[tlogo.jpg]

 

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (this “Agreement”) is dated as of October 25,
2012, among Synthetic Biologics, Inc., a Nevada corporation (the “Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).

 

RECITALS

 

A.           The Company and each Purchaser is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act, and Rule 506 of Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the
“Commission”) under the Securities Act.

 

B.           Each Purchaser, severally and not jointly, wishes to purchase, and
the Company wishes to sell, upon the terms and conditions stated in this
Agreement, that aggregate number of shares of Common Stock set forth below such
Purchaser’s name on the signature page of this Agreement.

 

C.           Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering the Registration
Rights Agreement, pursuant to which, among other things, the Company will agree
to provide certain registration rights with respect to the Shares under the
Securities Act and the rules and regulations promulgated thereunder and
applicable state securities laws.

 

AGREEMENT

 

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

 

Article I
DEFINITIONS

 

Section 1.1           Definitions. In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:

 

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

 

 

 

 

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

 

“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

 

“Closing Date” means the date and time of the Closing.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Stock” means the Common Stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed into.

 

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

 

“Company Counsel” means Gracin & Marlow, LLP.

 

“Compliance Certificate” shall have the meaning ascribed to such term in Section
2.4(b)(iii).

 

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered
concurrently herewith.

 

“Effective Date” means the date that the initial Registration Statement filed by
the Company pursuant to the Registration Rights Agreement is first declared
effective by the Commission.

 

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

 

2

 

 

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers or directors of the Company pursuant to any stock or option
plan duly adopted for such purpose, by a majority of the non-employee members of
the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established by the Board of Directors, (b)
securities upon the exercise or exchange of or conversion of any Securities
issued hereunder and/or other securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that such securities have not been amended since the
date of this Agreement to increase the number of such securities or to decrease
the exercise, exchange or conversion price of such securities, (c) securities
issued as a result of cancellation and/or transfer of previously issued
securities of the Company which do not result in a dilutive effect on the
Company’s securities, (d) securities issued in connection with and pursuant to a
stockholder “rights” plan, “poison pill” or other similar anti-takeover plan
adopted by the Company, and (e) securities issued in connection with or pursuant
to acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, provided that any such issuance shall
only be to a Person which is, itself or through its subsidiaries or Affiliates,
an operating company in a business synergistic with the business of the Company
and in which the Company receives benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to a Person whose
primary business is investing in securities.

 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(e).

 

“Intellectual Property” shall have the meaning ascribed to such term in Section
3.1(o).

 

“Legend Removal Date” shall have the meaning ascribed to such term in Section
4.1(c).

 

“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

 

“Material Adverse Effect” shall have the meaning ascribed to such term in
Section 3.1(a).

 

“Material Permits” shall have the meaning ascribed to such term in Section
3.1(z).

 

“Money Laundering Laws” shall have the meaning ascribed to such term in Section
3.1(cc).

 

“OFAC” shall have the meaning ascribed to such term in Section 3.1(bb).

 

“Per Share Purchase Price” equals $1.60.

 

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

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.5.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated
the date hereof, among the Company and the Purchasers, in the form of Exhibit A
attached hereto.

 

“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Shares.

 

3

 

 

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

 

“SEC Documents” shall have the meaning ascribed to such term in Section 3.1(e).

 

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

 

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

 

“Short Sales” include, without limitation, all “short sales” as defined in Rule
200 promulgated under Regulation SHO under the Exchange Act, whether or not
against the box, and all types of direct and indirect stock pledges, forward
sale contracts, options, puts, calls, short sales, swaps, “put equivalent
positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar
arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers.

 

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

 

“Subscription Document Package” means a package consisting of Purchaser
Information Request; Investors Questionnaire; Escrow Agent information for
payment of the Shares; and Signature Pages to the Transaction Documents.

 

“Subsidiary” means any subsidiary of the Company as set forth in the SEC
Documents.

 

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

 

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

 

“Transaction Documents” means this Agreement, the Registration Rights Agreement
and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

 

“Transfer Agent” means Continental Stock Transfer and Trust Company, and any
successor transfer agent of the Company.

 

4

 

 

Article II
PURCHASE AND SALE

 

Section 2.1           Closing. Upon the terms and subject to the conditions set
forth herein, the Company agrees to sell, and the Purchasers, severally and not
jointly, agree to purchase, such number of Shares equal to the quotient
resulting from dividing (i) the Subscription Amount for such Purchaser by (ii)
the Per Share Purchase Price, rounded down to the nearest whole Share. The
Closing shall occur on the Business Day immediately following the date of
execution of this Agreement remotely via the exchange of documents and
signatures.

 

Section 2.2           Form of Payment. Except as may otherwise be agreed to
among the Company and one or more of the Purchasers, on or prior to the Business
Day immediately prior to the Closing Date, each Purchaser shall wire its
Subscription Amount, in United States dollars and in immediately available
funds, to an escrow account established by the Company and the Placement Agent
(the aggregate amounts received being held in escrow are referred to herein as
the “Escrow Amount”). On the Closing Date, (a) the Escrow Amount shall be
distributed as follows: (1) to the Placement Agent, the fees and reimbursable
expenses payable to the Placement Agent, and (2) the balance of the aggregate
Escrow Amount to the Company, and (b) the Company shall irrevocably instruct the
Transfer Agent to deliver to each Purchaser one or more stock certificates, free
and clear of all restrictive and other legends (except as expressly provided in
Section 4.1(b) hereof), evidencing the number of Shares such Purchaser is
purchasing within three Trading Days after the Closing. Notwithstanding the
foregoing, in the event a Purchaser has specified to the Company at the time of
execution of this Agreement that it shall settle “delivery versus payment”, the
Company shall deliver the Shares to such Purchaser on or before the Closing Date
and, upon receipt, the Purchaser shall wire its Subscription Amount to an
account designated in writing by the Company on the Closing Date.

 

Section 2.3           Deliveries.

 

(a)          At the Closing , the Company shall deliver or cause to be delivered
to each Purchaser the following:

 

(i)          this Agreement duly executed by the Company;

 

(ii)         facsimile or “.pdf” copies of one or more stock certificates, free
and clear of all restrictive and other legends (except as provided in Section
4.1(b) hereof), evidencing the Shares subscribed for by such Purchaser
hereunder, registered in the name of such Purchaser as set forth on the
Purchaser Information Document as provided in the Subscription Document Package
(the “Stock Certificates”), with the original Stock Certificates delivered by
the Transfer Agent within three Trading Days of Closing (unless such Purchaser
has specified to the Company at the time of execution of this Agreement that it
shall settle “delivery versus payment” in which case such original Stock
Certificates shall be delivered on or prior to the Closing Date);

 

(iii)        the Registration Rights Agreement duly executed by the Company;

 

5

 

 

(iv)        a certificate of the Secretary of the Company (the “Secretary’s
Certificate”), dated as of the Closing Date, (a) certifying the resolutions
adopted by the Board of Directors of the Company or a duly authorized committee
thereof approving the transactions contemplated by this Agreement and the other
Transaction Documents and the issuance of the Shares, (b) certifying the current
versions of the certificate or articles of incorporation, as amended, and
by-laws of the Company and (c) certifying as to the signatures and authority of
persons signing the Transaction Documents and related documents on behalf of the
Company;

 

(v)         the Compliance Certificate referred to in Section 2.4(b); and

 

(vi)        a legal opinion of Company Counsel in the form of Exhibit B attached
hereto.

