Ex 4.5


    EXHIBIT
      4.5

     

    WARRANT
      AND COMMON STOCK PURCHASE AGREEMENT

     

    This
      WARRANT AND COMMON STOCK PURCHASE AGREEMENT is dated effective as of December
      22, 2005 (the “Effective
      Date”)
      by and
      between Protalex, Inc., a Delaware corporation with its principal office at
      145
      Union Square Drive, New Hope, PA 18938 (the “Company”),
      and
      the several purchasers identified from timer to time in the attached
Exhibit A
      (individually, a “Purchaser”
and
      collectively, the “Purchasers”).

     

    NOW,
      THEREFORE, in consideration of the mutual agreements, representations,
      warranties and covenants herein contained, the parties hereto agree as
      follows:

     

    1.    Definitions.
      As used
      in this Agreement, the following terms shall have the following respective
      meanings:

     

    (a)    “Affiliate”
of
      a
      party means any corporation or other business entity controlled by, controlling
      or under common control with such party. For this purpose “control”
shall
      mean direct or indirect beneficial ownership of fifty percent (50%) or more
      of the voting or income interest in such corporation or other business
      entity.

     

    (b)    “Agreement”
means
      this Warrant and Common Stock Purchase Agreement.

     

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

     

    (d)    “Closing
      Date”
means
      the date of the sale and purchase of the Warrants and Common Stock acquired
      hereunder.

     

    (e)    “Majority
      Purchasers”
shall
      mean Purchasers which, at any given time, hold greater than fifty
      percent (50%) of the outstanding Securities (as defined in Section 2.3
      below) that have not been resold pursuant to an effective registration statement
      under the Securities Act or Rule 144 under the Securities Act.

     

    (f)    “Operative
      Agreements”
shall
      mean the Registration Rights Agreement and Warrants together with this
      Agreement.

     

    (g)    “Registration
      Rights Agreement”
shall
      mean that certain Registration Rights Agreement, dated as of the date hereof,
      among the Company and the Purchasers.

     

    (h)    “SEC”
shall
      mean the Securities and Exchange Commission.

     

    (i)    “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended, and all of the rules and
      regulations promulgated thereunder.

     

    
      
         

      

      
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    2.    Purchase
      and Sale of Shares.

     

    2.1    Purchase
      and Sale.
      Subject
      to and upon the terms and conditions set forth in this Agreement, the Company
      agrees to issue and sell to each Purchaser, and each Purchaser, severally,
      hereby agrees to purchase from the Company, at the Closing (as defined below),
      the number of shares of Common Stock set forth opposite the name of such
      Purchaser under the heading “Number
      of Shares to be Purchased”
on
      Exhibit A
      hereto,
      at a purchase price of $2.25 per share. The total purchase price payable by
      each
      Purchaser for the number of shares of Common Stock that such Purchaser is hereby
      agreeing to purchase is set forth opposite the name of such Purchaser under
      the
      heading “Purchase
      Price”
on
      Exhibit A
      hereto.


     

    2.2    In
      addition, subject to the terms and conditions of this Agreement, each Purchaser
      agrees, severally, to purchase and the Company agrees to sell and issue to
      each
      Investor, a five-year cashless exercise Warrant in form and substance attached
      hereto as Exhibit
      B
      to
      acquire one (1) share of the Company’s Common Stock at an exercise price equal
      to the ten (10) trading day volume weighted average closing price of the
      Company’s Common Stock on the OTCBB immediately preceding the Closing Date (the
“Exercise Price”) for each four (4) shares of Common Stock acquired pursuant to
      Section 2.1 above (the “Warrant”). No fractional shares shall be issued under
      the Warrants (any fractional shares shall be rounded down to the nearest whole
      number). 

     

    2.3    The
      shares of Common Stock sold to the Purchasers pursuant to this Agreement are
      hereinafter referred to as the “Shares.”
      The
      Warrants to purchase Common Stock sold hereunder are hereinafter referred to
      as
      the “Warrants.”
      The
      total amount of Common Stock and other securities issuable upon conversion
      of
      the Warrants are hereinafter referred to as the “Conversion
      Stock.”
      The
      Shares, the Warrants and the Conversion Stock are hereinafter collectively
      referred to as the “Securities.”

     

    2.4    Closing.
      The
      initial purchase and sale of the Shares and Warrants shall take place at the
      offices of Reed Smith, LLP Two Embarcadero, 20th
      Floor,
      San Francisco, CA 94111 at 10:00 A.M., effective as of the Effective Date,
      or at
      such other time and place as the Company and the Purchasers acquiring at the
      Closing in the aggregate more than half of such Shares sold pursuant to Section
      2.1 mutually agree upon, but in no event later than December 30, 2005 (which
      time and place are designated as the “Closing”).
      Within
      five (5) business days after the Closing, the Company shall deliver to each
      Purchaser purchasing Shares and Warrants at the Closing a certificate
      representing the Shares and a corresponding Warrant, registered in the name
      of
      such Purchaser, or in such nominee’s or nominees’ name(s) as designated by such
      Purchaser in writing in the form of the Investor Questionnaire attached hereto
      as Appendix
      I,
      which
      such Purchaser is purchasing against delivery to the Company by such Purchaser
      of a cashiers check or wire transfer in the aggregate amount of the Purchase
      Price therefor payable to the Company’s order as identified on Exhibit
      A.

     

    
      
         

      

      
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    3.    Representations
      and Warranties of the Company.
      Except
      as otherwise described in the SEC Documents (as defined below), including any
      documents incorporated by reference therein or exhibits referenced or attached
      thereto, the Company hereby represents and warrants to each of the Purchasers
      as
      follows immediately prior to the Closing:

     

    3.1    Incorporation.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and
      is
      qualified to do business and is in good standing in each jurisdiction in which
      the character of its properties or the nature of its business requires such
      qualification, except where the failure to so qualify would not have a material
      adverse effect on the business, condition (financial or otherwise) or prospects
      of the Company (“Material
      Adverse Effect”).
      The
      Company does not have any material subsidiaries other than those identified
      in
      the SEC Documents (as defined below). Except for short-term investments and
      investments that are not material to the Company, the Company does not own
      any
      shares of stock or any other equity or long-term debt securities of any
      corporation or have any equity interest in any firm, partnership, limited
      liability company, joint venture, association or other entity. Complete and
      correct copies of the certificate of incorporation (the “Certificate
      of Incorporation”)
      and
      bylaws (the “Bylaws”)
      of the
      Company as in effect on the Effective Date have been filed by the Company with
      the SEC. The Company has all requisite corporate power and authority to carry
      on
      its business as now conducted.

