Document:

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

 

 

EXCLUSIVE OPTION AGREEMENT

 

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

 

RECITALS

 

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

 

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

 

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

 

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

 

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

 

 

    	Page 1 of 10

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

    

 

		1.	Grant of Option. Except as provided hereinafter and subject to the terms of this Agreement,
Company shall have until the expiration of six (6) months from the Effective Date
as an exclusive option period (“Option Period”) to notify CSMC of its desire to initiate negotiations for an Exclusive
License (“Option Notice”). Company shall have the right to extend the Option Period for an additional six (6)
months prior to the expiration thereof by delivering written notice to CSMC (“Extension Notice”), subject to
Company’s agreement to pay the non-refundable Extension Fee set forth in Section 3. Upon receipt of the Option Notice within
the Option Period, the Parties shall enter into negotiations for the Exclusive License, which the Parties agree shall provide for
(a) the payment of an initial License Issue Fee equal to fifty thousand dollars ($50,000) plus reimbursement of CSMC’s patent
expenses incurred prior to the effective date of the Exclusive License, such aggregate amount shall be payable in cash or in shares
of Synthetic common stock having a market value of 110% of such aggregate amount; provided that such share issuance shall be subject
to Section 4 hereof and the terms of the Stock Purchase Agreement of even date herewith entered into by and among the Parties (the
“Synthetic Stock Purchase Agreement”); and (b) the same milestone payments, royalties and sublicense fees that are
payable under the License Agreement among the Parties of even date herewith (the “Contemporaneous License Agreement”);
(c) the “Field of Use” definition set forth in Appendix B hereto; and
(d) such other customary terms and conditions as CSMC includes in its licensing arrangements. If an Option Notice is not delivered
within the Option Period or the Parties fail to execute an Exclusive License within three (3) months of CSMC’s receipt of
an Option Notice, then this Agreement and the exclusive option herein shall terminate, CSMC shall have no further obligation whatsoever
to Company with respect to the Patent Rights, and CSMC may freely dispose of the Patent Rights as it sees fit in its own discretion.

 

		2.	Option Fee. In consideration of the execution and delivery by CSMC of this Agreement, no
later than thirty (30) days after the execution of this Agreement, Company shall pay to CSMC a non-refundable fee of Fifty Thousand
Dollars ($50,000) (“Option Fee”), payable in cash or in shares of Synthetic common stock having a market value of 110%
of such aggregate amount; provided, that such share issuance shall be subject to Section 4 hereof and the terms of the Synthetic
Stock Purchase Agreement. Failure of Synthetic either to issue such shares to CSMC or pay the equivalent amount in cash to CSMC
within thirty (30) days of the execution of this Agreement shall render this Agreement null and void (ab initio).

 

		3.	Extension Fee. In the event that Company desires to extend the six (6)
month Option Period for an additional six (6)  months and delivers an Extension
Notice to CSMC as set forth in Section 1, Company shall pay to CSMC a non-refundable extension fee of Twenty-Five Thousand Dollars
($25,000) (“Extension Fee”) no later than thirty (30) days after the date of the Extension Notice, payable in cash
or in shares of Synthetic common stock having a market value of 110% of such aggregate amount; provided, that such share issuance
shall be subject to Section 4 hereof and the terms of the Synthetic Stock Purchase Agreement.

 

    	Page 2 of 10

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		4.	Exchange Approval. The Parties acknowledge that subject to Synthetic’s
obligations under the Synthetic Stock Purchase Agreement(s), any issuance of stock by Synthetic
hereunder may be subject to the prior approval of the NYSE MKT or any other exchange upon which the shares of Synthetic are traded,
and shareholder approval, if so required by such exchange or any other rule or regulation applicable to the Company or Synthetic.
In the event that Synthetic elects to pay any of the fees and expenses described herein by issuing shares of Synthetic stock
to CSMC, Synthetic shall submit an application to the NYSE MKT for approval to issue such shares within the following timeframes:
(a) in the case of the option fee described in Section 2 hereof, within five (5) days of the execution of this Agreement; (b) in
the case of the extension fee described in Section 3 hereof, within five (5) days of the date of the Company’s Extension
Notice; and (c) in the case of the license fee and patent expense reimbursement obligations described in Section 1 hereof, within
five (5) days of the execution of the Exclusive License. In the event that Synthetic shall not have received shareholder approval
(if required) or NYSE MKT approval to issue any such shares hereunder within fifteen (15) business days of the submission of any
such application to the NYSE MKT, then Company shall instead make cash payments in satisfaction of its obligations under Sections
1, 2 and/or 3, as applicable.

