Exhibit 10.1
 
RENEWAL AND MODIFICATION PROMISSORY NOTE
 
 

 
$405,600
 
June 2, 2006
 
 

For value received, OXIS INTERNATIONAL, INC., a Delaware corporation (“Oxis”),
and each of the undersigned subsidiaries of Oxis, jointly and severally, hereby
promise to pay, on or before the Maturity Date (as defined below), to the order
of FAGAN CAPITAL INC., a Texas corporation (the “Lender”), the principal amount
of FOUR HUNDRED FIVE THOUSAND SIX HUNDRED AND 00/100 DOLLARS ($405,600.00), plus
all accrued and unpaid interest thereon plus any other sums owing under or
pursuant to this Note, all upon the terms and conditions set forth below.
 

1.  
Definitions. For purposes of this Note, certain capitalized terms used herein
shall have the following meanings:

(a)  
“Acceleration” is defined later herein.

 

(b)  
“Borrowers” shall mean Oxis and each of the undersigned subsidiaries of Oxis,
individually, collectively, jointly, severally, and interchangeably any, each,
and/or all of them.

(c)  
“Effective Date” shall mean June 2, 2006.

(d)  
“Event of Default” is defined later herein.

(e)  
“Excluded Indebtedness” shall mean the following obligations of the Borrowers:

i.  
The Existing Secured Debt in a principal amount not to exceed at any time
$3,100,000, plus accrued interest thereon, plus

ii.  
Any indebtedness which is specifically subordinated to this Note (and upon which
no payments of principal can be made while any Financial Obligations are
outstanding).

(f)  
“Existing Secured Debt” shall mean the existing loan due by Borrowers to Bridge
Bank N.A. whose address is 2120 El Camino Real, Santa Clara, CA 95050.

(g)  
“Financial Obligations” shall mean, collectively, the principal amount of this
Note, plus all accrued and unpaid interest thereon, plus any other sums owing
under this Note.

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(h)  
“Fundamental Transaction” is defined later herein.

(i)  
“Indebtedness” shall mean all indebtedness of the Borrowers (inclusive of the
Financial Obligations), as the term indebtedness is generally understood;
provided that the term Indebtedness specifically shall also include any trade
debt and accrued expenses which have not been paid within 60 days of the initial
customary due dates specified in the original invoices or other original
documents evidencing the liabilities.

(j)  
“Indemnified Party” is defined later herein.

(k)  
“Lien” shall mean a lien and/or security interest.

(l)  
“Maturity Date” is defined later herein.

(m)  
“Maximum Legal Rate” shall mean the highest legal non-usurious interest rate
permissible by law from time to time under the laws of the State of Texas or the
federal laws of the United States, or the laws of an applicable foreign
jurisdiction in the case of non-U.S. companies, as the case may be, whichever
applicable laws allow the highest rate of interest to be charged on all amounts
due under this Note.

(n)  
“Non-Permitted Event” is defined later herein.

(o)  
“Note” shall mean this Renewal and Modification Promissory Note.

(p)  
“Permitted Lien” shall mean the existing Lien on a certificate of deposit owned
by Borrowers, in a face amount not to exceed at any time $3,100,000, plus
accrued interest, which certificate of deposit secures the Existing Secured
Debt.

 

2.  
Payments Due Under This Note.

(a)  
Unless sooner paid, all principal and accrued interest on this Note shall be due
and payable on June 1, 2007, or earlier upon the occurrence of an Event of
Default (the “Maturity Date”).

(b)  
Interest shall accrue and be payable on the outstanding principal balance until
the Maturity Date at the lesser of eight percent (8%) per annum or the Maximum
Legal Rate.

(c)  
To the fullest extent permitted by applicable law, from and after the Maturity
Date, the unpaid Financial Obligations shall bear interest from such date until
paid in full at the lesser of eighteen percent (18%) per annum or the Maximum
Legal Rate.