     

    3.2    Capitalization.
      The
      authorized capital stock of the Company consists of (i)  100,000,000 shares
      of Common Stock, of which 19,443,221 shares are outstanding on the date hereof.
      The outstanding shares of capital stock of the Company have been duly and
      validly issued and are fully paid and nonassessable, have been issued in
      material compliance with all federal and state securities laws, and were not
      issued in violation of any preemptive or similar rights to subscribe for or
      purchase securities. Except for (i) options to purchase up to 3,888,805 shares
      of Common Stock or other equity awards issued to employees and consultants
      of
      the Company pursuant to the employee benefits plans disclosed in the SEC
      Documents and (ii) warrants to purchase up to 4,169,716 shares of Common Stock,
      there are no existing options, warrants, calls, preemptive (or similar) rights,
      subscriptions or other rights, agreements, arrangements or commitments of any
      character obligating the Company to issue, transfer or sell, or cause to be
      issued, transferred or sold, any shares of the capital stock of the Company
      or
      other equity interests in the Company or any securities convertible into or
      exchangeable for such shares of capital stock or other equity interests, and
      there are no outstanding contractual obligations of the Company to repurchase,
      redeem or otherwise acquire any shares of its capital stock or other equity
      interests. Except for that certain First Amended and Restated Shareholder
      Agreement dated May 25, 2005, there are no voting agreements or other similar
      arrangements with respect to the Common Stock to which the Company is a party.
      The Company has not adopted a stockholder rights plan or similar arrangement
      relating to accumulations of beneficial ownership of Common Stock or a change
      in
      control of the Company. The Company does not maintain any pension benefit plan,
      or other retirement plan, subject to the Employee Retirement Income Security
      Act.

     

    3.3    Authorization.
      All
      corporate action on the part of the Company, its officers, directors and
      stockholders necessary for the authorization, execution, delivery and
      performance of the Operative Agreements and the consummation of the transactions
      contemplated therein has been taken. When executed and delivered by the Company,
      each of the Operative Agreements shall constitute the legal, valid and binding
      obligation of the Company, enforceable against the Company in accordance with
      its terms, except as such may be limited by bankruptcy, insolvency,
      reorganization or other laws affecting creditors’ rights generally and by
      general equitable principles. The Company has all requisite corporate power
      to
      enter into the Operative Agreements and to carry out and perform its obligations
      under the terms of the Operative Agreements.

     

    
      
         

      

      
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    3.4    Valid
      Issuance of the Shares.
      The
      Shares being purchased by the Purchasers hereunder and the Conversion Stock
      upon
      exercise of the Warrants will, upon issuance pursuant to the terms hereof and
      thereof, be duly authorized and validly issued, fully paid and nonassessable.
      No
      preemptive rights or other rights to subscribe for or purchase the Company’s
      capital stock exist with respect to the issuance and sale of the Securities
      by
      the Company pursuant to this Agreement, except for any such right disclosed
      in
      the SEC Documents. As of the Effective Date, no further approval or authority
      of
      the stockholders or the Board of Directors of the Company shall be required
      for
      the issuance and sale of the Securities by the Company, or the filing of the
      Registration Statement by the Company, as contemplated in the Operative
      Agreements. The Shares, Warrants and Conversion Stock issuable upon exercise
      of
      the Warrants will, upon issuance pursuant to the terms hereof and thereof,
      be
      free and clear from any security interest, pledge, mortgage, lien (statutory
      or
      other), charge, option to purchase, lease or otherwise acquire any interest
      or
      any claim, restriction or covenant, title defect, hypothecation, assignment,
      deposit arrangement or other encumbrance of any kind or any preference, priority
      or other security agreement or preferential arrangement of any kind or nature
      whatsoever (including, without limitation, any conditional sale or other title
      retention agreement).

     

    3.5    Financial
      Statements.
      As of
      their respective dates, the financial statements of the Company included in
      the
      SEC Documents (as defined in Section 3.6 below) complied as to form in all
      material respects with applicable accounting requirements and the published
      rules and regulations of the SEC with respect thereto. Such financial statements
      have been prepared in accordance with generally accepted accounting principles,
      consistently applied, during the periods involved (except (i) as permitted
      pursuant to Regulation G promulgated under the Exchange Act, or (ii) in the
      case
      of unaudited interim financial statements, to the extent they may exclude
      footnotes or may be condensed or summary statements) and fairly present in
      all
      material respects the financial position of the Company as of the dates thereof
      and the results of its operations and cash flows for the periods then ended
      (subject, in the case of unaudited statements, to normal year end audit
      adjustments). Except as set forth in the subset of SEC Documents filed and
      publicly available beginning with the Company’s Annual Report on Form 10-KSB for
      the fiscal year ended May 31, 2005 and prior to the date hereof, since August
      31, 2005, (a) there has been no event, occurrence or development that has had
      or
      could result in a Material Adverse Effect, (b) the Company has not incurred
      any
      liabilities (contingent or otherwise) other than (x) liabilities incurred in
      the
      ordinary course of business consistent with past practice and (y) liabilities
      not required to be reflected in the Company’s financial statements pursuant to
      generally accepted accounting principals or required to be disclosed in filings
      made with the SEC, (c) the Company has not altered its method of accounting
      or
      the identity of its auditors and (d) the Company has not declared or made any
      payment or distribution of cash or other property to its stockholders or
      officers or directors (other than in compliance with existing Company stock
      option plans) with respect to its capital stock, or purchased, redeemed (or
      made
      any agreements to purchase or redeem) any shares of its capital stock. As of
      November 30, 2005 the Company’s cash and cash equivalents was equal to
      approximately $6,761,000.

     

    
      
         

      

      
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    3.6    SEC
      Documents.
      The
      Company has filed all reports, schedules, forms, statements (collectively,
      and
      in each case including all exhibits, financial statements and schedules thereto
      and documents incorporated by reference therein and including all registration
      statements and prospectuses filed with the SEC) required to be filed by it
      with
      the SEC through the Closing Date, and the Company will file, on a timely basis,
      all similar documents with the SEC during the period commencing on the date
      hereof and ending on the Closing Date (all of the foregoing being hereinafter
      referred to as the “SEC Documents”). As of their respective dates, the SEC
      Documents complied or will comply in all material respects with the requirements
      of the Securities Act, the Exchange Act and the rules and regulations of the
      SEC
      promulgated thereunder applicable to the SEC Documents, and none of the SEC
      Documents, contained or will contain any untrue statement of a material fact
      or
      omitted or will omit to state a material fact required to be stated therein
      or
      necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading, as of their respective
      filing dates.

     

    3.7    Consents.
      All
      consents, approvals, orders and authorizations required on the part of the
      Company in connection with the execution, delivery or performance of the
      Operative Agreements and the consummation of the transactions contemplated
      therein have been obtained and will be effective as of the Closing
      Date.

