposed of unless they are subsequently registered under
the Securities Act and under the applicable securities laws of such states or
an exemption from such registration is available.  In particular, the Investor is aware that the
Shares are “restricted securities,” as such term is defined in Rule 144 promulgated
under the Securities Act (“Rule 144”), and they may not be sold
pursuant to Rule 144 unless all of the conditions of Rule 144 are
met.  The Investor also understands that,
except as otherwise provided herein and in the certificates for the Shares, the
Company is under no obligation to register the Shares on his behalf or to
assist him in complying with any exemption from registration under the
Securities Act or applicable state securities laws.  The Investor further understands that sales
or transfers of the Shares are further restricted by state securities laws and
the provisions of this Agreement.

 

(h)                                 No representations or warranties have
been made to the Investor by the Company, or any officer, employee, agent,
affiliate or subsidiary of the Company, other than the representations of the
Company contained herein, and in subscribing for Shares the Investor is not
relying upon any representations other than those contained herein.  Investor has carefully reviewed filings made
by the Company with the U.S. Securities and Exchange Commission and the
Company’s Confidential Private Placement Memorandum dated February 2,
2009.

 

(i)                                     Any information which the Investor has
heretofore furnished to the Company with respect to his financial position and
business experience is correct and complete as of the date of this Agreement
and if there should be any material change in such information he will
immediately furnish such revised or corrected information to the Company.

 

 

(j)                                     The Investor understands and agrees that
the certificates for the Shares shall bear the following legend until
(i) such securities shall have been registered under the Securities Act
and effectively been disposed of in accordance with a registration statement
that has been declared effective; or (ii) in the opinion of counsel for the
Company such securities may be sold without registration under the Securities
Act as well as any applicable “Blue Sky” or state securities laws.  Accordingly the Investor understands and
consents that the certificates representing the Shares, in addition to any
notation required by law or by this Agreement, shall have the following legend:

 

“THESE SECURITIES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED
OR TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE
SECURITIES, OR (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED
THE WRITTEN OPINION OF COUNSEL TO THE CORPORATION, OR OTHER COUNSEL REASONABLY
ACCEPTABLE TO THE CORPORATION, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH
ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE “BLUE
SKY” OR SIMILAR SECURITIES LAW.”

 

(k)                                  The Investor understands that an
investment in the Shares is a speculative investment which involves a high
degree of risk and the potential loss of his entire investment.

 

(l)                                     The Investor’s overall commitment to
investments which are not readily marketable is not disproportionate to the
Investor’s net worth, and an investment in the Shares will not cause such
overall commitment to become excessive.

 

(m)                               Investor is not purchasing the Shares as
a result of any advertisement, article, notice or other communication regarding
the Securities published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

(n)                                 Other than the transaction contemplated
hereunder, such Investor has not directly or indirectly, nor has any person
acting on behalf of or pursuant to any understanding with such Investor,
executed any disposition, including Short Sales (defined below), in the
securities of the Company during the period commencing from the time that such
Investor first received a term sheet from the Company or any other person
setting forth the material terms of the transactions contemplated hereunder
until the date hereof (“Discussion Time”).  Notwithstanding the foregoing, in the case of
a Investor that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Investor’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager 

 

 

that made the
investment decision to purchase the Shares covered by this Agreement.  Other than to other persons party to this
Agreement, such Investor has maintained the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and
terms of this transaction). For the purpose of this Agreement, “Short Sales”
shall include all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).

 

(m)                               Investor hereby acknowledges that the
Company seeks to comply with all applicable laws concerning money laundering
and related activities. In furtherance of those efforts, Investor hereby
represents, warrants and agrees that, to the best of Investor’s knowledge based
upon appropriate diligence and investigation:

 

(i)                                          none of the cash or property that
Investor has paid, will pay or will contribute to the Company has been or shall
be derived from, or related to, an activity that is deemed criminal under
United States law;

 

(ii)                                       no contribution or payment by Investor to
the Company shall cause the Company to be in violation of the United States
Bank Secrecy Act, the United States Money Laundering Control Act of 1986 or the
United States International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001;

 

(iii)                                    Investor agrees to promptly notify the
Company if any of these representations cease to be true and accurate regarding
Investor, and to provide to the Company any additional information regarding
Investor that the Company deems necessary or appropriate to ensure compliance
with all applicable laws concerning money laundering and similar activities;

 

(iv)                                   Investor agrees that if at any time the
Company determines that any of the foregoing representations are incorrect with
respect to Investor, or if otherwise required by applicable law or regulation
related to money laundering and similar activities, the Company may undertake
whatever actions it considers appropriate to ensure compliance with applicable
law or regulation, including causing the withdrawal of Investor from the
Company in accordance with such terms as the Company shall determine in its
discretion are required to comply with applicable laws and regulations; and

 

(v)                                      Investor further agrees that the Company
may release confidential information about such Investor to proper authorities
if the Company, in its sole discretion, determines that it is in the best
interests of the Company in light of relevant rules and regulations under
the laws described herein.

 

(n)                                 The foregoing representations, warranties
and agreements shall survive the Closing.

 

 

3.2                                 Company Representations And Warranties.

 

The
Company hereby acknowledges, represents and warrants to, and agrees with each
Investor (which representations and will be true and correct as of the date of
the Closing as if the Agreement were made on the date of Closing) as follows:

 

(a)                                  The Company has been duly organized, is
validly existing and is in good standing under the laws of the State of
Florida.  The Company has full corporate
power and authority to enter into this Agreement and this Agreement, has been
duly and validly authorized, executed and delivered by the Company and are
valid and binding obligations of the Company, enforceable against the Company
in accordance with their terms, except as such enforcement may be limited by
the United States Bankruptcy Code and laws effecting creditors rights, generally.

 

(b)                                 Subject to the performance by the
Investors of their respective obligations under this Agreement and the accuracy
of the representations and warranties of the Investor, the offering and sale of
the Securities will be exempt from the registration requirements of the Act.

 

(c)                                  The execution and delivery by the Company
of, and the performance by the Company of its obligations hereunder in
accordance with its terms will not contravene any provision of applicable law
or the charter documents of the Company or any agreement or other instrument
binding upon the Company, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its
obligations under this Agreement in accordance with its terms.

 

(d)                                 All of the outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid, non-assessable and free of preemptive or similar rights.  The Shares have been duly authorized and,
when issued and delivered as provided by this Agreement, will be validly issued
and fully paid and non-assessable, and the Shares are not subject to any
preemptive or similar rights.  In
addition, the shares of Common Stock issuable pursuable to Section 4.3 of
this Agreement, when issued as provided in Section 4.3, will be validly
issued and fully paid and non-assessable, and such shares are not subject to
any preemptive or similar rights.  No
further corporate action is required on the Company’s part to issue, if
required to do so after the Closing, additional shares of Common Stock pursuant
to Section 4.3 of this Agreement.