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(d)  
Notwithstanding anything else to the contrary herein or in any other agreement
between or among Lender and any Borrower, it is the intent of Borrowers and
Lender to conform to and contract in strict compliance with applicable usury
laws from time to time in effect. All agreements between Lender and Borrowers
are hereby limited by the provisions of this paragraph which shall override and
control all agreements, between or among Lender and any Borrower, whether now
existing or hereafter arising and whether written or oral. In no way, nor in any
event or contingency (including, but not limited to, prepayment, default, demand
for payment, or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged or received under this Note or
otherwise, exceed the maximum non-usurious amount permissible under applicable
law. If, from any possible construction of any document, interest would
otherwise be payable in excess of the maximum non-usurious amount, any such
construction shall be subject to the provisions of this paragraph and such
document shall be automatically reformed and the interest payable shall be
automatically reduced to the maximum non-usurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If Lender shall ever receive anything of value which is characterized
as interest under applicable law and which would apart from this provision be in
excess of the maximum lawful amount of interest, an amount equal to the amount
which would have been excessive interest shall, without penalty, be applied to
the reduction of the Financial Obligations other than accrued interest or shall
be refunded to Borrowers to the extent such amount exceeds the then-outstanding
Financial Obligations other than accrued interest. The right to accelerate
maturity of this Note does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Lender
does not intend to charge or receive any unearned interest in the event of
acceleration. All interest paid or agreed to be paid to Lender shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of this
Note so that the amount of interest on account of this Note does not exceed the
maximum non-usurious amount permitted by applicable law.

(e)  
All interest shall be computed on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) elapsed.

(f)  
All payments on the Financial Obligations are payable in lawful money of the
United States of America in immediately available funds at Fagan Capital Inc.,
5201 North O'Connor Blvd. Suite 440, Irving, Texas 75039, or at such other
office as the Lender may designate.

3.  
Representations and Warranties of Borrowers. Borrowers hereby jointly and
severally represent and warrant to Lender as follows:

(a)  
Oxis is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.

(b)  
Each undersigned subsidiary of Oxis is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction shown in the signature block for each such subsidiary.

(c)  
Excluding Biocheck Inc., a California corporation (“Biocheck”), which is a
51%-owned subsidiary of Oxis and which is not a signatory to this Note as of the
Effective Date, the Borrowers do not have any other direct or indirect
subsidiaries which own any assets.

(d)  
The execution, delivery and performance of this Note by Borrowers are within
Borrowers' corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) Borrowers' charter or by-laws or
(ii) any law or any contractual restriction binding on or affecting Borrowers or
their properties.

(e)  
No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due
execution, delivery and performance by Borrowers of this Note and any other
documents or instruments executed in connection with this Note.

(f)  
This Note constitutes the legal, valid and binding obligation of Borrowers,
enforceable against Borrowers in accordance with its terms.

(g)  
All information and other materials concerning Borrowers which have been made
available by, or on behalf of Borrowers are, when considered as a whole,
complete and correct in all material respects and do not contain any untrue
statement of material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading in light of the
circumstances under which such statements have been made.

(h)  
There is no action, litigation, investigation, or proceeding pending or, to the
knowledge of Borrowers, threatened against Borrowers before any court,
arbitrator, or administrative agency which might result in any material adverse
change in the business or financial condition of Borrowers.

4.  
Representations and Warranties of Lender.  By accepting this Note, Lender agrees
that:

 

(a)  
Lender has full power and authority to hold this Note.

(b)  
This Note is being purchased for investment for Lender’s own account, not as a
nominee or agent, and not with a view to the public resale or distribution
thereof within the meaning of the 1933 Act, and Lender has no present intention
of selling, granting any participation in, or otherwise distributing the same.

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(c)  
Lender has such knowledge and experience in financial or business matters that
Lender is capable of evaluating the merits and risks of an investment in this
Note.

5.  
Covenants of Borrowers. So long as any portion of the Financial Obligations
shall remain outstanding, unless the Lender shall otherwise consent in writing:

(a)  
Borrowers will comply in all material respects with all applicable laws,
ordinances, rules, regulations, orders and other requirements of governmental
authorities;

(b)  
Borrowers will maintain and preserve their existence, rights and privileges,
intellectual property, licenses and franchises and obtain, maintain and preserve
all permits, licenses, authorizations and approvals that are necessary in the
proper conduct of their business;

(c)  
Borrowers will keep adequate and proper records and books of account, in which
complete and correct entries will be made in accordance with generally accepted
accounting principles consistently applied, reflecting all financial matters and
transactions in relation to the business and activities of Borrowers and their
subsidiaries and affiliates;

(d)  
Borrowers shall file, on a timely basis, all Federal, state and local tax
returns and other reports required by applicable law to be filed by Borrowers
and all taxes, assessments and other charges imposed by any governmental
authority upon Borrowers or any property of Borrowers (including, without
limitation, all federal income and social security taxes on employees' wages)
and all such taxes, assessments and other charges which become due and payable
shall be paid when due;

