Document:

SECURITY
AGREEMENT

     

    THIS
SECURITY AGREEMENT (this “Agreement”), dated as of
November 11, 2009, is made by and among Protalex, Inc. a Delaware corporation,
(the “Grantor”), and
Niobe Ventures, LLC (the “Secured Party”).

     

    WHEREAS,
the Grantor has issued to the Secured Party a senior secured convertible
promissory note in the principal amount of One Million Dollars ($1,000,000)
(such note, as amended or modified from time to time, the “Note”).

     

    WHEREAS, the Grantor and the
Secured Party have agreed to execute and deliver this Agreement, among other
things, to secure the obligations of the Grantor under the Note.

     

    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published or unpublished and whether or not the same also constitutes a trade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.

     

    “Documents” means this
Agreement and the Note, each as amended, modified, renewed, extended or replaced
from time to time.

     

    “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 Note including without limitation, the unpaid principal of the 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.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “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.  Capitalized
terms not otherwise defined herein shall have the meaning ascribed to them in
the Note or the Note Purchase Agreement, as applicable.

     

    (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.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    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.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    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 (as defined in
the Note), the Secured Party shall have, in addition to all other rights and
remedies granted to the Secured Party in this Agreement or the 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.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    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 any of the 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.

    

    145 Union Square Drive

    New Hope, PA 18938

    Attention:  Chief Financial
Officer

    

    With copies to

    

    Reed
Smith LLP

    101
2nd
Street, Suite 2000

    San
Francisco, CA 94111

    Attention:      Donald
C. Reinke, Esq.

    Fax:  415-391-8269

    

    If to the Secured
Party:

    

    Niobe Ventures, LLC

    c/o Arnold P. Kling

    712 Fifth Avenue, 1111h
Floor

    New York, NY 10019

    Attention: Arnold Kling, Managing
Member

    Fax:  212-713-1818

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    With a copy to

    

    Morse,
Zelnick, Rose & Lander LLP

    405 Park
Avenue, Suite 1401

    New York,
NY  10022

    Attention:  Kenneth
S. Rose, Esq.

    Fax:  212-838-5030

    

    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.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    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/ Marc Rose

                
	 
      	
                  Marc
      Rose, Chief Financial Officer

                
	 
      	 
      
	
                  NIOBE
      VENTURES, LLC

                
	 
      	 
      
	
                  By:

                	
                  /s/ Arnold Kling

                
	 
      	
                    Arnold
      Kling, Manager

                

        

      

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    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.FORM
OF

    PROTALEX,
INC.

     

    INDEMNIFICATION
AGREEMENT

     

    This
Indemnification Agreement (this “Agreement”) is effective as of
November __, 2009 by and between Protalex, Inc., a Delaware corporation (the
“Company”), and the
indemnitees listed on the signature pages hereto (individually, as “Indemnitee,” and,
collectively, the “Indemnitees”).

     

    A.           The
Company and Indemnitees recognize the substantial increase in corporate
litigation in general, which subjects directors, officers, employees, agents and
fiduciaries to expensive litigation risks at the same time as the availability
and coverage of liability insurance has been severely limited.

     

    B.           The
Indemnitees do not regard the current protection available as adequate under the
present circumstances, and Indemnitees and other directors, officers, employees,
agents and fiduciaries of the Company may not be willing to serve in such
capacities without additional protection.

     

    C.           The
Company (i) desires to attract and retain the involvement of highly qualified
individuals and entities, such as Indemnitees, to serve the Company and, in
part, in order to induce each Indemnitee to be involved with the Company and
(ii) wishes to provide for the indemnification and advancing of expenses to each
Indemnitee to the maximum extent permitted by law.

