CONSOLIDATED, AMENDED AND RESTATED SECURITY AGREEMENT
 
THIS CONSOLIDATED, AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”),
dated as of October 11, 2013, is made by and among Protalex, Inc. a Delaware
corporation, (the “Grantor”), and Niobe Ventures, LLC (the “Secured Party”) and
amends and restates the Security Agreements by and between Grantor and Secured
Party described on Exhibit B hereto. 
 
WHEREAS, the Grantor has issued to the Secured Party a Consolidated, Amended and
Restated Promissory Note in the principal amount of Nine Million Two Hundred
Nineteen Thousand Three Hundred Sixty Six and 67/100 Dollars ($9,219,366.67)
(the “Consolidated Note”); and
 
WHEREAS, the Grantor and the Secured Party have agreed to execute and deliver
this Agreement, among other things, to continue to secure the obligations of the
Grantor to the Secured Party.
 
NOW, THEREFORE, The Grantor and the Secured Party hereby agree as follows:
 
SECTION 1.           Definitions; Interpretation.
 
(a)          As used in this Agreement, the following terms shall have the
following meanings:
 
“Collateral” means the property described on Exhibit A attached hereto and all
Negotiable Collateral and Intellectual Property to the extent not described on
Exhibit A, except (i) to the extent any such property is nonassignable by its
terms without the consent of the licensor thereof or another party (but only to
the extent such prohibition on transfer is enforceable under applicable law,
including, without limitation, applicable provisions of the New York Uniform
Commercial Code as amended or supplemented from time to time.), or (ii) the
granting of a security interest in such property is contrary to applicable law,
provided that upon the cessation of any such restriction or prohibition, such
property shall automatically become part of the Collateral.
 
“Copyrights” means any and all copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held.
 
“Event of Default” has the meaning set forth in the Note.
 
“Intellectual Property” means all of Grantor’s right, title, and interest in and
to the following, except to the extent any security interest hereunder would
cause any application for a Trademark to be deemed invalidated, canceled or
abandoned due to the grant and/or enforcement of such security interest,
including, without limitation, all U.S. trademark applications that are based on
an intent-to-use, unless and until such time that the grant and/or enforcement
of the security interest will not affect the status or validity of such
trademark:
 
(a)          Copyrights, Trademarks and Patents;
 
 

 
(b)          and all trade secrets, and any and all intellectual property rights
in computer software and computer software products now or hereafter existing,
created, acquired or held;
 
(c)          and all design rights which may be available to Grantor now or
hereafter existing, created, acquired or held;
 
(d)          and all claims for damages by way of past, present and future
infringement of any of the rights included above, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of
the intellectual property rights identified above;
 
(e)          licenses or other rights to use any of the Copyrights, Patents or
Trademarks, and all license fees and royalties arising from such use to the
extent permitted by such license or rights;
 
(f)           amendments, renewals and extensions of any of the Copyrights,
Trademarks or Patents; and
 
(g)          proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.
 
“Lien” means any mortgage, deed of trust, pledge, security interest, assignment,
deposit arrangement, charge or encumbrance, lien, or other type of preferential
arrangement.
 
“Obligations” means the indebtedness, liabilities and other obligations of the
Grantor to the Secured Party under the Consolidated Note including without
limitation, the unpaid principal of the Consolidated Note and all interest
accrued thereon payable by the Grantor to the Secured Party thereunder or in
connection therewith.
 
“Patents”means all patents, patent applications and like protections, including,
without limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.
 
“Permitted Liens” mean: (i) Liens in favor of the Secured Party in respect of
the Obligations hereunder; (ii) Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings and which are adequately reserved for in
accordance with GAAP; (iii) Liens of materialmen, mechanics, warehousemen,
carriers or employees or other like Liens arising in the ordinary course of
business and securing obligations either not delinquent or being contested in
good faith by appropriate proceedings; (iv) Liens consisting of deposits or
pledges to secure the payment of worker’s compensation, unemployment insurance
or other social security benefits or obligations, or to secure the performance
of bids, trade contracts, leases, public or statutory obligations, surety or
appeal bonds or other obligations of a like nature incurred in the ordinary
course of business; (v) easements, rights of way, servitudes or zoning or
building restrictions and other minor encumbrances on real property and
irregularities in the title to such property which do not in the aggregate
materially impair the use or value of such property or risk the loss or
forfeiture of title thereto; and (vi) Liens upon or in any equipment now or
hereafter acquired or held by the Grantor to secure the purchase price of such
equipment or indebtedness incurred solely for the purpose of financing or
refinancing the acquisition of such equipment, provided that the Lien is
confined solely to the equipment so acquired and accessions thereon and proceeds
thereof.
 
