Portions herein identified by [*****] have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  A complete copy of this document has been filed separately with the Securities and Exchange Commission.

EXCLUSIVE LICENSE AGREEMENT

THIS EXCLUSIVE LICENSE AGREEMENT (“Agreement”) is entered into as of this 5 ^th day of December, 2013 (“Effective Date”) by and among CEDARS-SINAI MEDICAL CENTER, a California nonprofit public benefit corporation (“CSMC”), with offices at 8700 Beverly Boulevard, Los Angeles, California 90048-1865, SYNTHETIC BIOLOGICS, INC ., a Nevada corporation, with offices at 155 Gibbs Street, Suite 412, Rockville, Maryland 20850 (“Synthetic”), and SYNTHETIC BIOMICS, INC. , a Nevada corporation with offices at 155 Gibbs Street, Suite 412, Rockville, Maryland 2085 which is a majority-owned subsidiary of Synthetic (the “Licensee”).

RECITALS

A.            CSMC owns and/or is entitled to grant license rights with respect to certain Patent Rights and Technical Information (as defined below) invented or developed in connection with research performed at CSMC’s Gastrointestinal Motility Program and Laboratory and CSMC’s Division of Endocrinology, Diabetes and Metabolism under the direction of Mark Pimentel, M.D., Henry Lin, M.D., Christopher Chang, M.D., and Ruchi Mathur, M.D. (hereinafter collectively referred to as the “Inventors”).

B.            CSMC desires to have the Patent Rights and the Technical Information developed, used and commercialized in the Field of Use (as defined below) by Licensee, and Licensee desires to obtain an exclusive, worldwide license to conduct research in the Field of Use, and to develop, manufacture, use and sell Licensed Products and Licensed Technology Products (as defined below) in the Field of Use, using the Patent Rights and Technical Information in accordance with the terms of this Agreement. Other than the rights expressly granted by CSMC hereunder within the Field of Use, Licensee acknowledges that CSMC shall retain all other rights with respect to the Patent Rights and the Technical Information.

C.            CSMC and Licensee intend that the execution, delivery and performance of this Agreement by each party, and the consummation of the transactions contemplated hereunder, shall not at any time threaten CSMC’s tax-exempt status under Section 501(c)(3) of the Internal Revenue Code and Section 23701d of the California Revenue and Taxation Code, or cause CSMC to be in default under any of CSMC’s issued and outstanding tax-exempt bonds.

Now, Therefore , in consideration of the mutual covenants and premises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.           Definitions

1.1           “Affiliate” or “Affiliates” shall mean any corporation, person or entity, which controls, is controlled by, or is under common control with, a party to this Agreement without regard to stock or other equity ownership. For purposes hereof, the terms “control” and “controls” mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation, person or entity, whether through the ownership of voting securities, by contract or otherwise.

Portions herein identified by [*****] have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  A complete copy of this document has been filed separately with the Securities and Exchange Commission.

1.2           “Confidential Information” shall mean any confidential or proprietary information furnished by one party (the “Disclosing Party”) to the other parties (the “Receiving Party”) in connection with this Agreement, including, without limitation, all specifications, know-how, trade secrets, technical information, drawings, software, models, business information and patent applications pertaining to the Patent Rights and Technical Information, and as further provided in Section 10 hereof.

1.3           “FDA” shall mean the United States Food and Drug Administration, or any successor agency thereof.

1.4           “Field of Use” shall mean all human or veterinary therapeutic, prophylactic, diagnostic or prognostic applications, excluding the following:

1.          the therapeutic use of rifaximin;

2.          the therapeutic use of any of the following, as each is more fully described in U.S. Patent No. 6,558,708: (A) active lipids, (B) serotonin, serotonin agonists, or serotonin re-uptake inhibitors, (C) peptide YY or peptide YY functional analogs, (D) calcitonin gene-related peptide or functional analogs thereof, (E) adrenergic agonists, (F) opioid agonists, (G) combinations of any of (A), (B), (C), (D), (E) and/or (F); and (H) antagonists of receptors for any of (B), (C), (D), (E) and/or (F));

3.          the diagnosis, prognosis, or the testing of, or the provision of information to clinicians or patients regarding, small intestinal bacterial overgrowth (SIBO), and/or conditions or disorders related thereto in human subjects, using breath testing products or breath testing services to detect SIBO or SIBO-related conditions ( provided, however , that the right to include information about diagnostic testing described in the Patent Rights as inclusion, exclusion or similar criteria for regulatory purposes, including without limitation on prescribing labels shall not be excluded); and

4.          the diagnosis, prognosis, or the testing of, or the provision of information to clinicians or patients regarding, conditions, based on the analysis of anti-vinculin antibodies and/or anti-CDT (cytolethal distending toxins) antibodies.

1.5           “Funding Agencies” shall mean any public or private granting agencies which have provided funding to CSMC or to Dr. Pimentel for the development of any of the Patent Rights or Technical Information prior to the Effective Date.

1.6           “Improvements” shall mean all improvements or enhancements to the Patent Rights that, after the Effective Date, are conceived and reduced to practice if patentable, or reduced to practice if not patentable, by or under the direction of any of the Inventors at CSMC. For the avoidance of doubt, Improvements shall not include Sponsored Inventions (as defined in Section 2.4).

1.7           “Licensee Developments” shall mean any and all processes, uses, designs, applications, methods and compositions-of-matter, indications, improvements, enhancements and modifications in the Field of Use directly based upon or directly created using the Patent Rights and/or Technical Information and which were discovered or developed by or on behalf of Licensee (exclusive of work performed by CSMC or the Inventors) during the term of this Agreement.

1.8           “Licensed Product” or “Licensed Products” shall mean all therapeutic and prophylactic products and all diagnostic and/or prognostic products or services, in each case, the manufacture, use, offer for sale or sale of which would, but for the licenses granted in this Agreement, directly or indirectly infringe a Valid Claim of a Patent Right in the jurisdiction in the Territory where such product or service is manufactured, used, offered for sale or sold, and in each case, within the Field of Use.

1.9            “ Licensed Technology ” shall mean the clinical trial protocols, know-how, clinical trial results and data, developed and owned by CSMC relating to the Licensed Products, and in each case, within the Field of Use.

1.10          “ Licensed Technology Product ” shall mean a product or service made through the use of or incorporating Licensed Technology that is not otherwise a Licensed Product.

1.11         “Net Sales” shall mean the gross amount invoiced by Licensee or Permitted Sublicensees to third parties for all sales of Licensed Products or Licensed Technology Products less (a) trade, cash or quantity discounts or rebates actually allowed or taken; (b) credits for claims or allowances given or made for rejection of, or return of previously sold Licensed Products or Licensed Technology Products or retroactive price reductions (including Medicare and similar types of rebates); (c) charges for prepaid freight, insurance and other transportation costs directly related to the delivery of the Licensed Product or Licensed Technology Product and invoiced by Licensee or Permitted Sublicensees; and (d) sales, transfer and other excise taxes or other governmental charges actually paid in connection with sales of Licensed Products or Licensed Technology Products (but excluding what are commonly known as franchise, income taxes and value-added taxes). Sales of Licensed Products or Licensed Technology Products by Licensee, or a Permitted Sublicensee of Licensee, to any Permitted Sublicensee which is a reseller thereof shall be excluded, and only the subsequent sale of such Licensed Products or Licensed Technology Products by Permitted Sublicensees of Licensee shall be deemed Net Sales hereunder. If a Licensed Product or Licensed Technology Product is sold or provided as part of a system, package, or combination product or service that involve one or more products or services not covered by the Patent Rights (each, a “Combination Product”), Net Sales shall be calculated by multiplying the Net Sales of such Combination Product, by the fraction A/B, where “A” is the price of the Licensed Product or Licensed Technology Product included in such Combination Product when sold separately from any other products or services not covered by the Patent Rights and “B” is the price of the Combination Product. In the event that no market price is available for the Licensed Product or Licensed Technology Products included in such Combination Product when supplied or priced separately, CSMC and Licensee shall determine in good faith the fair market value thereof.

1.12         “Non-Royalty Sublicense Revenues” shall mean, but is not limited to, upfront fees, license maintenance fees, and milestone payments, or other payments, including the fair market value of any non-cash consideration, received by Licensee in consideration for any rights granted to Patent Rights under a sublicense agreement, including but not limited to upfront and milestone payments, license maintenance fees and the Fair Market Value of any non-cash consideration, excluding (a) sales-based royalties; and (b) reimbursements for customary patent expenses with respect to Patent Rights. As used in this Section 1.12, “ Fair Market Value ” means: (a) if the Permitted Sublicensee’s common stock is publicly traded on an exchange, the value of such equity using a per share price equal to the average of the reported closing prices of such stock on such exchange for the twenty (20) trading days prior to such purchase; or (b) if the Permitted Sublicensee’s common stock is not publicly traded, the value of such equity determined by the Permitted Sublicensee’s Board of Directors in good faith based on the per share purchase price of the Permitted Sublicensee’s most recent equity financing as of a date which is within thirty (30) days of the date as of which the determination is to be made.

1.13         “Patent Rights” shall mean the patents and/or patent applications existing on the Effective Date which are described on Schedule A attached hereto, and any patent that issues thereon. The Patent Rights are all owned by CSMC. The Licensed Patent Rights specifically exclude U.S. Patent Nos. 7,452,857, 7,605,240, 7,718,608, 7,935,799, 7,081,239, 7,244,412, 7,608,245, 7,615,207, 8,562,952, 6,558,708 and 5,977,175 and U.S. Patent Application Serial No. 11/411,733.

1.14         “Technical Information” shall mean, as of the Effective Date, the following information in the Field of Use which is described in the Patent Rights or otherwise provided to Licensee: know-how, trade secrets, unpublished patent applications, software, bioinformatics, unpatented technology, technical information, statistical information and analyses, biological materials, chemical reagents, preclinical and clinical information, in each case which has been conceived or reduced to practice prior to the Effective Date, in connection with research performed at CSMC’s Gastrointestinal Motility Program and Laboratory and CSMC’s Division of Endocrinology, Diabetes and Metabolism under the direction of one or any of the Inventors. The Technical Information shall further include information in the Field of Use described in Schedule B hereto and which has been reduced to practice prior to the Effective Date in the conduct of the aforementioned research programs at CSMC under the direction of one or any of the Inventors. Technical Information is all owned by CSMC.

1.15         “Territory” shall mean worldwide.

1.16         “Valid Claim” shall mean a claim of an issued patent included within the Patent Rights, which claim has not: (a) lapsed, been canceled, or become abandoned; (b) been declared invalid or unenforceable by a non-appealable decision or judgment of a court or other appropriate body or authority of competent jurisdiction; or (c) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise. The term Valid Claim shall also include the claims of a pending patent application within the Patent Rights.

2.           License

2.1           Grant of Exclusive Rights. Subject to the terms of this Agreement, CSMC hereby grants to Licensee, and Licensee hereby accepts from CSMC, the exclusive license, with the right to grant sublicenses (subject to the terms of Section 2.3 hereof), under and to the Patent Rights and Technical Information during the term of this Agreement (as provided in Section 6 hereof) to conduct research in the Field of Use and to make, have made, use, develop, import, have imported, export, have exported, offer for sale, or have offered for sale, sell and/or have sold Licensed Products and Licensed Technology Products in the Field of Use in the Territory. The foregoing grant of exclusivity is made expressly subject to the following:

(a)           All applicable laws and regulations, including, without limitation, the requirements of federal law as pertain to the manufacture of products within the United States;

(b)           All applicable rules of the Funding Agencies which have provided funding to CSMC or to any of its employees (including any of the Inventors) for the development of the Patent Rights and Technical Information; and

(c)           The following non-exclusive rights to the Patent Rights and Technical Information, which are retained by CSMC within the Field of Use:

(i)           the right to submit for publication the scientific findings from research conducted by or through CSMC or its investigators (including the Inventors) related to the Patent Rights and the Technical Information; and

(ii)          the right (A) to use any tangible or intangible information contained in the Patent Rights or the Technical Information or any Improvements (so long as CSMC shall treat such information as Confidential Information and maintain its confidentiality in accordance with Section 10 hereof), for CSMC’s internal non-commercial scientific, research, internal teaching, non-profit clinical research and other educationally-related and non-commercial (except for charges to its own patients) clinical purposes, where clinical use does not involve a third party funding grant to commercialize such information, and (B) to obtain research funding for further study and development thereof from governmental and other nonprofit organizations (including grant applications).

(d)           Notwithstanding any other provision hereof to the contrary, all rights to the Patent Rights, Technical Information and Improvements outside of the Field of Use are retained by CSMC. Furthermore, this Agreement confers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of CSMC other than Patent Rights regardless of whether such patents are dominant or subordinate to Patent Rights.

2.2           Guarantee of Licensee’s Performance. Synthetic hereby unconditionally guarantees to CSMC the full and complete performance of all of the terms, covenants and conditions of this Agreement as required to be performed by Licensee, including, but not limited to, the payment of all amounts due hereunder. Synthetic’s guarantee obligations hereunder shall terminate on the later of (a) the date on which Licensee ceases to be controlled or majority-owned by Synthetic, whether alone or together with one or more of Synthetic’s Affiliates (other than Licensee); and (b) the date on which Licensee has paid CSMC the second milestone payment required by Section 4.6(e)(ii). For purposes of this Section 2.2, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of Licensee, whether through the ownership of voting securities, by contract or otherwise.

2.3           Sublicensing. Licensee shall have the right to grant sublicenses or to assign (subject to Section 13.11) any or all of the rights granted hereunder to (a) public companies listed on the NYSE, NYSE MKT, NYSE Arca or NASDAQ stock exchanges; (b) private companies having at least $25 million in annual sales; or (c) entities which have been approved in writing by CSMC (such consent not to be unreasonably withheld) (each, “Permitted Sublicensee”). Any such Permitted Sublicensee shall be subject in all respects to the provisions contained in this Agreement and Licensee will remain primarily liable to CSMC for, and shall be responsible for monitoring and enforcing, performance of all of Licensee’s obligations hereunder by any such Permitted Sublicensee. Without limiting the generality of the foregoing, as an express condition of any such sublicense, any such Permitted Sublicensee shall be required to agree in writing to be bound by commercially reasonable reporting and record keeping, indemnification and inspection provisions, and the applicable provisions of this Agreement, including, without limitation, those pertaining to the use of CSMC’s name and marks, indemnification of CSMC and the use of CSMC’s Confidential Information. Permitted Sublicensees may not further sublicense without CSMC’s prior written consent, which consent shall not be unreasonably withheld. Licensee shall promptly forward to CSMC a copy of any and all fully executed sublicense agreements, any subsequent amendments, and all copies of Permitted Sublicensees’ profit sharing or royalty reports, in no event more than thirty (30) days following execution or receipt thereof, as applicable. Licensee shall also keep CSMC reasonably informed with respect to the progress of any relations entered into with any Permitted Sublicensees. If Licensee shall conduct one or more audits of its Permitted Sublicensees hereunder during the term hereof, Licensee shall provide copies of all audit reports to CSMC on a timely basis. The covenants pertaining to the use of CSMC’s name and marks, the indemnification of CSMC and the use of CSMC’s Confidential Information in any sublicense or assignment shall run for the benefit of CSMC, who shall be expressly stated as being a third-party beneficiary thereof with respect to the covenants set forth in this Agreement. Licensee understands and agrees that none of its permitted sublicenses hereunder shall reduce in any manner any of its obligations set forth in this Agreement.

(a)          Required Sublicensing. If Licensee is unable or unwilling to serve or develop a potential market or market territory for which there is a company willing to be a Permitted Sublicensee, Licensee will, at CSMC’s request, negotiate in good faith a sublicense with any such Permitted Sublicensee.

(b)          Royalty-Free Sublicenses. If, and only if, Licensee pays all royalties due CSMC from a Permitted Sublicensee’s Net Sales, Licensee may grant that Permitted Sublicensee a royalty-free or non-cash sublicense or cross-license.

2.4           Sponsored Research. Licensee shall sponsor at CSMC, under an Investigational New Drug application, at least one of the clinical trials described in Schedule G attached hereto, for the purpose of testing an oral anti-methanogen for (a) constipation-predominant irritable bowel syndrome and/or (b) obesity/hypercholesterolemia/pre-diabetes, as may be further enumerated pursuant to the protocols and budgets to be mutually developed by the parties (each, a “Sponsored Clinical Trial”). In the event that Licensee conducts the second clinical trial described in Schedule G , Licensee agrees to sponsor such clinical trial at CSMC. Any inventions within the Field of Use that are (a) created, discovered or invented as a direct result of the Sponsored Clinical Trial(s) and (b) the practice of which are generally described in a specification of the Patent Rights (each, a “Sponsored Invention”), shall automatically be, and shall be deemed to be, without any further consideration and without any further action by the parties, part of the rights licensed to Licensee under Section 2.1 hereof; provided, however , that to the extent that any such Sponsored Invention is captured in a patent application, the parties shall amend Schedule A of this Agreement to include such patent application.