     

    D.           Indemnitees
include one or more directors of the Company who are representatives of Fund
Indemnitors (as defined in Section 4) (individually, as “Director” and, collectively,
the “Directors”).  Each
such Director who is a representative of Fund Indemnitor (as defined in Section
4) may have certain rights to indemnification and/or insurance provided by such
Fund Indemnitor and/or certain of its affiliates which the parties hereto intend
to be secondary to the primary obligation of the Company to indemnify each such
Director as provided herein, with the Company’s acknowledgement and agreement to
the foregoing being a material condition to this Agreement.

     

    E.           In
view of the considerations set forth above, the Company desires that each
Indemnitee be indemnified by the Company as set forth herein.

     

    NOW,
THEREFORE, the Company and each Indemnitee hereby agree as
follows:

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    1.    Indemnification.

     

    (a) Third Party
Proceedings.  The Company shall indemnify each Indemnitee if
such Indemnitee is or was a party or is threatened to be made a party to any
threatened, pending or completed action, suit, proceeding or any alternative
dispute resolution mechanism, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) by reason
of the fact that such Indemnitee is or was a director, officer, employee, agent
or fiduciary of the Company, or any subsidiary of the Company, or by reason of
the fact that such Indemnitee is or was serving at the request of the Company as
a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise, against any and all
expenses (including attorneys’ fees and all other costs, expenses and
obligations incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to defend, to
be a witness in or to participate in, any action, suit, proceeding, alternative
dispute resolution mechanism, hearing, inquiry or investigation), judgments,
fines and penalties actually and reasonably incurred in connection with, and
amounts actually paid in settlement of (if such settlement is approved in
advance by the Company, which approval will not be unreasonably withheld), (and
any federal, state, local or foreign taxes imposed on the Indemnitee as a result
of the actual or deemed receipt of any payments under this Agreement) actually
and reasonably incurred by such Indemnitee in connection with such action, suit
or proceeding if such Indemnitee acted in good faith and in a manner such
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such Indemnitee’s conduct was
unlawful.  The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that an Indemnitee did
not act in good faith and in a manner which such Indemnitee reasonably believed
to be in or not opposed to the best interests of the Company, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that such
Indemnitee’s conduct was unlawful.

     

    (b) Proceedings By or in the Right of
the Company.  The Company shall indemnify an Indemnitee if such
Indemnitee was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit, proceeding or any alternative
dispute resolution mechanism, whether civil, criminal, administrative or
investigative, by or in the right of the Company or any subsidiary of the
Company to procure a judgment in its favor by reason of the fact that such
Indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company, or any subsidiary of the Company, or by reason of the fact that such
Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys’ fees) and, to
the fullest extent permitted by law, judgments, fines and amounts paid in
settlement actually and reasonably incurred by such Indemnitee in connection
with the defense or settlement of such action, suit or proceeding if such
Indemnitee acted in good faith and in a manner such Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such Indemnitee shall have been adjudged to be liable to the Company
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such Indemnitee is fairly and reasonably entitled
to indemnity for such expenses which the Court of Chancery of the State of
Delaware or such other court shall deem proper.

    
      
         

      

      
        - 2
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    (c) Reviewing
Party.  Notwithstanding the foregoing, (i) the obligations
of the Company under Section 1(a) and (b) shall be subject to the condition that
the Reviewing Party (as described in Section 11(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 1(e) hereof is involved) that an Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) each
Indemnitee acknowledges and agrees that the obligation of the Company to make an
advance payment of expenses to such Indemnitee pursuant to Section 2(a) (an
“Expense Advance”) shall be subject to the condition that, if, when and to the
extent that the Reviewing Party determines that such Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by such Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if such
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that such Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that such Indemnitee would not be permitted to be indemnified under applicable
law shall not be binding and such Indemnitee shall not be required to reimburse
the Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed).  An Indemnitee’s obligation to reimburse the
Company for any Expense Advance shall be unsecured and no interest shall be
charged thereon.  If there has not been a Change in Control (as
defined in Section 11(c) hereof), the Reviewing Party shall be selected by the
Board of Directors, and if there has been such a Change in Control (other than a
Change in Control which has been approved by a majority of the Company’s Board
of Directors who were directors immediately prior to such Change in Control),
the Reviewing Party shall be the Independent Legal Counsel referred to in
Section 1(e) hereof.  If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that an Indemnitee
substantively would not be permitted to be indemnified in whole or in part under
applicable law, such Indemnitee shall have the right to commence litigation
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding.  Any determination by the
Reviewing Party otherwise shall be conclusive and binding on the Company and
such Indemnitee.