 

(e)                                  The Company is not in violation of its
charter or bylaws and is not in default in the performance of any bond,
debenture, note or any other evidence of indebtedness or any indenture,
mortgage, deed of trust, license, contract, lease or other instrument to which
the Company is a party or by which it is bound, or to which any of the property
or assets of the Company is subject, except such as have been waived or which
would not have, singly or in the aggregate, a material adverse effect on the
Company, taken as a whole.

 

(f)                                    The execution and delivery by the Company
of, and the performance by the Company of its obligations under this Agreement
will not contravene any provision of law

 

 

known by the Company to
be applicable to it, or the charter documents of, the Company or any subsidiary
of the Company, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary of the
Company and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement in accordance with its terms.

 

(g)                                 There is no material litigation or
governmental proceeding pending, or to the knowledge of the Company, threatened
against, or involving the property or the business of the Company, or, to the
best knowledge of the Company which would adversely affect the condition
(financial or otherwise), business, prospects or results of operations of the
Company, taken as a whole.

 

(h)                                 The audited and unaudited consolidated
financial statements set forth in the SEC Documents fairly present the
financial position and the results of operations of the Company, at the dates
and periods therein specified.  Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the respective
periods involved and are complete and accurate and are in accordance with the
books and records of the Company.  Since
September 30, 2008, the Company;

 

(i)                                     has not entered into any transaction
outside of the ordinary course of business except pursuant to this and similar
subscription agreements; or

 

(ii)                                  suffered any material adverse change in
its financial condition or results of operations except as disclosed or
contemplated in the SEC Documents.

 

(i)                                     The foregoing representations, warranties
and agreements shall survive the Closing.

 

SECTION 4.

 

4.1                                 Lock-Up.

 

(a)                                  The Investor hereby agrees to be subject
to a lock-up until August 15, 2010. 
During such period, the Investor agrees not to directly or indirectly
sell, offer to sell, contract to sell, including, without limitation, “short”
or “short against the box” (as those terms are generally understood), grant any
option to purchase or otherwise transfer or dispose of (other than upon a
distribution to the partners members of the Investor who agree to be similarly
bound) the Shares of the Company held by it at any time during such period.

 

(b)                                 The Company may terminate or diminish the restrictions
set forth in this Section as to all or any portion of the Shares at its
sole discretion, provided that such termination or diminution shall apply to
all Investors, pro rata according to their respective Subscription Amounts.  In such event, the Company will notify all
the Investors of the nature and extent of such termination or diminution.

 

 

4.2                                 Stop Transfer and Legend.  In order to enforce the foregoing covenant,
the Company may impose stock-transfer instructions with respect to the Shares
of each Holder (and the Shares or securities of every other person subject to
the foregoing restriction) until the end of such period and the Investor
consents to the imprinting of a legend given notices of these restriction on
certificates representing the Shares, substantially in the following form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, AS SET FORTH IN THE SECURITIES
PURCHASE AGREEMENT DATED
                      ,
2009 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 ARE BINDING ON TRANSFEREES OF THESE SHARES.”

 

4.3                                 Per Share Purchase Price
Protection.  From the
date hereof until February 15, 2011, if the Company or any Subsidiary
shall issue any Common Stock or Common Stock Equivalents, in transaction other
than in an Exempt Transaction, (a “Subsequent Financing”) entitling any
person or entity to acquire shares of Common Stock at an effective price per
share less than the Per Share Purchase Price (subject to prior adjustment for
reverse and forward stock splits and the like) (the “Discounted Purchase
Price,” as further defined below), the Company shall issue to such Investor
that number of additional shares of Common Stock equal to (a) the
Subscription Amount paid by such Investor at the Closing divided by the
Discounted Purchase Price, less (b) the Shares issued to such Investor at
the Closing pursuant to this Agreement and pursuant to this Section 4.3.
The term “Discounted Purchase Price” shall mean the amount actually paid in new
cash consideration by third parties for each share of Common Stock. The sale of
Common Stock Equivalents shall be deemed to have occurred at the time of the
issuance of the Common Stock Equivalents and the Discounted Purchase Price
covered thereby shall also include the actual exercise or conversion price
thereof at the time of the conversion or exercise (in addition to the
consideration per share of Common Stock underlying the Common Stock Equivalents
received by the Company upon such sale or issuance of the Common Stock
Equivalents). In the case of any Subsequent Financing involving an “MFN
Transaction” (as defined below), the Discounted Purchase Price shall be deemed
to be the lowest actual conversion or exercise price at which such securities
are converted or exercised in the case of a Variable Rate Transaction, or the
lowest adjustment price in the case of an MFN Transaction. If shares are issued
for a consideration other than cash, the per share selling price shall be the
fair value of such consideration as determined in good faith by the Board of
Directors of the Company. The term “MFN Transaction” shall mean a
transaction in which the Company issues or sells any securities in a capital
raising transaction or series of related transactions which grants to an investor
the right to receive additional shares based upon future transactions of the
Company on terms more favorable than those granted to the such investor in such
offering. The Company shall not refuse to issue an Investor additional Shares
hereunder based on any claim that such Investor or any one associated or
affiliated with such Investor has been engaged in any violation of law,
agreement or for any other reason, unless an injunction from a court, on
notice, restraining and or enjoining an issuance hereunder shall have been
sought and obtained. Nothing herein shall limit a Investor’s right to pursue
actual damages for the Company’s failure to deliver Shares hereunder and such
Investor shall have the right to pursue all remedies available to it at law or in
equity including, without limitation, a decree of specific performance and/or
injunctive 

 

 

relief.
Notwithstanding anything to the contrary herein, this Section 4.3 not
apply in respect of an Exempt Issuance. Additionally, prior to any issuance to
an Investor pursuant to this Section 4.3, such Investor shall have the
right to irrevocably defer such issuances to such Investor under this
Section 4.3, in whole or in part, for continuous periods of not less than
75 days.

 

SECTION 5.

 

Definitions.  In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have
the meanings indicated in this Section 5:

 

“Affiliate” means any Person that, directly
or indirectly through one or more intermediaries, controls or is controlled by
or is under common control with a Person as such terms are used in and
construed under Rule 144 under the Securities Act. With respect to a
Investor, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Investor will be
deemed to be an Affiliate of such Investor.

 

“Business Day” means any day except Saturday,
Sunday, any day which shall be a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized
or required by law or other governmental action to close.