2.5           Improvements. Subject to the rights and applicable rules of the Funding Agencies, Licensee shall have, for a period of three (3) months after receipt by Licensee of written notice from CSMC disclosing an Improvement, the exclusive first right to negotiate with CSMC to obtain one or more licenses to the Improvement in the Field of Use upon such terms and conditions as shall be agreed by the parties hereto, which terms and conditions shall include provisions for fair market value consideration for the grant of any such licenses. If Licensee declines or fails to pursue a license to such Improvement in the Field of Use within the three (3) month period described above, or if the parties engage in good faith negotiations and fail to conclude negotiations for a license to such Improvement in the Field of Use within a six (6) month period from the date of such notice, then CSMC shall have the right to commence discussions with any other party concerning such Improvement. Subject to the provisions of this Section 2.5, Licensee acknowledges and agrees that CSMC expressly retains and reserves any and all right, title and interest in and to the Improvement, whether or not in the Field of Use and, accordingly, no license to any Improvement is granted to Licensee under this Agreement.

2.6           Licensee Developments. Licensee hereby grants, and shall require its Permitted Sublicensee(s) to grant to CSMC a nonexclusive, royalty-free, irrevocable, paid-up license, with the right to grant sublicenses to non-profit research institutions and governmental agencies, to practice and use Licensee Developments for non-commercial research purposes, which license shall include, without limitation, the rights to: (a) publish the scientific findings from research conducted by or through CSMC or on its behalf; provided, however , that Licensee is provided forty-five (45) days prior notice of any such publication and an opportunity to review such publication; (b) use any tangible or intangible information contained in the Licensee Developments (so long as CSMC shall treat such information as Confidential Information and maintain its confidentiality in accordance with Section 10 hereof), for CSMC’s internal teaching and other educationally-related and non-commercial (except for charges to its own patients) clinical purposes, where clinical use does not involve a third party funding grant to commercialize such information; and (c) obtain research funding from governmental and other nonprofit organizations (including grant applications).

2.7           Milestones. Licensee acknowledges that it is important to CSMC, and a requirement of the United States Government under Title 35, Section 203 of the United States Code, that Licensee pursue the development, commercialization and marketing of Licensed Products and Licensed Technology Products and otherwise exercises commercially reasonable efforts to maximize the value of this Agreement to CSMC. CSMC and Licensee have agreed on the Milestones set forth on Schedule F , with each such Milestone being deemed a separate and independent condition. Within sixty (60) days after each anniversary of the Effective Date, Licensee shall prepare and deliver to CSMC an annual written report (to be certified by an executive officer of Licensee) indicating its compliance with the Milestones. If Licensee believes that it is or will be unable to achieve such Milestones despite its diligent efforts, Licensee may request amendments or reasonable extensions to Schedule F in writing for CSMC’s consideration. Licensee agrees to provide any additional information reasonably required by CSMC to evaluate Licensee’s performance under this Agreement. If Licensee fails to meet any annual Milestone designated in Schedule F hereto, and has not obtained an extension or amendment to such Milestone(s), CSMC may, at its option and as its sole remedy for Licensee’ breach of this Section 2.7, upon written notice to Licensee, convert the exclusive license granted under Section 2.1 hereof to a non-exclusive license or to a co-exclusive license, or terminate the license.

3.           Representations And Warranties

3.1           Rights to Technology. Except for the rights, if any, of the Funding Agencies or the United States Government, CSMC represents and warrants to Licensee that, to the best of its actual, current knowledge (without investigation outside of CSMC as to such representations and warranties) (a) it has the right to grant the licenses in this Agreement; (b) it has not granted licenses to the Patent Rights or Technical Information to any other party that would restrict the rights granted hereunder except as stated herein; and (c) there are no claims, judgments or settlements to be paid by CSMC with respect the Patent Rights or Technical Information or pending claims or litigation relating to the Patent Rights or Technical Information. Except for any potential or actual rights of Funding Agencies or the United States Government, CSMC is not aware that any additional rights or licenses are necessary for Licensee to exercise its licensed rights granted by CSMC under this Agreement.

3.2           Limited Warranty; Certain Damages.

(a)          Limited Warranty. CSMC makes no representation or warranty other than those expressly specified in this Agreement. Licensee accepts the Patent Rights and the Technical Information on an “AS-IS” basis. OTHER THAN AS SET FORTH IN THIS AGREEMENT, CSMC MAKES NO OTHER WARRANTIES CONCERNING PATENT RIGHTS OR TECHNICAL INFORMATION COVERED BY THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AS TO PATENT RIGHTS, TECHNICAL INFORMATION OR ANY PRODUCT. OTHER THAN AS SET FORTH IN THIS AGREEMENT CSMC MAKES NO WARRANTY OR REPRESENTATION AS TO THE VALIDITY OR SCOPE OF PATENT RIGHTS, OR THAT ANY PRODUCT WILL BE FREE FROM AN INFRINGEMENT ON PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY INFRINGING PATENT RIGHTS COVERED BY THIS AGREEMENT. LICENSEE HEREBY AGREES THAT LICENSEE WILL NOT GIVE, AND SHALL NOT PERMIT ANY AFFILIATES OR SUBLICENSEES OR AFFILIATES THEREOF TO GIVE, ANY SUCH WARRANTY OR REPRESENTATION TO THIRD PARTIES ON BEHALF OF CSMC.

(b)          Certain Damages. EXCEPT FOR THE BREACH OF THE CONFIDENTIALITY PROVISIONS IN SECTION 10 OR IN ACCORDANCE WITH THE OBLIGATION TO INDEMNIFY SET FORTH IN SECTION 8, IN NO EVENT SHALL CSMC BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS OR EXPECTED SAVINGS OR OTHER ECONOMIC LOSSES, OR FOR INJURY TO PERSONS OR PROPERTY) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER, REGARDLESS OF WHETHER CSMC KNOWS OR SHOULD KNOW OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR THE BREACH OF THE CONFIDENTIALITY PROVISIONS IN SECTION 10 OR IN ACCORDANCE WITH THE OBLIGATION TO INDEMNIFY SET FORTH IN SECTION 8, CSMC’S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO THIS AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID BY LICENSEE TO CSMC UNDER THIS AGREEMENT. THE FOREGOING EXCLUSIONS AND LIMITATIONS SHALL APPLY TO ALL CLAIMS AND ACTIONS OF ANY KIND, WHETHER BASED ON CONTRACT, TORT (INCLUDING, BUT NOT LIMITED TO NEGLIGENCE), OR ANY OTHER GROUNDS.

3.3           Rights Retained by Funding Agencies . Licensee acknowledges that to the extent that the Patent Rights and Technical Information have been developed in part under one or more funding agreements (“Funding Agreements”) with one or more Funding Agencies, such Funding Agencies have certain statutory, non-exclusive rights relative thereto for use for government purposes as well as regulatory or statutory “march-in rights” (collectively, “Statutory Rights”). Licensee also acknowledges that to the extent that the Improvements may be developed in part under one or more Funding Agreements with one or more Funding Agencies, such Funding Agencies may have certain Statutory Rights relative thereto. This Agreement is explicitly made subject to such Statutory Rights and, to the extent of any conflict between any such Statutory Rights and this Agreement, such Statutory Rights shall prevail.

4.           Consideration

In consideration of the execution and delivery by CSMC of this Agreement, Licensee agrees as follows:

4.1           Initial License Fee. No later than thirty (30) days after the execution of this Agreement, Synthetic shall issue to CSMC $150,000 in shares of its common stock; provided that such share issuance shall be subject to Section 4.5 hereof and the execution of a Stock Purchase Agreement in the form attached hereto as Schedule C (the “Synthetic Stock Purchase Agreement”). Failure of Synthetic either to issue such shares to CSMC or pay the equivalent amount in cash to CSMC within thirty (30) days of the execution of this Agreement shall render this Agreement null and void ( ab initio ).

4.2           Reimbursement of Patent Expenses. No later than thirty (30) days after the execution of this Agreement, CSMC shall be reimbursed for its prior patent expenses related to Patent Rights through the issuance by Synthetic to CSMC of $220,000 in shares of its common stock; provided that such share issuance shall be subject to Section 4.5 hereof and the execution of the Synthetic Stock Purchase Agreement. Failure of Licensee either to issue such shares to CSMC or pay the equivalent amount in cash to CSMC within thirty (30) days of the execution of this Agreement shall render this Agreement null and void ( ab initio ).

4.3 Annual Maintenance Fee. Commencing on the second annual anniversary of this Agreement, and each anniversary thereof, Licensee shall pay CSMC an annual maintenance fee of $**** (“Maintenance Fee”). The Maintenance Fee shall be creditable against Royalties otherwise payable hereunder during the applicable twelve (12) month period; provided, however , that Licensee may not carry over to the following year any amount by which the Maintenance Fee paid exceeds the actual amount of Royalties payable hereunder during the applicable twelve (12) month period.

4.4           Licensee Equity Issuance. Prior to execution of this Agreement, Licensee shall have issued eleven and one-half percent (11.5%) of its issued and outstanding shares of common stock on a fully diluted basis to CSMC, subject to execution of a Stock Purchase Agreement in the form attached hereto as Schedule D (the “Licensee Stock Purchase Agreement”). Failure of Licensee to issue such shares shall render this Agreement null and void ( ab initio ). Such shares issued hereunder shall be of the same class and series as founders’ shares. A true and complete copy of Licensee’s capitalization table as of the Effective Date of the Agreement is set forth in Schedule E hereto. CSMC shall have the anti-dilution protections, tag-along rights and the right to exchange CSMC’s equity in Licensee for equity in Synthetic as set forth in the Licensee Stock Purchase Agreement.

4.5           Exchange Approval . The parties acknowledge that subject to Synthetic’s obligations under the Synthetic Stock Purchase Agreement(s), any issuance of stock by Synthetic hereunder, including with respect to the license fees, patent expense reimbursements, and Milestone payments referred to herein, may be subject to the prior approval of the NYSE MKT or any other exchange upon which the shares of Synthetic are traded, and shareholder approval, if so required by such exchange or any other rule or regulation applicable to the Licensee or Synthetic. Synthetic shall submit an application to the NYSE MKT for approval to issue the shares required to be issued under Sections 4.1 and 4.2 within five (5) days of the execution of this Agreement. In the event that Synthetic elects to pay either or both of the Phase I and Phase II Milestone payments described in Section 4.6(e)(ii) by issuing shares of Synthetic stock to CSMC, Synthetic shall submit an application to the NYSE MKT for approval to issue such shares within thirty (30) days of the occurrence of the applicable Milestone. In the event that Synthetic shall not have received shareholder approval or NYSE MKT approval to issue any such shares hereunder within fifteen (15) business days of the submission of any such application to the NYSE MKT, then Company shall instead make cash payments in satisfaction of its obligations under Sections 4.1, 4.2 and/or 4.6(e)(ii), as applicable.

4.6           Royalties and Non-Royalty Revenue.

(a)          Running Royalties for Licensed Products and Licensed Technology Products. Licensee agrees to pay and shall pay to CSMC the following running royalties: (a) **** percent (****%) of Net Sales of Licensed Products made, used, sold or otherwise distributed by Licensee or any Permitted Sublicensee hereunder; and (b) **** percent (****%) of Net Sales of Licensed Technology Products made, used, sold or otherwise distributed by Licensee or any Permitted Sublicensee hereunder (each, a “Royalty”). If Licensee is required to make any payment to a third party to obtain a license for the manufacture, use, sale or import of a Licensed Product or Licensed Technology Product or otherwise exploit the Licensed Patent Rights, Licensee shall be entitled to deduct up to **** percent (****%) of such third party payments made in a particular calendar year against Royalties payable to CSMC for that year; provided, however , that in no event shall the Royalties payable to CSMC hereunder for any one-year period be reduced by operation of this section by more than **** percent (****%); and provided, further , that such third party payments shall only be creditable against Royalties payable to CSMC for the calendar year in which the third party payment was actually made by Licensee.

(b)          Licensee Challenge of Patent Rights. Should Licensee bring, directly or through a third party indirectly, an action challenging the validity, scope or enforceability of any Patent Rights, Licensee will first provide CSMC with at least ninety (90) days’ prior written notice that it intends so to do before filing such a challenge. Following the giving of such notice, Licensee will pay to CSMC the Royalties and Non-Royalty Sublicense Revenue due hereunder at the rate of two times the applicable rate during the pendency of such action. Should the outcome of such action determine that any claim of a patent challenged by Licensee is valid and/or infringed and/or enforceable, as applicable, Licensee will thereafter pay to CSMC the Royalties and Non-Royalty Sublicense Revenue due hereunder at the rate of three times the applicable rate for all Licensed Products and Licensed Technology Products sold that would infringe such claim and/or transactions that include a grant of rights to such claim. Such increased royalty reflects the increased value of the Patent Rights upheld in such action. In the event that a challenge of Patent Rights brought by Licensee is partially or entirely successful, Licensee will have no right to recoup any Royalties or other amounts paid before or during the period of the challenge. Additionally, Licensee agrees to disburse any and all proceeds received from any sublicense of the applicable Patent Rights throughout the duration of any such challenge to CSMC, and agrees to reimburse CSMC for all costs actually incurred by CSMC in connection with the applicable legal proceedings. In the event that all or any portion of this Section 4.6(b) is invalid, illegal or unenforceable, then the parties will use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, gives effect to the intent of this Section 4.6(b).

(c)          Arm’s-Length Transactions. On sales of Licensed Products and Licensed Technology Products which are made in other than an arms’-length transaction, the value of the Net Sales attributed under this Section 4.6 to such a transaction shall be that which would have been received in an arms’-length transaction, based on sales of like quality and quantity products on or about the time of such transaction.

(d)          Duration of Royalty Obligations. The royalty obligations of Licensee as to each Licensed Product shall terminate on the later of, on a country-by-country basis, (a) the expiration of the last to expire of a Valid Claim within the Patent Rights that covers such Licensed Product, including any term extensions thereof, or (b) twelve years after the first commercial sale of such Licensed Product. The royalty obligations of Licensee as to each Licensed Technology Product shall terminate twenty (20) years after the first commercial sale of such Licensed Technology Product.

(e)          Non-Royalty Revenues.

(i)          Non-Royalty Sublicense Revenues. Any and all “Non-Royalty Sublicense Revenues” shall be reported and paid to CSMC by Licensee as set forth below within sixty (60) days of receipt by Licensee. Licensee shall pay to CSMC a percentage of these Non-Royalty Sublicense Revenues according to the following schedule:

Any non-cash consideration received by Licensee from Permitted Sublicensees shall be valued at its Fair Market Value as of the date of receipt and such amount shall be paid in cash to CSMC in accordance with the schedule above. In the event that the Patent Rights are sublicensed in combination with one or more patented technologies that are not covered under this Agreement, Non-Royalty Sublicense Revenues for the purposes of this Section 4.6(e) shall be calculated on a pro-rata basis in a manner to be mutually agreed by CSMC and Licensee (which agreement may be a condition of approval under Section 2.3).

(ii)         Product Development Milestones. Licensee agrees to pay and shall pay to CSMC the following non-creditable, non-refundable product development milestone payments within sixty (60) days of the first occurrence of a milestone (or its equivalent):

For the avoidance of doubt, in the event that Licensee has paid CSMC the required milestone payments with respect to a Licensed Product or Licensed Technology Product, new milestone payments (as set forth above) shall be due in the event that the Licensee proceeds with the development of new indications of such Licensed Product or Licensed Technology Product and initiates Phase III patient dosing for such new indications; provided, however, that no new milestone payments shall be due in the event that Licensee proceeds with subsequent clinical trials testing different formulations or dosing requirements with respect to such Licensed Product or Licensed Technology Product.

(f)          Payment and Accounting.

(i)          Reports. Each payment of Royalties shall be accompanied by a report in the form attached as Schedule H hereto, which sets forth in reasonable detail the number and each type of Licensed Product and Licensed Technology Product sold and the calculation of Net Sales applicable thereto, and such additional details as may be reasonably requested by CSMC for the determination of Royalties payable hereunder. Licensed Products and Licensed Technology Products shall be considered as being sold for the purpose of the calculation of Royalties under this Agreement when payment has been received for the Licensed Products or Licensed Technology Products. Each payment of Non-Royalty Sublicense Revenue shall be accompanied by a report in the form attached as Schedule H hereto setting forth in reasonable detail the basis for the calculation of such amounts, and such additional details as may be reasonably requested by CSMC for the determination of Non-Royalty Sublicense Revenue payable hereunder. Hard copies of such reports shall be sent to CSMC’s address set forth in Section 13.1 of the Agreement, while an electronic copy shall be sent by electronic mail to CSTechTransfer@cshs.org . Except as otherwise provided herein, all amounts due hereunder shall be paid in United States dollars and shall be made without set off and free and clear of (and without any deduction or withholding for) any taxes, duties, levies, imposts or similar fees or charges. Royalties shall be payable by Licensee quarterly, within sixty (60) days after the end of each calendar quarter, based upon revenues received during the immediately preceding calendar quarter. Licensee agrees to pay and shall pay to CSMC, or cause its Permitted Sublicensees to pay to CSMC, all Royalties resulting from the activities of its Permitted Sublicensees, within sixty (60) days after the end of each calendar quarter in which Licensee has received payment from the Permitted Sublicensees.

(ii)         Notice of Payment. Licensee shall provide prompt written notice to CSMC that it has paid any annual maintenance fee required by Section 4.3 or any product development milestone payment required by Section 4.6(e) by electronic mail to CSTechTransfer@cshs.org .