(e)  
Borrowers will not merge or consolidate with any person or entity or sell,
convey, transfer, lease or dispose of (whether in one transaction or in a series
of transactions) all or substantially all of their assets to any person or
entity, or abandon all or substantially all of their assets (any such
transaction, a “Fundamental Transaction”); provided, however, that Borrowers may
consummate a Fundamental Transaction if (i) Borrowers are the surviving entities
and, after the consummation of such Fundamental Transaction, Borrowers will
reaffirm in writing their obligations under this Note if requested to do so by
Lender, (ii) no other provision of this Note would be violated by or after
consummation of such Fundamental Transaction, and (iii) no Non-Permitted Event
shall have occurred either before or after giving effect to such Fundamental
Transaction;

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(f)  
After October 31, 2006, Borrowers shall not incur or maintain total
Indebtedness, other than Excluded Indebtedness, which at any time exceeds a
total of $1,000,000;

(g)  
Other than the Permitted Lien, Borrowers shall not pledge, grant or convey to
any person a Lien in or on any of the assets of Borrowers without the prior
written consent of the Lender. If Borrowers should grant or attempt to grant any
Lien (other than the Permitted Lien) to any creditor, then Borrowers intend that
they shall be deemed hereby to have pledged, granted and conveyed to Lender, to
secure all Financial Obligations, as of the date hereof, a prior Lien in the
collateral subject to such Lien, and the Lien of such other creditor shall be
automatically subordinated to the Lien of Lender;

(h)  
Oxis shall not reduce its ownership of the capital stock of Biocheck or its
voting interest in Biocheck below fifty-one percent (51%);

(i)  
Oxis shall not make any distributions or dividends of any of its cash or assets
to any of its shareholders and shall not redeem or repurchase any of its
outstanding capital stock;

(j)  
Any transaction which Borrowers purport to enter into, which would be in
violation of Borrowers’ covenants in Sections 5(f), 5(g), 5(h), or 5(i) of this
Note shall be null and void and of no force or effect. Borrowers hereby grant
Lender the independent right to enforce this Section 5(j), against Borrowers and
all relevant parties involved in any transaction prohibited by Sections 5(f),
5(g), 5(h), or 5(i) of this Note, at any time that Lender is not satisfied with
Borrowers’ enforcement of this Section 5(j);

(k)  
If, subsequent to the Effective Date, Borrowers increase their ownership of the
capital stock of or voting interest in Biocheck to 80% or greater, Borrowers
will immediately cause Biocheck to enter into this Note as one of the joint and
several obligors hereunder (or at the option of Lender, to enter into a full
guaranty of this Note);

(l)  
Subsequent to the Effective Date, Borrowers will not acquire or form, or
contribute any assets to any existing, acquired or newly formed subsidiary, in
any jurisdiction worldwide, without simultaneously causing each such entity to
become a joint and several obligor under this Note (or at the option of Lender,
to enter into a full guaranty of this Note); and

(m)  
If, subsequent to the Effective Date, Borrowers discover than any of their
existing subsidiaries which are not obligors under this Note, in fact have any
assets whatsoever, Borrowers will immediately cause each such subsidiary which
has assets to become a joint and several obligor under this Note (or at the
option of Lender, to enter into a full guaranty of this Note).

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(n)  
Prior to executing a debt instrument payable to any other person or entity, each
Borrower shall advise such other person or entity of the terms of this Note and
provide each such person or entity a copy of this Note.

(o)  
On the first day of each calendar quarter, beginning October 1, 2006, any one of
the Chief Executive Officer, President, or Chief Financial Officer of Oxis shall
provide Lender with a written statement (the “Quarterly Certification”) whereby
such officer executing the Quarterly Certification certifies that each of Oxis
and the other Borrowers are in compliance with all covenants in Section 5 hereof
and have been in compliance with all such covenants since the Effective Date.

6.  
Payments and Prepayments. Borrowers may, at their option, prepay the principal
amount of this Note, in whole at any time and in part from time to time without
premium or penalty. No check, draft or other instrument shall constitute final
payment unless and until such checks, drafts or instruments have actually been
collected. Any monies received shall be applied first to accrued and unpaid
interest hereunder, second to principal of this Note, and third to any other
Financial Obligations.