     

    3.8    No
      Conflict.
      The
      execution and delivery the Operative Agreements by the Company and the
      consummation of the transactions contemplated thereby will not conflict with
      or
      result in any violation of or default (with or without notice or lapse of time,
      or both) under, or give rise to a right of termination, cancellation or
      acceleration of any obligation or to a loss of a material benefit under
      (i) any provision of the Certificate of Incorporation or Bylaws of the
      Company, (ii) any material bond, debenture, note or other evidence of
      indebtedness, or any material lease, contract, indenture, mortgage, deed of
      trust, loan agreement, joint venture, franchise, license or other agreement
      or
      instrument to which the Company is a party or by which it or its property is
      bound or (iii) any judgment, order, statute, law, ordinance, rule or
      regulations, applicable to the Company or its respective properties or
      assets.

     

    3.9    Brokers
      or Finders.
      Except
      as disclosed on Schedule 3.9 attached hereto, the Company has not dealt with
      any
      broker or finder in connection with the transactions contemplated by this
      Agreement or incurred any liability for any brokerage or finders’ fees or agents
      commissions or any similar charges in connection with this Agreement or any
      transaction contemplated hereby.

     

    3.10    Nasdaq
      Stock Market.
      The
      Common Stock is registered pursuant to Section 12(g) of the Exchange Act and
      is
      quoted on the Nasdaq Stock Market Over-the-Counter Bulletin Board (“OTCBB”)
      under
      the ticker symbol “PRTX.OB.” The Company has taken no action designed to remove,
      or which, to the Company’s knowledge, is likely to have the effect of,
      suspending or terminating the quotation of the Common Stock on the OTCBB. The
      Company shall comply with all requirements, if any, of the National Association
      of Securities Dealers, Inc. (the “NASD”)
      with
      respect to the issuance of the Shares and Conversion Stock and the quoting
      of
      the Shares and Conversion Stock (when issued) on the OTCBB.

     

    
      
         

      

      
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    3.11    Absence
      of Litigation.
      There
      is no action, suit or proceeding or, to the Company’s knowledge, any
      investigation, pending, or to the Company’s knowledge, threatened by or before
      any court, governmental body or regulatory agency against the Company that
      is
      required to be disclosed in the SEC Documents and is not so disclosed. The
      Company has not received any written or oral notification of, or request for
      information in connection with, any formal or informal inquiry, investigation
      or
      proceeding from the SEC or the NASD. The foregoing includes, without limitation,
      any such action, suit, proceeding or investigation that questions this Agreement
      or the Registration Rights Agreement or the right of the Company to execute,
      deliver and perform under same.

     

    3.12    Intellectual
      Property.
      

     

    (a)    To
      the
      knowledge of the Company, the Company has ownership of or license or legal
      right
      to use all patents, copyrights, trade secrets, trademarks, domain names,
      customer lists, designs, manufacturing or other processes, computer software,
      systems, data compilations, research results and other intellectual property
      or
      proprietary rights (collectively, “Intellectual
      Property”)
      used
      in the business of the Company and material to the Company. The Company knows
      of
      no reason why its patent applications do not or would not comply with any
      statutory or legal requirements or would not issue into valid and enforceable
      patents.

     

    (b)    To
      the
      Company’s knowledge, there is no material default by the Company under any
      material licenses or other material agreements under which (i) the Company
      is
      granted rights in Intellectual Property or (ii) the Company has granted rights
      to others in Intellectual Property owned or licensed by the Company. There
      are
      no outstanding or threatened claims, disputes or disagreements with respect
      to
      any such licenses or agreements.

     

    (c)    To
      the
      knowledge of the Company, the present business, activities and products of
      the
      Company do not infringe or misappropriate any Intellectual Property of any
      third
      party. The Company has not been notified that any proceeding charging the
      Company with infringement or misappropriation of any Intellectual Property
      held
      by any third party has been filed. To the Company’s knowledge, there exists no
      patent held by any third party which includes claims that would be infringed
      by
      the Company in the conduct of its business as currently conducted where such
      infringement would have a Material Adverse Effect. To the knowledge of the
      Company, the Company is not making unauthorized use of any confidential
      information or trade secrets of any third party. Neither the Company nor, to
      the
      knowledge of the Company, any of its employees have any agreements or
      arrangements with any persons other than the Company restricting the Company’s
      or any such employee’s engagement in business activities that are material
      aspects of the Company’s business as currently conducted.

     

    (d)    None
      of
      the Intellectual Property owned or, to the Company’s knowledge, licensed by the
      Company that is used in the business of the Company and material to the Company,
      is subject to any outstanding judgment or order, and no action, suit,
      proceeding, hearing, investigation, charge, complaint, claim or demand is
      pending or, to the knowledge of the Company, threatened, which challenges the
      validity, enforceability, scope, use, or ownership of, or otherwise relates
      to,
      any such Intellectual Property anywhere in the world. No Patent has been or
      is
      now involved in any interference, reissue, reexamination, opposition, or other
      proceeding.

     

    
      
         

      

      
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    (e)    Each
      employee of the Company has executed a confidential information and invention
      assignment agreement in the form made available to Purchasers. No such employee
      has excluded works or inventions made prior to his or her employment with the
      Company from his or her assignment of inventions pursuant to such employee’s
      confidential information and invention assignment agreement, which works or
      inventions are necessary to the business of the Company as it is proposed to
      be
      conducted. Each consultant to the Company has entered into an agreement
      containing appropriate confidentiality and invention assignment provisions,
      in
      the form acceptable to Purchasers. The Company does not believe it is or will
      be
      necessary to utilize any inventions, trade secrets or proprietary information
      of
      any of its employees made prior to their employment by the Company, except
      for
      inventions, trade secrets or proprietary information that have been assigned
      to
      the Company. 

     

    3.13    Offering.
      The
      Company has not in the past nor will it hereafter take any action to sell,
      offer
      for sale or solicit offers to buy any securities of the Company which would
      require the offer, issuance or sale of the Securities, as contemplated by this
      Agreement, to be registered under Section 5 of the Securities Act.

     

    3.14    Investment
      Company.
      The
      Company is not and, after giving effect to the offering and sale of the Shares
      and the Warrants, will not be required to register as, an “investment company”
as such term is defined in the Investment Company Act of 1940, as
      amended.

     

    3.15    No
      Manipulation of Stock.
      The
      Company has not taken and will not, in violation of applicable law, take, any
      action designed to or that might reasonably be expected to cause or result
      in
      unlawful manipulation of the price of the Common Stock.

     

    3.16    No
      Violations.
      The
      Company is not in violation of its Certificate of Incorporation, Bylaws or
      other
      organizational documents, or in violation of any law, administrative regulation,
      ordinance or order of any court or governmental agency, arbitration panel or
      authority applicable to the Company, which violation, individually or in the
      aggregate, would be reasonably expected to have a Material Adverse Effect,
      or is
      not in default (and there exists no condition which, with the passage of time
      or
      otherwise, would constitute a default) in the performance of any material bond,
      debenture, note or any other evidence of indebtedness in any indenture,
      mortgage, deed of trust or any other material agreement or instrument to which
      the Company is a party or by which the Company is bound or by which the property
      of the Company is bound, which would be reasonably expected to have a Material
      Adverse Effect.