(iii)        Wire Transfer Instructions. All payments due hereunder shall be made by Licensee to CSMC in accordance with the following wire transfer instructions:

****

(iv)        Records and Audits. Licensee shall create and maintain complete and accurate records and documentation concerning all sales of Licensed Products and Licensed Technology Products by Licensee, its Affiliates and Permitted Sublicensees as well as transactions based upon which Non-Royalty Sublicense Revenue is due, in sufficient detail to enable the Royalties and Non-Royalty Sublicense Revenue, respectively, that is payable hereunder to be determined. Licensee shall retain such records and documentation for not less than seven (7) years from the date of their creation. During the term of this Agreement and for a period of three (3) years thereafter, CSMC and its representatives shall have the right to audit such records and documentation as shall pertain to the determination and payment of Royalties and Non-Royalty Sublicense Revenue upon ten (10) days prior written notice to Licensee. Such examiners shall have reasonable access during regular business hours to Licensee’s offices and the relevant records, files and books of account, and shall have the right to examine any other records reasonably necessary to determine the accuracy of the calculations of Royalties and Non-Royalty Sublicense Revenue provided by Licensee; provided, however , that such examiners must execute a confidentiality agreement in form and substance satisfactory to Licensee. The costs of any such audit shall be borne by CSMC, unless as a result of such inspection it is determined that the amounts payable by Licensee for any period are in error by greater than five percent (5%), in which case the costs of such audit shall be borne by Licensee. CSMC shall report the results of any such audit to Licensee within thirty (30) days of completion. Thereafter, Licensee shall promptly pay to CSMC the amount of any underpayment discovered in such audit, or CSMC shall credit to Licensee against future Royalty payments the amount of any overpayment discovered in such audit, as the case may be. In addition, Licensee shall pay interest on any underpayment at the rate that is the lower of (i) two percent (2%) over the rate of interest announced by Bank of America in Los Angeles, California (or any successor in interest thereto or any commercially equivalent financial institution if no such successor exists) to be its “prime rate”, or (ii) the highest rate permitted by applicable law, from the date such amount was underpaid to the date payment is actually received.

(v)         Currency Transfer Restrictions. If any restrictions on the transfer of currency exist in any country or other jurisdiction so as to prevent Licensee from making payments to CSMC, Licensee shall take all commercially reasonable steps to obtain a waiver of such restrictions or to otherwise enable Licensee to make such payments. If Licensee is unable to do so, Licensee shall make such payments to CSMC in a bank account or other depository designated by CSMC in such country or jurisdiction, which payments shall be in the local currency of such country or jurisdiction, unless payment in United States dollars is permitted. Any payment by Licensee to CSMC in currencies other than United States dollars shall be calculated using the appropriate foreign exchange rate for such currency quoted in the California edition of The Wall Street Journal for the close of business of the last banking day of the calendar quarter in which such payment is being made.

(vi)        Late Charges. A service charge of two percent (2%) per month, not to exceed the maximum rate allowed by applicable law, shall be payable by Licensee on any portion of Licensee’s outstanding Royalty or Non-Royalty Sublicense Revenue balance or any other amount payable by Licensee hereunder that is not paid to CSMC within thirty (30) days past the due date

(vii)       Taxes. Licensee shall pay, or cause to be paid, any and all taxes required to be paid or withheld on any sales, licenses or other transfers for value of Licensed Products, Licensed Technology Products or Patent Rights (other than taxes imposed on the income or revenues of CSMC); provided, however, that under no circumstances shall the amounts of such taxes be deducted from the total amount of payments otherwise due to CSMC hereunder. Upon CSMC’s request, Licensee shall secure and send to CSMC proof of any such taxes withheld and paid by Licensee, its Affiliates or Permitted Sublicensees.

(viii)      No Escrow. Licensee shall pay all Royalties and Non-Royalty Sublicense Revenue directly to CSMC and shall not pay royalties into any escrow or other similar account, including in the event of a validity or non-infringement challenge to the Patent Rights.

5.           Patent Rights

5.1           Prosecution. CSMC will continue to have full responsibility for the application, maintenance, reexamination, reissue, opposition and prosecution of any kind relating to the Patent Rights in the Territory (“Prosecution”) with due input from Licensee and using counsel reasonably acceptable to Licensee; provided, however, that CSMC’s patent counsel shall bill Licensee directly for all costs and expenses, including reasonable attorneys’ fees, filing fees and translation fees incurred in the prosecution of the Patent Rights (“Prosecution Costs”).

5.2           Abandonment, Disclaimers, etc. CSMC shall not abandon, disclaim, withdraw, seek reissue or allow to lapse any patent or patent application within the Patent Rights as long as Licensee continues to timely and fully pay all Prosecution Costs as set forth in Section 5.1; provided, however , that Licensee may elect to notify CSMC of its decision not to continue to pay the Prosecution Costs to prosecute or maintain a patent or patent application included in the Patent Rights in various jurisdictions at least forty-five (45) days before a final due date which would result in abandonment or bar of patentability of the patent or patent application with respect to such jurisdiction. In such event, CSMC may, at its sole option, continue Prosecution of the patent application or patent at its own cost and expense; provided, however , that in the event that CSMC intends to develop or commercialize any product in such jurisdiction with any third party based upon such patent or patent application, Licensee shall have an exclusive first right of negotiation for a period lasting sixty (60) days following notice from CSMC to Licensee of its intent to so develop or commercialize with respect to such patent or patent application, and if Licensee either does not exercise such right or if a license is not concluded with Licensee within the aforesaid sixty (60)-day period, then this right shall expire and CSMC shall have no further obligation to Licensee with respect to such patent or patent application.

5.3           CREATE Act. Licensee shall not invoke the Cooperative Research and Technology Enhancement Act of 2004, as set forth under Title 35, Section 102(c) of the United States Code (the “CREATE Act”), with respect to the Patent Rights without first obtaining the prior written consent of CSMC.

6.           Term And Termination

6.1           Term. Unless earlier terminated as provided in Section 6.2 hereof, the term of this Agreement shall commence on the Effective Date and shall expire, on a country-by-country and Licensed Product-by-Licensed Product and/or Licensed Technology Product-by-Licensed Technology Product basis, upon expiration of Licensee’s obligation to pay royalties for such Licensed Product or Licensed Technology Product in such country.

6.2           Termination. Except as provided by Section 6.3 hereof, and in addition to the termination provisions of Section 2.7, this Agreement shall terminate upon the earliest to occur of the following:

(a)           Automatically if Licensee shall enter into a liquidating bankruptcy, be adjudged insolvent, liquidate, dissolve and/or if the business of Licensee shall be placed in the hands of a receiver, assignee, or trustee, whether by voluntary act of Licensee or otherwise; provided, however, that if any such action is involuntary, termination shall not take place unless the action is not reversed within thirty (30) days. Further, Licensee shall give CSMC at least forty-five (45) days’ prior written notice before Licensee initiates any bankruptcy proceeding, and CSMC shall have the right to terminate this Agreement immediately upon receipt of such notice;

(b)           Automatically if the performance by either party to this Agreement of any term, covenant, condition or provision hereof: (i) shall jeopardize (A) the licensure of CSMC; (B) CSMC’s participation in the Medicare, Medi-Cal or other reimbursement or payment programs; (C) the full accreditation of CSMC by the Joint Commission of Accreditation of Healthcare Organizations or any other state or nationally recognized accreditation organization; or (D) CSMC’s tax-exempt status; or (ii) is deemed illegal or unethical by any recognized governmental agency or body. Upon the occurrence of any of the items set forth in this subparagraph (b), CSMC shall provide written notice to Licensee setting forth the reason for such termination (which termination shall be effective immediately);

(c)           Upon thirty (30) days’ written notice from CSMC if, within such thirty (30) day period (i) Licensee shall fail to pay fully any Royalty or Non-Royalty Sublicense Revenue payment required by Section 4.3 hereof, or (ii) Licensee shall fail to undertake commercially reasonable efforts to exploit the Patent Rights in the Field of Use in the Territory, regardless of Licensee’s satisfaction of the Milestones provided in Schedule F hereto;

(d)           Upon sixty (60) days’ written notice from CSMC if, within such sixty (60) day period, Licensee shall fail to cure fully any breach or default of any material obligation under this Agreement as described in such written notice detailing the facts of such breach with reasonable specificity; provided, however, that Licensee may avoid such termination if, before the end of such 60-day period, such breach or default has been cured by Licensee to the reasonable satisfaction of CSMC;

(e)           Upon ninety (90) days’ written notice from Licensee if, within such ninety (90) day period, CSMC shall fail to cure fully any breach or default of any material obligation under this Agreement as described in such written notice detailing the facts of such breach with reasonable specificity; provided, however, that CSMC may avoid such termination if, before the end of such 90-day period, such breach or default has been cured by CSMC to the reasonable satisfaction of Licensee;

(f)           Licensee shall have the right to terminate this Agreement at any time without cause upon six (6) months written notice to CSMC; provided, however , that in the event of such termination without cause by Licensee, Licensee shall pay to CSMC a termination fee calculated in accordance with the following table no later than the effective date of termination:

(g)           Upon the mutual written agreement of the parties hereto (such termination to be effective as of the date mutually agreed upon in such written agreement).

6.3           Obligations Upon Termination. Upon any termination of this Agreement pursuant to Section 6.2 hereof, nothing herein shall be construed to release any party from any liability for any obligation incurred through the effective date of termination (e.g., confidentiality, reimbursement of patent expenses incurred prior to such date, etc.) or for any breach of this Agreement prior to the effective date of such termination. Obligations which accrued prior to termination (including milestones which have been triggered) would survive termination.

Licensee may, for a period of one (1) year after the effective date of such termination, sell all tangible Licensed Products and Licensed Technology Products customarily classified as “inventory” that it has on hand at the date of termination, subject to payment by Licensee to CSMC of the applicable Royalty and Non-Royalty Sublicense Revenue; provided, however , that any such action by Licensee does not subject CSMC to any of the occurrences set forth in Section 6.2(b) hereof.

6.4           Effect of Termination. In the event of any termination of this Agreement pursuant to Section 6.2 hereof, where such termination has not been caused by any action or inaction on the part of any Permitted Sublicensee of Licensee or by any breach by such Permitted Sublicensee of its obligations under its sublicense from Licensee, such termination of this Agreement shall be without prejudice to the rights of each non-breaching Permitted Sublicensee of Licensee and each non-breaching Permitted Sublicensee shall be deemed to be a licensee of CSMC thereunder, and CSMC shall be entitled to all rights, but shall not be subject to any obligations (other than the grant of license and appurtenant obligations under this Agreement to the extent provided for in such sublicense) of Licensee thereunder. This Section 6.4, however, shall not be applicable if this Agreement has been terminated under Section 6.2(b) under circumstances where the application of this Section 6.4 would subject CSMC to any of the occurrences set forth in Section 6.2(b).

6.5           Right to Institute Legal Actions. Notwithstanding the provisions of Section 6.2 hereof, CSMC, on the one hand, and Licensee, on the other hand, may institute any other legal action or pursue any other remedy against the other party permitted by applicable law if the other party does not substantially cure any breach or default of any material obligation as provided herein.

6.6           Reversion of Rights. Notwithstanding anything to the contrary set forth herein (including, but not limited to, Section 5 hereof), full responsibility for Prosecution of the Patent Rights shall, at the option of CSMC (exercisable in its sole and absolute discretion), and at its sole expense from the date of reversion, revert to CSMC upon any termination of this Agreement.

6.7           Return of Data. In the event of any termination or expiration of this Agreement, Licensee may consider providing CSMC with copies of data, information and materials obtained or generated by or on behalf of Licensee in the course of conducting research and developing Licensed Products and Licensed Technology Products using the Patent Rights and the Technical Information.

7.           Infringement By Third Parties

7.1           Enforcement. Subject to contradictory obligations CSMC may have to any other licensee thereof, Licensee shall have the first right and the obligation to enforce, at its sole expense, any Patent Rights to the extent licensed hereunder against infringement by third parties and shall notify CSMC in writing in advance of all such enforcement efforts. Upon Licensee’s undertaking to pay all expenditures reasonably incurred by CSMC, CSMC shall reasonably cooperate in any such enforcement and, as necessary, join as a party therein. Licensee shall reimburse CSMC for all expenses, including reasonable attorneys’ fees, incurred in connection with any such enforcement. In the event that Licensee does not file suit against or commence and conclude settlement negotiations with a substantial infringer of Patent Rights within ninety (90) days of receipt of a written demand from CSMC that Licensee bring suit, then the parties will consult with one another in an effort to determine whether a reasonably prudent licensee would institute litigation to enforce the patent in question in light of all relevant business and economic factors (including, but not limited to, the projected cost of such litigation, the likelihood of success on the merits, the probable amount of any damage award, the prospects for satisfaction of any judgment against the alleged infringer, the possibility of counterclaims against the parties hereto, the impact of any possible adverse outcome on Licensee and the effect any publicity might have on the parties’ respective reputations and goodwill). If, after such process, it is determined that a suit should be filed and Licensee does not file suit or commence settlement negotiations forthwith against the infringer, then CSMC shall have the right, at its own expense, to enforce any Patent Rights licensed hereunder on behalf of itself and Licensee. Any damages or other recovery from an infringement action undertaken by Licensee shall first be used to reimburse the parties, on a pro rata pari passu basis, for the costs and expenses incurred in such action, and shall thereafter be allocated between the parties as follows: (i) fifty percent (50%) to CSMC and (ii) fifty percent (50%) to Licensee. If Licensee fails to prosecute any such action to completion, then any damages or other recovery net of the parties’ costs and expenses incurred in such infringement action shall be the sole property of CSMC. The foregoing notwithstanding, to the extent that any portion of damages awarded in a lawsuit brought by Licensee are specifically allocated in a judgment as lost sales, the amount due to CSMC for such amount shall be based on treating such amount as Net Sales.

7.2           Defense of Patent Rights. In the event that any Patent Rights are the subject of a legal action seeking declaratory relief or of any reexamination or opposition proceeding instituted by a third party, the parties agree to promptly consult with each other concerning the defense of such actions or proceedings. If the parties agree that such defense should be undertaken, then Licensee shall bear the expenses, including attorneys’ fees, associated with such defense and in any recoupment of expenses. If the parties disagree, then the party desiring to defend the action or proceeding may proceed with such defense and will bear its own expenses, and be entitled to all sums recovered.

8.           Indemnification

8.1           Indemnification by Licensee. Subject to Section 8.2 hereof, Licensee shall hold harmless, defend and indemnify CSMC and each of its officers, directors, employees (including the Inventors), agents and sponsors of the research (except Licensee) (each, an “Indemnified Party”, and collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses and costs of investigation, whether or not suit is filed) suffered or incurred by any of the Indemnified Parties in any action, suit, litigation, arbitration or dispute of any kind (“Action”) arising or resulting from any negligence or willful acts or omissions on the part of Licensee, its Affiliates or Permitted Sublicensees in connection with (a) their use the Patent Rights or Technical Information and/or (b) the exercise of their rights hereunder or under any sublicense, including, but not limited to (i) the preclinical development and clinical testing of Licensed Products or Licensed Technology Products, and (ii) the manufacture, sale, use, marketing, or other disposition of Licensed Products or Licensed Technology Products developed, manufactured, sold, marketed, used or otherwise disposed of under this Agreement. As part of its obligations hereunder, Licensee shall defend any Action brought against any of the Indemnified Parties with counsel of its own choosing and reasonably acceptable to CSMC, and neither CSMC nor any other Indemnified Party shall enter into any settlement of any such Action without first obtaining prior approval of Licensee. Licensee shall pay all costs, including attorney’s fees, incurred in enforcing this indemnification provision. Should CSMC or any other Indemnified Party not afford Licensee the right to defend any such Action, or should CSMC or any other Indemnified Party not obtain the approval of Licensee to any such settlement, Licensee shall have no obligation to indemnify CSMC or any other Indemnified Party hereunder. Should Licensee fail to provide a defense for the Indemnified Parties as required hereunder, then Licensee shall reimburse CSMC for its out-of-pocket expenses (including reasonable attorneys’ fees and expenses and costs of investigation) which are incurred as a result of any investigation, defense or settlement relating to the foregoing, which reimbursement shall be made to CSMC upon receipt by Licensee of invoices reflecting in reasonable detail such expenses incurred by CSMC. Licensee shall obtain and maintain insurance policies (including products liability and general liability policies at such time as is appropriate) which are reasonable and necessary to cover its activities and to comply with the indemnification obligations set forth above. Such insurance policies shall name CSMC as an additional insured party and shall provide a minimum of $3,000,000 in coverage per occurrence. Upon initiation of any human clinical studies of Licensed Products or Licensed Technology Products, Licensee shall have first increased its insurance coverage to a minimum of $10,000,000 in the aggregate. Licensee shall provide CSMC with prompt written notice of any material change in coverage under such policies. If the parties determine that evidence of Licensee’s insurance coverage is necessary and appropriate, within thirty (30) days of the Effective Date (subject to extension if reasonably required) and annually thereafter, Licensee shall provide CSMC with a certificate of insurance issued by the appropriate insurance company evidencing the insurance coverage required by this Section 8.1, together with copies of the endorsement which specifies CSMC as an additional insured and the declarations page for each such insurance policy. The certificate of insurance, endorsements and declarations pages (and any renewals or replacements thereof), if required, shall be sent to CSMC’s Technology Transfer Office by electronic mail at CSTechTransfer@cshs.org and by prepaid, first class, certified mail, return receipt requested, at the following address: 8797 Beverly Boulevard, Suite 206, Los Angeles, CA 90048.