 

(b)          At the Closing, each Purchaser shall deliver or cause to be
delivered to the Company the following:

 

(i)          this Agreement duly executed by such Purchaser;

 

(ii)         subject to Section 2.2, such Purchaser’s Subscription Amount
through direction to the Escrow Agent, or directly to the Company as applicable,
by wire transfer to the account as specified in writing by the Company;

 

(iii)        the Registration Rights Agreement duly executed by such Purchaser;
and

 

(iv)        a fully completed and duly executed Subscription Document package.

 

Section 2.4           Closing Conditions.

 

(a)          The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met or waived by the
Company:

 

(i)          the accuracy when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein (except with
respect to representations and warranties which relate to a specific date, in
which case such representations and warranties shall continue to be materially
accurate as of such date);

 

(ii)         all obligations, covenants and agreements of the Purchasers
required to be performed at or prior to the Closing Date shall have been
performed;

 

(iii)        the delivery by the Purchasers of the items set forth in Section
2.3(b) of this Agreement;

 

(iv)        no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents;

 

6

 

 

(v)         the Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Shares, all of which shall be and
remain so long as necessary in full force and effect.

 

(b)          The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions being met or
waived by each Purchaser as to itself:

 

(i)          the accuracy on the Closing Date of the representations and
warranties of the Company contained herein (except with respect to
representations and warranties which relate to a specific date, in which case
such representations and warranties shall continue to be materially accurate as
of such date);

 

(ii)         all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing Date shall have been performed;

 

(iii)        the delivery by the Company of the items set forth in Section
2.3(a) of this Agreement and a certificate, dated as of the Closing Date and
signed by its Chief Executive Officer or its Chief Financial Officer, certifying
to the fulfillment of the conditions specified in Sections 2.4(b)(i) and (ii)
(the “Compliance Certificate”);

 

(iv)        on the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or the Company’s principal Trading Market (except
for any suspension of trading of limited duration agreed to by the Company,
which suspension shall be terminated prior to the Closing), and, at any time
prior to the Closing Date, trading in securities generally as reported by
Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall
not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been
declared either by the United States or New York State authorities;

 

(v)         no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents;

 

(vi)        the Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Shares, all of which shall be and
remain so long as necessary in full force and effect;

 

(vii)       the Company shall have duly executed and entered into Stock Purchase
Agreements to sell at least 3,125,000 Shares for an aggregate amount of gross
proceeds of $5,000,000; and

 

7

 

 

(viii)      the Company’s Board of Directors, to the extent permissible under
Nevada law, shall have taken all necessary action such that any provisions
contained in its Articles of Incorporation, its Bylaws or Nevada law that may
apply to business combinations or other transactions with affiliated
stockholders or impact the voting rights of affiliated stockholders shall not
apply to the Purchasers or their Affiliates, including but not limited to
Sections 78.378 to 78.3793 and Sections 78.411 to 78.444 of the Nevada Revised
Statutes. The Company shall not have adopted any stockholder rights plan,
“poison pill” or similar arrangement, or any anti-takeover provisions under its
charter documents, that would trigger any right, obligation or event as a result
of the issuance of the Shares pursuant hereto to the Purchasers or the
Purchasers’ ownership of such securities, or the accumulation of Company
securities acquired in the market by the Purchasers or their respective
Affiliates.

 

Article III
REPRESENTATIONS AND WARRANTIES

 

Section 3.1           Representations and Warranties of the Company. Except as
set forth in the SEC Documents and Disclosure Schedules which Disclosure
Schedules shall be deemed a part hereof and shall qualify any representation or
otherwise made herein to the extent of the disclosure contained in the
corresponding Section of the Disclosure Schedules, the Company hereby makes the
following representations and warranties to each Purchaser as of the Closing
Date:

 

(a)          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
Commission pursuant to the reporting requirements of 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 Company
does not have any material Subsidiaries, and none of its Subsidiaries is
actively engaged in any business, owns any property or has any employees. The
Company 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, results
of operations, assets, properties, prospects or condition (financial or
otherwise) of the Company that could reasonably be expected to be material and
adverse to the Company, taken as a whole, and any condition, circumstance or
situation that would prohibit or adversely affect in any material respect the
Company’s entering into and performing any of its obligations under the
Transaction Documents.

 

(b)          Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and perform the Transaction Documents and to
issue the Shares in accordance with the terms hereof. The execution, delivery
and performance of the Transaction Documents by the Company and the consummation
by it 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, its board of directors or stockholders is
required. When executed and delivered by the Company, the Transaction Documents
shall constitute a valid and binding obligation of the Company enforceable
against the Company 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.

 

8

 

 

(c)          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, 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 (collectively, “Encumbrances”) and rights of refusal of any kind imposed
by the Company (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, 36,947,748 shares of the
Company’s Common Stock are issued and outstanding and no shares of preferred
stock are outstanding. The Company has options outstanding to acquire 4,258,746
shares of Common Stock and warrants outstanding to acquire 1,324,102 shares of
Common Stock. There are no other outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire any
shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents. All of the
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities. There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s stockholders.

 

(d)          No Conflicts; Governmental Approvals. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby do not and will not (i)
violate any provision of the Company’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 is a
party or by which the Company’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 by which any property or
asset of the Company 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. The
Company is not 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
and sell the shares in accordance with the terms hereof (other than any filings,
consents and approvals which may be required to be made by the Company under
applicable state and federal securities laws, rules or regulations or rules or
regulations of the NYSE MKT, prior to or subsequent to the Closing).