 

 
“Person” means an individual, corporation, partnership, joint venture, trust,
unincorporated organization, governmental agency or authority, or any other
entity of whatever nature.
 
“Trademarks”means any trademark and service mark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the parts of the goodwill of the business connected with the
use of and symbolized by such marks.
 
“UCC” means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York.
 
(b)          Where applicable and except as otherwise defined herein, terms used
in this Agreement shall have the meanings assigned to them in the UCC. 
 
(c)          In this Agreement, (i) the meaning of defined terms shall be
equally applicable to both the singular and plural forms of the terms defined;
(ii) the captions and headings are for convenience of reference only and shall
not affect the construction of this Agreement; (iii) the words “hereof,”
“herein,” “hereto,” “hereunder” and the like mean and refer to this Agreement as
a whole and not merely to the specific Article, Section, subsection, paragraph
or clause in which the respective word appears; (iv) the words “including,”
“includes” and “include” shall be deemed to be followed by the words “without
limitation;” and (v) the term “or” shall not be limiting.
 
SECTION 2.           Security Interest.
 
(a)          Subject to the Permitted Liens, as security for the payment and
performance of the Obligations, the Grantor hereby pledges, assigns and grants
to the Secured Party a security interest in all of the Grantor’s right, title
and interest in, to and under all of the Collateral (other than as set forth in
Section 2(b) hereof).
 
(b)          Notwithstanding the foregoing, except for fixtures (to the extent
covered by Article 9 of the UCC), such grant of a security interest shall not
extend to, and the term “Collateral” shall not include, any asset which would be
real property under the law of the jurisdiction in which it is located.
 
(c)          This Agreement shall create a continuing security interest in the
Collateral that shall remain in effect until terminated in accordance with the
provisions hereof.
 
SECTION 3.         Financing Statements, Etc. The Grantor hereby authorizes the
Secured Party to file (with a copy thereof to be provided to the Grantor
contemporaneously therewith), at any time and from time to time thereafter, all
financing statements, financing statement assignments, continuation financing
statements, and UCC filings, in form reasonably satisfactory to the Secured
Party. The Grantor shall execute and deliver and shall take all other action, as
the Secured Party may reasonably request, to perfect and continue perfected,
maintain the priority of or provide notice of the security interest of the
Secured Party in the Collateral (subject to the terms hereof) and to accomplish
the purposes of this Agreement. Without limiting the generality of the
foregoing, the Grantor ratifies and authorizes the filing by the Secured Party
of any financing statements filed prior to the date hereof that accomplish the
purposes of this Agreement. 
 
 

 
SECTION 4.          Representations and Warranties. The Grantor represents and
warrants to the Secured Party that:
 
(a)          Grantor is a business entity duly formed, validly existing and in
good standing under the law of the jurisdiction of its organization and has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement.
 
(b)          The execution, delivery and performance by the Grantor of this
Agreement has been duly authorized by all necessary corporate action of the
Grantor, and this Agreement constitutes the legal, valid and binding obligation
of the Grantor, enforceable against the Grantor in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws of general application
affecting enforcement of creditors’ rights generally, as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
 
(c)          Except for the filing of appropriate financing statements, no
authorization, consent, approval, license, exemption of, or filing or
registration with, any governmental authority or agency, or approval or consent
of any other Person, is required for the due execution, delivery or performance
by the Grantor of this Agreement unless the same has already been obtained or is
being obtained simultaneously in connection herewith.
 
(d)          This Agreement creates a security interest that is enforceable
against the Collateral in which the Grantor now has rights and will create a
security interest that is enforceable against the Collateral in which the
Grantor hereafter acquires rights at the time the Grantor acquires any such
rights.
 
(e)          The Grantor has the right and power to grant the security interests
in the Collateral to the Secured Party in the Collateral, and the Grantor is the
sole and complete owner of the Collateral, free from any Lien other than the
Permitted Liens.
 