8.2           Notice of Claim. CSMC shall promptly notify Licensee in writing of any claim or Action or material threat thereof brought against any Indemnified Party in respect of which indemnification may be sought and, to the extent allowed by law, shall reasonably cooperate with Licensee in defending or settling any such claim or Action. No settlement of any claim, Action or threat thereof received by CSMC and for which CSMC intends to seek indemnification (for itself or on behalf of any other Indemnified Party) shall be made without the prior joint written approval of Licensee and CSMC.

9.           Use Of Names

Licensee shall not, unless as required by any law or governmental regulation, use the name of CSMC, and/or any of its trademarks, service marks, trade names or fictitious business names without express prior written consent of the Vice President for Public Relations and Marketing of CSMC. Further, prior to any reference by Licensee to the names or marks of CSMC in any manner, Licensee shall provide CSMC with a writing reflecting the proposed reference so that CSMC can review the reference within a reasonable period of time prior to the proposed use thereof by Licensee. This limitation includes, but is not limited to, use by Licensee in any regulatory filing, advertising, offering circular, prospectus, sales presentation, news release or trade publication. Notwithstanding the foregoing, certain specific language shall be mutually agreed upon by the parties for Licensee’s use in certain contexts and with respect to certain topics, and once agreed upon, may be utilized by Licensee in connection with the approved contexts and topics without further permission of CSMC. Subject to compliance by Licensee with the foregoing, which shall be deemed conditions precedent to any use of CSMC’s name or marks by Licensee, Licensee shall ensure that the name of CSMC is used as scientifically or academically appropriate in the “byline” of any article, abstract, manuscript or any other publication related to the subject matter hereof.

10.        Confidentiality

10.1         Non-Disclosure. The parties hereto shall keep the terms of this Agreement and all business and scientific discussions relating to the business of the parties strictly confidential. All patient information to which a party is given access by the other party shall be subject to the provisions of the Confidentiality of Medical Information Act (Cal. Civ. Code §§56, et seq.) and the Health Insurance Portability and Accountability Act of 1996, and all regulations promulgated thereunder. It may, from time to time, be necessary for the parties, in connection with performance under this Agreement, to disclose Confidential Information (including know-how) to each other. The Receiving Party (as defined in Section 1.2 hereof) shall keep in strictest confidence the Confidential Information of the Disclosing Party (as defined in Section 1.2 hereof), using the standard of care it normally uses for information of like character, and shall not disclose the Confidential Information to any third party or use it except as expressly authorized by the prior written consent of the Disclosing Party or as otherwise permitted by this Agreement; provided, however, that Licensee may disclose the Confidential Information received from CSMC to its Affiliates and Permitted Sublicensees as shall be reasonably necessary to carry out the intent of this Agreement or any sublicense granted by Licensee as contemplated by this Agreement if, but only if, such Affiliates and/or Permitted Sublicensees each execute a confidentiality agreement containing confidentiality provisions no less restrictive than those confidentiality provisions contained in this Section 10. The Receiving Party’s obligation hereunder shall not apply to Confidential Information that the Receiving Party can show by written documentation:

(a)           Is or later becomes part of the public domain through no fault or neglect of the Receiving Party;

(b)           Is received in good faith from a third party having no obligations of confidentiality to the Disclosing Party, provided, however, that the Receiving Party complies with any restrictions imposed by the third party;

(c)           Is independently developed by the Receiving Party without use of the Disclosing Party’s Confidential Information as shown by its books and records at the time of disclosure; or

(d)           Is required by law or regulation to be disclosed (including, without limitation, in connection with FDA filings, filings with another government agency or as required under the California Public Records Act), provided, however, that the Receiving Party uses reasonable efforts to restrict disclosure and to obtain confidential treatment.

10.2         Limits on Permitted Disclosures. Each party agrees that any disclosure or distribution of the other party’s Confidential Information within its own organization shall be made only as is reasonably necessary to carry out the intent of this Agreement. The parties further agree that all of their respective officers, employees, agents, representatives or approved sublicensees to whom any Confidential Information is disclosed or distributed shall have agreed to maintain its confidentiality. In such event, the Receiving Party shall identify with reasonable particularity, upon request by the Disclosing Party, each person within the Receiving Party’s organization to whom the Receiving Party has disclosed or distributed Confidential Information.

10.3         Legally Required Disclosures. If a subpoena or other legal process concerning Confidential Information is served upon any party hereto pertaining to the subject matter hereof, the party served shall notify the other party immediately, the other party shall cooperate with the party served, at the other party’s expense, in any effort to contest the validity of such subpoena or other legal process. This Section 10.3 shall not be construed in any way to limit any party’s ability to satisfy any disclosure of its relationship with the other party required by any governmental authority. Notwithstanding anything to the contrary set forth in Section 10.1, the parties hereto acknowledge that Synthetic may be obligated to file a copy of this Agreement, any Schedules hereto, and summaries of the terms hereof with the U.S. Securities and Exchange Commission as reasonably required to comply with applicable laws or the rules of a nationally-recognized securities exchange. Synthetic shall be entitled to make such filings, provided that it requests confidential treatment of the commercial terms and sensitive technical terms hereof and thereof to the extent such confidential treatment is reasonably available. In the event of any such filing, Synthetic will provide CSMC with a copy of this Agreement (including the Schedules hereto) and related filings marked to show provisions for which Synthetic intends to seek confidential treatment and shall reasonably consider and incorporate CSMC’s comments thereon to the extent consistent with the legal requirements and the rules of any nationally recognized securities exchange governing disclosure of material agreements and material information to be publicly filed.

10.4         Patent Rights as Confidential Information. The Patent Rights are understood by Licensee to be the Confidential Information of CSMC to the extent “unpublished” as such term is construed under the United States Patent Laws. As such, Licensee’s confidentiality obligations hereunder automatically extend to any and all Technical Information and to any and all patent applications of CSMC relating to any Patent Rights, Technical Information and Improvements and to any and all communications with the United States Patent Office, and any foreign patent office relating to any Patent Rights, Technical Information or Improvements.

10.5         Return of Confidential Information. In the event of any termination of this Agreement, the Receiving Party, upon request, shall promptly return all Confidential Information and any copies made thereof previously made available to the Receiving Party by the Disclosing Party.

10.6         Remedies. Both parties acknowledge and agree that it would be difficult to measure damages for breach by either party of the covenants set forth in this Section 10, and that injury from any such breach would be incalculable, and that money damages would therefore be an inadequate remedy for any such breach. Accordingly, either party shall be entitled, in addition to all other remedies available hereunder or under law or equity, without the obligation of posting a bond, to injunctive or such other equitable relief as a court may deem appropriate to restrain or remedy any breach of such covenants.

11.          Information Exchange

In addition to the Patent Rights and Technical Information, the parties shall cooperate to exchange such non-confidential information as may be appropriate and necessary to facilitate Licensee’s development and commercialization of Licensed Products and Licensed Technology Products incorporating any Patent Rights or Technical Information.

12.          Patent Marking

In the event any Licensed Product or Licensed Technology Product is the subject of a patent under the Patent Rights, Licensee shall actually or virtually mark all Licensed Products and Licensed Technology Products made, sold or otherwise disposed of by or on behalf of it or any of its Permitted Sublicensees as set forth under Title 35, Section 287(a) of the United States Code and shall respond to any request or disclosure under Title 35, Section 287(b)(4)(B) of the United States Code by only notifying CSMC of the request for disclosure.

13.          Miscellaneous

13.1         Notices. Any notice, request, instruction or other document required by this Agreement shall be in writing and shall be deemed to have been given: (a) if mailed with the United States Postal Service by prepaid, first class, certified mail, return receipt requested, at the time of receipt by the intended recipient; (b) if sent by Federal Express or other overnight carrier, signature of delivery required, at the time of receipt by the intended recipient; or (c) if sent by facsimile transmission, when so sent and when receipt has been acknowledged by appropriate telephone or facsimile receipt, addressed as follows:

In the case of CSMC to:

Cedars-Sinai Medical Center
8700 Beverly Boulevard
Los Angeles, California 90048-1865
Attention: Senior Vice President for Academic Affairs

with a copy to Senior Vice President for Legal Affairs & General Counsel

or in the case of Synthetic Biologics, Inc. or Licensee to:

or to such other address or to such other person(s) as may be given from time to time under the terms of this Section 13.1.

13.2         Compliance with Laws. Each party shall comply with all applicable federal, state and local laws and regulations in connection with its activities pursuant to this Agreement.

13.3         Governing Law. For any dispute between the parties to this Agreement which arises from or relates to this Agreement, the Agreement shall be construed and enforced in accordance with the laws of the United States of America and of the State of California, irrespective of choice of laws provisions. The parties agree that Los Angeles County, California shall be the situs of any legal proceeding arising out of or relating to this Agreement. Each party hereby waives any right it may have to assert the doctrine of forum non conveniens or similar doctrine or to object to venue with respect to any proceeding brought in accordance with this Section, and stipulates that the state and federal courts located in Los Angeles, California shall have in personam jurisdiction and venue over each of them for the purpose of litigating any dispute, controversy, or proceeding arising out of or related to this Agreement. Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action against it as contemplated by this Section by registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices as set forth in this Agreement.

13.4         Waiver. Failure of any party to enforce a right under this Agreement shall not act as a waiver of that right or the ability to assert that right relative to the particular situation involved.

13.5         Enforceability. If any provision of this Agreement shall be found by a court of competent jurisdiction to be void, invalid or unenforceable, the same shall be reformed to comply with applicable law or stricken if not so conformable, so as not to affect the validity or enforceability of the remainder of this Agreement.

13.6         Modification. No change, modification, or addition or amendment to this Agreement, or waiver of any term or condition of this Agreement, is valid or enforceable unless in writing and signed and dated by the authorized officers of the parties to this Agreement.

13.7         Entire Agreement. This Agreement and the Schedules hereto (which are incorporated herein by this reference as if fully set forth herein) constitute the entire agreement between the parties with respect to the subject matter hereof and thereof, and replace and supersede as of the date hereof and thereof any and all prior agreements and understandings, whether oral or written, between the parties with respect to the subject matter of such agreements.

13.8         Construction. This Agreement has been prepared, examined, negotiated and revised by each party and their respective attorneys, and no implication shall be drawn and no provision shall be construed against any party to this Agreement by virtue of the purported identity of the drafter of this Agreement or any portion thereof.

13.9         Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall constitute one and the same instrument. This Agreement may be executed by facsimile or in .pdf format.

13.10         Attorneys’ Fees. In the event of any action at law or in equity between the parties hereto to enforce any of the provisions hereof, the unsuccessful party to such litigation shall pay to the successful party all reasonable costs and expenses, including reasonable attorneys’ fees, incurred therein by such successful party; and if such successful party shall recover a judgment in any such action or proceeding, such reasonable costs, expenses and attorneys’ fees may be included in and as part of such judgment.

13.11         Assignment; Successors.

(a)           Licensee may assign this Agreement to an Affiliate upon the prior written consent of CSMC. Subject to Section 13.11(b), Licensee may assign this Agreement without the consent of CSMC as part of a sale, regardless of whether such a sale occurs through an asset sale, stock sale, merger or other combination, or any other transfer of Licensee’s entire business, or that part of Licensee’s business that exercises all rights granted under this Agreement. Any other attempt to assign this Agreement by Licensee is null and void. In the event of a bankruptcy, assignment is permitted only to a party that can provide adequate assurance of future performance, including diligent development and sales, of Licensed Products and Licensed Technology Products. Synthetic shall have no right to assign this Agreement without the consent of CSMC other than as part of a sale of Synthetic, regardless of whether such a sale occurs through an asset sale, stock sale, merger or other combination, or any other transfer of Synthetic’s entire business; provided, however , that the successor entity shall have (a) a market capitalization greater than that of Synthetic at the time of the sale and (b) the ability to assume Synthetic’s guarantee obligations under Section 2.2 hereof; provided, further , that in the event that such sale occurs prior to the payment of the first and/or second milestone payment required by Section 4.6(e)(ii), then notwithstanding anything to the contrary set forth herein, such milestone payments shall be payable either in cash or stock of the successor entity in the amounts set forth in Section 4.6(e)(ii), at CSMC’s sole discretion,.

(b)           Prior to any assignment, the following conditions must be met: (i) Licensee or Synthetic, as the case may be, must give CSMC thirty (30) days prior written notice of the assignment, including the new assignee’s contact information, (ii) the new assignee must agree in writing to CSMC to be bound by this Agreement, and (iii) CSMC must have received a $25,000.00 assignment fee.

(c)           Subject to the limitations on assignment herein, this Agreement shall be binding upon and inure to the benefit of any successors in interest and assigns of CSMC, Licensee and Synthetic. CSMC shall have the right to assign its rights hereunder as part of any reorganization or bond financing.

13.12         Further Assurances. At any time and from time to time after the Effective Date, each party shall do, execute, acknowledge and deliver, and cause to be done, executed, acknowledged or delivered, all such further acts, transfers, conveyances, assignments or assurances as may be reasonably required to consummate the transactions contemplated by this Agreement.

13.13         Survival. The following sections shall survive any expiration or earlier termination of this Agreement: 4.6(e), 6.3, 8, 9, 10, 12 and 13.

[signature page follows]

IN WITNESS WHEREOF , the parties have caused their duly authorized representatives to execute this Agreement as of the date first above written.

and all divisions, continuations, continuations-in-part, reissues, reexaminations, supplementary protection certificates and extensions thereof, whether domestic or foreign, except as excluded under the definition of Patent Rights.

Schedule B

Technical Information

Schedule C

Stock Issuance Agreement – Synthetic Biologics, Inc.

See attached

Schedule D

Stock Issuance Agreement – Licensee

See attached

See attached

Schedule F

Milestones

Schedule G

CLINICAL TRIALS TO BE SPONSORED BY LICENSEE AND CONDUCTED AT CSMC

****

Schedule H

Royalty Reporting Form

Licensee name:

Reporting period:

Date of report:

Date of first commercial sale:

Total royalty due: $___________________________

Non-Royalty Sublicense Revenue Report

Report prepared by:

Title:

Date:

Please send report to:

Cedars-Sinai Medical Center
8700 Beverly Boulevard
Los Angeles, California 90048-1865
Attention: Senior Vice President for Academic Affairs

with a copy to Senior Vice President for Legal Affairs & General Counsel

Please send electronic copy to CSTechTransfer@cshs.org .

Portions herein identified by [*****] have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  A complete copy of this document has been filed separately with the Securities and Exchange Commission.

EXCLUSIVE OPTION AGREEMENT

This Exclusive Option Agreement (“Agreement”) is entered into this 5th day of December, 2013 (“Effective Date”) by and among Cedars-Sinai Medical Center, a California nonprofit public benefit corporation (“CSMC”), with offices at 8700 Beverly Boulevard, Los Angeles, CA 90048, Synthetic Biologics, Inc. , a Nevada corporation (hereinafter, “Synthetic”), with offices at 617 Detroit Street, Suite 100, Ann Arbor, MI 48104 and Synthetic Biomics, Inc. , a Nevada corporation (hereinafter, “Company”), having offices at 617 Detroit Street, Suite 100, Ann Arbor, MI 48104 and a wholly-owned subsidiary of Synthetic (each, a “Party,” and together, the “Parties”).

RECITALS

A.            CSMC owns and is entitled to grant license rights with respect to PCT Application No. **** (“Inventors”), and all patents and/or patent applications (including provisional patent applications) existing as of the Effective Date in any other country corresponding to any of the foregoing, and all divisions, continuations, continuations-in-part, reissues, reexaminations, supplementary protection certificates and extensions thereof, whether domestic or foreign, and any patent that issues thereon (“Patent Rights”).

B.            CSMC desires to have the Patent Rights developed, used and commercialized, and the Parties desire to enter into discussions regarding an exclusive, worldwide license to Company to develop, manufacture, use and sell products utilized or derived from the Patent Rights (“Exclusive License”) pending successful completion by Company of certain limited testing of the technology embodied in the Patent Rights (“Experiments”) described in Appendix A hereto.

C.            CSMC desires to grant to Company and Company desires to accept from CSMC, subject to the terms and conditions herein, an exclusive option to negotiate and obtain the Exclusive License. Other than the rights expressly granted by CSMC hereunder, Company acknowledges that CSMC shall retain all other rights with respect to the Patent Rights.

D.            CSMC and Company intend that the execution, delivery and performance of this Agreement by each Party, and the consummation of the transactions contemplated hereunder, shall not at any time threaten CSMC’s tax-exempt status under Section 501(c)(3) of the Internal Revenue Code and Section 23701d of the California Revenue and Taxation Code, or cause CSMC to be in default under any of CSMC’s issued and outstanding tax-exempt bonds.

Now, Therefore , in consideration of the mutual covenants and premises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

in the case of CSMC, to:

Cedars-Sinai Medical Center

Room 2009, North Tower

8700 Beverly Boulevard

Los Angeles, CA 90048-1865

Attention: Senior Vice President for Academic Affairs & Dean of the Medical Faculty

Fax: (310) 423-0119

or in the case of Company, to:

Chief Executive Officer

Synthetic Biologics, Inc.

617 Detroit Street, Suite 100

Attention: Jeffery Riley

Fax: (734) 332-7878

or to such other address or to such other person(s) as may be given from time to time under the terms of this Section 12.