7.  
Non-Permitted Event. Any of the following events is a “Non-Permitted Event”:

(a)  
Borrowers shall fail to pay any principal of, or interest on, this Note when due
(whether by scheduled maturity, acceleration, demand or otherwise);

(b)  
Any representation or warranty made by Borrowers in this Note shall have been
incorrect in any material respect when made;

(c)  
Borrowers shall fail to perform or observe any term, covenant or agreement
contained in the Note, including but not limited to the covenants in Section 5
hereof;

(d)  
After October 31, 2006, Borrowers or any of their subsidiaries shall fail to
timely pay when due any payment in any amount (or an acceleration otherwise
occurs) on any Indebtedness (where such Indebtedness is in an outstanding amount
in excess of an aggregate of $300,000).

(e)  
One or more judgments or orders for the payment of money exceeding any
applicable insurance coverage by more than $200,000 in the aggregate shall be
rendered against Borrowers or any of their subsidiaries;

(f)  
Borrowers or any of their subsidiaries shall admit in writing their inability to
pay their debts generally, or shall make a general assignment for the benefit of
creditors;

(g)  
The filing by or against Borrowers of any voluntary or involuntary petition in
bankruptcy or any petition for relief under the federal bankruptcy code or any

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other state or federal law for the relief of debtors; provided, however, with
respect to an involuntary petition in bankruptcy, such petition has not been
dismissed within sixty (60) days after the filing of such petition;

(h)  
The execution by Borrowers of an assignment for the benefit of creditors or the
appointment of a receiver, custodian, trustee or similar party to take
possession of a material portion of Borrowers’ assets or property; or

(i)  
Any provision of this Note shall at any time for any reason be declared to be
null and void by a court of competent jurisdiction, or the validity or
enforceability hereof shall be contested by Borrowers, or a proceeding shall be
commenced by Borrowers seeking to establish the invalidity or unenforceability
hereof, or Borrowers shall deny that they have any liability or obligation
hereunder.

8.  
Event of Default. If any Non-Permitted Event described in Sections 7(a), 7(b),
or 7(i) occurs, then such Non-Permitted Event will, without any further notice,
constitute an “Event of Default” hereunder. If any Non-Permitted Event described
in Sections 7(c), 7(d), 7(e), 7(f), 7(g), or 7(h) occurs and is not cured within
fifteen (15) days after written notice is delivered to any Borrower regarding
such Non-Permitted Event, then such Non-Permitted Event will also constitute an
“Event of Default”. Upon an Event of Default, all Financial Obligations will
become immediately due and payable (“Acceleration”), without the need for any
further action on the part of Lender. Lender will have, in addition to its
rights and remedies under this Note, full recourse against any real, personal,
tangible or intangible assets of Borrowers, and may pursue any legal or
equitable remedies that are available to Lender, and Lender may take any other
actions or remedies available to it under this Note or other applicable law.
Borrowers will not have an opportunity to cure any Event of Default, and prevent
Acceleration, absent written Lender approval at such time, which approval may be
granted or withheld in Lender's sole discretion.

9.  
Amendments and Waivers of Note Provisions. No amendment of any provision of this
Note shall be effective unless it is in writing and signed by Lender, and no
waiver of any provision of this Note, and no consent to any departure herefrom,
shall be effective unless it is in writing and signed by Lender, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No course of dealing between Borrowers and
Lender will operate as a waiver or modification of any party’s rights or
obligations under this Note. No delay or failure on the part of Lender in
exercising any right or remedy under this Note will operate as a waiver of such
right or any other right. A waiver given on one occasion will not be construed
as a bar to, or as a waiver of, any right or remedy on any future occasion.

 

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10.  
Joint and Several Obligation. It is the express intention of Lender and
Borrowers that the obligations under this Note shall be joint and several as to
Borrowers. The fact that this Note is a joint and several obligation of
Borrowers is a material inducement and bargained-for exchange pursuant to which
Lender has agreed to accept this Note. Borrowers agree that they have received
or shall receive a material benefit, whether direct or indirect, from entering
into this Note, and do hereby waive any claim or argument, whether now or
hereafter existing, relating in any way to fraudulent conveyance or lack of
consideration for entering into this Note.

