ADDITIONAL INVESTMENT RIGHT To Purchase $1,000,000 Principal Amount of 6% Convertible Debentures and Warrants Generex Biotechnology Corporation
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”),
AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES
ADDITIONAL
INVESTMENT RIGHT
To
Purchase $1,000,000 Principal Amount of 6% Convertible Debentures and
Warrants
Generex
Biotechnology Corporation
THIS
ADDITIONAL INVESTMENT RIGHT (the “AIR”)
certifies that, for value received, l
(the
“Holder”),
is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the 181st
day
following the date hereof (the “Initial
Exercise Date”)
and on
or prior to the earlier of the close of business on the 12 month anniversary
of
the Effective Date and the two year anniversary of the date hereof (the
“Termination
Date”)
but
not thereafter, to subscribe for and purchase from Generex Biotechnology
Corporation, a Delaware corporation (the “Company”),
up to
$1,000,000 principal amount of 6% Convertible Debentures (the “AIR
Debenture”)
and
warrants to purchase shares of Common Stock of the Company as described herein
at an exercise price of $1.25 per share (the “AIR
Warrant Exercise Price”)
(subject to adjustment hereunder and thereunder) (the “AIR
Warrant”).
Subject to the terms and conditions hereof, upon the purchase hereunder of
AIR
Debenture, the Holder shall receive a warrant to purchase a number of shares
of
Common Stock equal to 100% of the shares of Common Stock underlying such AIR
Debenture when issued. The initial conversion price of the Debenture shall
be
equal to $1.25, subject to adjustment thereunder and hereunder (“AIR
Debenture Conversion Price”).
The
AIR Debenture and AIR Warrant shall be in the form of the Debentures and
Warrants (with the same rights, privileges and preferences set forth in the
Transaction Documents) issued pursuant to the Purchase Agreement Amendment,
mutatis
mutandis.
The AIR
Debentures and the AIR Warrant shall be collectively referred to as the
“AIR
Securities.”
The
AIR Warrant Exercise Price and the AIR Debenture Conversion Price shall be
collectively referred to herein as the “AIR
Conversion Price.”
1
Section
1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Amendment No. 3 to Securities Purchase Agreement
and
Registration Rights Agreement dated December 4, 2005 (the “Purchase
Agreement Amendment”),
or,
if not found therein, the Securities Purchase Agreement dated November 10,
2004,
among the Company and the purchasers signatory thereto.
Section
2. Exercise.
a) Exercise
of AIR.
Subject
to the terms and conditions contained herein, exercise of the purchase rights
represented by this AIR may be made at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company
of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto
(or such other office or agency of the Company as it may designate by notice
in
writing to the registered Holder at the address of such Holder appearing on
the
books of the Company) and the payment of the Stated Value thereby purchased
by
wire transfer or cashier’s check drawn on a United States bank. Subject to the
terms and conditions contained herein, upon exercise of the AIR, the Company
shall issue AIR Debentures with a Stated Value equal to the amount paid by
the
Holder and the AIR Warrant to purchase a number of shares of Common Stock equal
to 100% of the shares of Common Stock issuable upon conversion of such AIR
Debenture.
b) Mechanics
of Exercise.
i. Authorization
of AIR Debenture and the AIR Warrant.
The
Company covenants that during the period the AIR is outstanding, it will reserve
from its authorized and unissued Common Stock a sufficient number of shares
to
provide for the issuance of all of the shares of Common Stock underlying the
AIR
Debenture and AIR Warrant (the collectively, “AIR
Conversion Shares”).
The
Company further covenants that its issuance of this AIR shall constitute full
authority to its officers who are charged with the duty of executing
certificates to execute and issue the necessary certificates for the AIR
Securities upon the exercise of the purchase rights under this AIR and
certificates upon conversion and exercise of the AIR Securities. The Company
covenants that the AIR Securities which may be issued upon the exercise of
the
purchase rights represented by this AIR and the AIR Conversion Shares issuable
thereunder will, upon exercise of the purchase rights represented by this AIR,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges in respect of the issue thereof (other than taxes
in respect of any transfer occurring contemporaneously with such issue). The
Company will take all such reasonable action as may be necessary to assure
that
the AIR Securities and AIR Conversion Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements
of
the Trading Market upon which the Common Stock may be listed.