IN WITNESS WHEREOF, the Parties have caused their duly authorized representatives to execute this Agreement as of the Effective Date.

“CSMC”:

Cedars-Sinai Medical Center,
a California nonprofit public

benefit corporation

Appendix A

Experiments

****

Appendix B

“Field of Use” Definition for Exclusive License

All human or veterinary therapeutic and prophylactic applications, excluding the following:

STOCK PURCHASE AGREEMENT

by and among

SYNTHETIC BIOLOGICS, INC.,

SYNTHETIC BIOMICS, INC.

and

CEDARS-SINAI MEDICAL CENTER, INC.

December 5, 2013

STOCK PURCHASE AGREEMENT

THIS AGREEMENT (“ Agreement ”) is made and entered into as of December 5, 2013 (the “ Effective Date ”), by and among Synthetic Biologics, Inc., a Nevada corporation (the “ Company ”), Synthetic Biomics, Inc., a Nevada corporation and wholly owned subsidiary of the Company (“ Licensee ”) and Cedars-Sinai Medical Center, a California nonprofit public benefit corporation (“ CSMC ”).

A.            Concurrently with the execution of this Agreement, the Company and the Licensee are entering into a license agreement with CSMC (the “ License Agreement ”) and an option agreement with CSMC (the “ Option Agreement ”, and, together with the License Agreement, the “ Agreements ”), pursuant to which CSMC is licensing and optioning the rights to certain technology to Licensee; and

B.            In partial consideration of the license and the option under the Agreements, the Company and the Licensee have agreed to issue to CSMC certain shares of the Company’s common stock in accordance with the terms and conditions of this Agreement and may issue additional shares of Company stock in lieu of cash (a) upon the occurrence of certain milestone events described in the License Agreement and (b) with respect to the payment of certain fees and expenses as required by the Option Agreement.

AGREEMENT

In consideration of the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and CSMC hereby agree as follows:

sECTION 1.  AUTHORIZATION OF ISSUANCES OF SHARES .

1.1 Authorization . Subject to the terms and conditions of this Agreement, the Company has authorized and intends to issue to CSMC shares of common stock, $0.001 par value, of Company (the “ Common Stock ”) immediately following approval of the NYSE MKT regarding the issuance of such shares and no later than thirty (30) days following the execution of the License Agreement and the Option Agreement in satisfaction of the following obligations: (a) the license issue fee and patent expense reimbursement obligations under Sections 4.1 and 4.2 of the License Agreement, and (b) the option fee obligation under Section 2 of the Option Agreement, and may, at the option of the Company and the Licensee, authorize and issue to CSMC additional shares of Common Stock, $0.001 par value of the Company, in lieu of cash in satisfaction of the following obligations: (x) the Phase I and Phase II milestone payment obligations described in Section 4.6(e)(ii) of the License Agreement, (y) the extension fee obligation under Section 3 of the Option Agreement, and (z) the obligation to pay an initial license issuance fee and to reimburse CSMC for its patent expenses in the event that the Licensee and CSMC execute an exclusive license to the technologies covered by the Option Agreement (together, the “ Shares ”).

1.2            Exchange Approval . The parties acknowledge that any issuance by the Company of its common stock described in Section 1.1 is subject to the prior approval of the NYSE MKT or any other exchange upon which the shares of the Company are listed and shareholder approval, if so required by such exchange or any other rule or regulation applicable to the Licensee or the Company. In the event that the Company shall not have received shareholder approval (if required) or NYSE MKT approval to issue any shares hereunder within fifteen (15) business days of such application to the NYSE MKT, then the Company shall instead make cash payments in satisfaction of (a) the license issue fee and patent reimbursement expense obligations under Sections 4.1 and 4.2 of the License Agreement; (b) Phase I and Phase II milestone payment obligations described in Section 4.6(e)(ii) of the License Agreement; (c) the option fee obligation under Section 2 of the Option Agreement; (d) the extension fee obligation under Section 3 of the Option Agreement, and (e) the license issuance fee and patent expense reimbursement obligations in the event that the Licensee and CSMC execute an exclusive license to the technologies covered by the Option Agreement, as set forth in Section 1 of the Option Agreement.

sECTION 2.  CLOSING AND DELIVERY

2.1            Issuance of Shares . Subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties and agreements contained herein, at each Closing (as such term is defined in Section 2.2), the Company will issue to CSMC, and CSMC will acquire from the Company, the Shares.

2.2            Closings . The closings of the issuances of the Shares hereunder shall be held at the offices of Gracin & Marlow, LLP, The Chrysler Building, 405 Lexington Avenue, 26 ^th Floor, New York, New York 10174 or at such other place as the Company and CSMC may agree (a) with respect to the Shares issued under Sections 4.1 and 4.2 of the License Agreement and Section 2 of the Option Agreement, within two (2) business days following approval of the NYSE MKT with respect to such issuance or simultaneously with the execution of this Agreement, whichever is later, and (b) with respect to the Shares that may be issued to CSMC under Sections 1 and 3 of the Option Agreement and in satisfaction of the Phase I and Phase II milestone payment obligations described in Section 4.6(e)(ii) of the License Agreement, within two (2) business days following approval of the NYSE MKT with respect to each such stock issuance(the “ Closings ”). At each Closing, the Company and the Licensee agree to deliver to CSMC a certificate signed by the Company’s Chief Executive Officer on behalf of the Company, dated as of the applicable Closing, certifying that each of the representations and warranties of the Company and the Licensee in this Agreement shall be true and correct as of the date of the applicable Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct as of such date. Furthermore, at each Closing, CSMC agrees to deliver to the Company a certificate signed by an authorized officer on behalf of CSMC, dated as of the applicable Closing, certifying that each of the representations and warranties of CSMC in this Agreement shall be true and correct as of the date of the applicable Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct as of such date.

2.3            Calculation of Number of Shares to be Issued . The number of shares to be issued at each Closing shall be determined (a) in the case of amounts due under Sections 4.1 and 4.2 of the License Agreement and Section 2 of the Option Agreement, by dividing such cash amounts (in the case of the amount due under Section 2 of the Option Agreement, such cash amount shall be $55,000) by the average closing price of the Common Stock as quoted by the NYSE MKT for the ten (10) trading days immediately preceding the execution of the License Agreement and the Option Agreement, (b) in the case of amounts due in satisfaction of the Company’s Phase I and Phase II milestone payment obligations described in Section 4.6(e)(ii) of the License Agreement, by dividing the applicable cash amounts (in the case of the Phase I milestone payment, such cash amount shall be $110,000, and in the case of the Phase II milestone payment, such cash amount shall be $275,000) by the average closing price of the of the Common Stock as quoted by the NYSE MKT for the ten (10) trading days immediately preceding the date of the event giving rise to such milestone payment, (c) in the case of the amount due under Section 3 of the Option Agreement, by dividing such cash amount (such cash amount shall be $27,500) by the average closing price of the Common Stock as quoted by the NYSE MKT for the ten (10) trading days immediately preceding the date of the Licensee’s written notice to CSMC of its intent to extend the option period, and (d) in the case of amounts due under Section 1 of the Option Agreement, by dividing such cash amounts (such cash amounts shall be 110% of the aggregate amount due under Section 1) by the average closing price of the Common Stock as quoted by the NYSE MKT for the ten (10) trading days immediately preceding the execution of the exclusive license agreement for the technologies covered by the Option Agreement.

2.4            Delivery of the Shares . At each Closing, the Company shall cause to be delivered to CSMC a certificate representing the number of Shares issued hereunder, registered in the name of CSMC.

sECTION 3.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE LICENSEE .

3.1            Organization, Good Standing and Power . The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted and as described in the reports filed by the Company with the Securities and Exchange Commission (the “ Commission ”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), since the end of its most recently completed fiscal year through the date hereof, including, without limitation, its most recent report on Form 10-Q. The Licensee is a corporation wholly owned by the Company and duly incorporated, validly existing and in good standing under the laws of the State of Nevada with the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted. Other than the Licensee and those subsidiaries identified in its most recent report on Form 10-Q, the Company does not have any subsidiaries. Each of the Company and the Licensee is qualified to do business as a foreign corporation and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except for any jurisdiction(s) (alone or in the aggregate) in which the failure to be so qualified will not have a Material Adverse Effect. For the purposes of this Agreement, “ Material Adverse Effect ” means any effect on the business, operations, properties or financial condition of the Company or the Licensee, as applicable, that is material and adverse to the Company or the Licensee, as applicable, taken as a whole, and any condition, circumstance or situation that would prohibit the Company or the Licensee, as applicable, from entering into and performing any of its obligations hereunder.

3.2            Authorization; Enforcement . Each of the Company and the Licensee has the requisite corporate power and authority to enter into and perform this Agreement and the Company has the requisite power and authority to issue and sell the Shares in accordance with the terms hereof. The execution, delivery and performance of this Agreement by the Company and the Licensee and the consummation by each of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Licensee, the Company, either of its board of directors or stockholders is required for the issuance of the Shares or the consummation of the transactions contemplated hereby. When executed and delivered by the Company and the Licensee, this Agreement shall constitute a valid and binding obligation of the Company and the Licensee enforceable against each in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

3.3            Issuance of Shares . The Shares to be issued and sold hereunder have been duly authorized by all necessary corporate action and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable. In addition, when issued such Shares will be free and clear of all liens, claims, charges, security interests or agreements, pledges, assignments, covenants, restrictions or other encumbrances created by, or imposed by, the Company and rights of first refusal of any kind imposed by the Licensee or the Company, as applicable (other than restrictions on transfer under applicable securities laws) and the holder of such Shares shall be entitled to all rights accorded to a holder of Common Stock. As of the date hereof, 44,654,414 shares of Company Stock are issued and outstanding.

3.4            No Conflicts; Governmental Approvals . The execution, delivery and performance of the Agreement by the Company and the Licensee and the consummation by the Company and the Licensee of the transactions contemplated hereby do not and will not: (i) violate any provision of the Company’s or the Licensee’s Articles of Incorporation or Bylaws, each as amended to date; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or the Licensee is a party or by which the Company’s or the Licensee’s properties or assets are bound; or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or the Licensee or by which any property or asset of the Company or the Licensee is bound or affected, except for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor the Licensee is required under federal, state, foreign or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or issue the Shares in accordance with the terms hereof (other than any filings, consents and approvals required to be made by the Company or the Licensee under applicable state and federal securities laws, securities and exchange commission rules or regulations, rules or regulations of any stock exchange upon which shares of common stock of the Company may be listed or rules or regulations prior to or subsequent to the date hereof).

3.5            SEC Documents, Financial Statements . The Company Stock is registered pursuant to Section 12(b) of the Exchange Act. During the two year period preceding the execution of this Agreement, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act (the “ SEC Documents ”). At the times of their respective filing, all such reports, schedules, forms, statements and other documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder. At the times of their respective filings, such reports, schedules, forms, statements and other documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, other than with respect to its initial Annual Report on Form 10-K for the year ended December 31, 2011 the financial statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

3.6            Brokers . Neither the Company, the Licensee nor any of the officers, directors or employees of the Company or the Licensee has employed any broker or finder in connection with the transaction contemplated by this Agreement

sECTION 4.  REPRESENTATIONS, WARRANTIES AND COVENANTS OF CSMC .

4.1            Purchaser Sophistication . CSMC represents and warrants to, and covenants with, the Company and the Licensee that CSMC: (a) is knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to, investments in shares presenting an investment decision like that involved in the purchase of the Shares, including investments in securities issued by the Company and investments in comparable companies, and has requested, received, reviewed and considered all information it deemed relevant in making an informed decision to purchase the Shares; (b) CSMC, in connection with its decision to purchase the Shares, relied only upon the documents of the Company filed with the Securities and Exchange Commission, other publicly available information, and the representations and warranties of the Company and the Licensee contained herein. CSMC is an " accredited investor " pursuant to Rule 501 of Regulation D under the Securities Act; (c) CSMC is acquiring the Shares for its own account for investment only and with no present intention of distributing any of such Shares or any arrangement or understanding with any other persons regarding the distribution of such Shares; (d) CSMC has not been organized, reorganized or recapitalized specifically for the purpose of investing in the Shares; (e) CSMC will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire to take a pledge of) any of the Shares except in compliance with the Securities Act of 1933 and applicable state securities laws; (f) CSMC understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act of 1933 and state securities laws, and that the Company and the Licensee are relying upon the truth and accuracy of, and CSMC’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of CSMC set forth herein in order to determine the availability of such exemptions and the eligibility of CSMC to acquire the Shares; (g) CSMC understands that its investment in the Shares involves a significant degree of risk, including a risk of total loss of CSMC’s investment; and (h) CSMC understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Shares.

4.2            Authorization and Power . CSMC has the requisite power and authority to enter into and perform this Agreement and to purchase the Shares being sold to it hereunder. The execution, delivery and performance of this Agreement by CSMC and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and no further consent or authorization of CSMC or its board of directors or stockholders is required. When executed and delivered by CSMC, this Agreement shall constitute a valid and binding obligation of CSMC enforceable against CSMC in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

4.3            No Conflict . The execution, delivery and performance of this Agreement by CSMC and the consummation by CSMC of the transactions contemplated hereby do not and will not: (i) violate any provision of CSMC’s charter or organizational documents; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which CSMC is a party or by which CSMC’s properties or assets are bound; or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to CSMC or by which any property or asset of CSMC are bound or affected, except, in all cases, other than violations (with respect to federal and state securities laws) above, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, materially and adversely affect CSMC’s ability to perform its obligations under the Agreement.

4.4            Restricted Shares . CSMC acknowledges that the Shares are restricted securities and subject to Section 6.2, must be held indefinitely unless subsequently registered under the Securities Act of 1933 or the Company receives an opinion of counsel reasonably satisfactory to the Company that such registration is not required.

4.5            Stock Legends . CSMC acknowledges that certificates evidencing the Shares shall bear a restrictive legend in substantially the following form (and including related stock transfer instructions and record notations):

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

sECTION 5.  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS .

Notwithstanding any investigation made by any party to this Agreement, all representations and warranties made by the Company, the Licensee and CSMC herein shall survive the execution of this Agreement and the issuance and sale to CSMC of the Shares.

sECTION 6.  COVENANTS .

6.1            In each case where the Company determines that the approval of the Company’s shareholders or any exchange or other listing upon which the Shares may be listed is required for the issuance of the Shares to CSMC, the Company shall use commercially reasonable efforts to secure such approval as promptly as possible.

6.2            Upon request of CSMC, the Company agrees to provide an opinion of counsel to its transfer agent regarding the removal of the legend on the Shares issued to CSMC hereunder; provided that all legal requirements allowing for such legend removal and all applicable conditions under Rule 144 promulgated under the Securities Act of 1933 are met.

sECTION 7.  NOTICES.

All notices or other communications which are required or permitted hereunder shall be in writing and addressed as follows:

or to such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such communication shall be deemed to have been given when delivered if personally delivered or sent by facsimile (provided that the party providing such notice promptly confirms receipt of such transmission with the other party by telephone), on the business day after dispatch if sent by a nationally-recognized overnight courier and on the third business day following the date of mailing if sent by certified mail, postage prepaid, return receipt requested.

sECTION 8.  MISCELLANEOUS .

8.1            Fees and Expenses . Each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

8.2            Waivers and Amendments . Neither this Agreement nor any provision hereof may be changed, waived, discharged, terminated, modified or amended except upon the written consent of the parties hereto.

8.3            Headings . The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement.

8.4            Severability . If any provision hereof should be held invalid, illegal or unenforceable in any respect, then, to the fullest extent permitted by law, (a) all other provisions hereof shall remain in full force and effect and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible and (b) the parties shall use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of such provision(s) in this Agreement.

8.5            Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California as applied to contracts entered into and performed entirely in the State of California, without regard to conflicts of law principles.

8.6            Counterparts . This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.

8.7            Successors and Assigns . Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto, provided that CSMC shall not assign its rights or obligations hereunder and the Licensee shall only be able to assign its tights or obligations hereunder to an affiliated entity if the License Agreement is also assigned to such entity.

8.8            No Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

8.9            Expenses . Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement.

8.10          Entire Agreement . This Agreement (including the Schedule of Exceptions), License Agreement and other documents delivered pursuant hereto and thereto, including the exhibits, constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

8.11          Publicity . Except as otherwise provided herein, no party shall issue any press releases or otherwise make any public statement with respect to the transactions contemplated by this Agreement without the prior written consent of the other party, except as may be required by applicable law or regulations, in which case such party shall provide the other parties with reasonable notice of such publicity and/or opportunity to review such disclosure.

8.12          Waiver of Rule of Construction . Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

8.13          Further Assurances . From and after the date of this Agreement, upon the reasonable request of CSMC or the Company, the Company and CSMC shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

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IN WITNESS WHEREOF , the parties hereto have caused this Stock Purchase Agreement to be executed by their duly authorized representatives as of the day and year first above written.

STOCK PURCHASE AGREEMENT

THIS AGREEMENT (this “ Agreement ”) is made and entered into as of December 3, 2013 (the “ Effective Date ”), by and among Synthetic Biologics, Inc., a Nevada corporation (the “ Company ”), Synthetic Biomics, Inc., a Nevada corporation and wholly-owned subsidiary of the Company (“ Synbiomics ”), and Mark Pimentel, M.D., an individual (“ Pimentel ”).