 

“Closing” means the closing of the purchase
and sale of the Shares pursuant to Section 2.2.

 

“Closing Date” means the Trading Day when all
of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Investors’
obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities have been satisfied or waived.

 

“Closing Price” means on any particular date
(a) the last reported closing bid price per share of Common Stock on such
date on the Trading Market (as reported by Bloomberg L.P. at 4:15 p.m.
(New York City time)), or (b) if there is no such price on such date, then
the closing bid price on the Trading Market on the date nearest preceding such
date (as reported by Bloomberg L.P. at 4:15 p.m. (New York City time)), or
(c) if the Common Stock is not then listed or quoted on the Trading Market
and if prices for the Common Stock are then reported in the “pink sheets”
published by Pink Sheets LLC (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) if the shares of Common Stock are not
then publicly traded the fair market value of a share of Common Stock as
determined by an appraiser selected in good faith by the Investors of a
majority in interest of the Shares then outstanding.

 

“Commission” means the Securities and
Exchange Commission.

 

“Common Stock” means the common stock of the
Company, par value $0.0001 per share and any other class of securities into
which such securities may hereafter be reclassified or changed into.

 

 

“Common Stock Equivalents” means any
securities of the Company or the Subsidiaries which would entitle the holder
thereof to acquire at any time Common Stock, including, without limitation, any
debt, preferred stock, rights, options, warrants or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock.

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

 

“Exempt Issuance” means the issuance of
(a) shares of Common Stock or options to employees, officers, consultants
or directors of the Company or any Subsidiary pursuant to any stock or option
plan duly adopted or ratified by a majority of the non-employee members of the
Board of Directors of the Company present or former corporate parent or a
majority of the members of a committee of non-employee directors established
for such purpose, (b) securities upon the exercise or exchange of or
conversion of any Securities issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise, exchange or
conversion price of any such securities, and (c) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of
the disinterested directors, provided that any such issuance shall only be to a
Person which is, itself or through its subsidiaries, an operating company in a
business synergistic with the business of the Company and in which the Company
receives benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing
in securities.

 

“Per Share Purchase Price” equals
$0.70, subject to adjustment for stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur
after the date of this Agreement.

 

“Person” means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.

 

“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.

 

“SEC Documents” means the filings made by the
Company with the Commission under the Securities Act and Exchange Act,
including those made not more than 48 hours prior to Closing.

 

“Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.

 

 

“Shares” means the shares of Common Stock issued
or issuable to each Investor pursuant to this Agreement.

 

“Subscription Amount” means, as to each
Investor, the aggregate amount to be paid for Shares purchased hereunder as
specified below such Investor’s name on the signature page of this
Agreement and next to the heading “Subscription Amount,” in United States
dollars and in immediately available funds.

 

“Subsequent Financing” shall have the meaning
ascribed to such term in Section 4.3.

 

“Subsidiary” means any subsidiary of the
Company.

 

“Trading Day” means a day on which the Common
Stock is traded on a Trading Market.

 

“Trading Market” means the following markets
or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the Nasdaq Capital Market, the American Stock Exchange, the
New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

 

SECTION 5

 

5.1                                 Indemnity.  The Investor
agrees to indemnify and hold harmless the Company, its officers and directors,
employees and its affiliates and each other person, if any, who controls any
thereof, against any loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation
commenced or threatened or any claim whatsoever) arising out of or based upon
any false representation or warranty or breach or failure by the Investor to
comply with any covenant or agreement made by the Investor herein or in any
other document furnished by the Investor to any of the foregoing in connection
with this transaction.

 

5.2                                 Modification. 
Neither this Agreement nor any provisions hereof shall be modified,
discharged or terminated except by an instrument in writing signed by the party
against whom any waiver, change, discharge or termination is sought.

 

5.3                                 Notices.  Any notice,
demand or other communication which any party hereto may be required, or may
elect, to give to anyone interested hereunder shall be sufficiently given if
(a) deposited, postage prepaid, in a United States mail letter box,
registered or certified mail, return receipt requested, addressed to such
address as may be given herein, or (b) delivered personally at such
address.

 

5.4                                 Counterparts. 
This Agreement may be executed through the use of separate signature
pages or in any number of counterparts, and each of such counterparts
shall, for all purposes, constitute one agreement binding on all parties,
notwithstanding that all parties are not signatories to the same counterpart.

 

 

5.5                                 Binding Effect. 
Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives and assigns.  If the Investor is more than one person, the
obligation of the Investor shall be joint and several and the agreements,
representations, warranties and acknowledgments herein contained shall be
deemed to be made by and be binding upon each such person and his heirs, executors,
administrators and successors.

 

5.6                                 Entire Agreement. 
This Agreement and the documents referenced herein contain the entire
agreement of the parties and there are no representations, covenants or other
agreements except as stated or referred to herein and therein.

 

5.7                                 Assignability. 
This Agreement is not transferable or assignable by the Investor.

 

5.8                                 Applicable Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to conflicts of law
principles.

 

5.9                                 Pronouns.  The use
herein of the masculine pronouns “him” or “his” or similar terms shall be
deemed to include the feminine and neuter genders as well and the use herein of
the singular pronoun shall be deemed to include the plural as well.

 

[SIGNATURE PAGES
FOLLOW]

 

 

ALL
INVESTORS MUST COMPLETE THIS PAGE

 

IN WITNESS
WHEREOF, the Investor has executed this Agreement on the
     day of
                ,
2009.

 

	
   

  	
   

  	
  X $0.70 Per Share

  	
   

  	
     =         $

  
	
  Shares Subscribed for

  	
   

  	
   

  	
   

  	
  Purchase Price

  

 

 

Name of Entity (Please
Print)

 

	
  Address for Registration of Ownership:

  	
   

  
	
   

  	
   

  
	
  US Taxpayer ID # (or attach W8-BEN):

  	
   

  

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  

 

ACCEPTED this
    st day of
            , 2009
on behalf of the Company.

 

	
   

  	
   

  	
  SYNERGY
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gary S. Jacob, Ph.D. 

  
	
   

  	
   

  	
  Title:

  	
  President and Acting CEOFiled by sedaredgar.com - Maverick Minerals Corporation - Exhibit 10.13

MAVERICK MINERALS CORPORATION

2009 STOCK OPTION PLAN

     This 2009 Stock Option Plan (the
"Plan") provides for the grant of options to acquire shares of common stock,
$0.001 par value (the "Common Stock"), of Maverick Minerals Corporation, a
Nevada company (the "Company"). For the purposes of Eligible Employees (as
defined below) who are subject to tax in the United States, stock options
granted under this Plan that qualify under Section 422 of the United States
Internal Revenue Code of 1986, as amended (the "Code"), are referred to in this
Plan as "Incentive Stock Options". Incentive Stock Options and stock options
that do not qualify under Section 422 of the Code ("Non-Qualified Stock
Options") and stock options granted to non-United States residents under this
Plan are referred to collectively as "Options".

