Document:

Unassociated Document

    THE
      SECURITIES REPRESENTED BY THIS WARRANT 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.

     

    THE
      SHARES REPRESENTED BY THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON
      TRANSFERABILITY AND RESALE PURSUANT TO A PURCHASE AGREEMENT, A COPY OF WHICH
      MAY
      BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

    

      
        	
                No.
                  2006 - ____

              	
                Date:
                  ___________, 2006

              

      

    

     

    WARRANT
      TO PURCHASE COMMON STOCK

     

    OF

     

    PROTALEX,
      INC.

     

    This
      certifies that, for value received, ______________ (“Holder”)
      is
      entitled, subject to the terms and conditions set forth below, to purchase
      from
PROTALEX,
      INC.,
      a
      Delaware corporation (the “Company”),
      ________ shares of the Company’s Common Stock (the “Warrant
      Shares”)
      at an
      exercise price of $3.85 per share (the “Exercise
      Price”).
      The
      number, character and Exercise Price of the Warrant Shares are subject to
      adjustment as provided below and all references to “Warrant Shares” and
“Exercise Price” herein shall be deemed to include any such adjustment or series
      of adjustments. This Warrant is issued pursuant to Section
      2
      of that
      certain Warrant and Common Stock Purchase Agreement between the Company and
      certain “Purchasers” thereunder, dated as of _______________, 2006 (the
“Purchase
      Agreement”),
      pursuant to which such Purchasers including the Holder, purchase this Warrant
      and Common Stock shares of the Company. The holder of this Warrant is subject
      to
      certain restrictions, and entitled to certain rights, set forth under the
      Purchase Agreement and as set forth in the Registration Rights Agreement, dated
      on even date herewith (the “Registration
      Rights Agreement”).
      Capitalized terms used and not otherwise defined herein shall have the meanings
      set forth in the Purchase Agreement

     

    This
      Warrant is one of a duly authorized series of Warrants of the Company (which
      are
      identical except for the variations necessary to express the identification
      numbers, names of the holder, number of shares issuable upon exercise thereof
      and Warrant issue dates) issued in connection with the Purchase Agreement and
      designated for reference purposes as “Series
      2006 Common Stock Warrants.”
      The term
“Common
      Stock Warrant”
as
      used
      herein shall also mean this Common Stock Warrant, and any Common Stock Warrants
      delivered in substitution or exchange therefor as provided herein.

     

    This
      Common Stock Warrant is subject to the following terms and
      conditions:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1. Term
      of Common Stock Warrant.
      Subject
      to the terms and conditions set forth herein, this Common Stock Warrant shall
      be
      exercisable, in whole or in part, on any Trading Day during the period (the
      “Exercise
      Period”)
      commencing on the Closing Date (as defined in the Purchase Agreement) and ending
      on the fifth anniversary date of the Closing Date.

     

    2. Exercise
      of Common Stock Warrant.

     

    (a) Cash
      Exercise.
      This
      Common Stock Warrant may be exercised by the Holder during the Exercise Period
      by (i) the surrender of this Common Stock Warrant to the Company (if exercised
      in full), with the Notice of Exercise annexed hereto duly completed and executed
      on behalf of the Holder, at the office of the Company (or such other office
      or
      agency of the Company as it may designate by notice in writing to the Holder
      at
      the address of the Holder appearing on the books of the Company) and (ii) the
      delivery of payment to the Company, for the account of the Company, by cash,
      wire transfer of immediately available funds to a bank account specified by
      the
      Company, or by certified or bank cashier’s check, in an amount equal to the
      Exercise Price multiplied by the number of Warrant Shares for which this Common
      Stock Warrant is being exercised as specified in the Notice of Exercise, such
      payment to be made in lawful money of the United States of America. The Company
      agrees that such Warrant Shares shall be deemed to be issued to the Holder
      as
      the record holder of such Warrant Shares as of the close of business on the
      date
      on which this Common Stock Warrant shall have been exercised and surrendered
      and
      payment made for the Warrant Shares as aforesaid. A stock certificate or
      certificates for the Warrant Shares specified in the Notice of Exercise shall
      be
      delivered to the Holder as promptly as practicable, and in any event within
      three (3) Trading Days (the “Warrant
      Share Delivery Date”),
      thereafter. Notwithstanding anything herein to the contrary, the Holder shall
      not be required to physically surrender this Warrant to the Company until the
      Holder has purchased all of the Warrant Shares available hereunder and the
      Warrant has been exercised in full, in which case, the Holder shall surrender
      this Warrant to the Company for cancellation within 3 Trading Days of the date
      the final Notice of Exercise is delivered to the Company. Partial exercises
      of
      this Warrant resulting in purchases of a portion of the total number of Warrant
      Shares available hereunder shall have the effect of lowering the outstanding
      number of Warrant Shares purchasable hereunder in an amount equal to the
      applicable number of Warrant Shares purchased. The Holder and the Company shall
      maintain records showing the number of Warrant Shares purchased and the date
      of
      such purchases. The Company shall deliver any objection to any Notice of
      Exercise Form within 1 Business Day of receipt of such notice. The Holder and
      any assignee, by acceptance of this Warrant, acknowledge and agree that, by
      reason of the provisions of this paragraph, following the purchase of a portion
      of the Warrant Shares hereunder, the number of Warrant Shares available for
      purchase hereunder at any given time may be less than the amount stated on
      the
      face hereof. At the request of the Holder and upon delivery by the Holder of
      this Warrant to the Company if this Common Stock Warrant shall have been
      exercised only in part and has not otherwise expired, the Company shall, at
      the
      time of delivery of the stock certificate or certificates, deliver to the Holder
      a new Common Stock Warrant evidencing the right to purchase the remaining
      Warrant Shares, which new Common Stock Warrant shall in all other respects
      be
      identical with this Common Stock Warrant. No adjustments shall be made on
      Warrant Shares issuable on the exercise of this Common Stock Warrant for any
      cash dividends or distributions paid or payable to holders of record of any
      capital stock of the Company prior to the date as of which the Holder shall
      be
      deemed to be the record holder of such Warrant Shares. Issuance of certificates
      for Warrant Shares shall be made without charge to the Holder for any issue
      or
      transfer tax or other incidental expense in respect of the issuance of such
      certificate, all of which taxes and expenses shall be paid by the Company,
      and
      such certificates shall be issued in the name of the Holder or in such name
      or
      names as may be directed by the Holder (subject to compliance with applicable
      state and federal securities laws and the Purchase Agreement involving transfers
      of securities).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) Net
      Issue Exercise.
      In lieu
      of exercising this Common Stock Warrant pursuant to Section 2(a)
      above,
      during the Exercise Period, the Holder may elect to convert this Common Stock
      Warrant or any portion hereof into Warrant Shares, the aggregate value of which
      shares shall be equal to the value of this Common Stock Warrant or portion
      thereof being so converted. The conversion right may be exercised by the Holder
      by surrender of this Common Stock Warrant to the Company, with a duly executed
      Notice of Exercise marked to reflect the Holder’s intention to exercise the
      conversion right hereunder, in which event the Company shall issue to the Holder
      a number of shares computed using the following formula:

     

    X
      =
Y
      (A-B)

    A

     

    
      	 	
              Where

            	
              X
                =

            	
              the
                number of shares to be issued to Holder under this Section
                2(b)
                upon exercise of the conversion rights under this Section
                2(b);

            

    

     

    
      	 	 	
              Y
                =

            	
              the
                number of Warrant Shares otherwise purchasable under this Common
                Stock
                Warrant upon a cash exercise or, if only a portion of the Common
                Stock
                Warrant is exercised, the portion of the Common Stock Warrant being
                exercised is such Warrant were issued pursuant to a cash exercise
                (as
                adjusted to the date of such
                calculation);

            

    

     

    
      	 	 	
              A
                =

            	
              the
                VWAP on the Trading Day immediately preceding the date of such
                election.