A.            The Company and Synbiomics may (or may not) enter into license and option agreements with Pimentel (the “ License Agreement ”), pursuant to which Pimentel may license and option the rights to certain technology to Synbiomics; and

B.            In advance of such potential License Agreement (which may or may not be entered into), Synbiomics has agreed to issue to Pimentel certain shares of Synbiomics’ common stock in exchange for $0.0001 per share (“ Common Stock ”), accordance with the terms and conditions of this Agreement.

AGREEMENT

In consideration of the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

sECTION 1.          AUTHORIZATION OF SALE OF SHARES ; ANTI-DILUTION; EXCHANGE OF SHARES.

1.1            Authorization . Subject to the terms and conditions of this Agreement, Synbiomics has duly authorized the issuance to Pimentel of Three Million Seven Hundred Forty Thousand (3,740,000) shares of Common Stock (such shares, together with any Additional Shares issued in accordance with Section 1.2, the “ Shares ”) in exchange for Three Hundred and Seventy Four Dollars ($374.00) payable immediately by cash or check, which shares shall represent eight and one-half percent (8.5%) of the shares of Synbiomics’ issued and outstanding capital stock on a Fully-Diluted Basis on the Effective Date. For purposes of this Agreement, the term “ Fully Diluted Basis ” shall include all of the issued and outstanding equity securities of Synbiomics (including, without limitation, all common stock, preferred stock and units of any kind) calculated on an “as-converted” basis plus all outstanding options, warrants and other securities exercisable or exchangeable for or convertible into equity securities of Synbiomics calculated on an “as-converted” basis plus any securities issued under any stock plan or other equity incentive plan or arrangement of Company then in effect or contemplated calculated on an “as-converted” basis.

1.2           Anti-Dilution Protection . Until such time as Synbiomics has received an aggregate of at least Three Million Dollars ($3,000,000) in cash proceeds from one or more investors in a bona fide equity financing transaction, including financing received from the Company (the “ Funding Threshold ”), Pimentel and its affiliates shall continue to own not less than eight and one-half percent (8.5%) of the shares of Synbiomics’ issued and outstanding capital stock on a Fully-Diluted Basis (or such lesser percentage if Pimentel shall sell or transfer any of the Shares to any person or entity other than an affiliate, the “ Percentage Interest ”). To the extent any security, including any security convertible into or exercisable for shares of capital stock of Synbiomics, is issued to any entity or person that would cause Pimentel’s equity ownership to fall below the Percentage Interest calculated on a Fully-Diluted Basis prior to the Synbiomics’ achievement of the Funding Threshold, then Pimentel may request that Synbiomics shall issue to Pimentel a new stock certificate in exchange for the prior certificate, without further consideration from Pimentel, with such new certificate representing a number of shares of Common Stock in an amount sufficient to maintain the Percentage Interest calculated on a Fully Diluted Basis through the achievement of the Funding Threshold (the “ Additional Shares ”). Not later than five (5) business days after the consummation of any transaction triggering the issuance of Additional Shares, Synbiomics shall cause to be delivered to Pimentel a written notice thereof. Each of the representations and warranties of the Company and Synbiomics in this Agreement shall be true and correct as of the date of any issuance of the Additional Shares, except for representations and warranties that speak as of a particular date, which shall be true and correct as of such date.

1.3           Exchange of Shares .

(a)           As of the 18-month anniversary of the Effective Date, if the Shares are not then freely tradeable, Pimentel shall have the right to exchange up to fifty percent (50%) of the Shares then held by Pimentel (such shares, the “ Initial Exchange Shares ”) for shares of common stock, $0.001 par value, of the Company (“ Company Stock ”) pursuant to the terms set forth in this Section 1.3 by delivering a written notice to the Company (the “ First Exchange Notice ”) at least ninety (90) days prior to the 18-month anniversary of the Effective Date. The right of Pimentel to exchange the Initial Exchange Shares is referred to as the “ First Exchange Right .” The number of shares of Company Stock for which the Initial Exchange Shares may be exchanged shall equal the quotient obtained by dividing (i) the aggregate Fair Market Value of the Initial Exchange Shares to be exchanged as determined in accordance with Section 1.3(e) below by (ii) the Current Market Price of a single share of Company Stock as determined in accordance with Section 1.3(f) below. The parties intend to exchange the Initial Exchange Shares for Company Stock pursuant to one (1) Exchange Closing transaction.

(b)           As of the 36-month anniversary of the Effective Date, if the Shares are not then freely tradeable, Pimentel shall have the right to exchange up to the number of Shares then held by Pimentel excluding any Initial Exchange Shares (whether or not exchanged pursuant to this Section 1.3) (the “ Remaining Exchange Shares ”) for shares of Company Stock pursuant to the terms of this Section 1.3 by delivering a written notice to the Company (the “ Second Exchange Notice ”) at least ninety (90) days prior to the 36-month anniversary of the Effective Date. The right of Pimentel to exchange the Remaining Exchange Shares is referred to as the “ Second Exchange Right .” The number of shares of Company Stock for which the Remaining Exchange Shares may be exchanged shall equal the quotient obtained by dividing (i) the aggregate Fair Market Value of the Remaining Exchange Shares to be exchanged as determined in accordance with Section 1.3(e) below by (ii) the Current Market Price of a single share of Company Stock as determined in accordance with Section 1.3(f) below. The parties intend to exchange the Remaining Exchange Shares for Company Stock pursuant to one (1) Exchange Closing transaction.

(c)           Unless the parties involved mutually agree otherwise, delivery to the Company of the share certificates representing the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, to be exchanged pursuant to this Section 1.3 shall take place at a closing (each, an “ Exchange Closing ”) to be held at the offices of Gracin & Marlow, LLP, The Chrysler Building, 405 Lexington Avenue, 26th Floor, New York, New York 10174 or at such other place as the Company and Pimentel may agree at 10:00 a.m. within two (2) calendar days following approval of the NYSE MKT with respect to such issuance. The Company shall promptly apply to the NYSE MKT for approval of the issuance of the shares of Company Stock after the determination of the applicable Fair Market Value for the Initial Exchange Shares or the Remaining Exchange Shares to be exchanged pursuant to this Section 1.3. Immediately prior to the transfer of title to the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, to be exchanged at an Exchange Closing and issuance of Company Stock, Pimentel shall provide the representations and warranties set forth in this Agreement as well as representations and warranties as to Pimentel’s good and marketable title to the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, and the absence of any liens, security interests or adverse claims of any kind arising by, through or under such Pimentel, all as of a recent date. It shall be a condition to Pimentel’s transfer of title to the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, to be exchanged at an Exchange Closing that each of the representations and warranties of the Company and Synbiomics in this Agreement shall be true and correct as of the date of the applicable Exchange Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct as of such date, and the Company shall deliver to Pimentel a certificate signed by its Chief Executive Officer on behalf of the Company, dated as of the applicable Exchange Closing, certifying that such condition has been satisfied. Pimentel agrees that as a condition to its receipt of any Company Stock pursuant to the terms of this Section 3 that it will enter into a customary “lockup” or “market standoff” agreement with a term no longer than four (4) months in a form reasonably satisfactory to the Company, and such agreement shall include customary exceptions including for transfers to affiliates.

(d)           No fractional shares or scrip representing fractional shares shall be issued upon the exchange of any Shares pursuant to this Section 1.3. As to any fraction of a share which Pimentel would otherwise be entitled to purchase upon such exchange, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Current Market Price of a share of Company Stock or round up to the next whole share.

(e)           The “ Fair Market Value ” of the Initial Exchange Shares and the Remaining Exchange Shares shall be determined based primarily upon the relative contribution of the valuation of Synbiomics to the public market capitalization of Company and as provided in this Section 1.3(e). Upon the Company’s receipt of the First Exchange Notice or the Second Exchange Notice, as applicable, Pimentel and the Company shall forthwith attempt to agree upon the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable. If Pimentel and the Company cannot agree on the Fair Market Value of the Initial Shares or the Remaining Exchange Shares, as applicable, within ten (10) days of the Company’s receipt of the First Exchange Notice or the Second Exchange Notice, as applicable, then Pimentel and the Company shall, within ten (10) days of the end of such initial 10-day period (such period, the “ Mutual Selection Period ”), choose one mutually acceptable qualified independent appraiser to determine the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, and such appraiser shall deliver its written appraisal within twenty (20) days of the date of its selection and the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, shall be as set forth in such appraisal. If Pimentel and the Company cannot agree on a mutually acceptable qualified independent appraiser within the Mutual Selection Period, then each of Pimentel and the Company shall select a qualified independent appraiser to determine the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, within five (5) days after the end of the Mutual Selection Period. The appraisers so selected shall attempt to agree to the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable.  If they are unable to do so within twenty (20) days of the date of selection of the last of the appraisers selected, they shall furnish each party with their respective written appraisals within thirty (30) days of the date of selection of the last of the appraisers selected, which written appraisals shall set forth the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable.  If each valuation is within ten percent (10%) of the other valuation, the Fair Market Value shall be the numerical average (mean) of both valuations.  If each valuation is not within ten percent (10%) of the other valuation, then the two appraisers, within ten (10) days after submitting their respective valuations, shall mutually select and appoint a third appraiser, similarly qualified, and give written notice of that appointment to the Company and Pimentel.  Within thirty (30) days after the appointment of the third appraiser, the third appraiser shall submit in writing its determination of the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable.  Thereafter, the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, shall be the numerical average (mean) of the two (2) valuations which are numerically closest together, unless one of the values is the numerical average (mean) of the three (3) values, in which case such value shall be the Fair Market Value. The Fair Market Value, as determined above, shall be conclusive, final and binding upon the Company and Pimentel.  If either the Company or Pimentel shall fail to appoint an appraiser within five (5) days after the end of the Mutual Selection Period referred to above, then, the appraiser appointed by the party which does appoint an appraiser shall alone determine the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, and such appraisal shall be binding. Any appraiser appointed in accordance with this Section 1.3(d) shall value Synbiomics as a going concern and shall not apply any illiquidity and minority discount to the Initial Exchange Shares or the Remaining Exchange Shares, as applicable. Each party shall compensate the appraiser appointed by such party, and the compensation of the first, mutually acceptable appraiser and the third appraiser, if any, and the expenses of the appraisal shall be borne equally by the Company and Pimentel. Company shall have no lost opportunity liability to Pimentel for Pimentel’s decision to exchange or not exchange the Initial Exchange Shares or the Remaining Exchange Shares, or any delays or disputes associated with the valuation process and subsequent price fluctuations of the public market price of the Company Stock.

(f)           The “ Current Market Price ” of a share of Company Stock shall be determined as provided in this Section 1.3(f). If the Company Stock is traded regularly in a public market, the fair market value of a share of Company Stock shall be the average of the closing prices of the Company Stock over a five (5) trading day period ending three (3) days before the applicable Exchange Closing. If the Company Stock is not regularly traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment.

1.4            Tag Along Rights . Pimentel shall have tag-along rights with respect to the Shares in the event that the Company proposes to sell, transfer or otherwise dispose of any of the Company’s shares of Synbiomics’ capital stock. If the Company proposes to engage, directly or indirectly, in a sale, transfer or other disposition (a “ Sale ”) of any shares of Synbiomics’ capital stock (the “ Offered Shares ”), and the Company receives a bona fide written offer (the “ Purchase Offer ”) from a person (the “ Offeror ”) to purchase the Offered Shares for a purchase price (the “ Offer Price ”) denominated and payable in United States dollars at closing or according to specified terms, with or without interest. Before making such a transfer, the Company shall, prior to consummating any Sale contemplated by this Section 1.4, immediately give to Pimentel written notice (such notice being referred to herein as the “ Notice of Transfer ”) setting froth the price and the terms of payment, and any other material terms of such proposed Sale. The Notice of Transfer shall constitute an offer by the Company to Pimentel to permit Pimentel to sell its shares of Synbiomics in the proposed Sale, for the same price and form of consideration to be received by the Company and otherwise upon the terms and subject to the conditions set forth in the Notice of Transfer, on a pro rata basis with the Company (based on respective shares of Synbiomics capital stock). For a period of twenty (20) days following receipt of the Notice of Transfer, Pimentel may, by delivering to the Company written notice of its election, elect irrevocably to participate as a seller in such proposed Sale on a pro rata basis with the Company. If Pimentel fails to respond within such 20-day period, Pimentel shall be deemed to have elected not to participate in the proposed Sale and shall have waived any and all rights under this Section with respect thereto. Within ten (10) days of the expiration of such 20-day period, the Company may consummate the transaction proposed in the applicable Purchase Offer and Notice of Transfer. Any such Synbiomics capital stock not so ttransferred during such 10-day period shall thereafter again be subject to the tag-along rights of Pimentel set forth in this Section 1.4.

1.5            Exchange Approval . Subject to the provisions of Section 6.2 below, the parties acknowledge that any issuance of stock by the Company of its common stock, including with respect to the license fees, patent expense reimbursements, milestones payments and share exchanges referred to above, is subject to the prior approval of the NYSE MKT or any other exchange upon which the shares of the Company are listed and if required by such exchange or any other rule or regulation applicable to Synbiomics or the Company, shareholder approval.

sECTION 2.         CLOSING AND DELIVERY

2.1            Issuance of Shares . Subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties and agreements contained herein, on the date hereof, the Company will cause Synbiomics to issue to Pimentel, and Pimentel will acquire from Synbiomics, the Shares.

2.2            Closing . The closing of the purchase and sale of the Shares to be issued pursuant to Section 2.1 of this Agreement shall be held at the offices of Gracin & Marlow, LLP, The Chrysler Building, 405 Lexington Avenue, 26 ^th Floor, New York, New York 10174 or at such other place as the Company and Pimentel may agree on simultaneously with the execution of this Agreement.

2.3            Delivery of the Shares . Promptly following the date hereof, the Company shall cause to be delivered to Pimentel a certificate representing the number of Shares purchased hereunder, registered in the name of Pimentel.

sECTION 3.         REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SYNBIOMICS .

Subject to and except as set forth in the SEC Documents (as defined below), the Company and Synbiomic, jointly and severally, hereby represent and warrant to Pimentel as of the date hereof as follows:

3.1            Organization, Good Standing and Power . The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted and as described in the reports filed by the Company with the Securities and Exchange Commission (the “ Commission ”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), since the end of its most recently completed fiscal year through the date hereof, including, without limitation, its most recent report on Form 10-Q. Synbiomics is a corporation wholly owned by the Company and duly incorporated, validly existing and in good standing under the laws of the State of Nevada with the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted. Other than Synbiomics and those subsidiaries identified in its most recent report on Form 10-Q, the Company does not have any subsidiaries. Each of the Company and Synbiomics is qualified to do business as a foreign corporation and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except for any jurisdiction(s) (alone or in the aggregate) in which the failure to be so qualified will not have a Material Adverse Effect. For the purposes of this Agreement, “ Material Adverse Effect ” means any effect on the business, operations, properties or financial condition of the Company or Synbiomics, as applicable, that is material and adverse to the Company or Synbiomics, as applicable, taken as a whole, and any condition, circumstance or situation that would prohibit the Company or Synbiomics, as applicable, from entering into and performing any of its obligations hereunder.

3.2            Authorization; Enforcement . Each of the Company and Synbiomics has the requisite corporate power and authority to enter into and perform this Agreement and Synbiomics has the requisite power and authority to issue and sell the Shares in accordance with the terms hereof. The execution, delivery and performance of this Agreement by the Company and Synbiomics and the consummation by each of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company, Synbiomics, either of its board of directors or stockholders is required for the issuance of the Shares, the issuance of the Company Stock or the consummation of the transactions contemplated hereby. When executed and delivered by the Company and Synbiomics, this Agreement shall constitute a valid and binding obligation of the Company and Synbiomics enforceable against each in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

3.3            Issuance of Shares and Company Stock . The Shares and Company Stock to be issued and sold hereunder have been duly authorized by all necessary corporate action and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable. In addition, when issued such Shares and Company Stock, as applicable, will be free and clear of all liens, claims, charges, security interests or agreements, pledges, assignments, covenants, restrictions or other encumbrances created by, or imposed by, Synbiomics or the Company and rights of first refusal of any kind imposed by Synbiomics or the Company, as applicable (other than restrictions on transfer under applicable securities laws) and the holder of such Shares or Company Stock, as applicable, shall be entitled to all rights accorded to a holder of Common Stock of Synbiomics or the Company, as applicable. As of the date hereof, no shares of Synbiomics’ Common Stock are issued and outstanding. Synbiomics is authorized to issue fifty million (50,000,000) shares of Common Stock, of which forty-four million (44,000,000) shares of Common Stock will be outstanding after the issuance of the Shares. The Shares, when issued, will represent eleven and one half percent (8.5%) of the outstanding shares of common stock of Synbiomics of a Fully Diluted Basis. As of the date hereof, 44,654,414 shares of Company Stock are issued and outstanding.

