131 Columbia Turnpike, Suite 1
Florham Park, New Jersey 07392
October 9, 2015
Niobe Ventures, LLC
410 Park Ave
New York, NY 10022
Re: Agreement to Convert Outstanding Debt
This will confirm the agreement we have reached with respect to the $13,904,336 of outstanding debt due and owing from Protalex, Inc. (“Protalex”) to Niobe Ventures, LLC (“Niobe”) as evidenced by promissory notes issued by Protalex to Niobe (the “Notes”).
Simultaneous with the effectiveness of the Company’s Registration Statement on Form S-1 (SEC File No. 333-206008) with respect to a “Qualified Public Offering”, Niobe hereby unconditionally agrees to convert the full principal amount of the Notes into shares of Protalex common stock, par value $.00001 per share (“Common Stock”), at the price per share that Common Stock is sold to purchasers in a Qualified Public Offering. Upon such conversion, all of the rights and obligations under the credit facility agreements, Notes and security agreements between Protalex and Niobe shall immediately terminate, other than Niobe’s right to the payment of all accrued and unpaid interest under the Notes as provided for below.
A “Qualified Public Offering” shall mean a public offering of Protalex Common Stock yielding gross proceeds to Protalex of at least $7 million.
Within five business days following the closing of a Qualified Public Offering, all accrued and unpaid interest on the Notes shall be paid to Niobe in cash.
Niobe agrees and acknowledges that the shares of Common Stock to be issued to Niobe upon conversion of the Notes as contemplated by this letter agreement (the “Shares”) will be “restricted securities” and that the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any applicable state securities law and that it is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell the Shares otherwise in compliance with applicable federal and state securities laws).
Upon issuance of the Shares as contemplated by this letter agreement, the Shares shall be duly authorized, full paid and nonassessable shares of Common Stock.
In furtherance of the transactions contemplated by this letter agreement, each of Protalex and Niobe, at any time or from time to time after the date hereof, agree to cooperate with each other, and at the request of the other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereto.
In the event that a Qualified Offering is not consummated on or before November 30, 2015 as contemplated by the related underwriting agreement, then this letter agreement and the rights and obligations hereunder shall be null and void, ab initio.
|By:||/s/ Kirk Warshaw|
|Kirk Warshaw, Chief Financial Officer|
AGREED TO AND ACCEPTED:
NIOBE VENTURES, LLC
|By:||/s/ Arnold P. Kling|
Arnold P. Kling, Managing Member