            

    

     

    
      	 	 	
              B
                =

            	
              the
                Exercise Price (as adjusted to the date of such
                calculation).

            

    

     

    (c) Deemed
      Exercise.
      This
      Common Stock Warrant shall be deemed to have been exercised immediately prior
      to
      the close of business on the date of its surrender for exercise as provided
      above, and the person entitled to receive the shares of Warrant Shares issuable
      upon such exercise shall be treated for all purposes as the holder of record
      of
      such shares as of the close of business on such date. As promptly as practicable
      on or after such date and in any event on or prior to the Warrant Share Delivery
      Date, the Company at its expense shall issue and deliver to the person or
      persons entitled to receive the same a certificate or certificates for the
      number of shares issuable upon such exercise. In the event that this Common
      Stock Warrant is exercised in part, the Company at its expense will execute
      and
      deliver a new Common Stock Warrant of like tenor upon delivery to the Company
      of
      the old Common Stock Warrant exercisable for the number of shares for which
      this
      Common Stock Warrant may then be exercised.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) Holder’s
      Restrictions.
      A
      Holder shall not have the right to exercise any portion of this Warrant,
      pursuant to Section 2(c) or otherwise, to the extent that after giving effect
      to
      such issuance after exercise as set forth on the applicable Notice of Exercise,
      such Holder (together with such Holder’s Affiliates, and any other person or
      entity acting as a group together with such Holder or any of such Holder’s
      Affiliates), as set forth on the applicable Notice of Exercise, would
      beneficially own in excess of the Beneficial Ownership Limitation (as defined
      below).  For purposes of the foregoing sentence, the number of shares of
      Common Stock beneficially owned by such Holder and its Affiliates shall include
      the number of shares of Common Stock issuable upon exercise of this Warrant
      with
      respect to which such determination is being made, but shall exclude the number
      of shares of Common Stock which would be issuable upon (A) exercise of the
      remaining, nonexercised portion of this Warrant beneficially owned by such
      Holder or any of its Affiliates and (B) exercise or conversion of the
      unexercised or nonconverted portion of any other securities of the Company
      (including, without limitation, any other Warrants) subject to a limitation
      on
      conversion or exercise analogous to the limitation contained herein beneficially
      owned by such Holder or any of its affiliates.  Except as set forth in the
      preceding sentence, for purposes of this Section 2(d), beneficial ownership
      shall be calculated in accordance with Section 13(d) of the Exchange Act and
      the
      rules and regulations promulgated thereunder, it being acknowledged by a Holder
      that the Company is not representing to such Holder that such calculation is
      in
      compliance with Section 13(d) of the Exchange Act and such Holder is solely
      responsible for any schedules required to be filed in accordance therewith.
      To
      the extent that the limitation contained in this Section 2(d) applies, the
      determination of whether this Warrant is exercisable (in relation to other
      securities owned by such Holder together with any Affiliates) and of which
      a
      portion of this Warrant is exercisable shall be in the sole discretion of a
      Holder, and the submission of a Notice of Exercise shall be deemed to be each
      Holder’s determination of whether this Warrant is exercisable (in relation to
      other securities owned by such Holder together with any Affiliates) and of
      which
      portion of this Warrant is exercisable, in each case subject to such aggregate
      percentage limitation, and the Company shall have no obligation to verify or
      confirm the accuracy of such determination. In addition, a determination as
      to
      any group status as contemplated above shall be determined in accordance with
      Section 13(d) of the Exchange Act and the rules and regulations promulgated
      thereunder. For purposes of this Section 2(d), in determining the number of
      outstanding shares of Common Stock, a Holder may rely on the number of
      outstanding shares of Common Stock as reflected in (x) the Company’s most recent
      Form 10-QSB or Form 10-KSB, as the case may be, (y) a more recent public
      announcement by the Company or (z) any other notice by the Company or the
      Company’s Transfer Agent setting forth the number of shares of Common Stock
      outstanding.  Upon the written or oral request of a Holder, the Company
      shall within two Trading Days confirm orally and in writing to such Holder
      the
      number of shares of Common Stock then outstanding.  In any case, the number
      of outstanding shares of Common Stock shall be determined after giving effect
      to
      the conversion or exercise of securities of the Company, including this Warrant,
      by such Holder or its Affiliates since the date as of which such number of
      outstanding shares of Common Stock was reported. The “Beneficial
      Ownership Limitation”
shall
      be 4.99% of the number of shares of the Common Stock outstanding immediately
      after giving effect to the issuance of shares of Common Stock issuable upon
      exercise of this Warrant. The Beneficial Ownership Limitation provisions of
      this
      Section 2(d) may be waived by such Holder, at the election of such Holder,
      upon
      not less than 61 days’ prior notice to the Company to change the Beneficial
      Ownership Limitation to 9.99% of the number of shares of the Common Stock
      outstanding immediately after giving effect to the issuance of shares of Common
      Stock upon exercise of this Warrant, and the provisions of this Section 2(d)
      shall continue to apply. Upon such a change by a Holder of the Beneficial
      Ownership Limitation from such 4.99% limitation to such 9.99% limitation, the
      Beneficial Ownership Limitation may not be further waived by such Holder. The
      provisions of this paragraph shall be construed and implemented in a manner
      otherwise than in strict conformity with the terms of this Section 2(d) to
      correct this paragraph (or any portion hereof) which may be defective or
      inconsistent with the intended Beneficial Ownership Limitation herein contained
      or to make changes or supplements necessary or desirable to properly give effect
      to such limitation. The limitations contained in this paragraph shall apply
      to a
      successor holder of this Warrant.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e) Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Company fails
      to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Shares pursuant to an exercise on or before the
      2nd
      Trading
      Day following the Warrant Share Delivery Date, and if after such date the Holder
      is required by its broker to purchase (in an open market transaction or
      otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
      Holder of the Warrant Shares which the Holder anticipated receiving upon such
      exercise (a “Buy-In”),
      then
      the Company shall (I) pay the greater of (1) the accruing partial liquidating
      damages pursuant to Section 6.5 of the Purchase Agreement or (2) cash to the
      Holder the amount by which (x) the Holder’s total purchase price (including
      brokerage commissions, if any) for the shares of Common Stock so purchased
      exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares
      that the Company was required to deliver to the Holder in connection with the
      exercise at issue times (B) the price at which the sell order giving rise to
      such purchase obligation was executed, and (II) at the option of the Holder,
      either reinstate the portion of the Warrant and equivalent number of Warrant
      Shares for which such exercise was not honored or deliver to the Holder the
      number of shares of Common Stock that would have been issued had the Company
      timely complied with its exercise and delivery obligations hereunder. For
      example, if the Holder purchases Common Stock having a total purchase price
      of
      $11,000 to cover a Buy-In with respect to an attempted exercise of shares of
      Common Stock with an aggregate sale price giving rise to such purchase
      obligation of $10,000, under clause (I)(2) of the immediately preceding sentence
      the Company shall be required to pay the Holder $1,000. Notwithstanding anything
      to the foregoing in this Section 2(e), the Holder shall not be entitled to
      recover damages under this Section 2(e) if it elects to receive or otherwise
      receives damages pursuant to Section 6 of the Purchase Agreement related to
      the
      same share transfer or delivery event. The Holder shall provide the Company
      written notice indicating the amounts payable to the Holder in respect of the
      Buy-In and, upon request of the Company, evidence of the amount of such loss.
      Nothing herein shall limit a Holder’s right to pursue any other remedies
      available to it hereunder, at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief with respect to the
      Company’s failure to timely deliver certificates representing shares of Common
      Stock upon exercise of the Warrant as required pursuant to the terms
      hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f) Rescission
      Rights.
      If the
      Company fails to cause its transfer agent to transmit to the Holder a
      certificate or certificates representing the Warrant Shares by the 2nd
      Trading
      Day following the Warrant Share Delivery Date, then the Holder will have the
      right to rescind such exercise.

