THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR QUALIFIED UNDER ANY OTHER APPLICABLE SECURITIES LAWS. AS A RESULT, NO SALE OR
TRANSFER OF THIS NOTE MAY BE MADE EXCEPT IN COMPLIANCE WITH OR PURSUANT TO AN
EXEMPTION FROM SUCH LAWS.

PROMISSORY NOTE

 

CONFIDENTIAL DRAFT: FOR DISCUSSION PURPOSES ONLY

 

U.S. $14,600,000 Wilmington, Delaware

 

FOR VALUE RECEIVED, GENEREX BIOTECHNOLOGY CORPORATION, a Delaware corporation
with a business address located at 10102 USA Today Way, Miramar, Florida, 33025
("Debtor") promises to pay to the order of REGENTYS CORPORATION, a Florida
corporation with a business address located at 6135 NW 167th Street, E-15, Miami
Lakes, Florida 33015 (“Lender") the sum of FOURTEEN MILLION SIX HUNDRED THOUSAND
DOLLARS (US $14,600,000) in lawful currency of the United States of America
together with simple interest as specified herein until such obligation is
satisfied in full (the “Note”).

 

 

1.       Rate of Interest. Debtor shall pay interest to Lender on the unpaid
principal balance of the Note hereunder at the rate of four percent (4.00%)
simple interest per annum with interest payable in one lump sum at the end of
the payment term.

 

2.       Payment Schedule. This Note shall be repaid as follows: (i) Three
Million Four Hundred Fifty Thousand Dollars ($3,450,000) to initiate
pre-clinical activities payable on or about January 15, 2019; (ii) Two Million
Dollars ($2,000,000) to initiate patient recruitment activities payable on or
about May 1, 2019; (iii) Three Million Dollars ($3,000,000) to initiate a
first-in-human pilot study payable on or about September 1, 2019; thereafter,
(payments (i)-(iii) are collectively referred to herein as the “Guaranteed
Payments”) (iv) Five Million Dollars ($5,000,000) to initiate a human pivotal
study payable on or about February 1, 2020 and (v) One Million One Hundred Fifty
Thousand Dollars ($1,150,000) to submit a 510(k) de novo submission to the FDA
payable on or about February 1, 2021 plus accrued interest to date (payments
(iv) and (v) are collectively referred to herein as the “Incremental Payments”).

 

3.       Purpose of Loan. With this obligation Debtor is recognizing sums owed
for the purchase of stock in the Corporation (defined herein) from the Lender as
evidenced by that certain Stock Purchase Agreement dated this same date hereof
(the "Purchase Agreement"), pursuant to which Lender has sold to Debtor [_____]
shares of Lender’s Common Stock (“Acquired Shares”). Debtor warrants and
represents to Lender that this loan is for business and commercial purposes.

 

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4.       Grant of Security Interest. Debtor hereby grants to Lender or its Agent
(for the benefit of the Lender) as security for the prompt and complete payment,
observance and performance of the Note, a security interest in all of Debtor’s
right, title and interest in and to the Acquired Shares, purchased by Debtor
through the Purchase Agreement, to be held by Debtor or his assigns, including
but not limited to any trust, and, without limitation, interest, dividends,
distributions, cash, instruments, debt or equity securities and/or proceeds
specifically arising from this stock interest, receivable or otherwise
distributed (“Collateral”). Debtor shall assist Lender to (i) perfect a security
interest and to execute and deliver Uniform Commercial Code (“UCC”) financing
statements; (ii) register Collateral to Lender or Agent for its nominee and
(iii) take such other steps as Lender or Agent may from time to time may
reasonably request to (i) perfect Lender’s or Agent’s security interest or (ii)
pledge Corporation stock, including taking physical possession of share
certificates under Article 8 of the Florida U.C.C..

5.       Representations and Warranties. Debtor warrants and represents that it
has the right, power and authority to execute, deliver and perform this Note, to
incur this obligation, and to grant to Lender or its Agent security interests in
the Collateral. No consent, approval, or authorization of, or declaration of
filing within any governmental authority, and no consent of any other person, is
required in connection with Debtor’s execution, delivery, and performance of
this Note and related documents except for those already duly obtained. All
transaction documents have been duly executed and delivered by Debtor and
constitute a legal, valid and binding obligation of Debtor enforceable against
her in accordance with its terms. Debtor is the sole, direct, legal and
beneficial owner of each of the Pledged Interests that are delivered to Lender
or its Agent pursuant to this Agreement.

 

6.       Default. In the event that the Borrower fails to make full payment when
due of the Guaranteed Payments, Lender, in its sole discretion, shall have the
option to (i) forfeit all of Borrower’s shares OR (ii) demand and receive freely
tradeable common shares of Borrower equivalent to 110% of the value of the
missing Guaranteed Payment with Borrower facilitating the disposition of same in
ordinary trading activities and in accordance with all state and federal
securities laws, rules and regulations and exchange requirements. In the event
any Incremental Payment is not paid when due, (i) Borrower’s ownership interest
in the Purchased Shares shall be automatically and proportionally reduced based
upon the amount of the Purchase Price actually paid and (ii) such Borrower’s
share certificate shall be returned by Borrower to Corporation for reissuance
and failing that, Lender shall be entitled to automatically adjust Borrower’s
ownership interest on the books of the Corporation.

 

7.       Waiver of Default. No waiver by Lender of any default shall be
effective unless in writing, nor operate as a waiver of any other default or of
the same default in the future.

 

8.       Change of Address. Debtor will immediately notify Lender in writing of
any change of address from that shown herein.

 

9.       Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, disregarding any rules
relating to the choice or conflict of laws.

 

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10.       Enforceability. The unenforceability of any specific provision hereof
shall not affect the validity of any other provision hereof.

 

11.       Binding Agreement. All obligations of Debtor hereunder shall bind the
heirs, legal representatives, successors and assigns of Debtor. If there be more
than one Debtor, their liabilities shall be joint and several. All rights of
Lender hereunder shall inure to the benefit of its successors and assigns.

 

12.       Assignment. Neither party may assign this Agreement without the prior
written permission of the other, which shall not be unreasonably withheld,
except upon Debtor’s sale of substantially all of its assets or stock resulting
in a change of control of the Debtor.

 

13.       Entire Agreement. This Note, along with that letter agreement of same
date, constitutes the entire agreement between and among the parties with
respect to the subject matter hereof. There are no verbal understandings,
agreements, representations or warranties not expressly asset forth herein. The
Note shall not be changed orally, but only by writing signed by the parties
hereto.

 

14.       DEBTOR ACKNOWLEDGES ALL OF THE TERMS AND CONDITIONS OF THIS PROMISSORY
NOTE. BY EXECUTION HEREOF, THE UNDERSIGNED OFFICER OF THE DEBTOR HEREBY
CERTIFIES THAT HE IS DULY AUTHORIZED TO EXECUTE THIS PROMISSORY NOTE ON BEHALF
OF THE DEBTOR IN THE CAPACITY STATED BELOW.

 

Executed December __, 2018, at Miami Lakes, Florida

 

GENEREX BIOTECHNOLOGY CORPORATION (DEBTOR)

 

 

By: ____________________________

Name:_____________________________

Its: ____________________________

 

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