 

9

 

 

(e)          Commission Documents, Financial Statements. The Common Stock of the
Company is registered pursuant to Section 12(b) of the Exchange Act. During the
year preceding 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 other
than its Annual Report on Form 10-K for the year ended December 31, 2011 filed
with the Commission on March 30, 2012 (the “2012 10-K”) which due to the failure
of Berman & Co. to follow proper partner rotation procedures resulted in the
withdrawal of Berman & Co.’s audit opinion included in the 2012 10-K and the
Company being unable to rely upon such audit opinion. (the foregoing materials
exclusive of the 2012 10-K but inclusive of Company’s annual report on Form
10-K/A for the year ended December 31, 2011 filed with the Commission on May 11,
2012 and all of the exhibits to all such materials and the documents
incorporated by reference therein being collectively referred to as the “SEC
Documents”). At the times of their respective filing, all SEC 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, 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 United States
generally accepted accounting principles applied on a consistent basis (“GAAP”)
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).

 

(f)          Accountants. Berman & Company, P.A. whose report on the financial
statements of the Company is filed with the Commission in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2011, were, at the time such
report was issued, independent registered public accountants as required by the
Securities Act. On July 3, 2012 the Company dismissed Berman & Company, P.A. as
its independent registered public accounting firm, and on July 9, 2012, the
Company selected BDO USA, LLP as its new independent registered public
accounting firm responsible for auditing its financial statements.

 

(g)          Internal Controls. The Company has established and maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that: (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles in the United States and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

 

10

 

 

(h)          Disclosure Controls. The Company has established and maintains
disclosure controls and procedures (as such term is defined in Rules 13a 15 and
15d-15 under the Exchange Act). Since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no significant changes
in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses. The Company is in compliance in all
material respects with all provisions currently in effect and applicable to the
Company of the Sarbanes-Oxley Act of 2002, and all rules and regulations
promulgated thereunder or implementing the provisions thereof.

 

(i)          No Material Adverse Change. Except as disclosed in the SEC
Documents, since December 31, 2011, the Company has not (i) experienced or
suffered any Material Adverse Effect, (ii) incurred any material liabilities,
obligations, claims or losses (whether liquidated or unliquidated, secured or
unsecured, absolute, accrued, contingent or otherwise) other than those incurred
in the ordinary course of the Company’s business or (iii) declared, made or paid
any dividend or distribution of any kind on its capital stock.

 

(j)          No Undisclosed Events or Circumstances. Except as disclosed in the
SEC Documents, and except for the consummation of the transactions contemplated
herein, since December 31, 2011, to the Company’s knowledge, no event or
circumstance has occurred or exists with respect to the Company or its
businesses, properties, prospects, operations or financial condition, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.

 

(k)          Litigation. No action, suit, proceeding or investigation is
currently pending or, to the knowledge of the Company, has been threatened in
writing against the Company that: (i) concerns or questions the validity of this
Agreement; (ii) concerns or questions the right of the Company to enter into
this Agreement; or (iii) is reasonably likely to have a Material Adverse Effect.
The Company is neither a party to nor subject to the provisions of any material
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or that the Company intends to initiate that would
have a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty. There has not been, and to the knowledge of
the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current director or officer of the
Company. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.

 

11

 

 

(l)          Compliance. Except for defaults or violations which are not
reasonably likely to have a Material Adverse Effect, the Company is not (i) in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company under), nor has the Company received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws, applicable to its
business.

 

(m)          Intellectual Property

 

(i)          To the best of its knowledge, the Company has entered into
agreements with each of its current and former officers, employees and
consultants involved in research and development work, including development of
the Company’s products and technology providing the Company, to the extent
permitted by law, with title and ownership to patents, patent applications,
trade secrets and inventions conceived, developed, reduced to practice by such
person, solely or jointly with other of such persons, during the period of
employment by the Company except where the failure to have entered into such an
agreement would not have a Material Adverse Effect. The Company is not aware
that any of its employees or consultants is in material violation thereof.

 

(ii)         To the Company’s knowledge, the Company owns or possesses adequate
rights to use all trademarks, service marks, trade names, domain names,
copyrights, patents, patent applications, inventions, know how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), and other intellectual property rights
(“Intellectual Property”) as are necessary for the conduct of its business as
described in the Commission Documents. Except as described in the SEC Documents,
(i) to the knowledge of the Company, there is no infringement, misappropriation
or violation by third parties of any such Intellectual Property; (ii) there is
no pending or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others against the Company challenging the Company’s
rights in or to any such Intellectual Property; (iii) the Intellectual Property
owned by the Company and, to the knowledge of the Company, the Intellectual
Property licensed to the Company has not been adjudged invalid or unenforceable
by a court of competent jurisdiction or applicable government agency, in whole
or in part, and there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others challenging the validity
or scope of any such Intellectual Property; (iv) there is no pending or, to the
knowledge of the Company, threatened action, suit, proceeding or claim by others
against the Company that the Company infringes, misappropriates or otherwise
violates any Intellectual Property or other proprietary rights of others, and
the Company has not received any written notice of such claim; and (v) to the
Company’s knowledge, no employee of the Company is the subject of any claim or
proceeding involving a violation of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive covenant
to or with a former employer where the basis of such violation relates to such
employee’s employment with the Company or actions undertaken by the employee
while employed with the Company, in each of (i) through (v), for any instances
which would not, individually or in the aggregate, result in a Material Adverse
Effect. The Company has taken reasonable security measures to protect the
secrecy, confidentiality and value of all of its intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

 

12

 

 

(n)          FDA Compliance.

 

(i)          Except as described in the SEC Documents, the Company: (i) is in
material compliance with all statutes, rules or regulations applicable to the
ownership, testing, development, manufacture, packaging, processing, use,
distribution, marketing, labeling, promotion, sale, offer for sale, storage,
import, export or disposal of any product that is under development,
manufactured or distributed by the Company (“Applicable Laws”); (ii) has not
received any FDA Form 483, notice of adverse finding, warning letter, untitled
letter or other correspondence or notice from the U.S. Food and Drug
Administration (the “FDA”) or any other federal, state, local or foreign
governmental or regulatory authority alleging or asserting material
noncompliance with any Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments thereto
required by any such Applicable Laws (“Authorizations”); (iii) possesses all
material Authorizations necessary for the operation of its business as described
in the SEC Documents and such Authorizations are valid and in full force and
effect and the Company is not in material violation of any term of any such
Authorizations; and (iv) since January 1, 2012: (A) has not received notice of
any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from the FDA or any other federal, state, local or
foreign governmental or regulatory authority or third party alleging that any
product operation or activity is in material violation of any Applicable Laws or
Authorizations and has no knowledge that the FDA or any other federal, state,
local or foreign governmental or regulatory authority or third party is
considering any such claim, litigation, arbitration, action, suit, investigation
or proceeding; (B) has not received notice that the FDA or any other federal,
state, local or foreign governmental or regulatory authority has taken, is
taking or intends to take action to limit, suspend, modify or revoke any
material Authorizations and has no knowledge that the FDA or any other federal,
state, local or foreign governmental or regulatory authority is considering such
action; (C) has filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and
supplements or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments were materially complete and
correct on the date filed (or were corrected or supplemented by a subsequent
submission); and (D) has not, either voluntarily or involuntarily, initiated,
conducted, or issued or caused to be initiated, conducted or issued, any recall,
market withdrawal or replacement, safety alert, post sale warning, “dear doctor”
letter, or other notice or action relating to the alleged lack of safety or
efficacy of any product or any alleged product defect or violation and, to the
Company’s knowledge, no third party has initiated, conducted or intends to
initiate any such notice or action.