1.             
          PURPOSE

1.1                     
The purpose of this Plan is to retain the services of valued key
employees and consultants of the Company and such other persons as the Plan
Administrator shall select in accordance with Section 3 below, and to encourage
such persons to acquire a greater proprietary interest in the Company, thereby
strengthening their incentive to achieve the objectives of the shareholders of
the Company, and to serve as an aid and inducement in the hiring of new
employees and to provide an equity incentive to consultants and other persons
selected by the Plan Administrator.

1.2                     
This Plan shall at all times be subject to all legal requirements
relating to the administration of stock option plans, if any, under applicable
United States federal and state securities laws, the Code, the rules of any
applicable stock exchange or stock quotation system, and the rules of any
foreign jurisdiction applicable to Options granted to residents therein
(collectively, the "Applicable Laws").

2.                       
ADMINISTRATION

2.1                     
This Plan shall be administered initially by the Board of Directors of
the Company (the "Board"), except that the Board may, in its discretion,
establish a committee composed of two (2) or more members of the Board to
administer the Plan, which committee (the "Committee") may be an executive,
compensation or other committee, including a separate committee especially
created for this purpose. The Board or, if applicable, the Committee is referred
to herein as the "Plan Administrator".

2.2                     
If and so long as the Common Stock is registered under Section 12(b) or 12(g) of
the United States Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Board shall consider in selecting the Plan Administrator
and the membership of any Committee, with respect to any persons subject or
likely to become subject to Section 16 of the Exchange Act, the provisions
regarding (a) "outside directors" as contemplated by Section 162(m) of the Code,
and (b) "Non-Employee Directors" as contemplated by Rule 16b-3 under the
Exchange Act.

2.3                     
The Committee shall have the powers and authority vested in the Board
hereunder (including the power and authority to interpret any provision of the
Plan or of any Option). The members of any such Committee shall serve at the
pleasure of the Board. A majority of the members of the Committee shall
constitute a quorum, and all actions of the Committee shall be taken by a 

- 2 -

majority of the members present. Any action may be taken by a
written instrument signed by all of the members of the Committee and any action
so taken shall be fully effective as if it had been taken at a meeting.

2.4                     
The Board may at any time amend, suspend or terminate the Plan, subject to such
shareholder approval as may be required by Applicable Laws, including the rules
of an applicable stock exchange or other national market system, provided
that:

	 	(a) 	
      no Options may be granted during any suspension of the
      Plan or after termination of the Plan; and

	 	 	 
	 	(b) 	
      any amendment, suspension or termination of the Plan will
      not affect Options already granted, and such Options will remain in full
      force and affect as if the Plan had not been amended, suspended or
      terminated, unless mutually agreed otherwise between the Optionee (as
      defined below) and the Plan Administrator, which agreement will have to be
      in writing and signed by the Optionee and the
Company.

2.5                     
Subject to the provisions of this Plan, and with a view to effecting its
purpose, the Plan Administrator shall have sole authority, in its absolute
discretion, to:

	 	(a) 	
      construe and interpret this Plan;

	 	 	 
	 	(b) 	
      define the terms used in the Plan;

	 	 	 
	 	(c) 	
      prescribe, amend and rescind the rules and regulations
      relating to this Plan;

	 	 	 
	 	(d) 	
      correct any defect, supply any omission or reconcile any
      inconsistency in this Plan;

	 	 	 
	 	(e) 	
      grant Options under this Plan;

	 	 	 
	 	(f) 	
      determine the individuals to whom Options shall be
      granted under this Plan and whether the Option is an Incentive Stock
      Option or a Non-Qualified Stock Option, or otherwise;

	 	 	 
	 	(g) 	
      determine the time or times at which Options shall be
      granted under this Plan;

	 	 	 
	 	(h) 	
      determine the number of shares of Common Stock subject to
      each Option, the exercise price of each Option, the duration of each
      Option and the times at which each Option shall become
  exercisable;

	 	 	 
	 	(i) 	
      determine all other terms and conditions of the Options;
      and

	 	 	 
	 	(j) 	
      make all other determinations and interpretations
      necessary and advisable for the administration of the
  Plan.

2.6                     
All decisions, determinations and interpretations made by the Plan
Administrator shall be binding and conclusive on all participants in the Plan
and on their legal representatives, heirs and beneficiaries, subject to any
contrary determination by the Board.

- 3 -

3.                
       ELIGIBILITY

3.1                     
Incentive Stock Options may be granted to any individual who, at the
time the Option is granted, is an employee of the Company or any Related Company
(as defined below) ("Eligible Employees") subject to tax in the United
States.

3.2                     
Non-Qualified Stock Options may be granted to Eligible Employees, Consultants,
and to such other persons who are not Eligible Employees as the Plan
Administrator shall select, subject to any Applicable Laws.

3.3                     
Options may be granted in substitution for outstanding options of another
company in connection with the merger, consolidation, acquisition of property or
stock or other reorganization between such other company and the Company or any
subsidiary of the Company. Options also may be granted in exchange for
outstanding Options.

3.4                     
Any person to whom an Option is granted under this Plan is referred to
as an "Optionee". Any person who is the owner of an Option is referred to as a
"Holder".

3.5                     
As used in this Plan, the term "Related Company" shall mean any company
(other than the Company) that is a "Parent Company" of the Company or
"Subsidiary Company" of the Company, as those terms are defined in Sections
424(e) and 424(f), respectively, of the Code (or any successor provisions) and
the regulations thereunder (as amended from time to time).

4.                       
STOCK

4.1                     
The Plan Administrator is authorized to grant Options to acquire up to
a total of 75,000,000 shares of the Company's authorized but unissued, or
reacquired, Common Stock. The number of shares with respect to which Options may
be granted hereunder is subject to adjustment as set forth in Section 5.1(m)
hereof. In the event that any outstanding Option expires or is terminated for
any reason, the shares of Common Stock allocable to the unexercised portion of
such Option may again be subject to an Option granted to the same Optionee or to
a different person eligible under Section 3 of this Plan; provided however, that
any cancelled Options will be counted against the maximum number of shares with
respect to which Options may be granted to any particular person as set forth in
Section 3 hereof.