     

    (g) DTC
      Delivery.
      After
      the Effective Date, certificates for shares purchased hereunder shall be
      transmitted by the transfer agent of the Company to the Holder by crediting
      the
      account of the Holder’s prime broker with the Depository Trust Company through
      its Deposit Withdrawal Agent Commission (“DWAC”)
      system
      if the Company is a participant in such system.

     

    3. No
      Fractional Shares or Scrip.
      No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Common Stock Warrant. In lieu of any fractional share
      to
      which the Holder would otherwise be entitled, the Company shall make a cash
      payment equal to the Exercise Price multiplied by such fraction (after
      aggregating all shares issuable upon exercise thereof).

     

    4. Replacement
      of Common Stock Warrant.
      On
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Common Stock Warrant and, in the case of
      loss,
      theft or destruction, on delivery of an indemnity agreement reasonably
      acceptable to the Company or, in the case of mutilation, on surrender and
      cancellation of this Common Stock Warrant, the Company at its expense shall
      execute and deliver, in lieu of this Common Stock Warrant, a new Common Stock
      Warrant of like tenor and amount. Subject to compliance with Section 6(d) below,
      this Warrant may be divided or combined with other Warrants upon presentation
      hereof at the aforesaid office of the Company, together with a written notice
      specifying the names and denominations in which new Warrants are to be issued,
      signed by the Holder or its agent or attorney. As to any transfer which may
      be
      involved in such division or combination, the Company shall execute and deliver
      a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
      or combined in accordance with such notice.

     

    5. Rights
      of a Stockholder.
      Subject
      to Section
      9
      of this
      Common Stock Warrant, the Holder shall not be entitled to vote or receive
      dividends or be deemed the holder of Warrant Shares for any purpose, and nothing
      contained herein shall be construed to confer upon the Holder, as such, any
      of
      the rights of a stockholder of the Company or any right to vote for the election
      of directors or upon any matter submitted to stockholders at any meeting
      thereof, or to give or withhold consent to any corporate action (whether upon
      any recapitalization, issuance of stock, reclassification of stock, change
      of
      par value, or change of stock to no par value, consolidation, merger, conveyance
      or otherwise) or to receive notice of meetings, or to receive dividends or
      subscription rights or otherwise until this Common Stock Warrant shall have
      been
      exercised as provided herein and then only as to the shares for which this
      Common Stock Warrant has been so exercised.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6. Transfer
      of Common Stock Warrant.

     

    (a) Common
      Stock Warrant Register.
      The
      Company will maintain a register (the “Common
      Stock Warrant Register”)
      containing the names and addresses of the Holder or Holders. Any Holder of
      this
      Common Stock Warrant or any portion thereof may change such Holder’s address as
      shown on the Common Stock Warrant Register by written notice to the Company
      requesting such change. Any notice or written communication required or
      permitted to be given to the Holder may be delivered or given by mail to such
      Holder as shown on the Common Stock Warrant Register and at the address shown
      on
      the Common Stock Warrant Register. Until this Common Stock Warrant is
      transferred on the Common Stock Warrant Register of the Company, the Company
      may
      treat the Holder as shown on the Common Stock Warrant Register as the absolute
      owner of this Common Stock Warrant for all purposes, notwithstanding any notice
      to the contrary.

     

    (b) Common
      Stock Warrant Agent.
      The
      Company may, by written notice to the Holder, appoint an agent for the purpose
      of maintaining the Common Stock Warrant Register referred to in Section
      6(a)
      above,
      issuing the Common Stock Warrant Shares or other securities then issuable upon
      the exercise of this Common Stock Warrant, exchanging this Common Stock Warrant,
      replacing this Common Stock Warrant or any or all of the foregoing. Thereafter,
      any such registration, issuance, exchange or replacement, as the case may be,
      shall be made at the office of such agent.

     

    (c) Transferability
      and Nonnegotiability of Common Stock Warrant.
      This
      Common Stock Warrant may not be transferred or assigned in whole or in part
      without compliance with all applicable federal and state securities laws by
      the
      transferor and the transferee (including the delivery of investment
      representation letters and legal opinions (which
      opinion shall be in form, substance and scope customary for opinions of counsel
      in comparable transactions) to the effect that such transfer may be made
      without
      registration under the
      Securities Act,
      if such
      are requested by the Company) and compliance with the requirements set forth
      in
Section
      6(d)
      below.
      Subject to the provisions of this Common Stock Warrant, title to this Common
      Stock Warrant may be transferred by endorsement (by the Holder executing the
      Assignment Form annexed hereto) and delivery in the same manner as a negotiable
      instrument transferable by endorsement and delivery.

     

    (d) Exchange
      of Common Stock Warrant Upon a Transfer.
      On
      surrender of this Common Stock Warrant for exchange, properly endorsed on the
      Assignment Form and subject to the provisions of this Common Stock Warrant
      with
      respect to compliance with the Act and applicable state securities laws, and
      with the limitations on assignments and transfers contained in this Section
      6,
      the Company at its expense shall issue to or on the order of the Holder a new
      Common Stock Warrant or Common Stock Warrants of like tenor, in the name of
      the
      Holder or as the Holder (on payment by the Holder of any applicable transfer
      taxes) may direct, for the number of shares issuable upon exercise
      hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e) Compliance
      with Securities Laws.