SECTION 5.           Covenants of the Grantor. Until this Agreement has
terminated in accordance with the terms hereof, the Grantor agrees to do the
following:
 
(a)          The Grantor shall give prompt written notice to the Secured Party
(and in any event not later than ten (10) days following any change described
below in this subsection) of: (i) any change in the Grantor’s name; (ii) any
changes in the Grantor’s identity or structure in any manner which might make
any financing statement filed hereunder incorrect or misleading; or (iii) any
change in jurisdiction of organization; provided that the Grantor shall not
locate any Collateral outside of the United States nor shall the Grantor change
its jurisdiction of organization to a jurisdiction outside of the United States.
 
(b)          The Grantor shall not surrender or lose possession of, sell, lease,
rent or otherwise dispose of or transfer any of the Collateral or any right or
interest therein, except in the ordinary course of business consistent with past
practice and except to the extent of equipment that is obsolete or no longer
useful to its business.
 
(c)          The Grantor shall keep the Collateral free of all Liens except the
Permitted Liens.
 
SECTION 6.           Collection of Accounts. The Grantor shall endeavor in the
first instance diligently to collect all amounts due or to become due on or with
respect to the accounts and other rights to payment. 
 
 

 
SECTION 7.           Authorization; Secured Party Appointed
Attorney-in-Fact. The Secured Party shall have the right, to, in the name of the
Grantor, or in the name of the Secured Party or otherwise, upon notice to, but
without the requirement of assent by the Grantor, and the Grantor hereby
constitutes and appoints the Secured Party (and any employees or agents
designated by a Secured Party) as the Grantor’s true and lawful
attorney-in-fact, with full power and authority to: (i) assert, adjust, sue for,
compromise or release any claims under any policies of insurance; and (ii),
execute any and all such other documents and instruments, and do any and all
acts and things for and on behalf of the Grantor, that such Secured Party may
deem necessary or advisable to maintain, protect, realize upon and preserve the
Collateral and the Secured Party’s security interests therein and to accomplish
the purposes of this Agreement. The Secured Party agrees that, except upon and
during the continuance of an Event of Default, it shall not exercise the power
of attorney, or any rights granted to the Secured Party under this Section
7. The foregoing power of attorney is coupled with an interest and is
irrevocable so long as the Obligations have not been indefeasibly paid and
performed in full and the commitments not terminated. The Grantor hereby
ratifies, to the extent permitted by law, all that the Secured Party shall
lawfully and in good faith do or cause to be done by virtue of and in compliance
with this Section 7.
 
SECTION 8.           Remedies.
 
  (a)  Upon the occurrence and during the continuance of an Event of Default,
the Secured Party shall have, in addition to all other rights and remedies
granted to the Secured Party in this Agreement or the Consolidated Note, all
rights and remedies of a secured party under the UCC and other applicable laws.
Without limiting the generality of the foregoing, upon the occurrence and during
the continuance of an Event of Default, the Secured Party may sell, resell,
lease, use, assign, license, sublicense, transfer or otherwise dispose of any or
all of the Collateral in its then condition or following any commercially
reasonable preparation or processing (utilizing in connection therewith any of
Grantor’s assets, without charge or liability to any Secured Party therefor) at
public or private sale, by one or more contracts, in one or more parcels, at the
same or different times, for cash or credit, or for future delivery without
assumption of any credit risk, all as the Secured Party deem advisable;
provided, however, that the Grantor shall be credited with the net proceeds of
sale only when such proceeds are finally collected by the Secured Party. Each
Secured Party shall have the right upon any such public sale, and, to the extent
permitted by law, upon any such private sale, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption, which
right or equity of redemption the Grantor hereby releases, to the extent
permitted by law. The Grantor hereby agrees that the sending of notice by
ordinary mail, postage prepaid, to the address of the Grantor set forth herein
or subsequent address that the Grantor provides to the Secured Party in writing,
of the place and time of any public sale or of the time after which any private
sale or other intended disposition is to be made, shall be deemed reasonable
notice thereof if such notice is sent ten (10) business days prior to the date
of such sale or other disposition or the date on or after which such sale or
other disposition may occur.
 
  (b)  The cash proceeds actually received from the sale or other disposition or
collection of the Collateral, and any other amounts received in respect of the
Collateral the application of which is not otherwise provided for herein shall
be applied first, to the payment of the reasonable costs and expenses of the
Secured Party in exercising or enforcing their rights hereunder and in
collecting or attempting to collect any of the Collateral, and to the payment of
all other amounts payable to the Secured Party pursuant to Section 12 hereof;
and second, to the payment of the Obligations. Any surplus thereof that exists
after payment and performance in full of the Obligations shall be promptly paid
over to the Grantor or otherwise disposed of in accordance with the UCC or other
applicable law. The Grantor shall remain liable to the Secured Party for any
deficiency that exists after any sale or other disposition or collection of the
Collateral.
 