     

    (d) Contribution. If the
indemnification provided for in Section 1(a) or (b) above for any reason is held
by a court of competent jurisdiction to be unavailable to an Indemnitee in
respect of any losses, claims, damages, expenses or liabilities referred to
therein, then the Company, in lieu of indemnifying such Indemnitee thereunder,
shall contribute to the amount paid or payable by such Indemnitee as a result of
such losses, claims, damages, expenses or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Indemnitee, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Indemnitee in connection with the action or
inaction which resulted in such losses, claims, damages, expenses or
liabilities, as well as any other relevant equitable
considerations.  The relative fault of the Company and the Indemnitee
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Indemnitee and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.  The
Company and the Indemnitee agree that it would not be just and equitable if
contribution pursuant to this Section 1(d) were determined by pro rata or per
capita allocation or by any other method of allocation which does not take
account of the equitable considerations referred to herein.

    
      
         

      

      
        - 3
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    (e) Change
in Control.  The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control which has been approved
by a majority of the Company’s Board of Directors who were directors immediately
prior to such Change in Control) then, with respect to all matters thereafter
arising concerning the rights of an Indemnitee to payments of expenses under
this Agreement or any other agreement or under the Company’s Certificate of
Incorporation (the “Certificate”), or Bylaws as
now or hereafter in effect, Independent Legal Counsel (as defined in Section
11(d) hereof) shall be selected by the Indemnitee and approved by the Company
(which approval shall not be unreasonably withheld).  Such counsel,
among other things, shall render its written opinion to the Company and the
Indemnitee as to whether and to what extent such Indemnitee would be permitted
to be indemnified under applicable law.  The Company agrees to abide
by such opinion and to pay the reasonable fees of the Independent Legal Counsel
referred to above and to fully indemnify such counsel against any and all
expenses (including attorneys’ fees), claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant
hereto.

     

    (f) Mandatory Payment of
Expenses.  To the extent that an Indemnitee has been successful
on the merits or otherwise in defense of any action, suit or proceeding referred
to in Subsections (a) and (b) of this Section 1, or in defense of any
claim, issue or matter therein, such Indemnitee shall be indemnified against
expenses (including attorneys’ fees) actually and reasonably incurred by such
Indemnitee in connection therewith.

     

    2.  
Expenses;
Indemnification Procedure.

     

    (a) Advancement of
Expenses.  The Company shall advance all expenses incurred by
an Indemnitee in connection with the investigation, defense, settlement or
appeal of any civil or criminal action, suit or proceeding referenced in
Section 1(a) or (b) hereof (but not amounts actually paid in settlement of
any such action, suit or proceeding).  Each Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall ultimately be determined that such Indemnitee is not entitled to be
indemnified by the Company as authorized hereby.  The advances to be
made hereunder shall be paid by the Company to the Indemnitee within
thirty (30) days following delivery of a written request therefor by such
Indemnitee to the Company.

     

    (b) Notice/Cooperation by
Indemnitee.  An Indemnitee shall, as a condition precedent to
his right to be indemnified under this Agreement, give the Company notice in
writing as soon as practicable of any claim made against such Indemnitee for
which indemnification will or could be sought under this
Agreement.  Notice to the Company shall be directed to the President
of the Company at the address shown on the signature page of this Agreement (or
such other address as the Company shall designate in writing to such
Indemnitee).  In addition, the Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
such Indemnitee’s power.