     

    (i) The
      Holder, by acceptance hereof, acknowledges that this Warrant and the Warrant
      Shares to be issued upon exercise hereof are being acquired solely for the
      Holder’s own account and not as a nominee for any other party and that the
      Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant
      Shares to be issued upon exercise hereof except under circumstances that will
      not result in a violation of the Securities Act or any applicable state
      securities laws (this representation and warranty not limiting the Holders
      right
      to sell the Warrants and Warrant Shares pursuant to a registration statement
      or
      otherwise in compliance with applicable federal and state securities laws).
      Holder hereby represents and warrants that such Holder is an “accredited
      investor” as such term is defined under Regulation D promulgated by the
      Securities and Exchange Commission. Upon exercise of this Common Stock Warrant,
      the Holder shall, if requested by the Company, confirm in writing, in a form
      satisfactory to the Company, that Holder remains an accredited investor and
      the
      Warrant Shares so purchased are being acquired solely for the Holder’s own
      account and not as a nominee for any other party and not with a view toward
      distribution or resale (this representation and warranty not limiting the
      Holders right to sell the Warrants and Warrant Shares pursuant to a registration
      statement or otherwise in compliance with applicable federal and state
      securities laws). Any transferee of this Common Stock Warrant shall represent
      the same as condition to such transfer and any subsequent exercise thereof.
      

     

    (ii) This
      Common Stock Warrant and all Warrant Shares issued upon exercise hereof shall
      be
      stamped or imprinted with legends substantially as required by the Purchase
      Agreement.

     

    (f) Reservation
      of Stock.
      The
      Company covenants that during the Exercise Period, the Company will reserve
      from
      its authorized and unissued Warrant Shares a sufficient number of shares to
      provide for the issuance of Warrant Shares upon the exercise of this Common
      Stock Warrant. The Company further covenants that all shares issued upon the
      exercise of rights represented by this Common Stock Warrant and payment of
      the
      Exercise Price, in the amount and otherwise all as set forth herein, shall
      be
      free from all taxes, liens and charges in respect of the issue thereof (other
      than taxes in respect of any transfer occurring contemporaneously or otherwise
      specified herein). Except and to the extent as waived or consented to by the
      Holder, the Company shall not by any action, including, without limitation,
      amending its certificate of incorporation or through any reorganization,
      transfer of assets, consolidation, merger, dissolution, issue or sale of
      securities or any other voluntary action, avoid or seek to avoid the observance
      or performance of any of the terms of this Warrant, but will at all times in
      good faith assist in the carrying out of all such terms and in the taking of
      all
      such actions as may be necessary or appropriate to protect the rights of Holder
      as set forth in this Warrant against impairment. Without limiting the generality
      of the foregoing, the Company will (a) not increase the par value of any Warrant
      Shares above the amount payable therefor upon such exercise immediately prior
      to
      such increase in par value, (b) take all such action as may be necessary or
      appropriate in order that the Company may validly and legally issue fully paid
      and nonassessable Warrant Shares upon the exercise of this Warrant, and (c)
      use
      commercially reasonable efforts to obtain all such authorizations, exemptions
      or
      consents from any public regulatory body having jurisdiction thereof as may
      be
      necessary to enable the Company to perform its obligations under this
      Warrant.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7. Notices.
      All
      notices required or permitted hereunder to be given shall be in writing and
      shall be telecopied or mailed by registered or certified mail, postage prepaid,
      or otherwise delivered by hand or by messenger, 

     

    

      
        	 	
                If
                  to the Company:

              	
                145
                  Union Square Drive

              
	 	 	New Hope,
                Pennsylvania
                18938
	 	 	Attn:
                Marc L. Rose
	 	 	 
	 	With a copy
                to:	Reed Smith
                LLP
	 	 	Two Embarcadero
                Center,
                Suite 2000
	 	 	San Francisco,
                CA
                94111
	 	 	Attn: Donald
                C.
                Reinke
	 	 	 
	 	If to any
                of the
                Holders:	The address
                set forth
                on the Company’s records.

      

    

     

    8. Amendments.
      Any
      term of this Common Stock Warrant hereunder may be amended, waived or terminated
      (either generally or in a particular instance and either retroactively or
      prospectively) only with the written consent of the Company, and the holders
      of
      at least a majority in interest of the Warrant Shares then exercisable under
      all
      Series 2006 Common Stock Warrants together with all Purchasers Consents. Any
      amendment, waiver or termination effected in accordance with this Section
      8
      shall be
      binding upon the Company, each of the Holders and each transferee of the Common
      Stock Warrants (and of any securities into which this Warrant is convertible).
      The Holder acknowledges that by the operation of this Section
      8,
      the
      holders of a majority in interest of the Warrant Shares then exercisable under
      all Series 2006 Common Stock Warrants together with Purchasers Consents will
      have the right and power to diminish or eliminate certain rights of the Holder
      under this Warrant. The foregoing shall not limit or otherwise affect the
      Holder’s right to waive any of such Holder’s rights hereunder with respect to
      itself without obtaining the consent of any other holders of Series 2006 Common
      Stock Warrants.

     

    9. Adjustments.
      The
      Exercise Price and the number of shares purchasable hereunder are subject to
      adjustment from time to time as follows:

     

    (a) Reclassification,
      etc.
      If the
      Company, at any time while this Common Stock Warrant or any portion thereof
      is
      exercisable and remains outstanding and unexpired, by reclassification of
      securities or otherwise, shall change any of the securities as to which purchase
      rights under this Common Stock Warrant exist into the same or a different number
      of securities of any other class or classes, this Common Stock Warrant shall
      thereafter represent the right to acquire such number and kind of securities
      as
      would have been issuable as the result of such change with respect to the
      securities that were subject to the purchase rights under this Common Stock
      Warrant immediately prior to such reclassification or other change and the
      Exercise Price therefor shall be appropriately adjusted, all subject to further
      adjustment as provided in this Section
      9.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) Split,
      Subdivision or Combination of Shares.
      If the
      Company, at any time while this Common Stock Warrant or any portion thereof
      is
      exercisable and remains outstanding and unexpired, shall split, subdivide or
      combine the outstanding shares of Warrant Shares into a different number of
      shares of Warrant Shares, then (i) in the case of a split or subdivision, the
      Exercise Price for such securities shall be proportionately decreased and the
      Warrant Shares issuable upon exercise of this Common Stock Warrant shall be
      proportionately increased, and (ii) in the case of a combination, the Exercise
      Price for such Warrant Shares shall be proportionately increased and the
      securities issuable upon exercise of this Common Stock Warrant shall be
      proportionately decreased. If the Warrant Shares are convertible into any other
      stock or securities of the Company, then if all of the outstanding Warrant
      Shares should be converted at any time prior to the Expiration Date into shares
      of the Company’s Common Stock or other stock or securities of the Company then
      (i) this Common Stock Warrant immediately shall become exercisable for that
      number of shares of such stock or securities (subject to further adjustment
      as
      herein provided) which would have been received if this Common Stock Warrant
      had
      been exercised in full and the Warrant Shares received thereupon had been
      simultaneously converted immediately prior to such event, (ii) the Exercise
      Price hereunder shall be appropriately adjusted and (iii) all references herein
      to Warrant Shares shall be automatically deemed amended to be references to
      the
      stock or securities into which the Warrant Shares was converted.