11.  
Other Waivers by Borrowers. Presentment for payment, demand, notice of
nonpayment or nonperformance, protest, notice of protest, notice of intent to
accelerate, notice of acceleration, and all other notices (except only those
notices which are specifically required by this Note), filing of suit and
diligence in collecting this Note or enforcing any of the security herefor are
hereby waived by Borrowers, all makers, sureties, guarantors and endorsers
hereof. This Note shall be the joint and several obligation of Borrowers, all
makers, sureties, guarantors and endorsers, and shall be binding upon them and
their successors and assigns. Borrowers, and any endorsers, or guarantors
hereof, severally waive and relinquish, to the fullest extent permitted by law,
all rights to the benefits of any moratorium, reinstatement, marshaling,
forbearance, valuation, stay, extension, redemption, appraisement, and exemption
now or hereafter provided by the constitution and laws of the United States of
America and of each state thereof and any other jurisdiction, both as to
themselves and in and to all of their property, real and personal, against the
enforcement of the obligations evidenced by this Note.  

12.  
Exercise of Remedies. No failure on the part of the Lender to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.

13.  
Severability; Unenforceability; Deemed Amendment. The invalidity or
unenforceability of any term or provision of this Note will not affect the
validity or enforceability of any other term or provision hereof.  Any provision
of this Note which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or thereof
or affecting the validity or enforceability of such provision in any other
jurisdiction. With respect to any jurisdiction, it is also the intent and
agreement of the Borrowers and Lender that this Note shall be deemed amended by
modifying such invalid or unenforceable provision to the extent necessary to
make it legal and enforceable while preserving its intent or, if that is not
possible, by substituting therefor another provision that is legal and
enforceable and achieves the same objectives.

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14.  
Fees and Expenses. Borrowers hereby agree to reimburse on demand, to Lender all
costs and expenses (including, without limitation, all legal fees and expenses)
incurred by Lender in connection with (i) the preparation, execution, delivery
and administration of this Note, and (ii) the enforcement of Lender's rights,
and the collection of all amounts due, hereunder. Notwithstanding item (i) of
the preceding sentence, in connection with the preparation and execution of this
Note and other documents being executed substantially contemporaneously
herewith, Lender’s costs and expenses to be reimbursed by Borrowers will be
between $5,000 and $7,500, for work performed through the date of execution of
this Note and such other documents (even though the date of execution is
subsequent to the Effective Date).

15.  
Indemnification. Borrowers hereby jointly and severally agree to indemnify,
defend, and hold harmless, to the fullest extent permitted by law, the Lender
and each of its directors, officers, shareholders, employees, agents, affiliates
and advisors (each, an “Indemnified Party”) from and against any and all claims,
damages, losses, liabilities and expenses (including, without limitation, all
legal fees and expenses) which may be incurred by or asserted against Lender or
any other Indemnified Party in connection with or arising out of any
investigation, litigation or proceeding related to or arising out of this Note
or any other related document or instrument or any transaction contemplated
hereby or thereby (but in any case excluding any such claims, damages, losses,
liabilities or expenses incurred solely by reason of the gross negligence or
willful misconduct of any such Indemnified Party). The obligations of Borrowers
under this Section shall survive the payment in full of this Note.

16.  
Exchange Rights. At any time on or before the fifth day after the repayment of
the Financial Obligations in full, if any Borrower enters into an agreement with
any party other than Lender, to issue debt, equity, or equity-linked securities
of such Borrower (“Subsequently Issued Instruments”), including without
limitation debt, preferred stock, warrants, options, convertible securities or
Common Stock, then at Lender’s sole option and discretion and within thirty (30)
days after Borrowers provide Lender with full details of the terms of the
Subsequently Issued Instruments, Lender may both (or either) (i) exchange the
remaining Financial Obligations due under this Note into such Subsequently
Issued Instruments on the most favorable terms provided to any purchaser and/or
(ii) separately purchase up to $405,600 of such Subsequently Issued Instruments
on the most favorable terms provided to any purchaser.

17.  
Assignment. This Note is freely transferable and assignable by Lender, provided
that such transfer is made in compliance with all applicable state and federal
laws. Any reference to Lender herein will be deemed to refer to any subsequent
transferee of this Note at such time as such transferee acquires title to this
Note. This Note may not be assigned or delegated by Borrowers, whether by
voluntary assignment or transfer, operation of law, merger or otherwise.

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18.  
No Impairment. Borrowers will not, by amendment of any of Borrowers’ charters,
by-laws or similar governing documents, or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issuance or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms and covenants to be
observed or performed hereunder by Borrowers, but will at all times in good
faith assist in the carrying out and abidance of all the terms and covenants of
this Note and in the taking of all such action as may be necessary or
appropriate in order to protect the intent of all the terms and covenants of
this Note.