 

(ii)         Since January 1, 2012, and except to the extent disclosed in the
SEC Documents, the Company has not received any notices or correspondence from
the FDA or any other federal, state, local or foreign governmental or regulatory
authority requiring the termination, suspension or material modification of any
studies, tests or preclinical or clinical trials conducted by or on behalf of
the Company.

 

13

 

 

(o)          General Healthcare Regulatory Compliance.

 

(i)          As used in this subsection:

 

(A)         “Governmental Entity” means any national, federal, state, county,
municipal, local or foreign government, or any political subdivision, court,
body, agency or regulatory authority thereof, and any Person exercising
executive, legislative, judicial, regulatory, taxing or administrative functions
of or pertaining to any of the foregoing.

 

(B)         “Law” means any federal, state, local, national or foreign law,
statute, code, ordinance, rule, regulation, order, judgment, writ, stipulation,
award, injunction, decree or arbitration award or finding.

 

(ii)         The Company has not committed any act, made any statement or failed
to make any statement that would reasonably be expected to provide a basis for
the FDA or any other Governmental Entity to invoke its policy with respect to
“Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities”,
or similar policies, set forth in any applicable Laws. Neither the Company, nor,
to the knowledge of the Company, any of its officers, key employees or agents
has been convicted of any crime or engaged in any conduct that has resulted, or
would reasonably be expected to result, in debarment under applicable Law,
including, without limitation, 21 U.S.C. Section 335a. No claims, actions,
proceedings or investigations that would reasonably be expected to result in
such a material debarment or exclusion are pending, or to the knowledge of the
Company, threatened, against the Company or any of its respective officers,
employees or agents.

 

(iii)        Each of the Company and, to its knowledge, its directors, officers,
employees, and agents (while acting in such capacity) is, and at all times has
been, in material compliance with all health care Laws applicable to the Company
or by which any of its properties, businesses, products or other assets is bound
or affected, including, without limitation, the federal Anti-kickback Statute
(42 U.S.C. § 1320a-7b(b)), the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)),
the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the administrative False
Claims Law (42 U.S.C. § 1320a-7b(a)), the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. § 1320d et seq.), the exclusion laws (42
U.S.C. § 1320a-7), the Food Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.)
(collectively, “Health Care Laws”). The Company has not received any
notification, correspondence or any other written or oral communication from any
Governmental Entity, including, without limitation, the FDA, the Centers for
Medicare and Medicaid Services, and the Department of Health and Human Services
Office of Inspector General, of potential or actual material non-compliance by,
or liability of, the Company under any Health Care Laws.

 

(iv)        The Company is not a party to any corporate integrity agreements,
monitoring agreements, consent decrees, settlement orders, or similar agreements
with or imposed by any Governmental Entity.

 

(p)          Application of Takeover Protections. The issuance of the Shares
hereunder and the Purchasers’ ownership thereof is not prohibited by the
business combination statutes of the state of Nevada. The Company has not
adopted any stockholder rights plan, “poison pill” or similar arrangement that
would trigger any right, obligation or event as a result of the issuance of such
Shares and the Purchasers’ ownership of such shares and there are no similar
anti-takeover provisions under the Company's charter documents. The Company is
not subject to Sections 78.378 to 78.3793 of the Nevada Revised Statutes,
because it is not an “issuing corporation” as defined in Section 73.3788 of the
Nevada Revised Statutes.

 

14

 

 

(q)          Listing and Maintenance Requirements. The Company is in compliance
with the requirements of the NYSE MKT for continued trading of the Common Stock
pursuant thereto. The issuance and sale of the shares hereunder does not
contravene the rules and regulations of the NYSE MKT.

 

(r)          Private Placement. Neither the Company nor its Affiliates, nor any
Person acting on its or their behalf, (i) has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the Shares
hereunder, (ii) has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under any circumstances
that would require registration of the sale and issuance by the Company of the
Shares under the Securities Act or (iii) has issued any shares of Common Stock
or shares of any series of preferred stock or other securities or instruments
convertible into, exchangeable for or otherwise entitling the holder thereof to
acquire shares of Common Stock which would be integrated with the sale of the
shares to Purchasers for purposes of the Securities Act or of any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated, nor will the Company or
any of its subsidiaries or affiliates take any action or steps that would
require registration of any of the Shares under the Securities Act or cause the
offering of the shares to be integrated with other offerings. Assuming the
accuracy of the representations and warranties of Purchasers, the offer and
issuance of the Shares by the Company to Purchasers pursuant to this Agreement
will be exempt from the registration requirements of the Securities Act.

 

(s)          No Manipulation of Stock. The Company has not taken, and has no
plans to take, in violation of applicable law, any action outside the ordinary
course of business designed to, or that might reasonably be expected to, cause
or result in unlawful manipulation of the price of the Common Stock.

 

(t)          Brokers. Other than Griffin Securities, Inc. being engaged as the
Company’s Placement Agent for a fee consisting of (i) six percent (6%) of the
gross proceeds to the Company from this Stock Purchase Agreement, and (ii) a
five year warrant to purchase ten percent (10%) of the total number of shares of
Company Common Stock issued pursuant to the Stock Purchase Agreement
exerciseable at the Per Share Purchase Price paid by Purchasers, neither the
Company nor any of the officers, directors or employees of the Company has
employed any broker or finder in connection with the transaction contemplated by
this Agreement. The Company shall indemnify Purchasers from and against any
broker’s, finder’s or agent’s fees for which the Company is responsible.

 

15

 

 

(u)          Solvency. Based on the financial condition of the Company as of the
Closing Date, (i) the fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities) as
they mature; (ii) the Company’s assets do not constitute unreasonably small
capital to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof; and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its
liabilities when such amounts are required to be paid. The Company does not
intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in
respect of its debt. Assuming the Closing occurs, the Company has no knowledge
of any facts or circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or reorganization laws of any
jurisdiction within one year from the Closing Date.

 

(v)         Foreign Corrupt Practices. Neither the Company, nor to the knowledge
of the Company, any agent or other person acting on behalf of the Company, has
(i) directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

 

(w)          Investment Company. The Company is not, and is not an Affiliate of,
and immediately after receipt of payment for the Shares, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its business in a
manner so that it will not become an “investment company” subject to
registration under the Investment Company Act of 1940, as amended.