 

 
SECTION 9.           Certain Waivers.
 
(a)  The Grantor waives, to the fullest extent permitted by law: (i) any right
of redemption with respect to the Collateral, whether before or after sale
hereunder, and all rights, if any, of marshalling of the Collateral or other
collateral or security for the Obligations; (ii) any right to require the
Secured Party to: (A) proceed against any Person, (B) exhaust any other
collateral or security for any of the Obligations, (C) pursue any remedy in the
Secured Party’s power or (D) except as provided herein or in the Consolidated
Note, make or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests or notices of dishonor in
connection with any of the Collateral; and (iii) all claims, damages and demands
against the Secured Party arising out of the repossession, retention, sale or
application of the proceeds of any sale of the Collateral.
 
SECTION 10.         Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by nationally-recognized overnight courier or by registered
or certified mail, postage prepaid, return receipt requested or by facsimile,
with confirmation as provided above addressed as follows:
 
 
If to Grantor:
 
Protalex, Inc.
133 Summit Avenue, Suite 22
Summit, NJ 07901
Attention: Chief Financial Officer
 
With copies to
Morse, Zelnick, Rose & Lander LLP
405 Park Avenue, Suite 1401
New York, NY 10022
Attention: Kenneth S. Rose, Esq.
Fax: 212-208-6809
 
If to the Secured Party:
 
Niobe Ventures, LLC
c/o Arnold P. Kling
410 Park Avenue, Suite 1710
New York, NY 10021
Attention: Arnold Kling, Managing Member
Fax: 212-713-1818
 
With a copy to
 
Morse, Zelnick, Rose & Lander LLP
405 Park Avenue, Suite 1401
New York, NY 10022
Attention: Kenneth S. Rose, Esq.
Fax: 212-208-6809
 
 
 

 
SECTION 11.        No Waiver; Cumulative Remedies. No failure on the part of the
Secured Party to exercise, and no delay in exercising, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to the Secured Party.
 
SECTION 12.        Costs and Expenses. The Grantor agrees to pay all reasonable
costs and expenses of the Secured Party, in connection with the enforcement and
preservation of any rights or interests under, this Agreement and the
protection, sale or collection of, or other realization upon, any of the
Collateral, including all reasonable expenses of taking, collecting, holding,
sorting, handling, preparing for sale, selling or the like and other such
expenses of sales and collections of the Collateral. 
 
SECTION 13.        Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the Grantor, the Secured Party and their
respective successors and assigns.
 
SECTION 14.        Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to principles
of conflict of laws.
 
SECTION 15.        Entire Agreement; Amendment. This Agreement contains the
entire agreement of the parties with respect to the subject matter hereof and
shall not be amended except by the written agreement of the Grantor and the
Secured Party. Notwithstanding the foregoing, this Agreement may not be amended
and any term hereunder may not be waived with respect to any Secured Party
without the written consent of such Secured Party unless such amendment or
waiver applies to all Secured Party in the same fashion.
 
SECTION 16.         Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be valid, legal and
enforceable under all applicable laws and regulations. If, however, any
provision of this Agreement shall be invalid, illegal or unenforceable under any
such law or regulation in any jurisdiction, it shall, as to such jurisdiction,
be deemed modified to conform to the minimum requirements of such law or
regulation, or, if for any reason it is not deemed so modified, it shall be
invalid, illegal or unenforceable only to the extent of such invalidity,
illegality or limitation on enforceability without affecting the remaining
provisions of this Agreement, or the validity, legality or enforceability of
such provision in any other jurisdiction.
 
SECTION 17.         Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
SECTION 18.         Termination. Upon the payment and performance in full of all
Obligations, this Agreement shall terminate and the Secured Party shall
promptly, at the cost of the Grantor, execute and deliver to the Grantor such
documents and instruments reasonably requested by the Grantor as shall be
necessary to evidence termination of all security interests given by the Grantor
to the Secured Party hereunder; provided, however, that the obligations of the
Grantor under Section 12 hereof shall survive such termination.
 
 

 
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of
the date first above written.
 
 
GRANTOR:
 
 
 
 
PROTALEX, INC.
   