     

    (c) Adjustments
      for Dividends in Stock or Other Securities or Property.
      If,
      while this Common Stock Warrant or any portion hereof is exercisable and remains
      outstanding and unexpired, the holders of Common Stock and/or Common Stock
      Equivalents shall have received, or, on or after the record date fixed for
      the
      determination of eligible stockholders, shall have become entitled to receive,
      without payment therefor, Common Stock, Common Stock Equivalents, indebtedness,
      assets (including cash dividends) or any rights, options or warrants to
      subscribe for, purchase or otherwise acquire any of the foregoing by way of
      dividend or distribution (collectively, “Additional
      Consideration”),
      then
      and in each case, this Common Stock Warrant shall represent the right to
      acquire, in addition to the number of shares of the security receivable upon
      exercise of this Common Stock Warrant, and without payment of any additional
      consideration therefor, the Additional Consideration that the Holder would
      hold
      on the date of such exercise had it been the holder of record of such capital
      stock as of the date on which the holders of Common Stock and/or Common Stock
      Equivalents received or became entitled to receive such Additional
      Consideration.

     

    (d) Merger,
      Consolidation or Sale of Assets.
      If at
      any time or from time to time there shall be a capital reorganization of the
      Common Stock (other than a subdivision, combination, reclassification or
      exchange of shares provided for elsewhere in this Section
      9)
      or a
      merger or consolidation of the Company with or into any other person or entity,
      or the sale of all or substantially all of the Company’s assets and properties
      to any other person or entity, or any tender offer or exchange offer (whether
      by
      the Company or another Person) is completed pursuant to which holders of Common
      Stock are permitted to tender or exchange their shares for other securities,
      cash or property, then as a part of such reorganization, merger, consolidation
      or sale, provision shall be made so that the Holder shall thereafter be entitled
      to receive upon the exercise of this Warrant, the number of shares of stock
      or
      other securities or property of the Company, or of the successor corporation
      resulting from such reorganization, merger, consolidation or sale, to which
      a
      holder of the number of shares of Common Stock issuable upon the exercise of
      this Warrant would have received if this Warrant had been exercised immediately
      prior to such reorganization, merger, consolidation or sale. As a condition
      to
      any merger, consolidation, or sale of substantially all of the assets of the
      Company, the Company shall require that the surviving corporation assume in
      writing the obligations pursuant to this Warrant and insuring that this Warrant
      (or any such replacement security) will be similarly adjusted upon any
      subsequent transaction analogous to a Fundamental Transaction. If the Company
      is
      acquired all or in part in a cash transaction at a per share price less than
      the
      product of three and the Exercise Price, the Holder of this Warrant may elect
      to
      receive, in its sole discretion at the time of such acquisition, cash equal
      to
      the value of this Warrant as determined in accordance with the Black-Scholes
      option pricing formula.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10. Adjustment
      of Exercise Price for Dilutive Issuances.
      The
      Exercise Price shall be subject to adjustment from time to time as
      follows:

     

    (a) For
      purposes of this Section
      10,
      the
      following definitions shall apply:

     

    (i) “Excluded
      Stock”
shall
      mean:

     

    (1) all
      shares of Common Stock issued and outstanding on the date of this Warrant and
      all shares of Common Stock issued after the date of this Warrant pursuant to
      Sections 2.1 and 2.2 of the Purchase Agreement and all shares of Common Stock
      issued or issuable upon the exercise or conversion of any Common Stock
      Equivalents outstanding on the date of this Warrant (provided that the terms
      of
      such Common Stock Equivalents are not modified or changed except as otherwise
      contemplated by the Purchase Agreement) and all shares of Common Stock issued
      or
      issuable upon the exercise of this Warrant and all other Series 2006 Common
      Stock Warrants;

     

    (2) all
      shares of Common Stock or other securities hereafter issued or issuable to
      officers, directors, employees or scientific advisors of the Company pursuant
      to
      any employee or consultant stock offering, plan or arrangement approved by
      the
      majority of the members of the Board of Directors of the Company;

     

    (3) all
      shares of Common Stock or other securities hereafter issued in connection with
      or as consideration for the acquisition or licensing of technology approved
      by
      the majority of the members of the Board of Directors of the Company;
      and

     

    (4) all
      shares of Common Stock or other securities issued in connection with equipment
      leasing or equipment financing arrangements approved by the majority of members
      of the Board of Directors of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii) “Options”
means
      options to purchase or rights to subscribe for Common Stock (other than Excluded
      Stock).

     

    (iii) “Purchase
      Rights”
means
      Options and Common Stock Equivalents.

     

    (iv) “Dilutive
      Issuance”
means
      an issuance of Purchase Rights or Common Stock, which is not Excluded Stock,
      without consideration or for an effective consideration per share less than
      the
      then applicable Exercise Price. “Dilutive Issuance” excludes any stock dividend,
      subdivision or split-up, stock combination, dividend or transaction described
      in
Section
      9.

     

    (b) If
      the
      Company issues or is deemed to issue any Common Stock or Purchase Rights in
      a
      Dilutive Issuance, the applicable Exercise Price in effect after each such
      issuance shall be reduced, and only reduced, to a price equal to the following:
      the applicable Exercise Price in effect immediately prior to the Dilutive
      Issuance (the “Old
      Exercise Price”)
      multiplied by the quotient obtained by dividing:

     

    (i) an
      amount
      equal to the sum of (x) the total number of shares of Common Stock outstanding
      immediately prior to the Dilutive Issuance, plus (y) the number of shares of
      Common Stock which the consideration received by the Company upon the Dilutive
      Issuance would purchase at such Old Exercise Price, by 

     

    (ii) the
      total
      number of shares of Common Stock outstanding immediately after the Dilutive
      Issuance.

     

    (c) For
      purposes of any adjustment of the applicable Exercise Price pursuant to
Section
      10(b)
      above,
      the following provisions shall be applicable:

     

    (i) In
      the
      case of the issuance of Common Stock for cash, the consideration shall be deemed
      to be the amount of cash paid therefor.

     

    (ii) In
      the
      case of the issuance of Common Stock for a consideration in whole or in part
      other than cash, the consideration other than cash shall be deemed to be the
      fair market value thereof as determined in good faith and in the exercise of
      reasonable judgment by the Board of Directors of the Company, in accordance
      with
      generally accepted accounting principles; provided,
      however,
      that if
      at the time of such determination, the Company’s Common Stock is traded in the
      over-the-counter market or on a national or regional securities exchange, such
      fair market value as determined by the Board of Directors of the Company shall
      not exceed the aggregate“Current
      Market Price” (as
      defined below) of the shares of Common Stock being issued.

     

    (iii) In
      the
      case of the issuance of Purchase Rights in a Dilutive Issuance:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (1) the
      aggregate maximum number of shares of Common Stock deliverable upon exercise
      of
      Options shall be deemed to have been issued at the time such Options were issued
      and for a consideration equal to the consideration (determined in the manner
      provided in Section
      10(c)(i)
      and
(ii)
      above),
      if any, received by the Company upon the issuance of such Options plus the
      minimum purchase price provided for in such Options;

     

    (2) the
      aggregate maximum number of shares of Common Stock deliverable upon conversion
      or exercise of or exchange for any Common Stock Equivalents shall be deemed
      to
      have been issued at the time such Common Stock Equivalents were issued and
      for a
      consideration equal to the consideration received by the Company for any such
      Common Stock Equivalents (excluding any cash received on account of accrued
      interest or accrued dividends), plus the minimum additional consideration,
      if
      any, to be received by the Company upon the conversion or exchange of such
      Common Stock Equivalents (determined in the manner provided in Section
      10(c)(i)
      and
(ii)
      above);
      and

     

    (3) on
      any
      change in the number of shares of Common Stock deliverable upon exercise of
      any
      such Purchase Rights or on any change in the minimum purchase price of such
      Purchase Rights, other than a change resulting from the antidilution provisions
      of such Purchase Rights, the applicable Exercise Price shall forthwith be
      readjusted to such Exercise Price as would have been obtained had the adjustment
      made upon (x) the issuance of such Purchase Rights not exercised, converted
      or
      exchanged prior to such change, as the case may be, been made upon the basis
      of
      such change or (y) the issuance of options or rights related to such securities
      not converted or exchanged prior to such change, as the case may be, been made
      upon the basis of such change.