     

    3.17    Accountants.
      Grant
      Thornton, LLP, who issued their report with respect to the financial statements
      to be incorporated by reference from the Company’s Annual Report on Form 10-KSB
      for the year ended May 31, 2005 into the Registration Statement and the
      prospectus which forms a part thereof, are an independent registered public
      accounting firm as required by the Securities Act.

     

    
      
         

      

      
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    3.18    Taxes.
      The
      Company has filed all necessary federal, state and foreign income and franchise
      tax returns and has paid or accrued all taxes shown as due thereon, and the
      Company has no knowledge of a tax deficiency which has been or might be asserted
      or threatened against it which would have a Material Adverse
      Effect.

     

    3.19    Title.
      The
      Company has good and marketable title to all real property and good and
      marketable title to all personal property owned by it which is material to
      the
      business of the Company, in each case free and clear of all encumbrances and
      defects, except such as do not have a Material Adverse Effect. Any facilities
      and items of equipment held under lease by the Company are held by it under
      valid, subsisting and enforceable leases with such exceptions as are not
      material and do not interfere with the use made and proposed to be made of
      such
      facilities and items of equipment by the Company. The Company is in compliance
      with all material terms of each lease to which it is a party or is otherwise
      bound. 

     

    3.20    Foreign
      Corrupt Practices.
      To the
      knowledge of the Company, neither the Company, nor any director, officer, agent,
      employee or other person acting on behalf of the Company, has in the course
      of
      its actions for, or on behalf of, the Company, used any corporate funds for
      any
      unlawful contribution, gift, entertainment or other unlawful expenses relating
      to political activity; made any direct or indirect unlawful payment to any
      foreign or domestic government official or employee from corporate funds;
      violated or is in violation of any provision of the U.S. Foreign Corrupt
      Practices Act of 1977, as amended; or made any unlawful bribe, rebate, payoff,
      influence payment, kickback or other unlawful payment to any foreign or domestic
      government official or employee. 

     

    3.21    Employee
      Relations.
      The
      Company is not involved in any union labor dispute, nor, to the knowledge of
      the
      Company, is any such dispute threatened. The Company is not a party to a
      collective bargaining agreement, and the Company believes that its relations
      with its employees are good. No executive officer (as defined in Rule 501(1)
      of
      the Securities Act) of the Company has notified the Company that such officer
      intends to leave the employ of the Company or otherwise terminate such officer’s
      employment with the Company. To the knowledge of the Company, no employee of
      the
      Company, as a consequence of his employment by the Company is, or is now
      expected to be, in violation of any material term of any agreement, covenant
      or
      contract (including any employment contract, confidentiality, disclosure or
      proprietary information agreement, non-competition agreement, or any other
      contract or agreement or any restrictive covenant with any previous employer),
      and the continued employment of each such employee by the Company will not
      subject the Company to any liability with respect to any of the foregoing
      matters.

     

    3.22    Internal
      Accounting Controls.
      The
      Company maintains a system of internal accounting controls (as such term is
      defined in Rule 13a-14 and 15d-14 under the Exchange Act) sufficient to provide
      reasonable assurance that (i) transactions are executed in accordance with
      management’s general or specific authorizations, (ii) transactions are recorded
      as necessary to permit preparation of financial statements in conformity with
      generally accepted accounting principles and to maintain asset accountability,
      (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 the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.

     

    
      
         

      

      
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    3.23    Disclosure
      Controls.
      The
      Company has established and maintains disclosure controls and procedures (as
      such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act); such
      disclosure controls and procedures are designed to ensure that material
      information relating to the Company, including its consolidated subsidiaries,
      if
      any, is made known to the Company’s Chief Executive Officer and its Chief
      Financial Officer by others within those entities, and such disclosure controls
      and procedures are effective to perform the functions for which they were
      established; the Company’s auditors and the Audit Committee of the Board of
      Directors have been advised of: (i) any significant deficiencies in the design
      or operation of internal controls which could adversely affect the Company’s
      ability to record, process, summarize, and report financial data; and (ii)
      any
      fraud, whether or not material, that involves management or other employees
      who
      have a role in the Company’s internal controls; any material weaknesses in
      internal controls have been identified for the Company’s auditors; 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
      principal executive officers (or their equivalents) and principal financial
      officers (or their equivalents) of the Company have made all certifications
      required by the Sarbanes Oxley Act of 2002 (the “Sarbanes Oxley Act”) and any
      related rules and regulations promulgated by the Commission, and the statements
      contained in any such certification are complete and correct; and the Company
      is
      otherwise in compliance in all material respects with all applicable effective
      provisions of the Sarbanes Oxley Act.

     

    3.24    Disclosure.
      Neither
      the Operative Agreements, any of the schedules or exhibits hereto or thereto,
      nor any other document or certificate provided by the Company to the Purchasers
      in connection herewith or therewith contains any untrue statement of a material
      fact or, when considered as a whole, omits a material fact necessary to make
      the
      statements contained herein or therein, in light of the circumstances in which
      they were made, not misleading.

     

    3.25    Real
      Property Holding Corporation.
      The
      Company is not a real property holding corporation within the meaning of Section
      897(c)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) and any
      regulations promulgated thereunder.

     

    4.    Representations
      and Warranties of the Purchasers.
      Each
      Purchaser severally for itself, and not jointly with the other Purchasers,
      represents and warrants to the Company as follows:

     

    4.1    Authorization.
      All
      action on the part of such Purchaser and, if applicable, its officers, directors
      and shareholders necessary for the authorization, execution, delivery and
      performance of the Operative Agreements and the consummation of the transactions
      contemplated therein has been taken. When executed and delivered by the Company
      and such Purchaser, each of the Operative Agreements will constitute the legal,
      valid and binding obligation of such Purchaser, enforceable against such
      Purchaser in accordance with its terms, except as such may be limited by
      bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights
      generally and by general equitable principles. Such Purchaser has all requisite
      power to enter into each of the Operative Agreements and to carry out and
      perform its obligations under the terms of the Operative Agreements. Such
      Purchaser has the knowledge and experience in financial and business matters
      as
      to be capable of evaluating the merits and risks of an investment in the
      Securities and has the ability to bear the economic risks of an investment
      in
      the Securities for an indefinite period of time. Furthermore, the Purchaser
      acknowledges that the Company has made no representations or warranties except
      as set for in this Agreement or the Registration Rights Agreement.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    4.2    Purchase
      Entirely for Own Account.
      Except
      for permitted transfers pursuant to Section 8.13, such Purchaser is acquiring
      the Securities being purchased by it hereunder for investment, for its own
      account, and not for resale or with a view to distribution thereof in violation
      of the Securities Act. Such Purchaser has not entered into an agreement or
      understanding with any other party to resell or distribute such Securities.
      