    
      
         

      

      
        - 4
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    (c) Procedure.  Any
indemnification and advances provided for in Section 1 and this
Section 2 shall be made no later than thirty (30) days after receipt of the
written request of an Indemnitee.  If a claim under this Agreement,
under any statute, or under any provision of the Company’s Certificate or Bylaws
providing for indemnification, is not paid in full by the Company within thirty
(30) days after a written request for payment thereof has first been received by
the Company, the Indemnitee may, but need not, at any time thereafter bring an
action against the Company to recover the unpaid amount of the claim and,
subject to Section 13 of this Agreement, such Indemnitee shall also be
entitled to be paid for the expenses (including attorneys’ fees) of bringing
such action.  It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition) that such
Indemnitee has not met the standards of conduct which make it permissible under
applicable law for the Company to indemnify such Indemnitee for the amount
claimed.  However, such Indemnitee shall be entitled to receive
interim payments of expenses pursuant to Subsection 2(a) unless and until
such defense may be finally adjudicated by court order or judgment from which no
further right of appeal exists.  It is the parties’ intention that if
the Company contests an Indemnitee’s right to indemnification, the question of
such Indemnitee’s right to indemnification shall be for the court to decide, and
neither the failure of the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) to have made a determination that indemnification of the
Indemnitee is proper in the circumstances because such Indemnitee has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including it Board of Directors, any committee or
subgroup of the Board of Directors, independent legal counsel, or its
stockholders) that such Indemnitee has not met such applicable standard of
conduct, shall create a presumption that such Indemnitee has or has not met the
applicable standard of conduct. In connection with any determination by any
Reviewing Party or otherwise as to whether the Indemnitee is entitled to be
indemnified hereunder, the burden of proof will be on the Company to establish
that Indemnitee is not so entitled.

     

    (d) Notice to
Insurers.  If, at the time of the receipt of a notice of a
claim pursuant to Section 2(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies.  The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such proceeding
in accordance with the terms of such policies.

     

    (e) Selection of
Counsel.  In the event the Company shall be obligated under
Section 2(a) hereof to pay the expenses of any proceeding against an
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense
of such proceeding, with counsel approved by such Indemnitee, upon the delivery
to such Indemnitee of written notice of its election to do so.  After
delivery of such notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to such
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
such Indemnitee with respect to the same proceeding, provided that (i) such
Indemnitee shall have the right to employ his counsel in any such proceeding at
such Indemnitee’s expense; and (ii) if (A) the employment of counsel
by such Indemnitee has been previously authorized by the Company, (B) such
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and such Indemnitee in the conduct of any such
defense, or (C) the Company shall not, in fact, have employed counsel to
assume the defense of such proceeding, then the fees and expenses of such
Indemnitee’s counsel shall be at the expense of the Company.

    
      
         

      

      
        - 5
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    3.  
Additional
Indemnification Rights; Nonexclusivity.

     

    (a) Scope.  Notwithstanding
any other provision of this Agreement, the Company hereby agrees to indemnify
the Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this
Agreement, the Company’s Certificate, the Company’s Bylaws or by
statute.  In the event of any change, after the date of this
Agreement, in any applicable law, statute, or rule which expands the right of a
Delaware corporation to indemnify a member of its Board of Directors or an
officer, such changes shall be, ipso facto, within the
purview of an Indemnitee’s rights and Company’s obligations, under this
Agreement.  In the event of any change in any applicable law, statute
or rule which narrows the right of a Delaware corporation to indemnify a member
of its Board of Directors or an officer, such changes, to the extent not
otherwise required by such law, statute or rule to be applied to this Agreement
shall have no effect on this Agreement or the parties’ rights and obligations
hereunder.

     

    (b) Nonexclusivity. The
indemnification provided by this Agreement shall not be deemed exclusive of any
rights to which an Indemnitee may be entitled under the Company’s Certificate,
its Bylaws, any agreement, any vote of stockholders or disinterested directors,
the General Corporation Law of the State of Delaware, or otherwise, both as to
action in such Indemnitee’s official capacity and as to action in another
capacity while holding such office.  The indemnification provided
under this Agreement shall continue as to each Indemnitee for any action taken
or not taken while serving in an indemnified capacity even though he may have
ceased to serve in such capacity at the time of any action, suit or other
covered proceeding.