     

    (4) on
      the
      expiration of any Purchase Rights, the applicable Exercise Price shall forthwith
      be readjusted to such Exercise Price as would have obtained had the adjustment
      made upon the issuance of such Purchase Right been made upon the basis of the
      issuance of only the number of shares of Common Stock actually issued upon
      the
      exercise of such Purchase Rights, provided the Company gives each Purchaser
      10
      Trading Days prior notice of such adjustment.

     

    (d) All
      calculations under this Section
      10
      shall be
      made to the nearest cent or to the nearest one hundredth (1/100) of a share,
      as
      the case may be.

     

    (e) For
      the
      purpose of any computation pursuant to this Section
      10,
      the
“Current
      Market Price”
at
      any
      date of one share of Common Stock, shall be deemed to be the VWAP on the
      preceding Trading Day; provided,
      however,
      that if
      the Common Stock is not traded in such manner that the quotations referred
      to in
      this Section
      10(e)
      are
      available for the period required hereunder, Current Market Price shall be
      determined in good faith and in the exercise of reasonable judgment by the
      Board
      of Directors of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f) No
      adjustment in the Exercise Price need be made if such adjustment would result
      in
      a change in the Exercise Price of less than $0.01. Any adjustment of less than
      $0.01 which is not made shall be carried forward and shall be made at the time
      of and together with any subsequent adjustment which, on a cumulative basis,
      amounts to an adjustment of $0.01 or more in the Conversion Price.

     

    11. No
      Impairment.
      The
      Company will not, by any voluntary action, avoid or seek to avoid the observance
      or performance of any of the terms to be observed or performed hereunder by
      the
      Company, but will at all times in good faith assist in the carrying out of
      all
      the provisions of Sections
      9
      and
10
      and in
      the taking of all such action as may be necessary or appropriate in order to
      protect the rights of the Holder against impairment.

     

    12. Notice
      of Adjustments and Record Dates.
      Whenever the Exercise Price or the number of shares of Common Stock purchasable
      hereunder shall be adjusted pursuant to Sections
      9
      or
10
      (or otherwise), the Company shall promptly notify the Holder in writing of
      each
      adjustment or readjustment of the Exercise Price hereunder and the number of
      shares of Common Stock (or any shares of stock or other securities which may
      be)
      issuable upon the exercise of this Warrant, Such notice shall state the
      adjustment or readjustment and show in reasonable detail the facts on which
      that
      adjustment or readjustment is based. Upon (i) any taking by the Company of
      a
      record of the holders of any class of securities for the purpose of determining
      the holders thereof who are entitled to receive any dividend or other
      distribution, or (ii) any acquisition or other capital reorganization of the
      Company, any reclassification or recapitalization of the capital stock of the
      Company, any merger or consolidation of the Company with or into any other
      person or entity, or any sale of all or substantially all of the assets or
      any
      voluntary or involuntary dissolution, liquidation or winding up of the Company,
      the Company shall mail to each holder of this Warrant at least fifteen (15)
      days
      prior to the record date specified therein a notice specifying (A) the date
      on
      which any such record is to be taken for the purpose of such dividend or
      distribution and a description of such dividend or distribution, (B) the date
      on
      which any such acquisition, reorganization, reclassification, transfer,
      consolidation, merger, asset sale, dissolution, liquidation or winding up is
      expected to become effective, and (C) the date, if any, that is to be fixed
      as
      to when the holders of record of Common Stock (or other securities) shall be
      entitled to exchange their shares of Common Stock (or other securities) for
      securities or other property deliverable upon such acquisition, reorganization,
      reclassification, transfer, consolidation, merger, asset sale, dissolution,
      liquidation or winding up.

     

    13. Miscellaneous.

     

    (a) Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be determined in accordance with the provisions of the
      Purchase Agreement.

     

    (b) Restrictions
      on Warrant Shares.
      The
      Holder acknowledges that the Warrant Shares acquired upon the exercise of this
      Warrant, if not registered, will have restrictions upon resale imposed by state
      and federal securities laws

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) Nonwaiver
      and Expenses.
      No
      course of dealing or any delay or failure to exercise any right hereunder on
      the
      part of Holder shall operate as a waiver of such right or otherwise prejudice
      Holder’s rights, powers or remedies, notwithstanding the fact that all rights
      hereunder terminate on the Termination Date. If either party willfully and
      knowingly fails to comply with any provision of this Warrant, which results
      in
      any material damages to the other party, such party shall pay to the other
      party
      such amounts as shall be sufficient to cover any costs and expenses including,
      but not limited to, reasonable attorneys’ fees, including those of appellate
      proceedings, incurred by such party in collecting any amounts due pursuant
      hereto or in otherwise enforcing any of its rights, powers or remedies
      hereunder. Notwithstanding the foregoing sentence, any amount owed by Holder
      pursuant to this Section 13(c) shall be offset by the Exercise Price paid to
      the
      Company in connection with the incident by the Holder, and the amount owed
      to
      the Company by Holder pursuant to this Section 13(c) shall not exceed the amount
      of net proceeds raised from the sale of the Warrant Shares used in connection
      with the incident.

     

    (d) Notices.
      Any
      notice, request or other document required or permitted to be given or delivered
      one party by the other party hereunder shall be delivered in accordance with
      the
      notice provisions of the Purchase Agreement.

     

    (e) Limitation
      of Liability.
      No
      provision hereof, in the absence of any affirmative action by Holder to exercise
      this Warrant to purchase Warrant Shares, and no enumeration herein of the rights
      or privileges of Holder, shall give rise to any liability of Holder for the
      purchase price of any Common Stock or as a stockholder of the Company, whether
      such liability is asserted by the Company or by creditors of the
      Company.

     

    (f) Remedies.
      Holder,
      in addition to being entitled to exercise all rights granted by law, including
      recovery of damages, will be entitled to specific performance of its rights
      under this Warrant. The Company agrees that monetary damages would not be
      adequate compensation for any loss incurred by reason of a breach by it of
      the
      provisions of this Warrant and hereby agrees to waive and not to assert the
      defense in any action for specific performance that a remedy at law would be
      adequate.

     

    (g) Successors
      and Assigns.
      Subject
      to applicable securities laws, the Purchase Agreement and Section 6(e) of this
      Warrant, this Warrant and the rights and obligations evidenced hereby shall
      inure to the benefit of and be binding upon the successors of the Company and
      the successors and permitted assigns of Holder. Subject to the foregoing, the
      provisions of this Warrant are intended to be for the benefit of all Holders
      from time to time of this Warrant and shall be enforceable by any such Holder
      or
      holder of Warrant Shares.