5.                       
TERMS AND CONDITIONS OF OPTIONS

5.1                     
Each Option granted under this Plan shall be evidenced by a written
agreement approved by the Plan Administrator (the "Agreement"). Agreements may
contain such provisions, not inconsistent with this Plan, as the Plan
Administrator in its discretion may deem advisable. All Options also shall
comply with the following requirements:

	 	(a) 	
      Number of Shares and Type of Option

	 	 	 
	 		
      Each Agreement shall state the number of shares of Common
      Stock to which it pertains and, for Optionees subject to tax in the United
      States, whether the Option is intended to be an Incentive Stock Option or
      a Non-Qualified Stock Option, provided
that:

- 4 -

	 		(i) 	
      in the absence of action to the contrary by the Plan
      Administrator in connection with the grant of an Option, all Options shall
      be Non-Qualified Stock Options;

	 	 	 	 
	 		(ii) 	
      the aggregate fair market value (determined at the Date
      of Grant, as defined below) of the stock with respect to which Incentive
      Stock Options are exercisable for the first time by an Optionee subject to
      tax in the United States during any calendar year (granted under this Plan
      and all other Incentive Stock Option plans of the Company, a Related
      Company or a predecessor company) shall not exceed U.S.$100,000, or such
      other limit as may be prescribed by the Code as it may be amended from
      time to time (the "Annual Limit"); and

	 	 	 	 
	 		(iii) 	
      any portion of an Option which exceeds the Annual Limit
      shall not be void but rather shall be a Non-Qualified Stock
  Option.

	 	 	 	 
	 	(b) 	
      Date of Grant

	 	 	 	 
	 		
      Each Agreement shall state the date the Plan
      Administrator has deemed to be the effective date of the Option for
      purposes of this Plan (the "Date of Grant").

	 	 	 	 
	 	(c) 	
      Option Price

	 	 	 	 
	 		
      Each Agreement shall state the price per share of Common
      Stock at which it is exercisable. The Plan Administrator shall act in good
      faith to establish the exercise price in accordance with Applicable Laws;
      provided that:

	 	 	 	 
	 		(i) 	
      the per share exercise price for an Incentive Stock
      Option or any Option granted to a "covered employee" as such term is
      defined for purposes of Section 162(m) of the Code ("Covered Employee")
      shall not be less than the fair market value per share of the Common Stock
      at the Date of Grant as determined by the Plan Administrator in good
      faith;

	 	 	 	 
	 		(ii) 	
      with respect to Incentive Stock Options granted to
      greater-than-ten percent (>10%) shareholders of the Company (as
      determined with reference to Section 424(d) of the Code), the exercise
      price per share shall not be less than one hundred ten percent (110%) of
      the Fair Market Value (as such term is defined in (v) below) per share of
      the Common Stock at the Date of Grant as determined by the Plan
      Administrator in good faith;

	 	 	 	 
	 		(iii) 	
      Options granted in substitution for outstanding options
      of another company in connection with the merger, consolidation,
      acquisition of property or stock or other reorganization involving such
      other company and the Company or any subsidiary of the Company may be
      granted with an exercise price equal to the exercise price for the
      substituted option of the other company, subject to any adjustment
      consistent with the terms of the transaction pursuant to which the
      substitution is to occur; and

- 5 -

	 		(iv) 	
      with respect to Non-Qualified Stock Options, the exercise
      price per share shall be determined by the Plan Administrator at the time
      the Option is granted.

	 	 	 	 
	 		(v) 	
      For the purposes of the Plan, “Fair Market Value” means,
      with respect to the Common Stock and as of the date an Incentive Stock
      Option is granted hereunder, the market price per share of such Common
      Stock determined by the Committee, consistent with the requirements of
      Section 422 of the Code and to the extent consistent therewith, as
      follows: (i) If the Common Stock was traded on a stock exchange on the
      date in question, then the Fair Market Value will be equal to the closing
      price reported by the applicable composite-transactions report for such
      date; (ii) If the Common Stock was traded over-the-counter on the date in
      question and was classified as a national market issue, then the Fair
      Market Value will be equal to the last-transaction price quoted by the
      NASDAQ system for such date; (iii) If the Stock was traded
      over-the-counter on the date in question but was not classified as a
      national market issue, then the Fair Market Value will be equal to the
      average of the last reported representative bid and asked prices quoted by
      the NASDAQ system for such date; and (iv) If none of the foregoing
      provisions is applicable, then the Fair Market Value will be determined by
      the Committee in good faith on such basis as it deems
  appropriate.

	 	 	 	 
	 	(d) 	
      Duration of Options

	 	 	 	 
	 		
      At the time of the grant of the Option, the Plan
      Administrator shall designate, subject to paragraph 5.1(g) below, the
      expiration date of the Option, which date shall not be later than ten (10)
      years from the Date of Grant; provided, that the expiration date of
      any Incentive Stock Option granted to a greater-than-ten percent (>10%)
      shareholder of the Company (as determined with reference to Section 424(d)
      of the Code) shall not be later than five (5) years from the Date of
      Grant. In the absence of action to the contrary by the Plan Administrator
      in connection with the grant of a particular Option, and except in the
      case of Incentive Stock Options as described above, all Options granted
      under this Plan shall expire five (5) years from the Date of
  Grant.

	 	 	 	 
	 	(e) 	
      Vesting Schedule

	 	 	 	 
	 		
      No Option shall be exercisable until it has vested. The
      vesting schedule for each Option shall be specified by the Plan
      Administrator at the time of grant of the Option prior to the provision of
      services with respect to which such Option is granted; provided
      that if no vesting schedule is specified at the time of grant, the
      Option shall vest as follows:

	 	 	 	 
	 		(i) 	
      on the first anniversary of the Date of Grant, the Option
      shall vest and shall become exercisable with respect to 25% of the Common
      Stock to which it pertains;

- 6 -

	 		(ii) 	
      on the second anniversary of the Date of Grant, the
      Option shall vest and shall become exercisable with respect to an
      additional 25% of the Common Stock to which it pertains;

	 	 	 	 	 
	 		(iii) 	
      on the third anniversary of the Date of Grant, the Option
      shall vest and shall become exercisable with respect to an additional 25%
      of the Common Stock to which it pertains; and

	 	 	 	 	 
	 		(iv) 	
      on the fourth anniversary of the Date of Grant, the
      Option shall vest and shall become exercisable with respect to balance of
      the Common Stock to which it pertains.