     

    4.3    Investor
      Status; Etc.
      Such
      Purchaser certifies and represents to the Company that it is an “Accredited
      Investor” as defined in Rule 501 of Regulation D promulgated under the
      Securities Act and was not organized for the purpose of acquiring the
      Securities. Such Purchaser’s financial condition is such that it is able to bear
      the risk of holding the Securities for an indefinite period of time and the
      risk
      of loss of its entire investment. Subject to the truth and accuracy of the
      representations and warranties of the Company set forth in Section 3 of this
      Agreement (as modified by the Company Disclosure Schedule), such Purchaser
      has
      received, reviewed and considered all information it deems necessary in making
      an informed decision to make an investment in the Securities and has been
      afforded the opportunity to ask questions of and receive answers from the
      management of the Company concerning this investment and has sufficient
      knowledge and experience in investing in companies similar to the Company in
      terms of the Company’s stage of development so as to be able to evaluate the
      risks and merits of its investment in the Company.

     

    4.4    Confidential
      Information.
      Each
      Purchaser understands that any information, other than the SEC Documents,
      provided to such Purchaser by the Company, including, without limitation, the
      existence and nature of all discussions and presentations, if any, regarding
      this offering and the Operative Agreements, is strictly confidential and
      proprietary to the Company and is being submitted to the Purchaser solely for
      such Purchaser’s confidential use in connection with its investment decision
      regarding the Securities. Such Purchaser agrees to use such information for
      the
      sole purpose of evaluating a possible investment in the Securities and such
      Purchaser hereby acknowledges that it is prohibited from reproducing or
      distributing such information, the Operative Agreements, or any other offering
      materials, in whole or in part, or divulging or discussing any of their contents
      except for use internally and by its legal counsel and except as required by
      law
      or legal process. Such Purchaser understands that the federal securities laws
      prohibit any person who possesses material nonpublic information about a company
      from trading in securities of such company. 

     

    4.5    Securities
      Not Registered.
      Such
      Purchaser understands that the Securities have not been registered under the
      Securities Act, by reason of their issuance by the Company in a transaction
      exempt from the registration requirements of the Securities Act, and that the
      Securities must continue to be held by such Purchaser unless a subsequent
      disposition thereof is registered under the Securities Act or is exempt from
      such registration. The Purchaser understands that the exemptions from
      registration afforded by Rule 144 (the provisions of which are known to it)
      promulgated under the Securities Act depend on the satisfaction of various
      conditions, and that, if applicable, Rule 144 may afford the basis for sales
      only in limited amounts.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    4.6    No
      Conflict.
      The
      execution and delivery of the Operative Agreements by such Purchaser and the
      consummation of the transactions contemplated thereby will not conflict with
      or
      result in any violation of or default by such Purchaser (with or without notice
      or lapse of time, or both) under, or give rise to a right of termination,
      cancellation or acceleration of any obligation or to a loss of a material
      benefit under (i) any provision of the organizational documents of such
      Purchaser, (ii) any material agreement or instrument, permit, franchise, or
      license or (iii) any judgment, order, statute, law, ordinance, rule or
      regulations, applicable to such Purchaser or its respective properties or
      assets.

     

    4.7    Brokers.
      Such
      Purchaser has not retained, utilized or been represented by any broker or finder
      in connection with the transactions contemplated by this Agreement.

     

    4.8    Consents.
      All
      consents, approvals, orders and authorizations required on the part of such
      Purchaser in connection with the execution, delivery or performance of this
      Agreement and the consummation of the transactions contemplated herein have
      been
      obtained and are effective as of the Closing Date.

     

    4.9    No
      Intent to Effect a Change of Control.
      Such
      Purchaser has no present intent to change or influence the control of the
      Company within the meaning of Rule 13d-1 of the Exchange Act.

     

    5.    Conditions
      Precedent.

     

    5.1    Conditions
      to the Obligation of the Purchasers to Consummate the Closing.
      The
      obligation of each Purchaser to consummate the Closing and to purchase and
      pay
      for the Securities being purchased by it pursuant to this Agreement is subject
      to the satisfaction of the following conditions precedent:

     

    (a)    The
      representations and warranties of the Company contained herein shall be true
      and
      correct on and as of the Closing Date with the same force and effect as though
      made on and as of the Closing Date (it being understood and agreed by each
      Purchaser that, in the case of any representation and warranty of the Company
      contained herein which is not hereinabove qualified by application thereto
      of a
      materiality standard, such representation and warranty need be true and correct
      only in all material respects in order to satisfy as to such representation
      or
      warranty the condition precedent set forth in the foregoing provisions of this
      Section 5.1(a)).

     

    (b)    The
      Registration Rights Agreement and respective Warrant shall have been executed
      and delivered by the Company.

     

    (c)    The
      Company shall not have been adversely affected in any material way prior to
      the
      Closing Date; and the Company shall have performed all obligations and
      conditions herein required to be performed or observed by the Company on or
      prior to the Closing Date.

     

    (d)    No
      proceeding challenging this Agreement or the transactions contemplated hereby,
      or seeking to prohibit, alter, prevent or materially delay the Closing, shall
      have been instituted before any court, arbitrator or governmental body, agency
      or official and shall be pending.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

    (e)    The
      purchase of and payment for the Securities by the Purchasers shall not be
      prohibited by any law or governmental order or regulation. All necessary
      consents, approvals, licenses, permits, orders and authorizations of, or
      registrations, declarations and filings with, any governmental or administrative
      agency or of any other person with respect to any of the transactions
      contemplated hereby shall have been duly obtained or made and shall be in full
      force and effect.

     

    (f)    All
      instruments and corporate proceedings in connection with the transactions
      contemplated by this Agreement to be consummated at the Closing shall be
      satisfactory in form and substance to such Purchaser. Such Purchaser shall
      have
      received such certificates of the Company’s officers as such Purchaser may have
      reasonably requested in connection with such transactions.

     

    (g)    The
      Company has received executed Subscription Agreements representing an aggregate
      Purchase Price of at least $5,000,000, provided that the Purchasers may waive
      this condition 5.1(g) by unanimous written consent.

     

    5.2    Conditions
      to the Obligation of the Company to Consummate the Closing.
      The
      obligation of the Company to consummate the Closing and to issue and sell to
      each of the Purchasers the Securities to be purchased by it at the Closing
      is
      subject to the satisfaction of the following conditions precedent:

     

    (a)    The
      representations and warranties contained herein of such Purchaser shall be
      true
      and correct on and as of the Closing Date with the same force and effect as
      though made on and as of the Closing Date (it being understood and agreed by
      the
      Company that, in the case of any representation and warranty of each Purchaser
      contained herein which is not hereinabove qualified by application thereto
      of a
      materiality standard, such representation and warranty need be true and correct
      only in all material respects in order to satisfy as to such representation
      or
      warranty the condition precedent set forth in the foregoing provisions of this
      Section 5.2(a)).