     

    (h) Expiration.
      This
      Common Stock Warrant shall be exercisable as provided for herein, except that
      in
      the event that the expiration date of this Common Stock Warrant shall fall
      on a
      day other than a Trading Day, the expiration date for this Common Stock Warrant
      shall be extended to 5:00 p.m. Eastern standard time on the first Trading Day
      following such day.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i) Severability.
      Wherever possible, each provision of this Warrant shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      of this Warrant shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provisions or the remaining
      provisions of this Warrant.

     

    (j) Headings.
      The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant.

     

    IN
      WITNESS WHEREOF, PROTALEX, INC. has caused this Common Stock Warrant to be
      executed as of the date first above written.

     

    Number
      of
      Warrant Shares: _________

     

    COMPANY:

     

    PROTALEX,
      INC.

    a
      Delaware corporation 

    

    By: ______________________________

    Steven
      H. Kane 

    President
      and Chief Executive Officer

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOTICE
      OF EXERCISE

     

    To: PROTALEX,
      INC.

     

    (1) The
      undersigned hereby:

     

    
      	 	____	 	
              elects
                to purchase __________ shares of Warrant Shares (as defined in the
                attached Common Stock Warrant) of PROTALEX, INC. pursuant to the
                terms of
                the attached Common Stock Warrant, and tenders herewith payment of
                the
                purchase price for such shares in full;
                or

            

    

     

    
      	 	____	 	
              elects
                to exercise the conversion right features under Section
                2(b)
                of
                the attached Common Stock Warrant with respect to __________ shares
                of
                Warrant Shares of PROTALEX, INC. pursuant to the terms of such Common
                Stock Warrant.

            

    

     

    (2) In
      exercising this Common Stock Warrant, the undersigned hereby confirms and
      acknowledges that the shares of Warrant Shares (and any securities issuable
      upon
      conversion thereof) are being acquired solely for the account of the undersigned
      and not as a nominee for any other party, and that the undersigned will not
      offer, sell or otherwise dispose of any such shares of Warrant Shares except
      under circumstances that will not result in a violation of the Securities Act
      of
      1933, as amended, or any applicable state securities laws (this representation
      and warranty not limiting such Purchaser’s right to sell the Securities pursuant
      to the Registration Statement or otherwise in compliance with applicable federal
      and state securities laws).

     

    (3) Please
      issue a certificate or certificates representing said shares of Warrant Shares
      in the name of the undersigned:

     

     

    
      	 	 	 
	 	(Name)	 
	 	 	 
	 	 	 
	 	(Name)	 

     

    (4) Please
      issue a new Common Stock Warrant for the unexercised portion of the attached
      Common Stock Warrant in the name of the undersigned:

    
       

      
        	 	 	 	 
	 	 	(Name)	 
	 	 	 	 
	 	 	 	 
	(Date)	 	(Signature)	 

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ASSIGNMENT
      FORM

     

    FOR
      VALUE
      RECEIVED, the undersigned registered owner of this Common Stock Warrant hereby
      sells, assigns and transfers unto the Assignee named below all of the rights
      of
      the undersigned under this Common Stock Warrant, with respect to the number
      of
      shares of Warrant Shares (as defined in the this Common Stock Warrant) set
      forth
      below:

     

    
      	
              Name
                of Assignee

            	
              Address

            	
              No.
                of Shares

            
	 	 	 

    

     

    and
      does
      hereby irrevocably constitute and appoint the Secretary of the Company to make
      such transfer on the books of PROTALEX, INC. maintained for such purpose, with
      full power of substitution in the premises.

     

    The
      undersigned also represents that, by assignment hereof, the Assignee
      acknowledges that this Common Stock Warrant and the shares of stock to be issued
      upon exercise hereof or conversion thereof are being acquired for the account
      of
      the Assignee and that the Assignee will not offer, sell or otherwise dispose
      of
      this Common Stock Warrant or any shares of stock to be issued upon exercise
      hereof or conversion thereof except under circumstances which will not result
      in
      a violation of the Securities Act of 1933, as amended, or any applicable state
      securities laws (this representation and warranty not limiting such Purchaser’s
      right to sell the Securities pursuant to the Registration Statement or otherwise
      in compliance with applicable federal and state securities laws). Further,
      the
      Assignee has acknowledged that upon exercise of this Common Stock Warrant,
      the
      Assignee shall, if requested by the Company, confirm in writing, in a form
      satisfactory to the Company, that the shares of stock so purchased are being
      acquired not with a view toward distribution or resale.

     

    Dated:
      __________

    
       

      
        	 	 	 
	 	Signature of Holder	 

    

     

    The
      undersigned hereby agrees to be bound by the terms of the attached Common Stock
      Warrant on this __ day of __________, 200_.

     

     

    ASSIGNEE:
      

    

     

      
        

      

    

    [Name]

    

     

    
      
        

      
By:      

     

    
      
        

      
Title:Exhibit
      4.3

     

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement is entered into as of the 22nd
      day of
      December 2004 (the “Agreement”),
      by
      and between NaturalNano, Inc., a Delaware corporation (the “Company”),
      and
      Technology Innovations, LLC, a limited liability company (the “Purchaser“).

    

    WITNESSETH
      :

    

    WHEREAS,
      the
      Company has offered and sold to Purchaser (the “Offering”)
      an
      aggregate of 10,000,000 shares of the Company’s common stock, par value $.001
      per share (the “Common
      Stock”);
      and

    

    WHEREAS,
      in
      connection with the Offering and as a condition thereto, the Company will
      provide to Purchaser certain limited “piggy-back” registration rights related to
      the Common Stock and as set forth in this Agreement.

    

    NOW, THEREFORE,
      in
      consideration of the foregoing premises and the mutual covenants and agreements
      hereinafter contained, and for other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, intending to be
      legally bound, the parties hereto hereby agree as follows:

    

    1.        Registration
      Rights.
      The
      Company, currently a privately owned corporation, intends to use its reasonable
      best efforts to effect a transaction whereby the Company will become a publicly
      owned corporation, either by facilitating an initial public offering, merging
      with or being acquired by an existing public company, or by other similar and
      satisfactory means. At such time as the Company becomes a public company, it
      will use its reasonable best efforts to cause to be prepared and filed with
      the
      Securities and Exchange Commission (“SEC”),
      a
      registration statement on an appropriate form (the “Registration
      Statement”)
      that
      is available pursuant to the Securities Act of 1933, as amended (the
Securities
      Act”),
      that
      will register the Common Stock and permit the offer and re-sale from time to
      time of such Common Stock in accordance with the applicable laws, rules and
      regulations promulgated under the Securities Act. The Company will also use
      its
      reasonable best efforts to cause the Registration Statement to become effective
      as promptly as reasonably practicable thereafter, and to keep the Registration
      Statement continuously effective for a period of one year after the Registration
      Statement first becomes effective.

    

    (a)      No
      Firm Commitment. The rights granted hereunder to Purchaser are not intended
      to
      be guaranteed and nothing herein is to be construed as the Company making a
      firm
      commitment to file, or cause to be filed with the SEC, a Registration Statement
      related to the Common Stock at any time in the future. 