     

    4. 
Primacy of
Indemnification.  The Company hereby acknowledges that one or
more of the Directors now or in the future may have certain rights to
indemnification and/or insurance provided by one or more of the other
Indemnitees and/or certain of their affiliates (collectively, the “Fund
Indemnitors”).  The Company hereby agrees that it is the
indemnitor of first resort (i.e., its obligations to such
Directors are primary and those of the Fund Indemnitors to advance expenses or
to provide indemnification for the same expenses and liabilities incurred by
such Directors are secondary), that it shall be liable to Directors for the full
amount of all indemnifiable amounts to the extent legally permitted regardless
of any indemnification, insurance or benefits or accommodations provided by the
Fund Indemnitors, and that it irrevocably waives any claims against the Fund
Indemnitors for contribution, subrogation or any other recovery of any kind in
respect thereof.  The Company further agrees that no advancement or
payment by the Fund Indemnitors on behalf of any Director with respect to any
claim for which such Director has sought indemnification from the Company shall
affect the foregoing, and that the Fund Indemnitors shall have a right of
contribution and/or be subrogated to the extent of any such advancement or
payment to all of the rights of recovery of each Director against the
Company.  In the event a Fund Indemnitor shall pay, reimburse or
advance to or for the benefit of a Director, any amounts (including attorneys’
fees), judgments, fines or amounts paid in settlement which are indemnifiable by
the Company pursuant to this Agreement or any other agreement between the
Company and Director, then the Company shall reimburse such Fund Indemnitor for
all such amounts paid, reimbursed or advanced by the Fund Indemnitor within
thirty (30) days following delivery of a written request therefor by the
Fund Indemnitor.

    
      
         

      

      
        - 6
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    5. 
Subrogation. Except as provided in
Section 4 above, in the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of contribution
or recovery of an Indemnitee (other than against the Fund Indemnitors) who shall
take, at the request of the Company, all reasonable action necessary to secure
such rights, including the execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.

     

    6. 
Partial
Indemnification.  If an Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by him in the investigation, defense, appeal or settlement of any civil
or criminal action, suit or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify such Indemnitee for the
portion of such expenses, judgments, fines or penalties to which such Indemnitee
is entitled.

     

    7. 
Mutual
Acknowledgement.  The Company and each Indemnitee acknowledge
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise.  The Indemnitees
understand and acknowledge that the Company has undertaken or may be required in
the future to undertake with the Securities and Exchange Commission to submit
the question of indemnification to a court in certain circumstances for a
determination of the Company’s rights under public policy to indemnify an
Indemnitee.

     

    8. 
Officer and
Director Liability Insurance.  The Company shall, from time to
time, make the good faith determination whether or not it is practicable for the
Company to obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the officers and directors of the Company with
coverage for losses from wrongful acts, or to ensure the Company’s performance
of its indemnification obligations under this Agreement.  The Company
will also make commercially reasonable efforts to obtain and maintain liability
insurance applicable to directors, officers or fiduciaries in an amount
determined by the Company’s board of directors. Among other considerations, the
Company will weigh the costs of obtaining such insurance coverage against the
protection afforded by such coverage.  In all policies of director and
officer liability insurance, each Indemnitee shall be named as an insured in
such a manner as to provide such Indemnitee the same rights and benefits as are
accorded to the most favorably insured of the Company’s directors, if such
Indemnitee is a director; or of the Company’s officers, if such Indemnitee is
not a director of the Company but is an officer.  The Company shall
promptly notify Indemnitee in writing of any policy coverage modification,
expiration, lapse, non-renewal or denial of coverage under any such
policy.