2
ii. Delivery
of Certificates Upon Exercise.
Certificates for the AIR Securities purchased hereunder shall be delivered
to
the Holder within 3 Trading Days from the delivery to the Company of the Notice
of Exercise Form, surrender of this AIR and payment of the Stated Value as
set
forth above (“AIR
Security Delivery Date”).
This
AIR shall be deemed to have been exercised on the date the payment of the
principal amount is received by the Company. The AIR Securities shall be deemed
to have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such security
for
all purposes, as of the date the AIR has been exercised by payment to the
Company of the principal amount and all taxes required to be paid by the Holder,
if any, pursuant to Section 2(e)(vii) prior to the issuance of such security,
have been paid.
iii. Delivery
of New AIRs Upon Exercise.
If this
AIR shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing the AIR Securities,
deliver to Holder a new AIR evidencing the rights of Holder to purchase the
unpurchased AIR Securities called for by this AIR, which new AIR shall in all
other respects be identical with this AIR.
iv. Rescission
Rights.
If the
Company fails to deliver to the Holder a certificate or certificates
representing the AIR Securities pursuant to this Section 2(e)(iv) by the AIR
Security Delivery Date, then the Holder will have the right to rescind such
exercise.
v. Charges,
Taxes and Expenses.
Issuance of certificates for AIR Securities shall be made without charge to
the
Holder for any issue or transfer tax or other incidental expense in respect
of
the issuance of such certificate, all of which taxes and expenses shall be
paid
by the Company, and such certificates shall be issued in the name of the Holder
or in such name or names as may be directed by the Holder; provided,
however,
that in
the event certificates for AIR Securities are to be issued in a name other
than
the name of the Holder, this AIR when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.
vi. Closing
of Books.
The
Company will not close its records in any manner which prevents the timely
exercise of this AIR, pursuant to the terms hereof or the conversion of the
AIR
Securities pursuant to the terms hereof.
3
Section
3. Certain
Adjustments.
a) Stock
Dividends and Splits.
If the
Company, at any time while this AIR is outstanding: (A) pays a stock dividend
or
otherwise make a distribution or distributions on shares of its Common Stock
or
any other equity or equity equivalent securities payable in shares of Common
Stock (which, for avoidance of doubt, shall not include any shares of Common
Stock issued by the Company pursuant to the AIR Securities), (B) subdivides
outstanding shares of Common Stock into a larger number of shares, (C) combines
(including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (D) issues by reclassification of shares
of
the Common Stock any shares of capital stock of the Company, then in each case
the AIR Conversion Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding before such event and of which the denominator
shall
be the number of shares of Common Stock outstanding after such event. Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after
the
effective date in the case of a subdivision, combination or
re-classification.
b) Subsequent
Equity Sales.
If the
Company or any Subsidiary thereof, as applicable, at any time while this AIR
is
outstanding, shall offer, sell, grant any option to purchase or offer, sell
or
grant any right to reprice its securities, or otherwise dispose of or issue
(or
announce any offer, sale, grant or any option to purchase or other disposition)
any Common Stock or Common Stock Equivalents entitling any Person to acquire
shares of Common Stock, at an effective price per share less than the then
AIR
Conversion Price (such lower price, the “Base
Share Price”
and
such issuances collectively, a “Dilutive
Issuance”),
as
adjusted hereunder (if the holder of the Common Stock or Common Stock
Equivalents so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices
or otherwise, or due to warrants, options or rights per share which is issued
in
connection with such issuance, be entitled to receive shares of Common Stock
at
an effective price per share which is less than the AIR Conversion Price, such
issuance shall be deemed to have occurred for less than the AIR Conversion
Price), then the AIR Conversion Prices shall be reduced to equal to the Base
Share Price. Such adjustment shall be made whenever such Common Stock or Common
Stock Equivalents are issued. The Company shall notify the Holder in writing,
no
later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this section, indicating therein the applicable
issuance price, or of applicable reset price, exchange price, conversion price
and other pricing terms (such notice the “Dilutive
Issuance Notice”).
For
purposes of clarification, whether or not the Company provides a Dilutive
Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
entitled to receive a number of securities based upon the Base Share Price
regardless of whether the Holder accurately refers to the Base Share Price
in
the Notice of Exercise.
c) Pro
Rata Distributions.