 
By:
/s/Kirk M. Warshaw
 
 
Kirk M. Warshaw, Chief Financial Officer
 
 
 
 
NIOBE VENTURES, LLC
 
 
 
 
By:
/s/ Arnold P. Kling
 
 
Arnold P. Kling, Manager

 
 

EXHIBIT A
 
COLLATERAL DESCRIPTION ATTACHMENT TO SECURITY AGREEMENT
 
DEBTOR                                      PROTALEX, INC., a Delaware
corporation
 
SECURED PARTY:                    Niobe Ventures, LLC
 
All personal property of Grantor (herein referred to as “Grantor” or “Debtor”)
whether presently existing or hereafter created or acquired, and wherever
located including, without limitation:
 
(a)          all accounts (including health-care-insurance receivables), chattel
paper (including tangible and electronic chattel paper), deposit accounts,
documents (including negotiable documents), equipment (including all accessions
and additions thereto), general intangibles (including payment intangibles and
software), goods (including fixtures), instruments (including promissory notes),
inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment
property (including securities and securities entitlements), letter of credit
rights, money, and all of Grantor’s books and records with respect to any of the
foregoing, and the computers and equipment containing said books and records;
provided that notwithstanding the foregoing, "Collateral" shall not include more
than 65% of the stock of any subsidiary that is not incorporated, formed or
organized under the laws of the United States, any state thereof or the District
of Columbia (a "Foreign Subsidiary"), or more than 65% of the stock of any
subsidiary substantially all of the assets of which are stock in Foreign
Subsidiaries;
 
(b)          all common law and statutory copyrights and copyright
registrations, applications for registration, now existing or hereafter arising,
in the United States of America or in any foreign jurisdiction, obtained or to
be obtained on or in connection with any of the foregoing, or any parts thereof
or any underlying or component elements of any of the foregoing, together with
the right to copyright and all rights to renew or extend such copyrights and the
right (but not the obligation) of Secured Party to sue in their own name and/or
in the name of the Debtor for past, present and future infringements of
copyright;
 
(c)          all trademarks, service marks, trade names and service names and
the goodwill associated therewith, together with the right to trademark and all
rights to renew or extend such trademarks and the right (but not the obligation)
of Secured Party to sue in their own name and/or in the name of the Debtor for
past, present and future infringements of trademark;
 
(d)          all (i) patents and patent applications filed in the United States
Patent and Trademark Office or any similar office of any foreign jurisdiction,
and interests under patent license agreements, including, without limitation,
the inventions and improvements described and claimed therein, (ii) licenses
pertaining to any patent whether Debtor is licensor or licensee, (iii) income,
royalties, damages, payments, accounts and accounts receivable now or hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof, (iv) right (but not the obligation) to sue in the name of Debtor and/or
in the name of Secured Party for past, present and future infringements thereof,
(v) rights corresponding thereto throughout the world in all jurisdictions in
which such patents have been issued or applied for, and (vi) reissues,
divisions, continuations, renewals, extensions and continuations-in-part with
respect to any of the foregoing; and
 
 

 
(e)          any and all cash proceeds and/or non-cash proceeds of any of the
foregoing, including, without limitation, insurance proceeds, and all supporting
obligations and the security therefor or for any right to payment. All terms
above have the meanings given to them in the New York Uniform Commercial Code,
as amended or supplemented from time to time.
 
 

EXHIBIT B
 
PRIOR SECURITY AGREEMENTS
 
 
1) The Second Amended and Restated Security Agreement dated as of February 1,
2012, between Protalex, Inc. and Niobe Ventures, LLC;

2) The Third Amended and Restated Security Agreement dated as of June 5, 2012,
between Protalex, Inc. and Niobe Ventures, LLC;

3) The Fourth Amended and Restated Security Agreement dated as of October 1,
2012, between Protalex, Inc. and Niobe Ventures, LLC;
4) The Fifth Amended and Restated Security Agreement dated as of December 3,
2012, between Protalex, Inc.   and Niobe Ventures, LLC;
5) The Sixth Amended and Restated Security Agreement dated as of January 18,
2013, between Protalex, Inc. and Niobe Ventures, LLC;
6) The Seventh Amended and Restated Security Agreement dated as of May 13, 2013,
between Protalex, Inc. and Niobe Ventures, LLC; and
7) The Eighth Amended and Restated Security Agreement dated as of August 27,
2013, between Protalex, Inc. and Niobe Ventures, LLC.