    
      
         

      

      
        - 7
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    9. 
Severability.  Nothing
in this Agreement is intended to require or shall be construed as requiring the
Company to do or fail to do any act in violation of applicable
law.  The Company’s inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 9.  If this Agreement or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify an Indemnitee to the full extent permitted
by any applicable portion of this Agreement that shall not have been
invalidated, and the balance of this Agreement not so invalidated shall be
enforceable in accordance with its terms.

     

    10. Exceptions.  Any
other provision herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement:

     

    (a) Claims Initiated by an
Indemnitee.  To indemnify or advance expenses to an Indemnitee
with respect to proceedings or claims initiated or brought voluntarily by the
Indemnitee and not by way of defense, except:  (i) with respect to
actions or proceedings to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Company’s
Certificate or Bylaws now or hereafter in effect relating to proceedings or
claims for indemnifiable events, to the extent permitted by law; (ii) in
specific cases if the Board of Directors has approved the initiation or bringing
of such Claim; or (iii) as otherwise required under Section 145 of the DGCL,
regardless of whether the Indemnitee ultimately is determined to be entitled to
such indemnification, advance expense payment or insurance recovery, as the case
may be; or

     

    (b) Insured Claims.  To
indemnify an Indemnitee for expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) which have been paid directly to such
Indemnitee by an insurance carrier under a policy of officers’ and directors’
liability insurance maintained by the Company.

     

    (c) Claims Under
Section 16(b).  To indemnify any Indemnitee for expenses
and the payment of profits arising from the purchase and sale by such Indemnitee
of securities in violation of Section 16(b) of the Securities Exchange Act
of 1934, as amended, or any similar successor statute.

     

    (d) Claims Excluded Under Section 145 of
the DGCL.  To indemnify an Indemnitee if:  (i) such
Indemnitee did not act in good faith and in a manner reasonably believed to be
in or not opposed to the best interests of the Company or (ii) with respect to
any criminal action or proceeding, such Indemnitee had reasonable cause to
believe the conduct was unlawful or (iii) such Indemnitee shall have been
adjudged to be liable to the Company unless and only to the extent the court in
which such action was brought shall permit indemnification as provided in
Section 145(b) of the DGCL.

     

    
      
         

      

      
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    11. 
Construction of
Certain Phrases.

     

    (a) For
purposes of this Agreement, references to the “Company” shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees, agents or fiduciaries, so that
if Indemnitee is or was a director, officer, employee, agent or fiduciary of
such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, each
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as each
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.

     

    (b) For
purposes of this Agreement, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes
assessed on any Indemnitee with respect to an employee benefit plan; and
references to “serving at the request of the Company” shall include any service
as a director, officer, employee, agent or fiduciary of the Company which
imposes duties on, or involves services by, such director, officer, employee,
agent or fiduciary with respect to an employee benefit plan, its participants,
or its beneficiaries; and if any Indemnitee acted in good faith and in a manner
such Indemnitee reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan, such Indemnitee shall be deemed
to have acted in a manner “not opposed to the best interests of the Company” as
referred to in this Agreement.

     

    (c) For
purposes of this Agreement a “Change in Control” shall be deemed to have
occurred if (i) any “person” (as such term is used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, (A) who is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company’s
then outstanding Voting Securities, increases his beneficial ownership of such
securities by 5% or more over the percentage so owned by such person, or (B)
becomes the “beneficial owner” (as defined in Rule 13d-3 under said Exchange
Act), directly or indirectly, of securities of the Company representing more
than 30% of the total voting power represented by the Company’s then outstanding
Voting Securities, (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the Board of
Directors or nomination for election by the Company’s stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation
other than a merger or consolidation which would result in the Voting Securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least two-thirds (2/3) of the total voting power
represented by the Voting Securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of (in one transaction or a
series of transactions) all or substantially all of the Company’s
assets.

    
      
         

      

      
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    (d) For
purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney
or firm of attorneys, selected in accordance with the provisions of Section 1(e)
hereof, who shall not have otherwise performed services for the Company or any
Indemnitee within the last three (3) years (other than with respect to matters
concerning the right of any Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).