If the
Company, at any time while this AIR is outstanding, distributes to all holders
of Common Stock (and not to Holders) evidences of its indebtedness or assets
or
rights or warrants to subscribe for or purchase any security other than the
Common Stock (which shall be subject to Section 3(b), then in each such case
the
AIR Conversion Price shall be determined by multiplying such AIR Conversion
Price in effect immediately prior to the record date fixed for determination
of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the Closing Price determined as of the record date
mentioned above, and of which the numerator shall be such Closing Price on
such
record date less the then fair market value at such record date of the portion
of such assets or evidence of indebtedness so distributed applicable to one
outstanding share of the Common Stock as determined by the Board of Directors
in
good faith. In either case the adjustments shall be described in a statement
provided to the Holder of the portion of assets or evidences of indebtedness
so
distributed or such subscription rights applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.
4
d) Calculations.
All
calculations and adjustments to the AIR Conversion Price under this Section
3
shall be made to the nearest cent or the nearest 1/100th of a share, as the
case
may be. For purposes of this Section 3, the number of shares of Common Stock
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding treasury shares, if any) outstanding.
e) Notice
to Holders.
i. Adjustment
to AIR Conversion Price.
Whenever the AIR Conversion Price is adjusted pursuant to this Section 3, the
Company shall promptly mail to each Holder a notice setting forth the AIR
Conversion Price after such adjustment and setting forth a brief statement
of
the facts requiring such adjustment.
ii. Notice
to Allow Exercise by ▇▇▇▇▇▇.
If (A)
the Company shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend on
or
a redemption of the Common Stock; (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of the Company shall be required in connection
with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of
the
assets of the Company, of any compulsory share exchange whereby the Common
Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding
up of
the affairs of the Company; then, in each case, the Company shall cause to
be
mailed to the Holder at its last addresses as it shall appear upon the AIR
Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date
on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date
as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined
or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record
shall
be entitled to exchange their shares of the Common Stock for securities, cash
or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided,
that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this AIR during the 20-day
period commencing the date of such notice to the effective date of the event
triggering such notice.
5
f) Fundamental
Transaction.
If, at
any time while this AIR is outstanding, (A) the Company effects any merger
or
consolidation of the Company with or into another Person, (B) the Company
effects any sale of all or substantially all of its assets in one or a series
of
related transactions, (C) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (D) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental
Transaction”),
then,
upon any subsequent exercise of this AIR the Holder shall have the right to
receive upon conversion or exercise of the AIR Securities, as applicable, for
each AIR Conversion Share that would have been issuable upon such exercise
and
then subsequent conversion absent such Fundamental Transaction, at the option
of
the Holder, (a) upon conversion or exercise of the AIR Securities, shares of
Common Stock of the successor or acquiring corporation or of the Company, if
it
is the surviving corporation, and Alternate Consideration receivable upon or
as
a result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a Holder of the number of shares of Common Stock for
which the underlying AIR Securities are convertible immediately prior to such
event or (b) cash equal to the value of this AIR as determined in accordance
with the Black-Scholes option pricing formula (the “Alternate
Consideration”).
For
purposes of any such deemed conversion, the determination of the AIR Conversion
Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share
of Common Stock in such Fundamental Transaction, and the Company shall apportion
the AIR Conversion Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as
to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any conversion or exercise of the AIR Securities underlying
this AIR following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new
additional investment right consistent with the foregoing provisions and
evidencing the Holder’s right to exercise such additional investment right
ultimately into Alternate Consideration. The terms of any agreement pursuant
to
which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this
paragraph (f) and insuring that this AIR (or any such replacement security)
will
be similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.
6
g) Exempt
Issuance.
Notwithstanding the foregoing, no adjustments, Alternate Consideration nor
notices shall be made, paid or issued under this Section 3 in respect of (i)
an
Exempt Issuance other than an Exempt Issuance that involves an MFN Transaction
or a Variable Rate Transaction for which the adjustment, Alternate Consideration
and notice provision Section 3 shall be applicable, or (ii) issuances of up
to,
in the aggregate, the first 1,500,000 shares of Common Stock or Common Stock
Equivalents (subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common
Stock
that occur after the date of this Agreement) to consultants of the Company
in
any 12 month period pursuant to a resolution duly adopted by a majority of
the
non-employee members of the Board of Directors of the Company or a majority
of
the members of a committee of non-employee directors established for such
purpose.
h) Voluntary
Adjustment By Company.
