LEES PHARMACEUTICAL (HK) LIMITED/REGENERX BIOPHARMACEUTICALS, INC. PROPOSED LICENSING TRANSACTION BINDING TERM SHEET *HIGHLY CONFIDENTIAL* March 16, 2012

Lee’s Pharmaceutical (HK) Limited (“Lee’s” or the “Company”)

and

RegeneRx Biopharmaceuticals, Inc. (“RegeneRx”)

US$ 200,000 payable upon execution of this binding Term Sheet.

US$ 200,000 payable upon execution of the definitive License Agreement (the “License Agreement”)

Sharing of all

clinical and non-clinical data

Development

milestones and

relevant costs

Lee’s shall pay to RegeneRx:

1.      US$ 0,5 million upon initiation of first commercial sale of the first Licensed Product in the People’s Republic of China.

2.      US$ 1,5 million upon reaching US$ 50 million of aggregate commercial sales in the Territory.

3.      US$ 1,6 million upon reaching US$ 80 million of aggregate commercial sales in the Territory.

Intellectual

Property

New Intellectual

Property

Negotiation;

Disputes

(a) Promptly following the execution of this Term Sheet, the parties shall use commercially reasonable efforts to negotiate the terms of a definitive agreement for a period of sixty (60) days after signature hereof. The terms of the definitive agreement shall be consistent with the terms of this Term Sheet and include other customary terms applicable to a transaction of this type. In the event the parties are unable to reach agreement on the terms of a definitive agreement, then either party may terminate this agreement, unless the parties mutually agree to pursue the dispute resolution provisions below with respect to any disputed terms. In the event of any termination of this Term Sheet: a) RegeneRx will promptly return to Lee’s the 200,000 US$ paid by Lee’s and, b) this term sheet will terminate in all respects and neither party will have any obligation to the other party hereunder.

(b) Good Faith Negotiations. In the event of disputes between the Parties arising out of or relating to this binding Term Sheet and the License Agreement, or the breach, termination or invalidity thereof, a Party seeking to resolve such dispute will, by written notice to the other, have such dispute referred to their respective chief executive officers, for attempted resolution by good faith negotiations within fourteen (14) days after such notice is received.

(c) Mediation. In the event that the Parties are unable to resolve a dispute through good faith negotiations pursuant to point (a) above, the Parties agree to submit such dispute to non-binding mediation using an industry expert mutually acceptable to the Parties. The costs of any such mediation shall be shared by the Parties equally.

(d) Arbitration. If all good faith attempts to resolve a dispute through negotiations and mediation pursuant to points (a) and (b) above have failed after sixty (60) days from notice provided pursuant to point (a) above, then upon the request of either Party, the dispute shall be finally resolved by binding arbitration administered by I.C.C. Arbitration (the “ICC Rules”).

(i) The arbitration shall be conducted by a panel of three neutral arbitrators (the “Panel”) appointed in accordance with the ICC Rules.

(ii) The arbitration proceedings shall take place in Geneva, Switzerland. The arbitral proceedings and all pleadings shall be in the English language. Any written evidence originally in a language other than English shall be submitted in English translation accompanied by the original or true copy thereof.

(iii) The Panel shall have the power to decide all questions of arbitrability.

(iv) At the request of either Party, the Panel will enter an appropriate protective order to maintain the confidentiality of information produced or exchanged in the course of the arbitration proceedings.

(v) The Panel is empowered to award any remedy allowed by law, including monetary damages, prejudgment interest and punitive damages, and to grant final, complete, interim or interlocutory relief, including injunctive relief.

(vi) Each Party shall bear its own legal fees arising in connection with the dispute. The Panel may assess costs, fees and expenses of the Panel to the Parties in the manner the Panel deems appropriate under the circumstances.

The Agreement shall be legally effective for an initial term of three (3) years starting from the Effective Date (the “Initial Term”) and subject to the options to renew as provided below in this Article. RegeneRx hereby irrevocably grants the options to renew (the “Renewal Options”) to Lee’s, which shall be solely exercisable by Lee’s at its own discretion, to renew this Agreement for another extended term of three years (the “Extended Term”) and such Renewal Options can be exercised by the Company for not more than 6 times on the six month period immediately before the expiry date of the Initial Term (for the first time of the exercise of the Renewal Option) and the six months period immediately before the expiry date of the Extended Term (for the time of the exercise of the Renewal Option and onward.

The parties hereto acknowledge and agree that the exercise of the Renewal Option by the Company shall, where applicable, be subject to further independent shareholder approval and any other requirements under the Listing Rules at each time when the Renewal Option is exercised. Lee’s shall serve a written notice (the “Written Notice”) for its intention to exercise the Renewal Option, RegeneRx agrees that upon the service of the Written Notice by Lee’s, RegeneRx will give it written consent to renew this Agreement for the Extended Term. This Agreement shall remain in full force and effect until the expiration of the Initial Term (if the Renewal Option is not exercised by Lee’s) or the expiration of the Extended Term (if the Renewal Options are exercised by Lee’s).

Notwithstanding the Duration time, the effect of this Agreement shall be conditional upon:

a)      all waivers, consents, approvals or confirmations of the Stock Exchange or other governmental and regulatory bodies in Hong Kong or elsewhere which are required or appropriate for the purposes of the entering into and implementation of this Agreement having been obtained (if applicable); and

b)      this Agreement and the transactions contemplated hereunder having been approved by the shareholders at the extraordinary general meeting of Lee’s or the written approval of shareholders of Lee’s approved by the Stock Exchange in lieu of holding an extraordinary general meeting of Lee’s (as the case may be) if such approval is required under the relevant laws, rules and regulations (including the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited).

If the Initial Term and the Extended Term cover the entire Relevant Period, the Company shall, upon the expiration of the Relevant Period, have a royalty-free, fully paid up, perpetual and irrevocable license, with the right to sublicense and/or to assignee.

/s/ Benjamin Li

/s/ J.J. Finkelstein