 

(x)          Tax Status. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for periods subsequent
to the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary know
of no basis for any such claim.

 

16

 

 

(y)          Labor Relations. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse
Effect. None of the Company’s employees is a member of a union that relates to
such employee’s relationship with the Company, and the Company is not a party to
a collective bargaining agreement, and the Company believes that its
relationships with its employees are good. To the knowledge of the Company, no
executive officer of the Company is, or is now expected to be, in violation of
any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of any third party,
and the continued employment of each such executive officer does not subject the
Company to any liability with respect to any of the foregoing matters. The
Company is in compliance in all material respects with all U.S. federal, state,
local and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours.

 

(z)          Regulatory Permits. The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its business as described in
the SEC Reports, except where the failure to possess such permits could not
reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and the Company has not received any notice of proceedings relating
to the revocation or modification of any Material Permit.

 

(aa)         Title to Assets. The Company has good and marketable title in fee
simple to all real property owned by it and good and marketable title in all
personal property owned by it that is material to the business of the Company,
in each case free and clear of all Liens, except for (i) Liens as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
(ii) Liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made therefor in accordance with GAAP and the
payment of which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by the Company are held by them under
valid, subsisting and enforceable leases with which the Company is in
compliance.

 

(bb)         Office of Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company's knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary (i) has violated any rule
or regulation issued or is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”)
or (ii) has violated any rule or regulation issued by the U.S. Secretary of the
Treasury under Section 311 or 312 of the USA Patriot Act or similar rules or
regulations.

 

(cc)         Money Laundering. The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations thereunder, including
rules and regulations issued by the Financial Action Task Force on Money
Laundering (collectively, the “Money Laundering Laws”), and no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any Subsidiary with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened.

 

17

 

 

(dd)         Disclosure. All of the disclosure furnished by or on behalf of the
Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the
Disclosure Schedules to this Agreement, is true and correct and does not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.

 

Section 3.2           Representations and Warranties of the Purchasers. Each
Purchaser, for itself and for no other Purchaser, hereby represents and warrants
as of the Closing Date to the Company as follows:

 

(a)          Authority. The execution, delivery and performance by such
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of such
Purchaser. Each Transaction Document to which it is a party has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance
with the terms hereof, will constitute the valid and legally binding obligation
of such Purchaser, enforceable against it in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

 

(b)          Own Account. Such Purchaser understands that the Shares are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Shares as principal for
its own account and not with a view to or for distributing or reselling such
Shares or any part thereof in violation of the Securities Act or any applicable
state securities law, has no present intention of distributing any of such
Shares in violation of the Securities Act or any applicable state securities law
and has no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such Shares (this
representation and warranty not limiting such Purchaser’s right to sell the
Shares pursuant to the Registration Statement or otherwise in compliance with
applicable federal and state securities laws) in violation of the Securities Act
or any applicable state securities law. Such Purchaser is acquiring the Shares
hereunder in the ordinary course of its business. Such Purchaser understands
that it may not be able to sell any of the Shares without prior registration
under the Securities Act or the existence of an exemption from such registration
requirement.

 

(c)          No Conflicts. The execution, delivery and performance by such
Purchaser of this Agreement and the Registration Rights Agreement and the
consummation by such Purchaser of the transactions contemplated hereby and
thereby will not (i) result in a violation of the organizational documents of
such Purchaser, (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, indenture or instrument to which such Purchaser is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to such
Purchaser, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to perform its obligations hereunder.

 

18

 

 

(d)          Purchaser Status. At the time such Purchaser was offered the
Shares, it was, and at the date hereof is, an “accredited investor” as defined
in Rule 501 under the Securities Act. Investor is not a registered broker dealer
registered under Section 15(a) of the Exchange Act, or a member of the Financial
Industry Regulatory Authority Inc. (“FINRA”), or an entity engaged in the
business of being a broker-dealer.

 

(e)          Experience of Such Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares, and has so
evaluated the merits and risks of such investment. Such Purchaser is able to
bear the economic risk of an investment in the Shares and, at the present time,
is able to afford a complete loss of such investment. Such Purchaser
acknowledges that it has not received any legal or tax advice from the Company
or any of its representatives with respect the transactions contemplated hereby.

 

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

 

(g)          Access to Information. Such Purchaser acknowledges that it has had
the opportunity to review any Company information and business updates requested
by Purchaser and has been afforded (i) the opportunity to ask such questions as
it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the offering of the Shares and
the merits and risks of investing in the Shares and; (ii) access to information
about the Company and its financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment. Such Purchaser has sought such accounting, legal and tax advice as
it has considered necessary to make an informed decision with respect to its
acquisition of the Shares.

 

(h)          Certain Trading Activities. Other than with respect to the
transactions contemplated herein, since the time that such Purchaser was first
contacted by the Company or any other Person regarding the transactions
contemplated hereby, neither the Purchaser nor any Affiliate of such Purchaser
which (i) had knowledge of the transactions contemplated hereby, (ii) has or
shares discretion relating to such Purchaser’s investments or trading or
information concerning such Purchaser’s investments, including in respect of the
Shares, and (iii) is subject to such Purchaser’s review or input concerning such
Affiliate’s investments or trading (collectively, “Trading Affiliates”) has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any purchases or sales of the securities of the Company (including,
without limitation, any Short Sales involving the Company’s securities).
Notwithstanding the foregoing, in the case of a Purchaser and/or Trading
Affiliate that is, individually or collectively, a multi-managed investment bank
or vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s or Trading Affiliate’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s or Trading Affiliate’s assets, the
representation set forth above shall apply only with respect to the portion of
assets managed by the portfolio manager that have knowledge about the financing
transaction contemplated by this Agreement. Other than to other Persons party to
this Agreement, such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).

 

19

 

 

(i)          Brokers and Finders. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or any Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Purchaser.

 

(j)          Independent Investment Decision. Such Purchaser has independently
evaluated the merits of its decision to purchase Shares pursuant to the
Transaction Documents, and such Purchaser confirms that it has not relied on the
advice of any other Purchaser’s business and/or legal counsel in making such
decision. Such Purchaser understands that nothing in this Agreement or any other
materials presented by or on behalf of the Company to the Purchaser in
connection with the purchase of the Shares constitutes legal, tax or investment
advice. Such Purchaser has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Shares.

 

(k)          No Governmental Review. Such Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Shares or the
fairness or suitability of the investment in the Shares nor have such
authorities passed upon or endorsed the merits of the offering of the Shares.

 

(l)          Residency. Such Purchaser’s residence (if an individual) or office
in which its investment decision with respect to the Shares was made (if an
entity) are located at the address immediately below such Purchaser’s name on
its signature page hereto.