	 	 	 	 	 
	 		
      The Plan Administrator may specify a vesting schedule for
      all or any portion of an Option based on the achievement of performance
      objectives established in advance of the commencement by the Optionee of
      services related to the achievement of the performance objectives.
      Performance objectives shall be expressed in terms of one or more of the
      following: return on equity, return on assets, share price, market share,
      sales, earnings per share, costs, net earnings, net worth, inventories,
      cash and cash equivalents, gross margin or the Company's performance
      relative to its internal business plan, or such other terms as determined
      and directed by the Board. Performance objectives may be in respect of the
      performance of the Company as a whole (whether on a consolidated or
      unconsolidated basis), a Related Company, or a subdivision, operating
      unit, product or product line of either of the foregoing. Performance
      objectives may be absolute or relative and may be expressed in terms of a
      progression or a range. An Option that is exercisable (in full or in part)
      upon the achievement of one or more performance objectives may be
      exercised only following written notice to the Optionee and the Company by
      the Plan Administrator that the performance objective has been
      achieved.

	 	 	 	 	 
	 	(f) 	
      Acceleration of Vesting

	 	 	 	 	 
	 		
      The vesting of one or more outstanding Options may be
      accelerated by the Plan Administrator at such times and in such amounts as
      it shall determine in its sole discretion. The vesting of Options also
      shall be accelerated under the circumstances described in Section 5.1(m)
      below.

	 	 	 	 	 
	 	(g) 	
      Term of Option

	 	 	 	 	 
	 		(i) 	
      Options that have vested as specified by the Plan
      Administrator or in accordance with this Plan, shall terminate, to the
      extent not previously exercised, upon the occurrence of the first of the
      following events:

	 	 	 	 	 
	 			A. 	
      the expiration of the Option, as designated by the Plan
      Administrator in accordance with Section 5.1(d) above;

	 	 	 	 	 
	 			B. 	
      the date of an Optionee's termination of employment or
      contractual relationship with the Company or any Related Company for cause
      (as determined in the sole discretion of the Plan
  Administrator);

- 7 -

	 		
      
	C.
      
	the expiration of three (3) months from the
      date of an Optionee's termination of employment or contractual
      relationship with the Company or any Related Company for any reason
      whatsoever other than cause, death or Disability (as defined below);
  or
	 	 	 	 	 
	 			D. 	
      the expiration of one year (1) from termination of an
      Optionee's employment or contractual relationship by reason of death or
      Disability (as defined below).

	 	 	 	 	 
	 		(ii) 	
      Upon the death of an Optionee, any vested Options held by
      the Optionee shall be exercisable only by the person or persons to whom
      such Optionee's rights under such Option shall pass by the Optionee's will
      or by the laws of descent and distribution of the Optionee's domicile at
      the time of death and only until such Options terminate as provided
      above.

	 	 	 	 	 
	 		(iii) 	
      For purposes of the Plan, unless otherwise defined in the
      Agreement, "Disability" shall mean medically determinable physical or
      mental impairment which has lasted or can be expected to last for a
      continuous period of not less than six (6) months or that can be expected
      to result in death. The Plan Administrator shall determine whether an
      Optionee has incurred a Disability on the basis of medical evidence
      acceptable to the Plan Administrator. Upon making a determination of
      Disability, the Plan Administrator shall, for purposes of the Plan,
      determine the date of an Optionee's termination of employment or
      contractual relationship.

	 	 	 	 	 
	 		(iv) 	
      Unless accelerated in accordance with Section 5.1(f)
      above, unvested Options shall terminate immediately upon the Optionee
      resigning from or the Company terminating the Optionee’s employment or
      contractual relationship with the Company or any Related Company for any
      reason whatsoever, including death or Disability.

	 	 	 	 	 
	 		(v) 	
      For purposes of this Plan, transfer of employment between
      or among the Company and/or any Related Company shall not be deemed to
      constitute a termination of employment with the Company or any Related
      Company. For purposes of this subsection, employment shall be deemed to
      continue while the Optionee is on military leave, sick leave or other
      bona fide leave of absence (as determined by the Plan
      Administrator). The foregoing notwithstanding, employment shall not be
      deemed to continue beyond the first ninety (90) days of such leave, unless
      the Optionee's re-employment rights are guaranteed by statute or by
      contract.

	 	 	 	 	 
	 	(h) 	
      Exercise of Options

	 	 	 	 	 
	 		(i) 	
      Options shall be exercisable, in full or in part, at any
      time after vesting, until termination. If less than all of the shares
      included in the vested portion of any Option are purchased, the remainder
      may be purchased at any subsequent time prior to the expiration of the
      Option term. No portion of any Option for less than fifty (50) shares (as
      adjusted pursuant to Section 5.1(m) below) may be exercised;
      provided, that if the vested portion of any Option is less
    than

- 8 -

	 		
       
	fifty (50) shares, it may be exercised with respect to
      all shares for which it is vested. Only whole shares may be issued
      pursuant to an Option, and to the extent that an Option covers less than
      one (1) share, it is unexercisable.
	 	 	 	 
	 		(ii) 	
      Options or portions thereof may be exercised by giving
      written notice to the Company, which notice shall specify the number of
      shares to be purchased, and be accompanied by payment in the amount of the
      aggregate exercise price for the Common Stock so purchased, which payment
      shall be in the form specified in Section 5.1(i) below. The Company shall
      not be obligated to issue, transfer or deliver a certificate of Common
      Stock to the Holder of any Option, until provision has been made by the
      Holder, to the satisfaction of the Company, for the payment of the
      aggregate exercise price for all shares for which the Option shall have
      been exercised and for satisfaction of any tax withholding obligations
      associated with such exercise.

	 	 	 	 
	 		(iii) 	
      During the lifetime of an Optionee, Options are
      exercisable only by the Optionee or in the case of a Non-Qualified Stock
      Option, transferee who takes title to such Option in the manner permitted
      by subsection 5.1(k) hereof.

	 	 	 	 
	 	(i) 	
      Payment upon Exercise of Option

	 	 	 	 
	 		
      Upon the exercise of any Option, the aggregate exercise
      price shall be paid to the Company in cash or by certified or cashier's
      check. In addition, if pre-approved in writing by the Plan Administrator
      who may arbitrarily withhold consent, the Holder may pay for all or any
      portion of the aggregate exercise price by complying with one or more of
      the following alternatives:

	 	 	 	 
	 		(i) 	
      by delivering to the Company shares of Common Stock
      previously held by such Holder, or by the Company withholding shares of
      Common Stock otherwise deliverable pursuant to exercise of the Option,
      which shares of Common Stock received or withheld shall have a fair market
      value at the date of exercise (as determined by the Plan Administrator)
      equal to the aggregate exercise price to be paid by the Optionee upon such
      exercise; or

	 	 	 	 
	 		(ii) 	
      by complying with any other payment mechanism approved by
      the Plan Administrator at the time of exercise.