 

		5.	Grant of Limited License. Subject to the terms of this Agreement, CSMC hereby grants to
Company, and Company hereby accepts from CSMC, a non-exclusive license to the Patent Rights solely for the purpose of conducting
the Experiments. The license granted hereunder is not sublicensable by Company to any third party other than as set forth herein,
nor shall it include any other rights not expressly enumerated herein. Company shall have the right to grant a limited sublicense
of the rights granted under this Section 5 to Intrexon Corporation (the “Approved Sublicensee”),
who shall be subject in all respects to the provisions contained in this Agreement, and Company will remain primarily liable
to CSMC for, and shall be responsible for monitoring and enforcing, the performance of all of Company’s obligations hereunder
by the Approved Sublicensee.

 

		6.	Limited Warranty. CSMC makes no representation or warranty other than those expressly specified
in this Agreement. For purposes of Section 5, Company accepts the Patent Rights on an “AS-IS” basis. CSMC MAKES NO
EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OTHER ATTRIBUTES OF ANY OF THE PATENT RIGHTS.

 

		7.	Guarantee of Company’s Performance. Synthetic hereby unconditionally guarantees to
CSMC the full and complete performance of all of the terms, covenants and conditions of this Agreement as required to be performed
by Company, including, but not limited to, the payment of all amounts due hereunder.

 

    	Page 3 of 10

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		8.	Indemnification. Company shall hold harmless, defend and indemnify CSMC and each of its
officers, directors, employees and agents and each Inventor (each, an “Indemnified Party”, and collectively, the “Indemnified
Parties”) from and against any and all claims, damages, losses, liabilities, costs and expenses (including reasonable attorneys’
fees and expenses and costs of investigation, whether or not suit is filed) suffered or incurred by any of the Indemnified Parties
in any action, suit, litigation, arbitration or dispute of any kind (“Action”) arising or resulting from any negligence
or willful acts or omissions on the part of Company and/or its Approved Sublicensee in connection with this Agreement, including
without limitation: (a) its use of the Patent Rights under this Agreement, (b) the design or conduct of the Experiments and/or
(c) the exercise of its rights hereunder. As part of its obligations hereunder, Company shall defend any Action brought against
any of the Indemnified Parties with counsel of its own choosing and reasonably acceptable to CSMC, and neither CSMC nor any other
Indemnified Party shall enter into any settlement of any such Action without first obtaining prior approval of Company. Should
CSMC or any other Indemnified Party not afford Company the right to defend any such Action, or should CSMC or any other Indemnified
Party not obtain the approval of Company to any such settlement, Company shall have no obligation to indemnify CSMC or any other
Indemnified Party hereunder. Should Company fail to provide a defense for the Indemnified Parties as required hereunder, then Company
shall reimburse CSMC for its out-of-pocket expenses (including reasonable attorneys’ fees and expenses and costs of investigation)
which are incurred as a result of any investigation, defense or settlement relating to an indemnified matter, which reimbursement
shall be made to CSMC upon receipt by Company of invoices reflecting in reasonable detail such expenses incurred by CSMC. Company
shall obtain and maintain insurance policies or a program of self-insurance (including products liability and general liability
policies at such time as is appropriate) which are reasonable and necessary to cover its activities and to comply with the indemnification
obligations set forth above. CSMC shall promptly notify Company in writing of any claim or Action or material threat thereof brought
against any Indemnified Party in respect of which indemnification may be sought and, to the extent allowed by law, shall reasonably
cooperate with Company in defending or settling any such claim or Action.

 

		9.	Prosecution Costs. CSMC will prepare, file, prosecute and maintain the Patent Rights during
the Option Period. The Exclusive License shall provide that (a) Company will reimburse CSMC for the costs and expenses, including
reasonable attorneys’ fees, filing fees and translation fees (“Prosecution Costs”), actually incurred by CSMC
in the prosecution of any Patent Rights prior to and during the Option Period and through the effective date of the Exclusive License;
and (b) CSMC will continue to have full responsibility for patent prosecution; provided, however, that CSMC’s
patent counsel shall bill Company directly for all Prosecution Costs related to the Patent Rights following the effective
date of the Exclusive License. If Company desires any foreign filings to be pursued on the Patent Rights during the Option Period,
Company shall be responsible for the Prosecution Costs related to any such foreign filings, regardless of whether the Option is
exercised.