19.  
Notices. All notices and other communications provided for hereunder shall be in
writing and shall be mailed, telecopied or delivered, if to Lender, to Fagan
Capital Inc., 5201 North O'Connor Blvd. Suite 440, Irving, Texas 75039,
facsimile no.: 972-869-4066; and if to Borrowers, to Oxis International Inc.,
323 Vintage Park Drive, Suite B, Foster City, California 94404, facsimile no.:
650-573-1969 attention: Steven Guillen; or at such other addresses as shall be
designated in a written notice complying as to delivery with the terms of this
paragraph. All such demands, notices, and other communications shall be
effective (i) if mailed, three days after being deposited in the mails with
postage prepaid and sent via certified mail, return receipt requested, (ii) if
telecopied, when received, and (iii) if delivered, upon delivery.

20.  
Headings.  The headings of this Note have been inserted for convenience of
reference only and shall in no way restrict or otherwise modify any of the terms
or provisions hereof or affect in any way the meaning or interpretation of this
Note.

21.  
Pronouns and Plurals. Whenever the context may require, any pronoun used in this
Note shall include the corresponding masculine, feminine, or neuter forms, and
the singular form of nouns, pronouns, and verbs shall include the plural and
vice versa.

22.  
Further Action. Borrowers shall execute all documents, provide all information,
and take or refrain from taking all actions as may be necessary or appropriate
to comply with the terms and covenants of this Note.

23.  
Binding Effect. The terms and covenants of this Note shall be binding upon
Borrowers and their, and enforceable by Lender and its, respective executors,
administrators, successors, personal represent-atives, heirs, and assigns.

24.  
Replacement of Note. On receipt by Borrowers of evidence of the loss, theft,
destruction or mutilation of this Note, Borrowers shall execute and deliver, in
lieu thereof, a new Note of like tenor.

25.  
Entire Agreement. This Note constitutes the entire agreement and understanding
between Borrower and Lenders relating to the subject matter hereof and
supersedes all prior representations, inducements, promises, projections,
endorsements, premises, agreements, memoranda, communications, negotiations,
discussions, understandings, and arrangements, whether oral, written, or
inferred, between the parties relating to the subject matter hereof.

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26.  
Counterparts. This Note may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The parties intend that faxed versions or pdf
versions of signature pages will be enforceable without presentation of the
manually executed signature pages.

27.  
Jurisdiction. BORROWERS HEREBY (A) IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF ANY TEXAS STATE OR FEDERAL COURT SITTING IN DALLAS, TEXAS IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, (B) WAIVE ANY
DEFENSE BASED ON DOCTRINES OF VENUE OR FORUM NON CONVENIENS, OR SIMILAR RULES OR
DOCTRINES, (C) IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH AN ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE OR FEDERAL COURT, AND
(D) IRREVOCABLY AGREE THAT THIS NOTE IS PERFORMABLE IN DALLAS COUNTY, TEXAS.

28.  
Jury Trial. BORROWERS AND LENDER MUTUALLY WAIVE ANY RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE.

29.  
Governing Law. This Note shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of Texas applicable to contracts
made and to be performed therein without consideration as to choice of law.

30.  
Renewal and Modification. This Note renews, modifies, amends, and extends that
certain Promissory Note, dated March 31, 2006, payable by Borrowers to Lender.

IN WITNESS WHEREOF, the undersigned have executed this Note as of the date first
set forth above.

OXIS INTERNATIONAL, INC., a Delaware corporation
By: /s/ Steven T. Guillen    
Name: Steven T. Guillen  
Title: President & Chief Executive Officer

OXIS HEALTH PRODUCTS, INC., a Delaware corporation
By:____________________________  
Name:__________________________
Title:___________________________

OXIS THERAPEUTICS, INC., a Delaware corporation
By:____________________________  
Name:__________________________
Title:___________________________

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OXIS ACQUISITION CORPORATION., a Delaware corporation
By:____________________________  
Name:__________________________
Title:___________________________

OXIS ISLE OF MAN LIMITED, an Isle of Man corporation
By:____________________________  
Name:__________________________
Title:___________________________

OXIS INSTRUMENTS, INC., a Pennsylvania corporation
By:____________________________  
Name:__________________________
Title:___________________________

AGREED TO AND ACCEPTED:

FAGAN CAPITAL, INC.

By: /s/ William S. Fagan  
William S. Fagan, President