3.4            No Conflicts; Governmental Approvals . The execution, delivery and performance of the Agreement by the Company and Synbiomics and the consummation by the Company and Synbiomics of the transactions contemplated hereby do not and will not: (i) violate any provision of the Company’s or Synbiomics’ Articles of Incorporation or Bylaws, each as amended to date; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or Synbiomics is a party or by which the Company’s or Synbiomics’ properties or assets are bound; or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or Synbiomics or by which any property or asset of the Company or Synbiomics is bound or affected, except for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor Synbiomics is required under federal, state, foreign or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or issue the Shares in accordance with the terms hereof (other than any filings, consents and approvals required to be made by the Company or Synbiomics under applicable state and federal securities laws, securities and exchange commission rules or regulations, rules or regulations of any stock exchange upon which shares of common stock of the Company may be listed or rules or regulations prior to or subsequent to the date hereof).

3.5            SEC Documents, Financial Statements . The Company Stock is registered pursuant to Section 12(b) of the Exchange Act. During the two year period preceding the execution of this Agreement, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act (the “ SEC Documents ”). At the times of their respective filing, all such reports, schedules, forms, statements and other documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder. At the times of their respective filings, such reports, schedules, forms, statements and other documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, other than with respect to its initial Annual Report on Form 10-K for the year ended December 31, 2011 the financial statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

3.6            Brokers . Neither the Company, Synbiomics nor any of the officers, directors or employees of the Company or Synbiomics has employed any broker or finder in connection with the transaction contemplated by this Agreement

sECTION 4.         REPRESENTATIONS, WARRANTIES AND COVENANTS OF Pimentel .

4.1            Purchaser Sophistication . Pimentel represents and warrants to, and covenants with, the Company and Synbiomics that Pimentel: (a) is knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to, investments in shares presenting an investment decision like that involved in the purchase of the Shares, including investments in securities issued by Synbiomics and investments in comparable companies, and has requested, received, reviewed and considered all information it deemed relevant in making an informed decision to purchase the Shares; (b) Pimentel, in connection with its decision to purchase the Shares, relied only upon the documents of the Company filed with the Commission, other publicly available information, and the representations and warranties of the Company and Synbiomics contained herein. Pimentel is an “ accredited investor ” pursuant to Rule 501 of Regulation D under the Securities Act; (c) Pimentel is acquiring the Shares for its own account for investment only and with no present intention of distributing any of such Shares or any arrangement or understanding with any other persons regarding the distribution of such Shares; (d) Pimentel has not been organized, reorganized or recapitalized specifically for the purpose of investing in the Shares; (e) Pimentel will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire to take a pledge of) any of the Shares except in compliance with the Securities Act of 1933 and applicable state securities laws; (f) Pimentel understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act of 1933 and state securities laws, and that the Company and Synbiomics are relying upon the truth and accuracy of, and Pimentel’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Pimentel set forth herein in order to determine the availability of such exemptions and the eligibility of Pimentel to acquire the Shares; (g) Pimentel understands that its investment in the Shares involves a significant degree of risk, including a risk of total loss of Pimentel’s investment; and (h) Pimentel understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Shares.

4.2            Authorization and Power . Pimentel has the requisite power and authority to enter into and perform this Agreement and to purchase the Shares being sold to it hereunder. The execution, delivery and performance of this Agreement by Pimentel and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and no further consent or authorization of Pimentel or its board of directors or stockholders is required. When executed and delivered by Pimentel, this Agreement shall constitute a valid and binding obligation of Pimentel enforceable against Pimentel in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

4.3            No Conflict . The execution, delivery and performance of this Agreement by Pimentel and the consummation by Pimentel of the transactions contemplated hereby do not and will not: (i) violate any provision of Pimentel’s marital or other agreements; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which Pimentel is a party or by which Pimentel’s properties or assets are bound; or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to Pimentel or by which any property or asset of Pimentel are bound or affected, except, in all cases, other than violations (with respect to federal and state securities laws) above, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, materially and adversely affect Pimentel’s ability to perform its obligations under the Agreement.

4.4            Restricted Shares . Pimentel acknowledges that the Shares are restricted securities and must be held indefinitely unless subsequently registered under the Securities Act of 1933 or Synbiomics receives an opinion of counsel reasonably satisfactory to Synbiomics that such registration is not required.

4.5            Stock Legends . Pimentel acknowledges that certificates evidencing the Shares shall bear a restrictive legend in substantially the following form (and including related stock transfer instructions and record notations):

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

sECTION 5.         SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS .

Notwithstanding any investigation made by any party to this Agreement, all representations and warranties made by the Company, Synbiomics and Pimentel herein shall survive the execution of this Agreement and the issuance and sale to Pimentel of the Shares.

sECTION 6.         COVENANTS.

6.1            Approval . In each case where the Company determines that the approval of the Company’s investors or any exchange or other listing upon which the Company Stock may be listed is required for the issuance of Company Stock to Pimentel, the Company shall use commercially reasonable efforts to secure such approval as promptly as possible. In the event, notwithstanding the foregoing obligation, the Company is unable to secure the approval with respect to the issuance of any Company Stock to be issued hereunder, then Pimentel shall have a one-time demand registration right, at its own expense, to request that Synbiomics register the Shares held by Pimentel with the Securities and Exchange Commission, subject to any Securities and Exchange Commission limitations; provided that such request is made within sixty (60) days of the date of notification from the Company to Pimentel of the position of the NYSE MKT.   If such registration is an underwritten  public offering then it shall be subject to standard underwriter cut backs and lock ups. If the managing underwriter of an underwritten public offering determines and advises Synbiomics in writing that the inclusion of all securities proposed to be included by Pimentel and Synbiomics and any other holders of Licensee securities requesting inclusion of their securities in the underwritten public offering would materially and adversely interfere with the successful marketing of the offering, then Pimentel shall not be permitted to include any Shares in excess of the amount, if any, of securities which the managing underwriter of such underwritten public offering shall reasonably and in good faith agree in writing to include in such public offering.

6.2            Upon request of Pimentel, the Company agrees to provide an opinion of counsel to its transfer agent regarding the removal of the legend on the Company Stock issued to Pimentel hereunder; provided that all legal requirements allowing for such legend removal and all applicable conditions under Rule 144 promulgated under the Securities Act of 1933 are met.

sECTION 7.         NOTICES.

7.1            Any notice, request, instruction or other document required by this Agreement shall be in writing and shall be deemed to have been given (a) if mailed with the United States Postal Service by prepaid, first class, certified mail, return receipt requested, at the time of receipt by the intended recipient, (b) if sent by Federal Express or other overnight carrier, signature of delivery required, at the time of receipt by the intended recipient, or (c) if sent by facsimile transmission, when so sent and when receipt has been acknowledged by appropriate telephone or facsimile receipt, addressed as follows:

In the case of Pimentel to:

Mark Pimentel, M.D.

or in the case of the Company or Synbiomics to:

155 Gibbs Street, Suite 412

Rockville, MD 20850

Attention:

Fax No.: (734) 332-7878

or to such other address or to such other person(s) as may be given from time to time under the terms of this Section 7.1.

sECTION 8.         MISCELLANEOUS .

8.1            Fees and Expenses . Each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

8.2            Waivers and Amendments . Neither this Agreement nor any provision hereof may be changed, waived, discharged, terminated, modified or amended except upon the written consent of the parties hereto.

8.3            Headings . The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement.

8.4            Severability . If any provision hereof should be held invalid, illegal or unenforceable in any respect, then, to the fullest extent permitted by law: (a) all other provisions hereof shall remain in full force and effect and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible and (b) the parties shall use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of such provision(s) in this Agreement.

8.5            Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California as applied to contracts entered into and performed entirely in the State of California, without regard to conflicts of law principles.

8.6            Counterparts . This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.

8.7            Successors and Assigns . Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto, provided that Pimentel shall not assign its rights or obligations hereunder and Synbiomics shall only be able to assign its tights or obligations hereunder to an affiliated entity if the License Agreement is also assigned to such entity.

8.8            No Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

8.9            Expenses . Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement.

8.10          Entire Agreement . This Agreement (including the Schedule of Exceptions), License Agreement and other documents delivered pursuant hereto and thereto, including the exhibits, constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

8.11          Publicity . Except as otherwise provided herein, no party shall issue any press releases or otherwise make any public statement with respect to the transactions contemplated by this Agreement without the prior written consent of the other party, except as may be required by applicable law or regulations, in which case such party shall provide the other parties with reasonable notice of such publicity and/or opportunity to review such disclosure.

8.12          Waiver of Rule of Construction . Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

8.13          Further Assurances . From and after the date of this Agreement, upon the reasonable request of Pimentel or the Company, the Company and Pimentel shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

IN WITNESS WHEREOF , the parties hereto have caused this Stock Purchase Agreement to be executed by their duly authorized representatives as of the day and year first above written.

STOCK PURCHASE AGREEMENT

THIS AGREEMENT (this “ Agreement ”) is made and entered into as of December 5, 2013 (the “ Effective Date ”), by and among Synthetic Biologics, Inc., a Nevada corporation (the “ Company ”), Synthetic Biomics, Inc., a Nevada corporation and wholly-owned subsidiary of the Company (“ Synbiomics ”), and Cedars-Sinai Medical Center, a California nonprofit public benefit corporation (“ CSMC ”).

A.            The Company and Synbiomics may (or may not) enter into license and option agreements with CSMC (the “ License Agreement ”), pursuant to which CSMC may license and option the rights to certain technology to Synbiomics; and

B.            In advance of such potential License Agreement (which may or may not be entered into), Synbiomics has agreed to issue to CSMC certain shares of Synbiomics’ common stock in exchange for $0.0001 per share (“ Common Stock ”), accordance with the terms and conditions of this Agreement.

AGREEMENT

In consideration of the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

sECTION 1.         AUTHORIZATION OF SALE OF SHARES ; ANTI-DILUTION; EXCHANGE OF SHARES.

1.1            Authorization . Subject to the terms and conditions of this Agreement, Synbiomics has duly authorized the issuance to CSMC of five million sixty thousand (5,060,000) shares of Common Stock (such shares, together with any Additional Shares issued in accordance with Section 1.2, the “ Shares ”) in exchange for Five Hundred and Six Dollars ($506.00) payable immediately by cash or check, which shares shall represent eleven and one-half percent (11.5%) of the shares of Synbiomics’ issued and outstanding capital stock on a Fully-Diluted Basis on the Effective Date. For purposes of this Agreement, the term “ Fully Diluted Basis ” shall include all of the issued and outstanding equity securities of Synbiomics (including, without limitation, all common stock, preferred stock and units of any kind) calculated on an “as-converted” basis plus all outstanding options, warrants and other securities exercisable or exchangeable for or convertible into equity securities of Synbiomics calculated on an “as-converted” basis plus any securities issued under any stock plan or other equity incentive plan or arrangement of Company then in effect or contemplated calculated on an “as-converted” basis.

1.2            Anti-Dilution Protection . Until such time as Synbiomics has received an aggregate of at least Three Million Dollars ($3,000,000) in cash proceeds from one or more investors in a bona fide equity financing transaction, including financing received from the Company (the “ Funding Threshold ”), CSMC and its affiliates shall continue to own not less than eleven and one-half percent (11.5%) of the shares of Synbiomics’ issued and outstanding capital stock on a Fully-Diluted Basis (or such lesser percentage if CSMC shall sell or transfer any of the Shares to any person or entity other than an affiliate, the “ Percentage Interest ”). To the extent any security, including any security convertible into or exercisable for shares of capital stock of Synbiomics, is issued to any entity or person that would cause CSMC’s equity ownership to fall below the Percentage Interest calculated on a Fully-Diluted Basis prior to the Synbiomics’ achievement of the Funding Threshold, then Synbiomics shall issue to CSMC, without further consideration from CSMC, additional shares of Common Stock in an amount sufficient to maintain the Percentage Interest calculated on a Fully Diluted Basis through the achievement of the Funding Threshold (the “ Additional Shares ”). Not later than five (5) business days after the consummation of any transaction triggering the issuance of Additional Shares, Synbiomics shall cause to be delivered to CSMC a certificate representing the number of Additional Shares issued hereunder, registered in the name of CSMC. Each of the representations and warranties of the Company and Synbiomics in this Agreement shall be true and correct as of the date of any issuance of the Additional Shares, except for representations and warranties that speak as of a particular date, which shall be true and correct as of such date.

1.3          Exchange of Shares .

(a)           As of the 18-month anniversary of the Effective Date, if the Shares are not then freely tradeable, CSMC shall have the right to exchange up to fifty percent (50%) of the Shares then held by CSMC (such shares, the “ Initial Exchange Shares ”) for shares of common stock, $0.001 par value, of the Company (“ Company Stock ”) pursuant to the terms set forth in this Section 1.3 by delivering a written notice to the Company (the “ First Exchange Notice ”) at least ninety (90) days prior to the 18-month anniversary of the Effective Date. The right of CSMC to exchange the Initial Exchange Shares is referred to as the “ First Exchange Right .” The number of shares of Company Stock for which the Initial Exchange Shares may be exchanged shall equal the quotient obtained by dividing (i) the aggregate Fair Market Value of the Initial Exchange Shares to be exchanged as determined in accordance with Section 1.3(e) below by (ii) the Current Market Price of a single share of Company Stock as determined in accordance with Section 1.3(f) below. The parties intend to exchange the Initial Exchange Shares for Company Stock pursuant to one (1) Exchange Closing transaction.

(b)           As of the 36-month anniversary of the Effective Date, if the Shares are not then freely tradeable, CSMC shall have the right to exchange up to the number of Shares then held by CSMC excluding any Initial Exchange Shares (whether or not exchanged pursuant to this Section 1.3) (the “ Remaining Exchange Shares ”) for shares of Company Stock pursuant to the terms of this Section 1.3 by delivering a written notice to the Company (the “ Second Exchange Notice ”) at least ninety (90) days prior to the 36-month anniversary of the Effective Date. The right of CSMC to exchange the Remaining Exchange Shares is referred to as the “ Second Exchange Right .” The number of shares of Company Stock for which the Remaining Exchange Shares may be exchanged shall equal the quotient obtained by dividing (i) the aggregate Fair Market Value of the Remaining Exchange Shares to be exchanged as determined in accordance with Section 1.3(e) below by (ii) the Current Market Price of a single share of Company Stock as determined in accordance with Section 1.3(f) below. The parties intend to exchange the Remaining Exchange Shares for Company Stock pursuant to one (1) Exchange Closing transaction.

(c)           Unless the parties involved mutually agree otherwise, delivery to the Company of the share certificates representing the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, to be exchanged pursuant to this Section 1.3 shall take place at a closing (each, an “ Exchange Closing ”) to be held at the offices of Gracin & Marlow, LLP, The Chrysler Building, 405 Lexington Avenue, 26th Floor, New York, New York 10174 or at such other place as the Company and CSMC may agree at 10:00 a.m. within two (2) calendar days following approval of the NYSE MKT with respect to such issuance. The Company shall promptly apply to the NYSE MKT for approval of the issuance of the shares of Company Stock after the determination of the applicable Fair Market Value for the Initial Exchange Shares or the Remaining Exchange Shares to be exchanged pursuant to this Section 1.3. Immediately prior to the transfer of title to the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, to be exchanged at an Exchange Closing and issuance of Company Stock, CSMC shall provide the representations and warranties set forth in this Agreement as well as representations and warranties as to CSMC’s good and marketable title to the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, and the absence of any liens, security interests or adverse claims of any kind arising by, through or under such CSMC, all as of a recent date, and CSMC shall deliver to the Company a certificate signed by an authorized officer on behalf of CSMC, dated as of the applicable Exchange Closing, regarding such representations and warranties. It shall be a condition to CSMC’s transfer of title to the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, to be exchanged at an Exchange Closing that each of the representations and warranties of the Company and Synbiomics in this Agreement shall be true and correct as of the date of the applicable Exchange Closing, except for representations and warranties that speak as of a particular date, which shall be true and correct as of such date, and the Company shall deliver to CSMC a certificate signed by its Chief Executive Officer on behalf of the Company, dated as of the applicable Exchange Closing, certifying that such condition has been satisfied. CSMC agrees that as a condition to its receipt of any Company Stock pursuant to the terms of this Section 3 that it will enter into a customary “lockup” or “market standoff” agreement with a term no longer than four (4) months in a form reasonably satisfactory to the Company, and such agreement shall include customary exceptions including for transfers to affiliates.

(d)           No fractional shares or scrip representing fractional shares shall be issued upon the exchange of any Shares pursuant to this Section 1.3. As to any fraction of a share which CSMC would otherwise be entitled to purchase upon such exchange, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Current Market Price of a share of Company Stock or round up to the next whole share.