     

    (b)    The
      Registration Rights Agreement and respective Warrant shall have been executed
      and delivered by each Purchaser.

     

    (c)    Each
      Purchaser shall have performed all obligations and conditions herein required
      to
      be performed or observed by such Purchaser on or prior to the Closing
      Date.

     

    (d)    No
      proceeding challenging this Agreement or the transactions contemplated hereby,
      or seeking to prohibit, alter, prevent or materially delay the Closing, shall
      have been instituted before any court, arbitrator or governmental body, agency
      or official and shall be pending.

     

    (e)    The
      sale
      of the Securities by the Company shall not be prohibited by any law or
      governmental order or regulation. All necessary consents, approvals, licenses,
      permits, orders and authorizations of, or registrations, declarations and
      filings with, any governmental or administrative agency or of any other person
      with respect to any of the transactions contemplated hereby shall have been
      duly
      obtained or made and shall be in full force and effect.

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

    (f)    Each
      such
      Purchaser shall have executed and delivered to the Company an Investor
      Questionnaire, in the form attached hereto as Appendix
      I,
      pursuant to which such Purchaser shall provide information necessary to confirm
      each such Purchaser’s status as an “accredited investor” (as such term is
      defined in Rule 501 promulgated under the Securities Act) and to enable the
      Company to comply with the Registration Rights Agreement.

     

    (g)    All
      instruments and corporate proceedings in connection with the transactions
      contemplated by this Agreement to be consummated at the Closing shall be
      satisfactory in form and substance to the Company, and the Company shall have
      received counterpart originals, or certified or other copies of all documents,
      including without limitation records of corporate or other proceedings, which
      it
      may have reasonably requested in connection therewith.

     

    6.    Transfer,
      Legends.

     

    6.1    Securities
      Law Transfer Restrictions.
      

     

    (a)    Each
      Purchaser acknowledges that the Securities are subject to the transfer
      restrictions set forth in Section 2 of the Registration Rights Agreement and
      that the certificates or instruments representing such securities shall bear
      such legends as are set forth in Section 2.2 of the Registration Rights
      Agreement. 

     

    (b)    Each
      Purchaser understands that the Securities have not been registered under the
      Securities Act or any state securities laws. In that connection, such Purchaser
      is aware of Rule 144 under the Securities Act and the restrictions imposed
      thereby. Such Purchaser will not engage in hedging or other similar transactions
      which would include, without limitation, effecting any short sale or having
      in
      effect any short position (whether or not such sale or position is against
      the
      box and regardless of when such position was entered into) or any purchase,
      sale
      or grant of any right (including, without limitation, any put or call option)
      with respect to the Securities or with respect to any security (other than
      a
      broad-based market basket or index) that includes, relates to or derives any
      significant part of its value from the Common Stock of the Company.

     

    (c)    Each
      Purchaser acknowledges that no action has been or will be taken in any
      jurisdiction outside the United States by the Company that would permit an
      offering of the Securities, or possession or distribution of offering materials
      in connection with the issue of Securities, in any jurisdiction outside of
      the
      United States where action for that purpose is required. Each Purchaser outside
      the United States will comply with all applicable laws and regulations in each
      foreign jurisdiction in which it purchases, offers, sells or delivers Securities
      or has in its possession or distributes any offering material, in all cases
      at
      its own expense.

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

     

    Notwithstanding
      the foregoing, following the effective date of the Registration Statement,
      the
      legend referenced above and below in Section 6.2 may, at the request of the
      Purchaser, be removed from the certificates evidencing such Shares and the
      Conversion Stock prior to the resale thereof and the Company will rescind any
      stop transfer orders with respect to such shares given to the Company’s transfer
      agent, provided that such Purchaser represents and covenants to the Company
      in
      writing (in a form reasonably acceptable to the Company and its counsel) that
      (1) the Purchaser will sell such shares only pursuant to and in the manner
      contemplated by the Registration Statement, including the Plan of Distribution
      section contained therein (in substantially the form attached hereto as Exhibit
      C), and otherwise in compliance with the Securities Act, including the
      prospectus delivery requirements of such act, (2) the Purchaser will indemnify
      the Company for any damages or losses resulting to the Company for the
      Purchaser’s breach of its representation and covenant described in the foregoing
      clause (1), and (3) such other agreements or covenants as the Company or its
      counsel may reasonably request. Subject to the foregoing, at such time and
      to
      the extent a legend is no longer required for the Shares or Conversion Stock,
      the Company will use its best efforts to no later than three (3) trading days
      following the delivery by a Purchaser to the Company or the Company’s transfer
      agent of a legended certificate representing such Shares or Warrant Shares
      (together with such accompanying documentation or representations as reasonably
      required by counsel to the Company), deliver or cause to be delivered a
      certificate representing such Shares or Conversion Stock that is free from
      the
      legend described above and below in Section 6.2.

     

    6.2    Legends.
      Each
      certificate requesting any of the Securities shall be endorsed with the legends
      set forth below, and each Purchaser covenants that, except to the extent such
      restrictions are waived by the Company, it shall not transfer the securities
      represented by any such certificate without complying with the restrictions
      on
      transfer described in this Agreement and the legends endorsed on such
      certificate: 

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED,
      TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
      UNDER SAID ACT AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY OF AN OPINION
      OF
      COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS
      EXEMPT FROM SAID ACT.”. 

     

    7.    Termination;
      Liabilities Consequent Thereon.
      This
      Agreement may be terminated and the transactions contemplated hereunder
      abandoned at any time prior to the Closing only as follows:

     

    (a)    at
      any
      time by mutual agreement of the Company and the Majority Purchasers;
      or

     

    (b)    by
      the
      Majority Purchasers, if there has been any breach of any representation or
      warranty or any material breach of any covenant of the Company contained herein
      and the same has not been cured within 15 days after notice thereof (it being
      understood and agreed by each Purchaser that, in the case of any representation
      or warranty of the Company contained herein which is not hereinabove qualified
      by application thereto of a materiality standard, such representation or
      warranty will be deemed to have been breached for purposes of this Section
      7.1(b) only if such representation or warranty was not true and correct in
      all
      material respects at the time such representation or warranty was made by the
      Company); or

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

     

    (c)    by
      the
      Company with respect to a certain purchaser, if there has been any breach of
      any
      representation, warranty or any material breach of any covenant of such
      Purchaser contained herein and the same has not been cured within 15 days after
      notice thereof (it being understood and agreed by the Company that, in the
      case
      of any representation and warranty of such Purchaser contained herein which
      is
      not hereinabove qualified by application thereto of a materiality standard,
      such
      representation or warranty will be deemed to have been breached for purposes
      of
      this Section 7.1(c) only if such representation or warranty was not true and
      correct in all material respects at the time such representation or warranty
      was
      made by such Purchaser).