	 	 	 	 
	 	(j) 	
      No Rights as a Shareholder

	 	 	 	 
	 		
      A Holder shall have no rights as a shareholder with
      respect to any shares covered by an Option until such Holder becomes a
      record holder of such shares, irrespective of whether such Holder has
      given notice of exercise. Subject to the provisions of Section 5.1(m)
      hereof, no rights shall accrue to a Holder and no adjustments shall be
      made on account of dividends (ordinary or extraordinary, whether in cash,
      securities or other property) or distributions or other rights declared
      on, or created in, the Common Stock for which the record date is prior to
      the date the Holder becomes a record holder of the shares of Common Stock
      covered by the Option, irrespective of whether such Holder has given
      notice of exercise.

- 9 -

	 	(k) 	
      Transfer of Option

	 	 	 	 	 
	 		(i) 	
      Options granted under this Plan and the rights and
      privileges conferred by this Plan may not be transferred, assigned,
      pledged or hypothecated in any manner (whether by operation of law or
      otherwise) other than by will or by applicable laws of descent and
      distribution or pursuant to a qualified domestic relations order, and
      shall not be subject to execution, attachment or similar process;
      provided however that, subject to applicable laws:

	 	 	 	 	 
	 			A. 	
      for Incentive Stock Options, any Agreement may provide or
      be amended to provide that a Option to which it relates is transferable
      without payment of consideration to immediate family members of the
      Optionee or to trusts or partnerships or limited liability companies
      established exclusively for the benefit of the Optionee and the Optionee's
      immediate family members; or

	 	 	 	 	 
	 			B. 	
      for Non-Qualified Stock Options, the Optionee's heirs or
      administrators may exercise any portion of the outstanding Options within
      one year of the Optionee's death.

	 	 	 	 	 
	 		(ii) 	
      Upon any attempt to transfer, assign, pledge, hypothecate
      or otherwise dispose of any Option or of any right or privilege conferred
      by this Plan contrary to the provisions hereof, or upon the sale, levy or
      any attachment or similar process upon the rights and privileges conferred
      by this Plan, such Option shall thereupon terminate and become null and
      void.

	 	 	 	 	 
	 	(l) 	
      Securities Regulation and Tax Withholding

	 	 	 	 	 
	 		(i) 	
      Shares shall not be issued with respect to an Option
      unless the exercise of such Option and the issuance and delivery of such
      shares shall comply with all Applicable Laws. The inability of the Company
      to obtain from any regulatory body the authority deemed by the Company to
      be necessary for the lawful issuance and sale of any Options or shares
      under this Plan, or the unavailability of an exemption from registration
      for the issuance and sale of any shares under this Plan, shall relieve the
      Company of any liability with respect to the non-issuance or sale of such
      Options or shares.

	 	 	 	 	 
	 		(ii) 	
      As a condition to the exercise of an Option, the Plan
      Administrator may require the Holder to represent and warrant in writing
      at the time of such exercise that the shares are being purchased only for
      investment and without any then-present intention to sell or distribute
      such shares. At the option of the Plan Administrator, a stop-transfer
      order against such shares may be placed on the stock books and records of
      the Company, and a legend indicating that the stock may not be pledged,
      sold or otherwise transferred unless an opinion of counsel is provided
      stating that such transfer is not in violation of any applicable law or
      regulation, may be stamped on the certificates representing such shares in
      order to assure an exemption from registration. The Plan Administrator
      also may require such other documentation as may from time to time be
      necessary to comply with federal

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      or state securities laws. THE COMPANY HAS NO OBLIGATION
      TO UNDERTAKE REGISTRATION OF OPTIONS OR THE SHARES OF STOCK ISSUABLE UPON
      THE EXERCISE OF OPTIONS.

	 	 	 	 	 
	 		(iii) 	
      The Holder shall pay to the Company by wire transfer,
      certified or cashier's check, promptly upon exercise of an Option or, if
      later, the date that the amount of such obligations becomes determinable,
      all applicable federal, state, local and foreign withholding taxes that
      the Plan Administrator, in its discretion, determines to result upon
      exercise of an Option or from a transfer or other disposition of shares of
      Common Stock acquired upon exercise of an Option or otherwise related to
      an Option or shares of Common Stock acquired in connection with an Option.
      Upon approval of the Plan Administrator, a Holder may satisfy such
      obligation by complying with one or more of the following alternatives
      selected by the Plan Administrator:

	 	 	 	 	 
	 			A. 	
      by delivering to the Company shares of Common Stock
      previously held by such Holder or by the Company withholding shares of
      Common Stock otherwise deliverable pursuant to the exercise of the Option,
      which shares of Common Stock received or withheld shall have a fair market
      value at the date of exercise (as determined by the Plan Administrator)
      equal to any withholding tax obligations arising as a result of such
      exercise, transfer or other disposition; or

	 	 	 	 	 
	 			B. 	
      by complying with any other payment mechanism approved by
      the Plan Administrator from time to time.

	 	 	 	 	 
	 		(iv) 	
      The issuance, transfer or delivery of certificates of
      Common Stock pursuant to the exercise of Options may be delayed, at the
      discretion of the Plan Administrator, until the Plan Administrator is
      satisfied that the applicable requirements of the federal or state
      securities laws and the withholding provisions under Applicable Laws have
      been met and that the Holder has paid or otherwise satisfied any
      withholding tax obligation as described in paragraph 5.1(l)(iii)
    above.

	 	 	 	 	 
	 	(m) 	
      Stock Dividend or Reorganization

	 	 	 	 	 
	 		(i) 	
      If: (1) the Company shall at any time be involved in a
      transaction described in Section 424(a) of the Code (or any successor
      provision) or any "corporate transaction" described in the regulations
      thereunder; (2) the Company shall declare a dividend payable in, or shall
      subdivide, reclassify, reorganize, or combine, its Common Stock or
      otherwise effect a change in the outstanding Common Stock as a result of a
      stock split, reverse stock split or other recapitalization; or (3) any
      other event with substantially the same effect shall occur, the Plan
      Administrator shall, subject to applicable law, with respect to each
      outstanding Option, proportionately adjust the number of shares of Common
      Stock subject to such Option and/or the exercise price per share so as to
      preserve the rights of the Holder substantially proportionate to the
      rights of the Holder prior to such event, and to the extent that such
      action shall include an increase or decrease in the number of shares of
      Common Stock

- 11 -

	 		
      subject to outstanding Options, the number of shares
      available under Section 4 of this Plan and the exercise price for such
      Options shall automatically be increased or decreased, as the case may be,
      proportionately, without further action on the part of the Plan
      Administrator, the Company, the Company's shareholders, or any Holder, so
      as to preserve the proportional rights of the Holder.