The
Company may at any time during the term of this AIR reduce the then current
AIR
Conversion Price to any amount and for any period of time deemed appropriate
by
the Board of Directors of the Company.
Section
4. Transfer
of AIR.
a) Transferability.
Subject
to compliance with any applicable securities laws and the conditions set forth
in Sections 5(a) and 4(e) hereof and to the provisions of Section 4.1 of the
Purchase Agreement, this AIR and all rights hereunder are transferable, in
whole
or in part, upon surrender of this AIR at the principal office of the Company,
together with a written assignment of this AIR substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall execute
and deliver a new AIR or AIRs in the name of the assignee or assignees and
in
the denomination or denominations specified in such instrument of assignment,
and shall issue to the assignor a new AIR evidencing the portion of this AIR
not
so assigned, and this AIR shall promptly be cancelled. An AIR, if properly
assigned, may be exercised by a new holder for the purchase of AIR Securities
without having a new AIR issued.
b) New
AIRs.
This
AIR may be divided or combined with other AIRs upon presentation hereof at
the
aforesaid office of the Company, together with a written notice specifying
the
names and denominations in which new AIRs are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with Section 4(a), as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new AIR or AIRs in exchange for the AIR or AIRs
to
be divided or combined in accordance with such notice.
7
c) AIR
Register.
The
Company shall register this AIR, upon records to be maintained by the Company
for that purpose (the “AIR
Register”),
in
the name of the record Holder hereof from time to time. The Company may deem
and
treat the registered Holder of this AIR as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary
d) Transfer
Restrictions.
If,
at the
time
of
the surrender of this AIR in connection with any transfer of this AIR, the
transfer of this AIR shall not be registered pursuant to an effective
registration
statement under the Securities Act
and
under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the Holder or transferee of this
AIR, as the case may be, furnish to the Company a written opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions
of
counsel in comparable transactions) to the effect that such transfer may be
made
without
registration under
the
Securities Act and under applicable state securities or blue sky laws, (ii)
that
the holder or transferee execute and deliver to the Company an investment letter
in form and substance acceptable to the Company and (iii) that the transferee
be
an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
promulgated under the Securities Act or a qualified institutional buyer as
defined in Rule 144A(a) under the Securities Act.
Section
5. Miscellaneous.
a) Title
to the Additional Investment Right.
Prior
to the Termination Date and subject to compliance with applicable laws and
Section 4 of this AIR, this AIR and all rights hereunder are transferable,
in
whole or in part, at the office or agency of the Company by the Holder in person
or by duly authorized attorney, upon surrender of this AIR together with the
Assignment Form annexed hereto properly endorsed. The transferee shall sign
an
investment letter in form and substance reasonably satisfactory to the
Company.
b) No
Rights as Shareholder Until Exercise.
This
AIR does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the surrender
of
this AIR and the payment of the aggregate principal, the AIR Securities so
purchased shall be and be deemed to be issued to such Holder as the record
owner
of such shares as of the close of business on the later of the date of such
surrender or payment.
c) Loss,
Theft, Destruction or Mutilation of AIR.
The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this AIR
or
any certificate relating to the AIR Securities, and in case of loss, theft
or
destruction, of indemnity or security reasonably satisfactory to it (which,
in
the case of the AIR, shall not include the posting of any bond), and upon
surrender and cancellation of such AIR or certificate, if mutilated, the Company
will make and deliver a new AIR or certificate of like tenor and dated as of
such cancellation, in lieu of such AIR or certificate.
8
d) Saturdays,
Sundays, Holidays, etc.
If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.
e) Authorized
Shares.
The
Company covenants that during the period the AIR is outstanding, it will reserve
from its authorized and unissued Common Stock a sufficient number of shares
to
provide for the issuance of the shares of Common Stock issuable upon conversion
and exercise, as applicable, of the AIR Securities. The Company further
covenants that its issuance of this AIR shall constitute full authority to
its
officers who are charged with the duty of executing certificates to execute
and
issue the necessary certificates for the AIR Securities upon the exercise of
the
purchase rights under this AIR. The Company will take all such reasonable action
as may be necessary to assure that such AIR Securities and AIR Conversion Shares
may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common
Stock may be listed.