 

(m)          Acknowledgment. Each Purchaser acknowledges and agrees that such
Purchaser has reviewed and considered prior to entering this Agreement the more
detailed information about the Company and the risk factors that may affect the
realization of forward-looking statements set forth in the Company’s filings
with the SEC, including its Annual Report on Form 10-K and its Quarterly Reports
on Form 10-Q filed with the SEC.

 

The Company and each of the Purchasers acknowledge and agree that no party to
this Agreement has made or makes any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in this Article III and the Transaction Documents.

 

20

 

 

Article IV
OTHER AGREEMENTS OF THE PARTIES

 

Section 4.1           Transfer Restrictions.

   

(a)          The Shares may only be disposed of in compliance with state and
federal securities laws, including the requirement not to trade in the Shares
while in possession of material non-public information. In connection with any
transfer of Shares other than pursuant to an effective registration statement,
to the Company or to an Affiliate of a Purchaser or in connection with a pledge
as contemplated in Section 4.1(b), the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor and reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Shares
under the Securities Act. As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights
Agreement.

 

(b)          The Purchasers agree to the imprinting, so long as is required by
this Section 4.1

, of a legend on any of the Shares in the following form:

 

THIS SECURITY HAS 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

(c)          The Company acknowledges and agrees that a Purchaser may from time
to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Shares to a
financial institution that is an “accredited investor” as defined in Rule 501(a)
under the Securities Act and who agrees to be bound by the provisions of this
Agreement and the Registration Rights Agreement and, if required under the terms
of such arrangement, such Purchaser may transfer pledged or secured Shares to
the pledgees or secured parties. Such a pledge or transfer would not be subject
to approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser’s expense,
the Company will execute and deliver such reasonable documentation as a pledgee
or secured party of Shares may reasonably request in connection with a pledge or
transfer of the Shares, including, if the Shares are subject to registration
pursuant to the Registration Rights Agreement, the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of Selling Stockholders thereunder.

 

21

 

 

(d)          Certificates evidencing the Shares shall not contain any legend
(including the legend set forth in Section 4.1(b)), (i) while a registration
statement (including the Registration Statement) covering the resale of such
Shares is effective under the Securities Act, or (ii) following any sale of such
Shares pursuant to Rule 144, or (iii) if such Shares are eligible for sale under
Rule 144, or (iv) if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). The Company shall cause its counsel to
issue a legal opinion to the Transfer Agent promptly after the Effective Date if
required by the Transfer Agent to effect the removal of the legend hereunder.
The Company agrees that following the Effective Date or at such time as such
legend is no longer required under this Section 4.1(d), it will, no later than
three Trading Days following the delivery by a Purchaser to the Company or the
Transfer Agent of a certificate representing Shares issued with a restrictive
legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to
be delivered to such Purchaser a certificate representing such shares that is
free from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section. Certificates for Shares
subject to legend removal hereunder shall be transmitted by the Transfer Agent
to the Purchasers by crediting the account of the Purchaser’s prime broker with
the Depository Trust Company System, if the Transfer Agent is a participant in
the DWAC system, and otherwise by physical delivery of certificates as directed
by the Purchaser.

 

(e)          Each Purchaser, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend from certificates
representing Shares as set forth in this Section 4.1 is predicated upon the
Company’s reliance that the Purchaser will sell any Shares pursuant to either
the registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom, and that if Shares
are sold pursuant to a Registration Statement, they will be sold in compliance
with the plan of distribution set forth therein.

 

Section 4.2           Furnishing of Information. For a period of one year after
the date of this Agreement, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act. During this one-year period, if the Company is not required to
file reports pursuant to the Exchange Act, it will prepare and furnish to the
Purchasers and make publicly available in accordance with Rule 144 such
information as is required for the Purchasers to sell the Shares under Rule 144.
The Company further covenants that it will take such further action as any
holder of Shares may reasonably request, to the extent required from time to
time to enable such Person to sell such Shares without registration under the
Securities Act within the requirements of the exemption provided by Rule 144.

 

22

 

 

Section 4.3           Integration. The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2.1 of the Securities Act) that could reasonably be expected
to be integrated with the offer or sale of the Shares in a manner that would
require the registration under the Securities Act of the sale of the Shares to
the Purchasers or that would be integrated with the offer or sale of the Shares
for purposes of the rules and regulations of any Trading Market such that it
would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such
subsequent transaction.

 

Section 4.4           Securities Laws Disclosure; Publicity. On or before 9:00
a.m., New York City time, on the Business Day immediately following the date
hereof, the Company shall issue a press release (the “Press Release”) reasonably
acceptable to the Placement Agent disclosing all material terms of the
transactions contemplated hereby. On or before 5:30 p.m., New York City time, on
the fourth Trading Day immediately following the execution of this Agreement,
the Company will file a Current Report on Form 8-K with the Commission
describing the terms of the Transaction Documents (and including as exhibits to
such Current Report on Form 8-K the material Transaction Documents (including,
without limitation, this Agreement, the form of Warrant and the Registration
Rights Agreement)). Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser or an Affiliate of any Purchaser, or
include the name of any Purchaser or an Affiliate of any Purchaser in any press
release or filing with the Commission (other than the Registration Statement) or
any regulatory agency or Trading Market, without the prior written consent of
such Purchaser, except (i) as required by federal securities law in connection
with (A) any registration statement contemplated by the Registration Rights
Agreement and (B) the filing of final Transaction Documents (including signature
pages thereto) with the Commission and (ii) to the extent such disclosure is
required by law, request of the Staff of the Commission or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
written notice of such disclosure permitted under this subclause (ii). From and
after the issuance of the Press Release, no Purchaser shall be in possession of
any material, non-public information received from the Company or any of its
officers, directors, employees or agents, that is not disclosed in the Press
Release. Each Purchaser, severally and not jointly with the other Purchasers,
covenants that it will comply with the provisions of any confidentiality or
nondisclosure agreement executed by it and, in addition, until such time as the
transactions contemplated by this Agreement are required to be publicly
disclosed by the Company as described in this Section 4.4, such Purchaser will
maintain the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this transaction).

 

23

 

 

Section 4.5           Indemnification of Purchasers.