 

		10.	Use of Names. Company shall not make any written use of or reference to the name of CSMC
and/or any of its trademarks, service marks, trade names or fictitious business names without the prior written consent of CSMC,
which consent may be withheld or granted in CSMC’s sole and absolute discretion, unless required by law. Further, prior to
any reference by Company to the names or marks of CSMC in any manner, Company shall provide CSMC with a writing reflecting the
proposed reference so that CSMC can review the reference within a reasonable period of time prior to the proposed use thereof by
Company. This limitation includes, but is not limited to, use by Company in any regulatory filing, advertising, offering circular,
prospectus, sales presentation, news release or trade publication, unless required by law, and provided, however, that certain
specific language shall be mutually agreed upon by the Parties for Company’s use in certain contexts and with respect to
certain topics, and once agreed upon, may be utilized by Company in connection with the approved contexts and topics without further
permission of CSMC.

 

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		11.	Confidentiality. The terms of this Agreement and any information disclosed by either Party
hereunder shall be maintained in the strictest of confidence by the Parties hereto and their respective officers, directors, employees
and agents, including any proprietary, non-public information designated as such and disclosed by one Party to the other in connection
with the transactions proposed in this Agreement. Furthermore, the Patent Rights are understood by Company to be the Confidential
Information of CSMC to the extent “unpublished” as such term is construed under the United States Patent Laws. As such,
Company’s confidentiality obligations hereunder automatically extend to any and all patent applications of CSMC relating
to any Patent Rights. Company shall have no right to share the Confidential Information with any third party other than the Approved
Sublicensee; provided, however, that (a) the Approved Sublicensee shall have entered into a confidentiality agreement with
Company that provides the same standard of protection described in this Agreement; and (b) Company shall be fully responsible and
liable for any action of the Approved Sublicensee which would constitute a breach of this Agreement if committed by Company as
if Company had committed such action itself.  Any public announcements, notices or other communications regarding such matters
to third parties, other than the Parties’ respective professional advisors or potential investors or business partners, including,
without limitation, any disclosure regarding the transactions contemplated hereby, shall require the prior written approval of
both Company and CSMC. Notwithstanding anything to the contrary set forth in this Section 11, the Parties acknowledge that Synthetic
may be obligated to file a copy of this Agreement, any Schedules hereto, and summaries of the terms hereof with the U.S. Securities
and Exchange Commission as reasonably required to comply with applicable laws or the rules of a nationally-recognized securities
exchange. Synthetic shall be entitled to make such filings, provided that it requests confidential treatment of the commercial
terms and sensitive technical terms hereof and thereof to the extent such confidential treatment is reasonably available. In the
event of any such filing, Synthetic will provide CSMC with a copy of this Agreement (including the Schedules hereto) and related
filings marked to show provisions for which Synthetic intends to seek confidential treatment and shall reasonably consider and
incorporate CSMC’s comments thereon to the extent consistent with the legal requirements and the rules of any nationally
recognized securities exchange governing disclosure of material agreements and material information to be publicly filed.

 

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

 

    	Page 5 of 10

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

    

 

 

in the case of CSMC, to:

 

Cedars-Sinai Medical Center

Room 2009, North Tower

8700 Beverly Boulevard

Los Angeles, CA 90048-1865

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

Fax: (310) 423-0119

 

			Copy to: Vice President for Legal Affairs

 

or in the case of Company, to:

 

Chief Executive Officer

Synthetic Biologics, Inc.

617 Detroit Street, Suite 100

Attention: Jeffery Riley

Fax: (734)
332-7878

 

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

 

		13.	Miscellaneous.

 

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

 

		b.	Governing Law. This Agreement shall be construed and enforced in accordance with the laws
of the United States of America and of the State of California, irrespective of choice of laws provisions.

 

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

 

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

 

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

 

		f.	Entire Agreement. This Agreement and the Confidentiality Agreement currently in effect between
CSMC and Synthetic constitute the entire agreements among the Parties with respect to the subject matter hereof and thereof, and
replace and supersede as of the date hereof and thereof any and all prior agreements and understandings, whether oral or written,
among the Parties with respect to the subject matter of such agreements.

 

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

 

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

 

		i.	Assignment. Except as otherwise expressly provided in this Agreement, this Agreement shall
be binding upon, inures to the benefit of, and is enforceable by, the Parties and their respective heirs, legal representatives,
successors and permitted assigns. This Agreement shall not be assignable by Company absent the prior written consent of CSMC unless
to a successor to Company or a purchaser of all or substantially all of the assets of Company relating to the subject matter of
this Agreement. Synthetic shall have no right to assign this Agreement.