     

    Any
      termination pursuant to this Section 7 shall be without liability on the part
      of
      any party, unless such termination is the result of a material breach of this
      Agreement by a party to this Agreement in which case such breaching party shall
      remain liable for such breach notwithstanding any termination of this
      Agreement.

     

    8.    Miscellaneous
      Provisions.

     

    8.1    Public
      Statements or Releases.
      None of
      the Purchasers to this Agreement shall make, issue, or release any announcement,
      whether to the public generally, or to any of its suppliers or customers, with
      respect to this Agreement or the transactions provided for herein, or make
      any
      statement or acknowledgment of the existence of, or reveal the status of, this
      Agreement or the transactions provided for herein, without the prior consent
      of
      the Majority Purchasers, which shall not be unreasonably withheld or delayed,
      provided,
      that
      nothing in this Section 8.1 shall prevent any of the Purchasers hereto from
      making such public announcements as it may consider necessary in order to
      satisfy its legal obligations, but to the extent not inconsistent with such
      obligations, it shall provide the other Purchasers and the Company with an
      opportunity to review and comment on any proposed public announcement before
      it
      is made.

     

    8.2    Further
      Assurances.
      Each
      party agrees to cooperate fully with the other party and to execute such further
      instruments, documents and agreements and to give such further written
      assurances, as may be reasonably requested by the other party to better evidence
      and reflect the transactions described herein and contemplated hereby, and
      to
      carry into effect the intents and purposes of this Agreement.

     

    8.3    Rights
      Cumulative.
      Each
      and all of the various rights, powers and remedies of the parties shall be
      considered to be cumulative with and in addition to any other rights, powers
      and
      remedies which such parties may have at law or in equity in the event of the
      breach of any of the terms of this Agreement. The exercise or partial exercise
      of any right, power or remedy shall neither constitute the exclusive election
      thereof nor the waiver of any other right, power or remedy available to such
      party.

     

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

     

    8.4    Pronouns.
      All
      pronouns or any variation thereof shall be deemed to refer to the masculine,
      feminine or neuter, singular or plural, as the identity of the person, persons,
      entity or entities may require.

     

    8.5    Notices.
      Any
      notices, reports or other correspondence (hereinafter collectively referred
      to
      as “correspondence”) required or permitted to be given hereunder shall be in
      writing and shall be sent by postage prepaid first class mail, courier or
      telecopy or delivered by hand to the party to whom such correspondence is
      required or permitted to be given hereunder, and shall be deemed sufficient
      upon
      receipt when delivered personally or by courier, overnight delivery service
      or
      confirmed facsimile, or three (3) business days after being deposited in the
      regular mail as certified or registered mail (airmail if sent internationally)
      with postage prepaid, if such notice is addressed to the party to be notified
      at
      such party’s address or facsimile number as set forth below:

     

    (a)    All
      correspondence to the Company shall be addressed as follows:

     

    Protalex,
      Inc.

    145
      Union
      Square Drive, 

    New
      Hope,
      PA 18938

    Attention:
      __________________

    __________________________

    Facsimile: (___) _____________

     

    with
      a
      copy to:

     

    Reed
      Smith LLP

    Two
      Embarcadero Center, Suite 2000

    San
      Francisco, CA 94111

    Attention:
       Donald
      C.
      Reinke, Esq.

    Facsimile: (415) 391.8269

     

    (b)    All
      correspondence to any Purchaser shall be sent to such Purchaser at the address
      set forth in Exhibit A.

     

    (c)    Any
      entity may change the address to which correspondence to it is to be addressed
      by written notification as provided for herein.

     

    8.6    Captions.
      The
      captions and paragraph headings of this Agreement are solely for the convenience
      of reference and shall not affect its interpretation.

     

    8.7    Severability.
      Should
      any part or provision of this Agreement be held unenforceable or in conflict
      with the applicable laws or regulations of any jurisdiction, the invalid or
      unenforceable part or provisions shall be replaced with a provision which
      accomplishes, to the extent possible, the original business purpose of such
      part
      or provision in a valid and enforceable manner, and the remainder of this
      Agreement shall remain binding upon the parties hereto.

     

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

     

    8.8    Governing
      Law; Injunctive Relief.

     

    (a)    This
      Agreement shall be governed by and construed in accordance with the internal
      and
      substantive laws of the State of Delaware and without regard to any conflicts
      of
      laws concepts which would apply the substantive law of some other jurisdiction.
      Venue for all purposes hereunder shall be in the applicable state or federal
      court located within the State of Delaware.

     

    (b)    Each
      of
      the parties hereto acknowledges and agrees that damages will not be an adequate
      remedy for any material breach or violation of this Agreement if such material
      breach or violation would cause immediate and irreparable harm (an “Irreparable
      Breach”).
      Accordingly, in the event of a threatened or ongoing Irreparable Breach, each
      party hereto shall be entitled to seek, equitable relief of a kind appropriate
      in light of the nature of the ongoing or threatened Irreparable Breach, which
      relief may include, without limitation, specific performance or injunctive
      relief; provided,
      however,
      that if
      the party bringing such action is unsuccessful in obtaining the relief sought,
      the moving party shall pay the non-moving party’s reasonable costs, including
      attorney’s fees, incurred in connection with defending such action. Such
      remedies shall not be the parties’ exclusive remedies, but shall be in addition
      to all other remedies provided in this Agreement.

     

    8.9    Amendments.
      This
      Agreement may be amended or modified only pursuant to an instrument in writing
      signed by the Company and the Majority Purchasers. 

     

    8.10    Exculpation.
      Each
      Purchaser acknowledges that it is not relying upon any person, entity or
      corporation, other than the Company and its officers and directors, in making
      its investment or decision to invest in the Company. The obligations of each
      Purchaser hereunder are several and not joint with the obligations of any other
      Purchaser, and no Purchaser shall be responsible in any way for the performance
      of the obligations of any other Purchaser hereunder. Nothing contained herein,
      and no action taken by any Purchaser pursuant hereto, 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 hereunder. Each Purchaser shall be entitled to
      independently protect and enforce its rights hereunder, 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 this Agreement. The
      Company has elected to provide all Purchasers with the same terms and forms
      of
      Operative Agreements for the convenience of the Company and not because it
      was
      required or requested to do so by the Purchasers. Each Purchaser agrees that
      no
      Purchaser nor the respective controlling persons, officers, directors, partners,
      agents, or employees of any Purchaser shall be liable to any other Purchaser
      for
      any action heretofore or hereafter taken or omitted to be taken by any of them
      in connection with the Securities or the Operative Agreements.

     

    8.11    Waiver.
      No
      waiver of any term, provision or condition of this Agreement, whether by conduct
      or otherwise, in any one or more instances, shall be deemed to be, or be
      construed as, a further or continuing waiver of any such term, provision or
      condition or as a waiver of any other term, provision or condition of this
      Agreement.