 

(a)          In addition to the indemnity provided in the Registration Rights
Agreement, the Company will indemnify and hold each Purchaser and its directors,
officers, stockholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, stockholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction
Documents. The Company will not be liable to any Purchaser Party under this
Agreement to the extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents; provided that
such a claim for indemnification relating to any breach of any of the
representations or warranties made by the Company in this Agreement is made
within one year from the Closing

 

(b)          Promptly after receipt by any Person (the “Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 4.5(a), such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person, and shall assume the payment of all fees and
expenses; provided, however, that the failure of any Indemnified Person so to
notify the Company shall not relieve the Company of its obligations hereunder
except to the extent that the Company is actually and materially and adversely
prejudiced by such failure to notify. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless: (i)
the Company and the Indemnified Person shall have mutually agreed to the
retention of such counsel; (ii) the Company shall have failed promptly to assume
the defense of such proceeding and to employ counsel reasonably satisfactory to
such Indemnified Person in such proceeding; or (iii) in the reasonable judgment
of counsel to such Indemnified Person, representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Without the prior written consent
of the Indemnified Person, which consent shall not be unreasonably withheld,
delayed or conditioned, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such proceeding.

 

Section 4.6           Reservation of Common Stock. As of the date hereof, the
Company has reserved and the Company shall continue to reserve and keep
available at all times, a sufficient number of shares of Common Stock for the
purpose of enabling the Company to issue Shares pursuant to this Agreement.

 

24

 

 

Section 4.7           Listing or Quotation of Common Stock. The Company’s common
stock is currently quoted on the NYSE MKT. The Company hereby agrees to use best
efforts to maintain the listing or quotation of the Common Stock on a Trading
Market, and as soon as reasonably practicable following the Closing (but not
later than the earlier of the Effective Date and the first anniversary of the
Closing Date) to list all of the Shares on such Trading Market, as may be
applicable. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will include in such
application all of the Shares, and will take such other action as is necessary
to cause all of the Shares to be listed on such other Trading Market as promptly
as possible. The Company will take all action reasonably necessary to continue
the listing and trading of its Common Stock on a Trading Market and will comply
in all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the Trading Market.

 

Section 4.8           Equal Treatment of Purchasers. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of any of the Transaction Documents unless the same consideration
is also offered to all of the parties to the Transaction Documents. For
clarification purposes, this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated separately by each Purchaser, and
is intended for the Company to treat the Purchasers as a class and shall not in
any way be construed as the Purchasers acting in concert or as a group with
respect to the purchase, disposition or voting of Shares or otherwise.

 

Section 4.9           Confidentiality After The Date Hereof. Each Purchaser,
severally and not jointly with the other Purchasers, covenants that until such
time as the transactions contemplated by this Agreement and such other material
non-public information related to the Company in possession of the Purchaser are
publicly disclosed by the Company as described in Section 4.4, such Purchaser
will maintain the confidentiality of all disclosures made to it in connection
with this transaction (including the existence and terms of this transaction).

 

Section 4.10         Delivery of Shares After Closing. The Company shall
deliver, or cause to be delivered, the respective Shares purchased by each
Purchaser to such Purchaser within three Trading Days of the date approval has
been received by the NYSE MKT which approval shall be requested immediately
after execution of this Agreement (unless such Purchaser has specified to the
Company at the time of execution of this Agreement that it shall settle
“delivery versus payment” in which case such Shares shall be delivered on or
prior to the Closing Date).

 

Section 4.11         Form D; Blue Sky Filings. The Company agrees to timely file
a Form D with respect to the Shares as required under Regulation D and to
provide a copy thereof, promptly upon request of any Purchaser. The Company
shall take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for, or to qualify the Shares for, sale to the
Purchasers at the Closing under applicable securities or “Blue Sky” laws of the
states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.

 

Section 4.12         Use of Proceeds. The Company intends to use the net
proceeds of this offering after payment of placement agent commissions and other
expenses of the offering for the funding of: general research and development
activities including the Exclusive Channel Collaboration with Intrexon
Corporation and the Company’s clinical trial programs; and, general corporate
purposes and shall not use such proceeds for the satisfaction of any portion of
the Company’s debt (other than trade payables in the ordinary course of the
Company’s business and prior practices), or to redeem any Common Stock or Common
Stock Equivalents.

 

25

 

 

Article V
MISCELLANEOUS

 

Section 5.1           Fees and Expenses. Except as expressly set forth in the
Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, 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. The Company
shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied
in connection with the delivery of the Shares to the Purchasers.

 

Section 5.2           Entire Agreement. The Transaction Documents, together with
the exhibits and schedules thereto, contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the
Company and the Purchasers will execute and deliver to the other such further
documents as may be reasonably requested in order to give practical effect to
the intention of the parties under the Transaction Documents.

 

Section 5.3           Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a
day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (c) the 2nd Trading Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the signature pages
attached hereto.

 

Section 5.4           Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and each Purchaser. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right. No consideration shall be
offered or paid to any Purchaser to amend or consent to a waiver or modification
of any provision of any Transaction Document unless the same consideration is
also offered to all Purchasers who then hold Securities.

 

Section 5.5           Headings and Construction. The headings herein are for
convenience only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof. The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied
against any party. This Agreement shall be construed as if drafted jointly by
the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement or any of the Transaction Documents.

 

26

 

 

Section 5.6           Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each Purchaser (other than by
merger). Any Purchaser may assign any or all of its rights under this Agreement
to any Person to whom such Purchaser assigns or transfers any Shares, provided
such transferee agrees in writing to be bound, with respect to the transferred
Shares, by the provisions of the Transaction Documents that apply to the
“Purchasers.”

 

Section 5.7           No Third-Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.

 

Section 5.8           Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of
the State of New York (including Sections 5-1401 and 5-1402 of the New York
General Obligations Law but excluding all other choice of law and conflicts of
law rules). Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper or is an inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by law.

 

Section 5.9           Survival. The representations and warranties contained
herein shall survive the Closing and the delivery of the Shares.

 

27

 

 

Section 5.10         Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

Section 5.11         Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

Section 5.12         Rescission and Withdrawal Right. Notwithstanding anything
to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever any Purchaser exercises a
right, election, demand or option under a Transaction Document and the Company
does not timely and materially perform its related obligations within the
periods therein provided, then such Purchaser may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice to its
future actions and rights.

 

Section 5.13         Replacement of Shares. If any certificate or instrument
evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company and the Transfer Agent of such loss, theft or destruction and the
execution by the holder thereof of a customary lost certificate affidavit of
that fact and an agreement to indemnify and hold harmless the Company and the
Transfer Agent for any losses in connection therewith or, if required by the
Transfer Agent, a bond in such form and amount as is required by the Transfer
Agent. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Shares. If a replacement certificate or
instrument evidencing any Shares is requested due to a mutilation thereof, the
Company may require delivery of such mutilated certificate or instrument as a
condition precedent to any issuance of a replacement.

 

Section 5.14         Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under
the Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agrees to waive
and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.