	 	 	 
	 	(ii) 	
      In the event that the presently authorized capital stock
      of the Company is changed into the same number of shares with a different
      par value, or without par value, the stock resulting from any such change
      shall be deemed to be Common Stock within the meaning of the Plan, and
      each Option shall apply to the same number of shares of such new stock as
      it applied to old shares immediately prior to such change.

	 	 	 
	 	(iii) 	
      If the Company shall at any time declare an extraordinary
      dividend with respect to the Common Stock, whether payable in cash or
      other property, the Plan Administrator may, subject to applicable law, in
      the exercise of its sole discretion and with respect to each outstanding
      Option, proportionately adjust the number of shares of Common Stock
      subject to such Option and/or adjust the exercise price per share so as to
      preserve the rights of the Holder substantially proportionate to the
      rights of the Holder prior to such event, and to the extent that such
      action shall include an increase or decrease in the number of shares of
      Common Stock subject to outstanding Options, the number of shares
      available under Section 4 of this Plan shall automatically be increased or
      decreased, as the case may be, proportionately, without further action on
      the part of the Plan Administrator, the Company, the Company's
      shareholders, or any Holder.

	 	 	 
	 	(iv) 	
      The foregoing adjustments in the shares subject to
      Options shall be made by the Plan Administrator, or by any successor
      administrator of this Plan, or by the applicable terms of any assumption
      or substitution document.

	 	 	 
	 	(v) 	
      The grant of an Option shall not affect in any way the
      right or power of the Company to make adjustments, reclassifications,
      reorganizations or changes of its capital or business structure, to merge,
      consolidate or dissolve, to liquidate or to sell or transfer all or any
      part of its business or assets.

6.                        EFFECTIVE
DATE; SHAREHOLDER APPROVAL

6.1                     
Incentive Stock Options may be granted by the Plan Administrator from time to
time on or after the date on which this Plan is adopted (the "Effective Date")
through the day immediately preceding the tenth anniversary of the Effective
Date.

6.2                     
Non-Qualified Stock Options may be granted by the Plan Administrator on
or after the Effective Date and until this Plan is terminated by the Board in
its sole discretion.

6.3                     
Termination of this Plan shall not terminate any Option granted prior
to such termination.

- 12 -

6.4                     
The approval of Disinterested Shareholders will be obtained for any
reduction in the exercise price of Options if the Optionee is an Insider of the
Company at the time of the proposed amendment. The terms "Disinterested
Shareholder" and "Insider" shall have the meanings as defined for those terms in
the Applicable Laws.

6.5                     
Any Options granted by the Plan Administrator prior to the approval of this Plan
by the shareholders of the Company shall be granted subject to ratification of
this Plan by the shareholders of the Company within twelve (12) months before or
after the Effective Date. If such shareholder ratification is sought and not
obtained, all Options granted prior thereto and thereafter shall be considered
Non-Qualified Stock Options and any Options granted to Covered Employees will
not be eligible for the exclusion set forth in Section 162(m) of the Code with
respect to the deductibility by the Company of certain compensation. In
addition, any such Options will remain unvested unless and until shareholder
approval is obtained.

7.                       
NO OBLIGATIONS TO EXERCISE OPTION

7.1                     
The grant of an Option shall impose no obligation upon the Optionee to exercise
such Option.

8.                       
NO RIGHT TO OPTIONS OR TO EMPLOYMENT

8.1                     
Whether or not any Options are to be granted under this Plan shall be
exclusively within the discretion of the Plan Administrator, and nothing
contained in this Plan shall be construed as giving any person any right to
participate under this Plan.

8.2                     
The grant of an Option shall in no way constitute any form of agreement
or understanding binding on the Company or any Related Company, express or
implied, that the Company or any Related Company will employ or contract with an
Optionee for any length of time, nor shall it interfere in any way with the
Company's or, where applicable, a Related Company's right to terminate
Optionee's employment at any time, which right is hereby reserved.

9.                       
APPLICATION OF FUNDS

9.1                     
The proceeds received by the Company from the sale of Common Stock
issued upon the exercise of Options shall be used for general corporate
purposes, unless otherwise directed by the Board.

10.                      
 INDEMNIFICATION OF PLAN ADMINISTRATOR

10.1                     
In addition to all other rights of indemnification they may have as
members of the Board, members of the Plan Administrator shall be indemnified by
the Company for all reasonable expenses and liabilities of any type or nature,
including attorneys' fees, incurred in connection with any action, suit or
proceeding to which they or any of them are a party by reason of, or in
connection with, this Plan or any Option granted under this Plan, and against
all amounts paid by them in settlement thereof (provided that such settlement is
approved by independent legal counsel selected by the Company), except to the
extent that such expenses relate to matters for which it is adjudged that such
Plan Administrator member is liable for willful misconduct; provided, that
within fifteen (15) days after the institution of any such action, suit or
proceeding, the Plan Administrator member involved therein shall, in writing,
notify the Company of such action, suit or proceeding, so that the 

- 13 -

Company may have the opportunity to make appropriate
arrangements to prosecute or defend the same.

11.                   
    AMENDMENT OF PLAN

11.1                     
The Plan Administrator may, subject to Applicable Laws, at any time,
modify, amend or terminate this Plan or modify or amend Options granted under
this Plan, including, without limitation, such modifications or amendments as
are necessary to maintain compliance with applicable statutes, rules or
regulations; provided however that:

	 	(a) 	
      no amendment with respect to an outstanding Option which
      has the effect of reducing the benefits afforded to the Holder thereof
      shall be made over the objection of such Holder;

	 	 	 
	 	(b) 	
      the events triggering acceleration of vesting of
      outstanding Options may be modified, expanded or eliminated without the
      consent of Holders;

	 	 	 
	 	(c) 	
      the Plan Administrator may condition the effectiveness of
      any such amendment on the receipt of shareholder approval at such time and
      in such manner as the Plan Administrator may consider necessary for the
      Company to comply with or to avail the Company and/or the Optionees of the
      benefits of any securities, tax, market listing or other administrative or
      regulatory requirement; and

	 	 	 
	 	(d) 	
      the Plan Administrator may not increase the number of
      shares available for issuance on the exercise of Incentive Stock Options
      without shareholder approval.

11.2                     
Without limiting the generality of Section 11.1 hereof, the Plan
Administrator may modify grants to persons who are eligible to receive Options
under this Plan who are foreign nationals or employed outside Canada and the
United States to recognize differences in local law, tax policy or custom.

Effective Date: June 1, 2009

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