     

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

     

    8.12    Expenses.
      Each
      party will bear its own costs and expenses in connection with this Agreement.
      

     

    8.13    Assignment.
      The
      rights and obligations of the parties hereto shall inure to the benefit of
      and
      shall be binding upon the authorized successors and permitted assigns of each
      party. Neither party may assign its rights or obligations under this Agreement
      or designate another person (i) to perform all or part of its obligations under
      this Agreement or (ii) to have all or part of its rights and benefits under
      this
      Agreement, in each case without the prior written consent of the other party,
      provided, however, that a Purchaser may assign its rights hereunder with respect
      to any Securities transferred in accordance with Section 2.3 of the Registration
      Rights Agreement. In the event of any assignment in accordance with the terms
      of
      this Agreement, the assignee shall specifically assume and be bound by the
      provisions of the Agreement by executing and agreeing to an assumption agreement
      reasonably acceptable to the other party.

     

    8.14    Survival.
      The
      respective representations and warranties given by the parties hereto, and
      the
      other covenants and agreements contained herein, shall survive the Closing
      Date
      and the consummation of the transactions contemplated herein for a period of
      two
      years, without regard to any investigation made by any party. 

     

    8.15    Counterpart.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which together shall constitute one
      instrument.

     

    8.16    Entire
      Agreement.
      This
      Agreement, the Warrants and the Registration Rights Agreement constitute the
      entire agreement between the parties hereto respecting the subject matter hereof
      and supersede all prior agreements, negotiations, understandings,
      representations and statements respecting the subject matter hereof, whether
      written or oral. No modification, alteration, waiver or change in any of the
      terms of this Agreement shall be valid or binding upon the parties hereto unless
      made in writing and duly executed by the Company and the Majority Purchasers.
      

     

    [Signature
      Page to Follow]

     


    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Warrant and Common Stock
      Purchase Agreement as of the day and year first above written.

     

    PROTALEX,
      INC.

     

    By: 
      /s/
      Steven H. Kane

      
        

      

    

    Name:
      Steven H. Kane

    Title:
      President and Chief Executive Officer

     

    THE
      PURCHASER’S SIGNATURE TO THE INVESTOR QUESTIONNAIRE DATED AS OF THE CLOSING
      SHALL CONSTITUTE THE PURCHASER’S SIGNATURE TO THIS WARRANT AND COMMON STOCK
      PURCHASE AGREEMENT.

     

    


     

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    


    Exhibit
      A

     

    SCHEDULE
      OF PURCHASERS

     

    
      	
              Purchaser
                Name and Address

            	
              Number
                of Shares to be Purchased

            	
              Aggregate
                Purchase Price

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


    

    


     

    


     

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    


    Exhibit
      B

     

    FORM
      OF
      WARRANT

     


    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    


    Exhibit
      C

     

    PROPOSED
      PLAN OF DISTRIBUTION

     

    The
      selling stockholders and any of their pledgees, assignees and
      successors-in-interest may, from time to time, sell any or all of their shares
      of common stock on any stock exchange, market or trading facility on which
      the
      shares are traded or in private transactions. These sales may be at fixed or
      negotiated prices. The selling stockholders may use any one or more of the
      following methods when selling shares:

     

    o    ordinary
      brokerage transactions and transactions in which the broker-dealer solicits
      the
      purchaser;

     

    o    block
      trades in which the broker-dealer will attempt to sell the shares as agent
      but
      may position and resell a portion of the block as principal to facilitate the
      transaction;

     

    o    purchases
      by a broker-dealer as principal and resale by the broker-dealer for its
      account;

     

    o    an
      exchange distribution in accordance with the rules of the applicable
      exchange;

     

    o    privately
      negotiated transactions;

     

    o    broker-dealers
      may agree with the selling stockholders to sell a specified number of such
      shares at a stipulated price per share;

     

    o    a
      combination of any such methods of sale; and 

     

    o    any
      other method permitted pursuant to applicable law.

     

    The
      selling stockholders may also sell shares under Rule 144 under the Securities
      Act, if available, rather than under this prospectus.

     

    The
      selling stockholders may pledge their shares to their brokers under the margin
      provisions of customer agreements. If a selling stockholder defaults on a margin
      loan, the broker may, from time to time, offer and sell the pledged
      shares.

     

    The
      selling stockholders may pledge their shares of common stock to their brokers
      under the margin provisions of customer agreements. If a selling stockholder
      defaults on a margin loan, the broker may, from time to time, offer and sell
      the
      pledged shares.

     

    Broker-dealers
      engaged by the selling stockholders may arrange for other broker-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the selling stockholders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated. The
      selling stockholders do not expect these commissions and discounts to exceed
      what is customary in the types of transactions involved.

     

    Each
      selling stockholder may be deemed to be an “underwriter” within the meaning of
      the Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act.

     

    We
      are required to pay all fees and expenses incident to the registration of the
      shares, but excluding brokerage commissions or underwriter discounts. We and
      the
      selling stockholders have agreed to indemnify each other against certain losses,
      claims, damages and liabilities, including liabilities under the Securities
      Act.


     


    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    


    Appendix
      I

    


    INVESTOR
      QUESTIONNAIRE

    



    
      
         

      

      
        -23-

        
          

        

      

      
         

      

    


    SCHEDULE
      3.9

    


    Griffin
      Securities, Inc. and Mufson Howe Hunter & Partners LLC (collectively, the
“Placement Agents”) have been engaged by the Company to act as its placement
      agents in connection with the sale of the Securities. The Company may pay the
      Placements Agents collectively up to 6.0% of the aggregate offering proceeds
      received by the Company from the Securities sold to the Purchasers hereunder.
      In
      addition, the Company may collectively issue to the Placement Agents warrants
      to
      purchase that number of shares of the Company’s Common Stock equal to 7% of the
      number of common share equivalents of the Securities sold hereunder. The
      warrants and shares issuable upon exercise of the warrants issued to the
      Placement Agents will be in form and substance substantially identical to the
      Warrants and Conversion Stock issued to the Purchasers hereunder. The Placement
      Agents may transfer all or part of the warrants issued to the Placement Agents
      to their officers, employees or principals provided that (1) the transfers
      are
      in compliance with applicable state and federal securities laws and (2) upon
      request by the Company, the Placement Agents will deliver a legal opinion in
      form and substance satisfactory to the Company, addressed to the Company, to
      the
      effect that the proposed transfer of warrants may be effected without
      registration under the Securities Act.

    


    The
      Company is also obligated to include the warrants and shares issuable upon
      exercise of the warrants issued to the Placement Agents in the Registration
      Statement to be filed with the SEC covering the Securities.

    
      	 	 	 	 
	 	 	 	 
	
              -24-