     

    (e) For
purposes of this Agreement, a “Reviewing Party” shall mean any appropriate
person or body consisting of a member or members of the Company’s Board of
Directors or any other person or body appointed by the Board of Directors who is
not a party to the particular claim or proceeding for which an Indemnitee is
seeking indemnification, or Independent Legal Counsel.

     

    (f) For
purposes of this Agreement, “Voting Securities” shall mean any securities of the
Company that vote generally in the election of directors.

     

    12. 
Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original.

     

    13. 
Successors
and Assigns.  This Agreement shall be binding upon the Company
and its successors and assigns, and shall inure to the benefit of each
Indemnitee and each Indemnitee’s estate, heirs, legal representatives and
assigns.

     

    14. 
Attorneys’
Fees.  In the event that any action is instituted by an Indemnitee
under this Agreement to enforce or interpret any of the terms hereof, the
Indemnitee shall be entitled to be paid all expenses incurred by such Indemnitee
with respect to such action, and shall be entitled to the advancement of
expenses with respect to such action.  The foregoing entitlement shall
apply, to the maximum extent permitted under applicable law, regardless of
whether such Indemnitee is ultimately successful in such action, but shall not
apply if, as a part of such action, a court of competent jurisdiction over such
action determines that each of the material assertions made by such Indemnitee
as a basis for such action was not made in good faith or was
frivolous.  In the event of an action instituted by or in the name of
the Company under this Agreement to enforce or interpret any of the terms of
this Agreement, the Indemnitee shall be entitled to be paid all expenses
incurred by such Indemnitee in defense of such action (including costs and
expenses incurred with respect to Indemnitee counterclaims and cross-claims made
in such action), and shall be entitled to the advancement of expenses with
respect to such action, unless as a part of such action the court determines
that each of such Indemnitee’s material defenses to such action were made in bad
faith or were frivolous.

     

    15. 
Notice.  All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed duly given (i) if delivered by hand and
receipted for by the party addressee, on the date of such receipt, or
(ii) if mailed by domestic certified or registered mail with postage
prepaid and properly addressed, on the third business day after the date
postmarked, or (iii) if sent by airmail to a country outside of North America,
on the fifth business day after the date postmarked.  Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.

    
      
         

      

      
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    16. 
Consent to
Jurisdiction.  The Company and Indemnitees each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of
Delaware.

     

    17. 
Choice of
Law.  This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely
within Delaware without regard to the conflict of law principles
thereof.

     

    18. 
Period of
Limitations.  No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company against an
Indemnitee, an Indemnitee’s estate, spouse, heirs, executors or personal or
legal representatives after the expiration of two years from the date of accrual
of such cause of action, and any claim or cause of action of the Company shall
be extinguished and deemed released unless asserted by the timely filing of a
legal action within such two-year period; provided, however, that if
any shorter period of limitations is otherwise applicable to any such cause of
action, such shorter period shall govern.

     

    19. 
Amendment
and Termination.  No amendment, modification, termination or
cancellation of this Agreement shall be effective with respect to any Indemnitee
unless it is in writing signed by such Indemnitee and the Company.  No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.

     

    20. 
Integration
and Entire Agreement.  This Agreement sets forth the entire
understanding between the parties hereto and supersedes and merges all previous
written and oral negotiations, commitments, understandings and agreements
relating to the subject matter hereof between the parties hereto.

     

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    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            COMPANY:

                                          
	 
      
	
                                            PROTALEX,
      INC.,

                                          
	
                                            a
      Delaware corporation

                                          
	 
      
	
                                            By:

                                          	 	 
      
	 
      	
                                            Name:

                                          
	 
      	
                                            Title:

                                          
	 
      
	
                                            INDEMNITEE:

                                          
	 
      	 
      
	
                                             

                                          	 
      	 
      
	
                                            Name:

                                          
	 
      	 
      
	
                                            Address:

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