AGREEMENT

This Agreement (the “Agreement”), dated December 22, 2008 (the “Effective Date”), is by and among Generex Biotechnology Corporation (the “Company”), and the investor listed on the signature page hereto (the “Investor”).

H.           Pursuant to that certain Securities Purchase Agreement (the “Purchase Agreement”), dated as of March 31, 2008, by and among the Company, the Investor and the other parties thereto, the Investor purchased the Company’s 8% Senior Secured Convertible Note in the aggregate principal amount of $3,650,000 (the “Note”). Capitalized terms used in this Agreement that are not otherwise defined have the meanings set forth in the Note.

I.           Pursuant to the Purchase Agreement, the Investor purchased (i) a Series A Warrant to acquire additional shares of Common Stock (the “Series A Warrants”), (ii) a Series A-1 Warrant to acquire additional shares of Common Stock (the “Series A-1 Warrants”), (iii) a Series B Warrant to acquire additional shares of Common Stock (the “Series B Warrants”), and (iv) a Series C Warrant to acquire additional shares of Common Stock (the “Series C Warrants”), in each case, as set forth on Schedule of Buyers attached to the Purchase Agreement.  The Series A Warrants, the Series A-1 Warrants, the Series B Warrants, and the Series C Warrants issued to the Investor are hereinafter collectively called the “Series Warrants.”

J.           In connection with the transactions contemplated by the Purchase Agreement, the Company reduced the strike prices of certain then outstanding warrants held by the Investor (collectively, the “Pre-Extant Warrants”) to $1.10 and extended the expiration dates thereof to March 31, 2015.

K.           The Company, as of the Effective Date, is not in compliance with the Net Cash Balance Test in the Note and each of the Other Notes, which constitutes an Event of Default under the Note and each of the Other Notes.

L.           On December 17, 2008, one of the holders of the Other Notes served on the Company an Event of Default Redemption Notice with respect to an Event of Default by the Company under Section 4(a)(xv) of its Other Note (the “Redemption Notice”).

M.           The Note requires the Company to pay the Investor on each applicable Installment Date the Installment Amount due on such date by electing (i) a Company Conversion if various conditions are satisfied and/or (ii) a Company Redemption.

N.           As of the Effective Date, one of the Equity Conditions has not been satisfied in that the Company received notice from The NASDAQ Stock Market of the Company’s failure to comply with the minimum bid price requirement of Marketplace Rule 4310(c)(4) (the “Listing Maintenance Equity Condition”).

 

 

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

 

 

 

 

 

 

 

 

[signature page follows]

 

IN WITNESS WHEREOF, the Investor and the Company have caused their respective signature page to this Agreement to be duly executed as of the Effective Date.

 

	COMPANY:
	GENEREX BIOTECHNOLOGY CORPORATION
	By:
		Name:	Rose C. Perri
		Title:	Chief Financial Officer
	By:
		Name:	Mark A. Fletcher
		Title:	Executive Vice President and General Counsel

 

IN WITNESS WHEREOF, the Investor and the Company have caused their respective signature page to this Agreement to be duly executed as of the Effective Date.

 

 

 

“Equity Conditions” means: (i) on each day during the period beginning one month prior to the applicable date of determination and ending on and including the applicable date of determination either (x) a registration statement for the resale of all shares of Common Stock issuable upon exercise of the Series Warrants and the Pre-Extant Warrants on a continuous basis into the market at prevailing market prices of all shares of Common Stock issuable upon exercise of the Series Warrants and the Pre-Extant Warrants shall be effective and the prospectus contained therein shall be available for use or (y) all shares of Common Stock issuable upon exercise of the Series Warrants and the Pre-Extant Warrants shall be eligible for sale without restriction and without the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitations on exercise); (ii) on each day during the period beginning three months prior to the applicable date of determination and ending on and including the applicable date of determination (the “Equity Conditions Measuring Period”), the shares of Common Stock are listed or designated for quotation on an Eligible Market (as defined in the Note) and shall not have been suspended from trading on an Eligible Market (other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting occurring) or pending either (A) in writing by such Eligible Market or (B) by falling below the minimum listing maintenance requirements of the Eligible Market on which the shares of Common Stock are then listed; (iii) on each day during the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of the Series Warrants and the Pre-Extant Warrants on a timely basis as set forth therein and all other shares of capital stock required to be delivered by the Company on a timely basis as set forth in the Transaction Documents; (iv) any shares of Common Stock to be issued in connection with the event requiring determination may be issued in full without violating the “blocker” provisions thereof or the rules or regulations of the Eligible Market on which the Common Stock is then listed; (v) on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction (as defined in the Note) shall have occurred which has not been abandoned, terminated or consummated; (vi) the Company shall have no knowledge of any fact that would reasonably be expected to cause (1) the registration statement described in clause (i) above not to be effective or the prospectus contained therein not to be available for the resale of at least all of the shares of Common Stock issuable upon exercise of the Series Warrants and the Pre-Extant Warrants or (2) any shares of Common Stock issuable upon exercise of the Series Warrants and the Pre-Extant Warrants not to be eligible for sale without restriction pursuant to Rule 144 under the 1933 Act (as defined in the Note) and any applicable state securities laws (in each case, disregarding any limitations on exercise); (vii) the Investor shall not be in possession of any material, non-public information provided to the Investor by the Company or any of its affiliates or representatives; (viii) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with and shall not have breached any provision, covenant, representation or warranty of any Transaction Document (which, for clarification purposes, includes, without limitation, this Agreement); (ix) on each day during the Equity Conditions Measuring Period, there shall not have occurred an Event of Default (as defined in the Note) or an event that with the passage of time or giving of notice would constitute an Event of Default; and (x) on each day beginning on the date of the Call Notice and ending on the Required Exercise Date, no share of Common Stock shall trade for a price less than the Trigger Price (as adjusted for stock splits, combinations and the like).