(e)           The “ Fair Market Value ” of the Initial Exchange Shares and the Remaining Exchange Shares shall be determined based primarily upon the relative contribution of the valuation of Synbiomics to the public market capitalization of Company and as provided in this Section 1.3(e). Upon the Company’s receipt of the First Exchange Notice or the Second Exchange Notice, as applicable, CSMC and the Company shall forthwith attempt to agree upon the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable. If CSMC and the Company cannot agree on the Fair Market Value of the Initial Shares or the Remaining Exchange Shares, as applicable, within ten (10) days of the Company’s receipt of the First Exchange Notice or the Second Exchange Notice, as applicable, then CSMC and the Company shall, within ten (10) days of the end of such initial 10-day period (such period, the “ Mutual Selection Period ”), choose one mutually acceptable qualified independent appraiser to determine the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, and such appraiser shall deliver its written appraisal within twenty (20) days of the date of its selection and the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, shall be as set forth in such appraisal. If CSMC and the Company cannot agree on a mutually acceptable qualified independent appraiser within the Mutual Selection Period, then each of CSMC and the Company shall select a qualified independent appraiser to determine the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, within five (5) days after the end of the Mutual Selection Period. The appraisers so selected shall attempt to agree to the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable.  If they are unable to do so within twenty (20) days of the date of selection of the last of the appraisers selected, they shall furnish each party with their respective written appraisals within thirty (30) days of the date of selection of the last of the appraisers selected, which written appraisals shall set forth the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable.  If each valuation is within ten percent (10%) of the other valuation, the Fair Market Value shall be the numerical average (mean) of both valuations.  If each valuation is not within ten percent (10%) of the other valuation, then the two appraisers, within ten (10) days after submitting their respective valuations, shall mutually select and appoint a third appraiser, similarly qualified, and give written notice of that appointment to the Company and CSMC.  Within thirty (30) days after the appointment of the third appraiser, the third appraiser shall submit in writing its determination of the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable.  Thereafter, the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, shall be the numerical average (mean) of the two (2) valuations which are numerically closest together, unless one of the values is the numerical average (mean) of the three (3) values, in which case such value shall be the Fair Market Value. The Fair Market Value, as determined above, shall be conclusive, final and binding upon the Company and CSMC.  If either the Company or CSMC shall fail to appoint an appraiser within five (5) days after the end of the Mutual Selection Period referred to above, then, the appraiser appointed by the party which does appoint an appraiser shall alone determine the Fair Market Value of the Initial Exchange Shares or the Remaining Exchange Shares, as applicable, and such appraisal shall be binding. Any appraiser appointed in accordance with this Section 1.3(d) shall value Synbiomics as a going concern and shall not apply any illiquidity and minority discount to the Initial Exchange Shares or the Remaining Exchange Shares, as applicable. Each party shall compensate the appraiser appointed by such party, and the compensation of the first, mutually acceptable appraiser and the third appraiser, if any, and the expenses of the appraisal shall be borne equally by the Company and CSMC. Company shall have no lost opportunity liability to CSMC for CSMC’s decision to exchange or not exchange the Initial Exchange Shares or the Remaining Exchange Shares, or any delays or disputes associated with the valuation process and subsequent price fluctuations of the public market price of the Company Stock.

(f)           The “ Current Market Price ” of a share of Company Stock shall be determined as provided in this Section 1.3(f). If the Company Stock is traded regularly in a public market, the fair market value of a share of Company Stock shall be the average of the closing prices of the Company Stock over a five (5) trading day period ending three (3) days before the applicable Exchange Closing. If the Company Stock is not regularly traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment.

1.4            Tag-Along Rights . CSMC shall have tag-along rights with respect to the Shares in the event that the Company proposes to sell, transfer or otherwise dispose of any of the Company’s shares of Synbiomics’ capital stock. If the Company proposes to engage, directly or indirectly, in a sale, transfer or other disposition (a “ Sale ”) of any shares of Synbiomics’ capital stock (the “ Offered Shares ”), and the Company receives a bona fide written offer (the “ Purchase Offer ”) from a person (the “ Offeror ”) to purchase the Offered Shares for a purchase price (the “ Offer Price ”) denominated and payable in United States dollars at closing or according to specified terms, with or without interest, then before making such a transfer, the Company shall, prior to consummating any Sale contemplated by this Section 1.4, immediately give to CSMC written notice (such notice being referred to herein as the “ Notice of Transfer ”) setting froth the price and the terms of payment, and any other material terms of such proposed Sale. The Notice of Transfer shall constitute an offer by the Company to CSMC to permit CMSC to sell its shares of Synbiomics in the proposed Sale, for the same price and form of consideration to be received by the Company and otherwise upon the terms and subject to the conditions set forth in the Notice of Transfer, on a pro rata basis with the Company (based on respective shares of Synbiomics capital stock). For a period of twenty (20) days following receipt of the Notice of Transfer, CSMC may, by delivering to the Company written notice of its election, elect irrevocably to participate as a seller in such proposed Sale on a pro rata basis with the Company. If CSMC fails to respond within such 20-day period, CSMC shall be deemed to have elected not to participate in the proposed Sale and shall have waived any and all rights under this Section with respect thereto. Within ten (10) days of the expiration of such 20-day period, the Company may consummate the transaction proposed in the applicable Purchase Offer and Notice of Transfer. Any such Synbiomics capital stock not so transferred during such 10-day period shall thereafter again be subject to the tag-along rights of CSMC set forth in this Section 1.4.

1.5            Exchange Approval . Subject to the provisions of Section 6.2 below, the parties acknowledge that any issuance of stock by the Company of its common stock hereunder is subject to the prior approval of the NYSE MKT or any other exchange upon which the shares of the Company are listed and if required by such exchange or any other rule or regulation applicable to Synbiomics or the Company, shareholder approval.

sECTION 2.         CLOSING AND DELIVERY

2.1            Issuance of Shares . Subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties and agreements contained herein, on the date hereof, the Company will cause Synbiomics to issue to CSMC, and CSMC will acquire from Synbiomics, the Shares.

2.2            Closing . The closing of the purchase and sale of the Shares to be issued pursuant to Section 2.1 of this Agreement shall be held at the offices of Gracin & Marlow, LLP, The Chrysler Building, 405 Lexington Avenue, 26 ^th Floor, New York, New York 10174 or at such other place as the Company and CSMC may agree on simultaneously with the execution of this Agreement.

2.3            Delivery of the Shares . Promptly following the date hereof, the Company shall cause to be delivered to CSMC a certificate representing the number of Shares purchased hereunder, registered in the name of CSMC.

sECTION 3.         REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SYNBIOMICS .

Subject to and except as set forth in the SEC Documents (as defined below), the Company and Synbiomic, jointly and severally, hereby represent and warrant to CSMC as of the date hereof as follows:

3.1            Organization, Good Standing and Power . The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted and as described in the reports filed by the Company with the Securities and Exchange Commission (the “ Commission ”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), since the end of its most recently completed fiscal year through the date hereof, including, without limitation, its most recent report on Form 10-Q. Synbiomics is a corporation wholly owned by the Company and duly incorporated, validly existing and in good standing under the laws of the State of Nevada with the requisite corporate power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted. Other than Synbiomics and those subsidiaries identified in its most recent report on Form 10-Q, the Company does not have any subsidiaries. Each of the Company and Synbiomics is qualified to do business as a foreign corporation and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except for any jurisdiction(s) (alone or in the aggregate) in which the failure to be so qualified will not have a Material Adverse Effect. For the purposes of this Agreement, “ Material Adverse Effect ” means any effect on the business, operations, properties or financial condition of the Company or Synbiomics, as applicable, that is material and adverse to the Company or Synbiomics, as applicable, taken as a whole, and any condition, circumstance or situation that would prohibit the Company or Synbiomics, as applicable, from entering into and performing any of its obligations hereunder.

3.2            Authorization; Enforcement . Each of the Company and Synbiomics has the requisite corporate power and authority to enter into and perform this Agreement and Synbiomics has the requisite power and authority to issue and sell the Shares in accordance with the terms hereof. The execution, delivery and performance of this Agreement by the Company and Synbiomics and the consummation by each of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company, Synbiomics, either of its board of directors or stockholders is required for the issuance of the Shares, the issuance of the Company Stock or the consummation of the transactions contemplated hereby. When executed and delivered by the Company and Synbiomics, this Agreement shall constitute a valid and binding obligation of the Company and Synbiomics enforceable against each in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

3.3            Issuance of Shares and Company Stock . The Shares and Company Stock to be issued and sold hereunder have been duly authorized by all necessary corporate action and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable. In addition, when issued such Shares and Company Stock, as applicable, will be free and clear of all liens, claims, charges, security interests or agreements, pledges, assignments, covenants, restrictions or other encumbrances created by, or imposed by, Synbiomics or the Company and rights of first refusal of any kind imposed by Synbiomics or the Company, as applicable (other than restrictions on transfer under applicable securities laws) and the holder of such Shares or Company Stock, as applicable, shall be entitled to all rights accorded to a holder of Common Stock of Synbiomics or the Company, as applicable. As of the date hereof, no shares of Synbiomics’ Common Stock are issued and outstanding. Synbiomics is authorized to issue fifty million (50,000,000) shares of Common Stock, of which forty-four million (44,000,000) shares of Common Stock will be outstanding after the issuance of the Shares. The Shares, when issued, will represent eleven and one half percent (11.5%) of the outstanding shares of common stock of Synbiomics of a Fully Diluted Basis. As of the date hereof, 44,654,414 shares of Company Stock are issued and outstanding.

3.4            No Conflicts; Governmental Approvals . The execution, delivery and performance of the Agreement by the Company and Synbiomics and the consummation by the Company and Synbiomics of the transactions contemplated hereby do not and will not: (i) violate any provision of the Company’s or Synbiomics’ Articles of Incorporation or Bylaws, each as amended to date; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company or Synbiomics is a party or by which the Company’s or Synbiomics’ properties or assets are bound; or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or Synbiomics or by which any property or asset of the Company or Synbiomics is bound or affected, except for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor Synbiomics is required under federal, state, foreign or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or issue the Shares in accordance with the terms hereof (other than any filings, consents and approvals required to be made by the Company or Synbiomics under applicable state and federal securities laws, securities and exchange commission rules or regulations, rules or regulations of any stock exchange upon which shares of common stock of the Company may be listed or rules or regulations prior to or subsequent to the date hereof).

3.5            SEC Documents, Financial Statements . The Company Stock is registered pursuant to Section 12(b) of the Exchange Act. During the two year period preceding the execution of this Agreement, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act (the “ SEC Documents ”). At the times of their respective filing, all such reports, schedules, forms, statements and other documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder. At the times of their respective filings, such reports, schedules, forms, statements and other documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, other than with respect to its initial Annual Report on Form 10-K for the year ended December 31, 2011 the financial statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

3.6            Brokers . Neither the Company, Synbiomics nor any of the officers, directors or employees of the Company or Synbiomics has employed any broker or finder in connection with the transaction contemplated by this Agreement

sECTION 4.         REPRESENTATIONS, WARRANTIES AND COVENANTS OF CSMC .

4.1            Purchaser Sophistication . CSMC represents and warrants to, and covenants with, the Company and Synbiomics that CSMC: (a) is knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to, investments in shares presenting an investment decision like that involved in the purchase of the Shares, including investments in securities issued by Synbiomics and investments in comparable companies, and has requested, received, reviewed and considered all information it deemed relevant in making an informed decision to purchase the Shares; (b) CSMC, in connection with its decision to purchase the Shares, relied only upon the documents of the Company filed with the Commission, other publicly available information, and the representations and warranties of the Company and Synbiomics contained herein. CSMC is an “ accredited investor ” pursuant to Rule 501 of Regulation D under the Securities Act; (c) CSMC is acquiring the Shares for its own account for investment only and with no present intention of distributing any of such Shares or any arrangement or understanding with any other persons regarding the distribution of such Shares; (d) CSMC has not been organized, reorganized or recapitalized specifically for the purpose of investing in the Shares; (e) CSMC will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire to take a pledge of) any of the Shares except in compliance with the Securities Act of 1933 and applicable state securities laws; (f) CSMC understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act of 1933 and state securities laws, and that the Company and Synbiomics are relying upon the truth and accuracy of, and CSMC’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of CSMC set forth herein in order to determine the availability of such exemptions and the eligibility of CSMC to acquire the Shares; (g) CSMC understands that its investment in the Shares involves a significant degree of risk, including a risk of total loss of CSMC’s investment; and (h) CSMC understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Shares.

4.2            Authorization and Power . CSMC has the requisite power and authority to enter into and perform this Agreement and to purchase the Shares being sold to it hereunder. The execution, delivery and performance of this Agreement by CSMC and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and no further consent or authorization of CSMC or its board of directors or stockholders is required. When executed and delivered by CSMC, this Agreement shall constitute a valid and binding obligation of CSMC enforceable against CSMC in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

4.3            No Conflict . The execution, delivery and performance of this Agreement by CSMC and the consummation by CSMC of the transactions contemplated hereby do not and will not: (i) violate any provision of CSMC’s charter or organizational documents; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which CSMC is a party or by which CSMC’s properties or assets are bound; or (iii) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to CSMC or by which any property or asset of CSMC are bound or affected, except, in all cases, other than violations (with respect to federal and state securities laws) above, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, materially and adversely affect CSMC’s ability to perform its obligations under the Agreement.

4.4            Restricted Shares . CSMC acknowledges that the Shares are restricted securities and must be held indefinitely unless subsequently registered under the Securities Act of 1933 or Synbiomics receives an opinion of counsel reasonably satisfactory to Synbiomics that such registration is not required.

4.5            Stock Legends . CSMC acknowledges that certificates evidencing the Shares shall bear a restrictive legend in substantially the following form (and including related stock transfer instructions and record notations):

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

sECTION 5.         SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS .

Notwithstanding any investigation made by any party to this Agreement, all representations and warranties made by the Company, Synbiomics and CSMC herein shall survive the execution of this Agreement and the issuance and sale to CSMC of the Shares.

sECTION 6.         COVENANTS.

6.1            Approval . In each case where the Company determines that the approval of the Company’s shareholders or any exchange or other listing upon which the Company Stock may be listed is required for the issuance of Company Stock to CSMC, the Company shall use commercially reasonable efforts to secure such approval as promptly as possible. In the event, notwithstanding the foregoing obligation, the Company is unable to secure the approval with respect to the issuance of any Company Stock to be issued hereunder, then CSMC shall have a one-time demand registration right, at its own expense, to request that Synbiomics register the Shares held by CSMC with the Securities and Exchange Commission, subject to any Securities and Exchange Commission limitations; provided that such request is made within sixty (60) days of the date of notification from the Company to CSMC of the position of the NYSE MKT.   If such registration is an underwritten  public offering then it shall be subject to standard underwriter cut backs and lock ups. If the managing underwriter of an underwritten public offering determines and advises Synbiomics in writing that the inclusion of all securities proposed to be included by CSMC and Synbiomics and any other holders of Licensee securities requesting inclusion of their securities in the underwritten public offering would materially and adversely interfere with the successful marketing of the offering, then CSMC shall not be permitted to include any Shares in excess of the amount, if any, of securities which the managing underwriter of such underwritten public offering shall reasonably and in good faith agree in writing to include in such public offering.

6.2            Upon request of CSMC, the Company agrees to provide an opinion of counsel to its transfer agent regarding the removal of the legend on the Company Stock issued to CSMC hereunder; provided that all legal requirements allowing for such legend removal and all applicable conditions under Rule 144 promulgated under the Securities Act of 1933 are met.

sECTION 7.         NOTICES.

7.1            Any notice, request, instruction or other document required by this Agreement shall be in writing and shall be deemed to have been given (a) if mailed with the United States Postal Service by prepaid, first class, certified mail, return receipt requested, at the time of receipt by the intended recipient, (b) if sent by Federal Express or other overnight carrier, signature of delivery required, at the time of receipt by the intended recipient, or (c) if sent by facsimile transmission, when so sent and when receipt has been acknowledged by appropriate telephone or facsimile receipt, addressed as follows:

In the case of CSMC to:

Cedars-Sinai Medical Center
8700 Beverly Boulevard
Los Angeles, California 90048-1865

Attention: Senior Vice President for Academic Affairs

Fax No.:

with a copy to Senior Vice President for Legal Affairs & General Counsel

or in the case of the Company or Synbiomics to:

155 Gibbs Street, Suite 412

Rockville, MD 20850

Attention:

Fax No.: (734) 332-7878

or to such other address or to such other person(s) as may be given from time to time under the terms of this Section 7.1.

sECTION 8.         MISCELLANEOUS .

8.1            Fees and Expenses . Each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.

8.2            Waivers and Amendments . Neither this Agreement nor any provision hereof may be changed, waived, discharged, terminated, modified or amended except upon the written consent of the parties hereto.

8.3            Headings . The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement.

8.4            Severability . If any provision hereof should be held invalid, illegal or unenforceable in any respect, then, to the fullest extent permitted by law: (a) all other provisions hereof shall remain in full force and effect and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible and (b) the parties shall use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of such provision(s) in this Agreement.

8.5            Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California as applied to contracts entered into and performed entirely in the State of California, without regard to conflicts of law principles.

8.6            Counterparts . This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.

8.7            Successors and Assigns . Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto, provided that CSMC shall not assign its rights or obligations hereunder and Synbiomics shall only be able to assign its tights or obligations hereunder to an affiliated entity if the License Agreement is also assigned to such entity.

8.8            No Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

8.9            Expenses . Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement.

8.10          Entire Agreement . This Agreement (including the Schedule of Exceptions), License Agreement and other documents delivered pursuant hereto and thereto, including the exhibits, constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

8.11          Publicity . Except as otherwise provided herein, no party shall issue any press releases or otherwise make any public statement with respect to the transactions contemplated by this Agreement without the prior written consent of the other party, except as may be required by applicable law or regulations, in which case such party shall provide the other parties with reasonable notice of such publicity and/or opportunity to review such disclosure.

8.12          Waiver of Rule of Construction . Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

8.13          Further Assurances . From and after the date of this Agreement, upon the reasonable request of CSMC or the Company, the Company and CSMC shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

IN WITNESS WHEREOF , the parties hereto have caused this Stock Purchase Agreement to be executed by their duly authorized representatives as of the day and year first above written.