Except
and to the extent as waived or consented to by the Holder, the Company shall
not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of
this
AIR or the AIR Securities, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may
be
necessary or appropriate to protect the rights of Holder as set forth in this
AIR and the AIR Securities against impairment. Without limiting the generality
of the foregoing, the Company will (a) take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable AIR Securities upon the exercise of this AIR and AIR
Conversion Shares upon conversion and exercise of the AIR Securities, and (b)
use commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under this AIR and the AIR Securities.
Before
taking any action which would result in an adjustment in the AIR Securities
for
which this AIR is exercisable or in the AIR Conversion Price, the Company shall
obtain all such authorizations or exemptions thereof, or consents thereto,
as
may be necessary from any public regulatory body or bodies having jurisdiction
thereof.
9
f) Jurisdiction.
All
questions concerning the construction, validity, enforcement and interpretation
of this AIR shall be determined in accordance with the provisions of the
Purchase Agreement Amendment.
g) Restrictions.
The
Holder acknowledges that the AIR Securities acquired upon the exercise of this
AIR, if not registered, will have restrictions upon resale imposed by state
and
federal securities laws.
h) Nonwaiver
and Expenses.
No
course of dealing or any delay or failure to exercise any right hereunder on
the
part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date. If the Company willfully and
knowingly fails to comply with any provision of this AIR, which results in
any
material damages to the Holder, the Company shall pay to Holder such amounts
as
shall be sufficient to cover any costs and expenses including, but not limited
to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.
i) Notices.
Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement Amendment.
j) Limitation
of Liability.
No
provision hereof, in the absence of any affirmative action by Holder to exercise
this AIR or purchase AIR Securities, and no enumeration herein of the rights
or
privileges of Holder, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the
Company.
k) Remedies.
Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this AIR. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this AIR and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
l) Successors
and Assigns.
Subject
to applicable securities laws, this AIR and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors of
the
Company and the successors and permitted assigns of Holder. The provisions
of
this AIR are intended to be for the benefit of all Holders from time to time
of
this AIR and shall be enforceable by any such Holder or holder of AIR
Securities.
m) Amendment.
This
AIR may be modified or amended or the provisions hereof waived with the written
consent of the Company and the Holder.
n) Severability.
Wherever possible, each provision of this AIR shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this AIR shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this AIR.
10
o) Headings.
The
headings used in this AIR are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this AIR.
********************
IN
WITNESS WHEREOF, the Company has caused this AIR to be executed by its officer
thereunto duly authorized.
Dated:
December 5, 2005
| GENEREX BIOTECHNOLOGY CORPORATION | ||
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| Date: | By: | /s/ |
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
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Title:
Executive Vice-President, General
Counsel
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11
NOTICE
OF EXERCISE
TO: GENEREX
BIOTECHNOLOGY CORPORATION
(1) The
undersigned hereby elects to purchase $________ Principal Amount of AIR
Debenture and Warrants to purchase _____ shares of Common Stock of Generex
Biotechnology Corporation pursuant to the terms of the attached AIR and tenders
herewith payment of the principal in full, together with all applicable transfer
taxes, if any.
(2) Payment
shall take the form of (check applicable box) in lawful money of the United
States; or
(3) Please
issue a certificate or certificates representing said AIR Securities in the
name
of the undersigned or in such other name as is specified below:
_______________________________
The
AIR
Securities shall be delivered to the following:
_______________________________
_______________________________
_______________________________
(4)
Accredited
Investor.
The
undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of
Investing Entity:
________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity:
_________________________________________________
Name
of
Authorized Signatory:
___________________________________________________________________
Title
of
Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this
form
and supply required information.
Do
not
use this form to exercise the warrant.)
FOR
VALUE
RECEIVED, the foregoing AIR and all rights evidenced thereby are hereby assigned
to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated:
______________, _______
Holder’s
Signature: _____________________________
Holder’s
Address: _____________________________
_____________________________
Signature
Guaranteed: ___________________________________________
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the AIR, without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank or trust company. Officers of corporations
and
those acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing AIR.