 

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

 

		k.	Survival. The following sections shall survive any expiration or earlier termination of
this Agreement: Section 6 (“Limited Warranty”), Section 8 (“Indemnification”), and Section 10 (“Use
of Names”).

 

    	Page 7 of 10

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

 

“CSMC”:

 

Cedars-Sinai Medical
Center,

a California nonprofit public 

benefit corporation

 

	By:	/s/ Shlomo Melmed, M.D.	 
	 	Shlomo Melmed, M.D.	 
	 	Senior Vice President for Academic Affairs	 
	 	& Dean of the Medical Faculty	 
	 	 	 
	By:	/s/ Edward M. Prunchunas	 
	 	Edward M. Prunchunas	 
	 	Senior Vice President for Finance & CFO	 

  

	“Company”:
	Synthetic Biomics, Inc., 
	a nevada corporation

 

	By:	/s/ Steve Kanzer	 
	Name:	Steve Kanzer	 
	Title:	CEO & President

	 
	 	 
	“Synthetic”:	 
	Synthetic Biologics, Inc.,	 
	a nevada corporation	 
	 	 
	By:	/s/ Jeff Riley

	 
	Name:	Jeff Riley

	 
	Title:	CEO	 

 

    	Page 8 of 10

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Appendix
A

 

Experiments

 

 

****

 

 

    	Page 9 of 10

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Appendix
B

 

“Field of Use” Definition
for Exclusive License

 

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

 

		1.	the therapeutic use of rifaximin;

 

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

 

		3.	the diagnosis, prognosis, or the testing of, or the provision of information to clinicians or patients regarding, small intestinal
bacterial overgrowth (SIBO), and/or conditions or disorders related thereto in human subjects, using breath testing products or
breath testing services to detect SIBO or SIBO-related conditions (provided, however, that methods of utilizing such diagnostic
information for the selection of one or more particular therapeutic regimens shall not be excluded); and

 

		4.	the use of small molecules and/or agonists and antagonists of vinculin.

 

    	Page 10 of 10STOCK PURCHASE AGREEMENT

 

by and among

 

SYNTHETIC BIOLOGICS,
INC., 

 

SYNTHETIC BIOMICS,
INC.

 

and

 

CEDARS-SINAI MEDICAL
CENTER, INC.

 

December 5, 2013

 

    	 

    	 

    

 

STOCK
PURCHASE AGREEMENT

 

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

 

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

 

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

 

AGREEMENT

 

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

 

sECTION
1. AUTHORIZATION OF ISSUANCES OF SHARES.

 

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

 

    	 

    	 

    

 

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

 

sECTION
2. CLOSING AND DELIVERY 

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

sECTION
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF CSMC.

 

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

 

    	 

    	 

    

 

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

 

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

 

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

 

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

 

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

 

    	 

    	 

    

 

sECTION
5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

 

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

 

sECTION
6. COVENANTS.

 

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

 

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

 

sECTION
7. NOTICES.

 

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

 

	If to the Company or the Licensee:	Synthetic Biologics, Inc.
	 	155 Gibbs Street, Suite 412
	 	Rockville, MD 20850
	 	Fax No.:  (734) 332-7878
	 	 
	If to CSMC:	Cedars- Sinai Medical Center
	 	8700 Beverly Boulevard
	 	West Hollywood, CA 90048-1865
	 	Attn:  Senior Vice President for Academic Affairs
	 	 
	With a copy to:	Senior Vice President for Legal Affairs & General Counsel

 

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

 

sECTION
8. MISCELLANEOUS.

 

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

 

    	 

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

[Remainder of page intentionally
left blank.]

 

    	 

    	 

    

 

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

 

	 	SYNTHETIC BIOLOGICS, INC.
	 	 	 
	 	By:	/s/ Steve Kanzer
	 	Name:	Steve Kanzer

	 	Title:	CEO & President

 

	 	SYNTHETIC BIOLOGICS, INC.
	 	 	 
	 	By:	         /s/ Jeff Riley
	 	Name:	Jeff Riley
	 	Title:	CEO

 

 

	 	CEDARS-SINAI MEDICAL CENTER
	 	 	 
	 	By:	/s/ Shlomo Melmed, M.D.
	 	Name:	Shlomo Melmed, M.D.
	 	Title:	Senior Vice President for Academic Affairs & Dean of the Medical Faculty
	 	 	 
	 	By:	/s/ Edward M. Prunchunas
	 	Name:	Edward M. Prunchunas
	 	Title:	Senior Vice President for Finance & CFO

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