 

28

 

 

Section 5.15         Payment Set Aside. To the extent that the Company makes a
payment or payments to any Purchaser pursuant to any Transaction Document or a
Purchaser enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

 

Section 5.16         Independent Nature of Purchasers’ Obligations and Rights.
The obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under any Transaction Document. Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in their review and negotiation of the Transaction
Documents. The Company has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and not because it
was required or requested to do so by the Purchasers.

 

Section 5.17         Liquidated Damages. The Company’s obligations to pay any
partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate
until all unpaid partial liquidated damages and other amounts have been paid
notwithstanding the fact that the instrument or security pursuant to which such
partial liquidated damages or other amounts are due and payable shall have been
canceled.

 

Section 5.18         Massachusetts Business Trust. A copy of the Declaration of
Trust of each Purchaser that is a Massachusetts Business Trust, as applicable,
or any affiliate thereof, is on file with the Secretary of State of the
Commonwealth of Massachusetts and notice is hereby given that this Agreement is
executed on behalf of the trustees of such Purchaser or any affiliate thereof as
trustees and not individually and that the obligations of this Agreement are not
binding on any of the trustees, officers or stockholders of such Purchaser or
any affiliate thereof individually but are binding only upon such Purchaser or
any affiliate thereof and its assets and property.

 

29

 

 

Section 5.19         No Promotion. The Company agrees that it will not, and
shall cause each of its Subsidiaries to not, without the prior written consent
of a Purchaser, use in advertising, publicity, or otherwise the name of such
Purchaser, or any partner or employee of such Purchaser, nor any trade name,
trademark, trade device, service mark, symbol or any abbreviation, contraction
or simulation thereof owned by such Purchaser or any of their respective
affiliates. The Company further agrees that it shall obtain the written consent
of such Purchaser prior to the Company’s or any of its Subsidiaries’ issuance of
any public statement detailing the purchase of Shares by Purchasers pursuant to
this Agreement.

 

Section 5.20         Construction. The parties agree that each of them and/or
their respective counsel has reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments hereto.

 

Section 5.21         Exculpation Among Purchasers. Each Purchaser acknowledges
that it is not relying upon any person, firm or corporation (including without
limitation any other Purchaser), other than the Company and its officers and
directors (acting in their capacity as representatives of the Company), in
deciding to invest and in making its investment in the Company. Each Purchaser
agrees that no other Purchaser nor the respective controlling persons, officers,
directors, partners, agents or employees of any other Purchaser shall be liable
to such Purchaser for any losses incurred by such Purchaser in connection with
its investment in the Company.

 

Section 5.22         Company Acknowledgement. The Company acknowledges and
agrees that (i) each of the Purchasers is participating in the transactions
contemplated by this Agreement and the other Transaction Documents at the
Company’s request and the Company has concluded that such participation is in
the Company’s best interest and is consistent with the Company’s objectives and
(ii) each of the Purchasers is acting solely in the capacity of an arm’s length
purchaser. The Company further acknowledges that no Purchaser is acting or has
acted as an advisor, agent or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement or the other Transaction Documents and
any advice given by any Purchaser or any of its respective representatives in
connection with this Agreement or the other Transaction Documents is merely
incidental to the Purchasers’ purchase of Shares. The Company further represents
to each Purchaser that the Company’s decision to enter into this Agreement has
been based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.

 

(Signature Pages Follow)

 

30

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

 

SYNTHETIC BIOLOGICS, INC.

 

By       Name:     Title:  

 

With a copy to (which shall not constitute notice):

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

31

 

 

IN WITNESS WHEREOF, the undersigned have caused this Stock Purchase Agreement to
be duly executed by their respective authorized signatories as of the date first
indicated above.

 

Name of Purchaser:  

 

Signature of Authorized Signatory of Purchaser:  

 

Name of Authorized Signatory:  

 

Title of Authorized Signatory:  

 

Total Subscription Amount: $____________________________

 

Address for Notice of Purchaser:

 

Address for Delivery of Shares for Purchaser (if not same as above):

 

32

 

 

Exhibit A

 

Registration Rights Agreement

 

33

 

 

Exhibit B

 

Form of Legal Opinion of Company Counsel

 

Based upon and subject to the foregoing, it is our opinion as of this date that:

 

1.          Based solely upon the certificate of good standing, dated October [
       ], 2012, issued by the State of Nevada, the Company is a corporation
validly existing and in good standing under the laws of the State of Nevada.

 

2.          The Company has the corporate power and authority to execute,
deliver and perform its obligations under the Transaction Documents, including,
without limitation, to issue and deliver the Shares as contemplated by the
Agreement. Each of the Transaction Documents has been duly authorized by all
necessary corporate action and each has been duly executed and delivered on
behalf of the Company, and each is a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.

 

3.          The execution and delivery by the Company of the Transaction
Documents, and the performance by the Company of its obligations thereunder as
of the date hereof, do not violate the Company’s Articles of Incorporation or
Bylaws, do not constitute a default under or a material breach of any material
agreement of the Company that has not otherwise been waived and, to our
knowledge, do not (a) violate any U. S. Federal or state statute, rule or
regulation applicable to the transactions contemplated by the Transaction
Documents or (b) violate any order, writ, judgment, injunction, decree,
determination or award which has been entered against the Company and of which
such counsel is aware, except, with respect to clauses (a) and (b), where such
violation would not materially and adversely affect the Company.

 

4.          The Company has the authorized capital stock as set forth in the SEC
Documents. The Shares have been duly authorized, and when issued and sold in
accordance with the Stock Purchase Agreement, will be validly issued and
non-assessable.

 

5.          No approval, authorization or other action by, or notice to or
filing with, any governmental authority is required in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
except (a) those that have been obtained or made and are in full force and
effect, and (b) any filings required by Regulation D promulgated under the
Securities Act of 1933, as amended, or by state securities laws.

 

6.          To our knowledge, there is no action, proceeding or investigation
pending or overtly threatened against the Company before any court or
administrative agency that questions the validity of the Transaction Documents
or that could reasonably be expected to result, either individually or in the
aggregate, in a material adverse effect on the Company.

 

7.          Assuming the truth and accuracy of the representations made by the
Company and the Purchasers in the Stock Purchase Agreement, the sale and
issuance of the Shares in conformity with the terms of the Transaction Documents
constitute transactions that are exempt from the registration requirements of
the Securities Act of 1933, as amended, subject to the timely filing of a Form D
pursuant to Regulation D.

 

34

 

 

8.          The Company is not, after giving effect to the issuance of the
Shares, an “investment company” as defined in the Investment Company Act of
1940, as amended.

 

9.          To our knowledge and except as set forth in the SEC Documents with
respect to Intrexon Corporation, there are no written contracts, agreements or
understandings between the Company and any person granting such person the right
(other than rights which have been waived in writing or otherwise satisfied) to
require the Company to include any securities of the Company in any registration
statement.

 

35