    

    (b)      Limitations.
      The
      registration rights granted hereunder are limited in that the Company will
      use
      its reasonable best efforts to file a Registration Statement for the Common
      Stock, or in the event the Company or a successor files a registration statement
      under the Securities Act for the public sale of its securities, Purchasers
      will
      have the limited right to include, or “piggyback” the shares, or a portion
      thereof, of the Common Stock in the Registration Statement. However, any
      investment banker and/or underwriter of any such public offering may severely
      restrict or completely negate the ability of Purchasers to include their shares
      in any such Registration Statement and public offering. Thus, the right to
      piggyback shares into a Registration Statement will be subject to and contingent
      upon approval by such investment banker and/or underwriter.

    

    (c)      Reasonable
      Efforts.
      The
      Company will use all reasonable best efforts to cause the managing underwriter
      or underwriters of a proposed underwritten offering to permit the Common Stock,
      or a portion thereof, to be included in a piggy-back Registration Statement,
      which will be included on the same terms and conditions as any similar
      securities of the Company or its successor or any other security holder included
      therein, and to permit the sale or other disposition of such Common Stock in
      accordance with the intended method of distribution thereof.

    

    (d)      Priority
      in Registrations.
      If a
      piggy-back Registration Statement is an underwritten primary registration on
      behalf of the Company or a successor, and the managing underwriters advise
      the
      Company or the successor in writing that in their opinion the number of shares
      of Common Stock requested to be included on a secondary basis in such
      registration exceeds the number which can be sold in such offering without
      materially and adversely affecting the marketability of such primary or
      secondary offering, then the Company or successor will have the right to limit
      the number of shares of Common Stock to be included in the Registration
      Statement.

    

    
      
         

      

      
         

        
          

        

      

      
         

        -2-

      

    

     

    2.    
  Registration
      Expenses.
      All
      expenses incident to the Company’s performance of or compliance with this
      Agreement including, without limitation, all registration and filing fees,
      costs
      and expenses of compliance with securities or blue sky laws, printing expenses,
      messenger and delivery expenses, and fees and disbursements of counsel for
      the
      Company and all independent certified public accountants, underwriters
      (excluding discounts and commissions, which will be paid by the sellers of
      the
      Common Stock) and other persons retained in connection with the Registration
      Statement, will be borne by the Company or its successor, and the Company or
      its
      successor will pay its internal expenses (including, without limitation, all
      salaries and expenses of its employees performing legal or accounting duties),
      the expense of any annual audit or quarterly review, the expense of any
      liability insurance and the expenses and fees for listing the securities to
      be
      registered on each securities exchange on which similar securities issued by
      the
      Company are then listed or on the OTC Bulletin Board or other trading system.
      

    

    3.        Transfer
      of Registration Rights.
      The
      rights granted to the Purchaser under this Agreement may be transferred and/or
      assigned to another party or entity, provided
      that
      nothing contained herein shall be deemed to permit an assignment, transfer
      or
      disposition of the Common Stock in violation of this Agreement or any applicable
      law. Any transferee to whom rights under this Agreement are transferred will,
      as
      a condition to such transfer, deliver to the Company a written instrument by
      which such transferee agrees to be bound by the obligations imposed upon the
      Purchaser under this Agreement to the same extent as if such transferee were
      a
      Purchaser hereunder.

    

    4.        Change
      of Control.
      In the
      event the Company enters into a transaction that results in a change of control
      of the Company, or whereby the Company is acquired by or merges with another
      entity that is deemed a public company, then the Company will transfer all
      of
      its obligations, rights and duties set forth herein to such other controlling
      party or entity.

     

    5.        Recapitalizations,
      Exchanges, etc.
      The
      provisions of this Agreement shall apply to the full extent set forth herein
      with respect to any and all securities into which the Common Stock may be
      converted, exchanged or substituted in any recapitalization or other capital
      reorganization by the Company or any successor, and any and all equity
      securities of the Company or any successor or assign of the Company (whether
      by
      merger, consolidation, sale of assets or otherwise) which may be issued in
      respect of, in conversion of, in exchange for or in substitution of, the Common
      Stock and will be appropriately adjusted for any stock dividends, splits,
      reverse splits, combinations, recapitalizations and the like occurring after
      the
      date hereof. The Company shall cause any successor or assign (whether by merger,
      consolidation, sale of assets or otherwise) to enter into a new registration
      rights agreement with the Purchaser on terms substantially the same as this
      Agreement as a condition of any such transaction.

    

    6.        No
      Inconsistent Agreements.
      The
      Company has not and shall not enter into any agreement with respect to its
      securities that is inconsistent with the rights granted to the Purchaser in
      this
      Agreement or grant any additional registration rights to any person or with
      respect to any securities that are prior in right to or inconsistent with the
      rights granted in this Agreement. 

    

    7.        Amendments
      and Waivers.
      The
      provisions of this Agreement may be amended and the Company may take action
      herein prohibited, or omit to perform any act herein required to be performed
      by
      it, if, but only if, the Company has obtained the written consent of Purchaser
      

    

    8.        Severability.
      Whenever possible, each provision of this Agreement shall be interpreted in
      such
      manner as to be effective and valid under applicable law, but if any provision
      of this Agreement shall be held to be prohibited by or invalid under applicable
      law, such provision shall be ineffective only to the extent of such prohibition
      or invalidity, without invalidating the remainder of such provision or the
      remaining provisions of this Agreement.

    

    9.        Counterparts.
      This
      Agreement may be executed in one or more counterparts each of which shall be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

    

    
      
         

      

      
         

        
          

        

      

      
         

        -3-

      

    

     

    10.      Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York, without regard to the conflicts of laws rules or
      provisions.

    

    11.      Successors
      and Assigns; Third Party Beneficiaries.
      This
      Agreement and all of the provisions hereof shall be binding upon and inure
      to
      the benefit of the parties hereto, each subsequent holder of the Common Stock
      and their respective successors and assigns and executors , administrators
      and
      heirs. Holders of the Common Stock are intended third party beneficiaries of
      this Agreement and this Agreement may be enforced by such holders.

    

    12.      Entire
      Agreement.
      This
      Agreement sets forth the entire agreement and understanding between the parties
      as to the subject matter hereof and merges and supersedes all prior discussions,
      agreements and understandings of any and every nature among them.

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Registration Rights Agreement to be duly
      executed as of the date and year first written above.

    

    
      	
               

            	
               

            	
               

            
	
               

            	
              NATURALNANO,
                INC.

            
	
               

               

            	
               

               

            	
               

               

            
	
               

            	
              By:  

            	
              /s/
                Michael D. Riedlinger      
                
                

              

              Name:
                Michael D. Riedlinger

            
	
               

            	
              
                Title: President

              

            

    

     

    
      	 	
               

            	
               

            
	
               

            	
              TECHNOLOGY
                INNOVATIONS, LLC.

            
	
               

               

            	
               

               

            	
               

               

            
	
               

            	
              By:  

            	
               
                /s/ Michael L. Weiner      
                
                

              

              Name:
                Michael L. Weiner

            
	
               

            	
              Title:
                Manager

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