AMENDMENT NO. 3 TO SECURITIES PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT
AMENDMENT
NO. 3 TO SECURITIES PURCHASE AGREEMENT
AND
REGISTRATION RIGHTS AGREEMENT
This
AMENDMENT NO. 3 TO SECURITIES PURCHASE AGREEMENT AND REGISTRATION RIGHTS
AGREEMENT (this “Amendment”) is made and entered into as of December 4, 2005, by
and among Generex Biotechnology Corporation, a Delaware corporation (“Generex”),
and the stockholders identified on the signature pages hereto (each, a
“Purchaser” and, collectively, the “Purchasers”).
RECITALS
1. |
Generex
and the Purchasers are parties to a Securities Purchase Agreement,
dated
as of November 10, 2004 (as amended by Amendment No. 1 (as hereinafter
defined) and Amendment No. 2 (as hereinafter defined), the “Purchase
Agreement”), pursuant to which Generex issued and sold to the Purchasers
an aggregate of $4,000,000 of Debentures and certain Warrants (each
as
defined in the Purchase Agreement). Capitalized terms used and not
defined
in this Amendment but defined in the Purchase Agreement shall have
the
respective meanings set forth in the Purchase Agreement.
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2. |
In
addition to the Debentures and Warrants, under the Purchase Agreement
Generex issued and sold to the Purchasers Additional Investment Rights,
pursuant to which the holders thereof had the right to purchase up
to an
additional aggregate principal amount of Debentures equal to the
principal
amount of $4,000,000 of Debentures (collectively, the “AIR Debentures”),
together with additional Warrants to purchase up to a number of shares
of
Generex’s Common Stock equal to 100% of the shares issuable upon
conversion of such AIR Debentures so purchased (collectively, the
“AIR
Warrants”).
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3. |
In
connection with the Purchase Agreement, Generex and the Purchasers
entered
into a Registration Rights Agreement, dated as of November 10, 2004
(as
amended by Amendment No. 1 (as hereinafter defined) and Amendment
No. 2
(as hereinafter defined), the “Registration Rights Agreement”), pursuant
to which Generex undertook certain registration obligations to the
Purchasers.
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4. |
In
connection with that certain Amendment No. 1 to Securities Purchase
Agreement and Registration Rights Agreement, dated as of June 15,
2005, by
and among Generex and the Purchasers (“Amendment No. 1”), the Purchasers
exercised an aggregate of $2,000,000 of Additional Investment Rights
and
Generex agreed to issue to the Purchasers further Additional Investment
Rights (the “Amendment No. 1 AIR”) for an aggregate principal amount of
$2,000,000 AIR Debentures, together with additional Warrants to purchase
up to a number of shares of Generex’s Common Stock equal to 100% of the
shares issuable upon conversion of such AIR Debentures so purchased.
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5. |
In
connection with that certain Amendment No. 2 to Securities Purchase
Agreement and Registration Rights Agreement, dated as of September
8,
2005, by and among Generex and the Purchasers (“Amendment No. 2”), the
Purchasers exercised an aggregate of $2,000,000 of Additional Investment
Rights and Generex agreed to issue to the Purchasers further Additional
Investment Rights (the “Amendment No. 2 AIR” and together with the
Amendment No. 1 AIR and and Amendment No. 2 AIR, the “Additional
Investment Rights”) for an aggregate principal amount of $2,000,000 AIR
Debentures, together with additional Warrants to purchase up to a
number
of shares of Generex’s Common Stock equal to 100% of the shares issuable
upon conversion of such AIR Debentures so purchased.
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6. |
Generex
and the Purchasers now wish to further modify certain of the terms
of the
Purchase Agreement, Registration Rights Agreement, Additional Investment
Rights and AIR Debentures.
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NOW,
THEREFORE, in consideration of the foregoing Recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Generex and each Purchaser, severally and not jointly, agree
as
follows:
1. Additional
Investment Rights.
Subject
to the terms hereof, each Purchaser agrees to exercise 100% of its Additional
Investment Rights (pertaining to an aggregate of $3,500,000 of AIR Debentures
and accompanying AIR Warrants) on the Business Day following the date of
this
Amendment.
1.1. |
In
consideration for such exercise, Generex agrees that the “Initial Exercise
Date” under each of the Additional Investment Rights shall be amended
to
be December 4, 2005.
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1.2. |
The
AIR Debentures issuable upon the Additional Investment Right exercise
contemplated in this Section 1 (the “Amendment No. 3 AIR Debentures”)
shall be in a principal amount equal to the amount set forth on such
Purchaser’s signature page to this Amendment and shall have a Conversion
Price equal to $0.82 (subject to adjustment as set forth therein).
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1.3. |
The
AIR Warrants issuable upon the Additional Investment Right exercise
contemplated in this Section 1 (the “Amendment No. 3 AIR Warrants”) shall
entitle the holder thereof to purchase a number of shares of Common
Stock
equal to 100% of the shares of Common Stock issuable upon the conversion
in full (without regard to any restrictions on conversion therein
contained) of the Amendment No. 3 AIR Debentures issuable upon the
exercise contemplated by this Section 1 at a $0.82 Conversion Price
(subject to adjustment as set forth therein).
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1.4. |
In
further consideration for the exercise of the Additional Investment
Right
herein contemplated, Generex will issue and deliver to each Purchaser
a
further Additional Investment Right in the form of Exhibit A (which
is
substantially the same in form as the existing Additional Investment
Rights) (each an “Amendment No. 3 Additional AIR” and collectively, the
“Amendment No. 3 Additional AIRs”), pursuant to which each Purchaser will
have the right to acquire detachable units consisting of (a) additional
AIR Debentures in principal amount equal to the principal amount
of AIR
Debentures issuable upon the portion of the Additional Investment
Right to
be exercised by each such Purchaser under Section 1 (such additional
AIR
Debentures, the “Amendment No. 3 Additional AIR Debentures”) and (b)
additional AIR Warrants entitling the holder thereof to purchase
a number
of shares of Common Stock equal to 100% of the shares of Common Stock
issuable upon an assumed conversion in full (without regard to any
restrictions on conversion therein contained) at a $1.25 Conversion
Price
(subject to adjustment as set forth therein) of the Amendment No.
3 AIR
Debentures contemplated in clause (a) above, at an exercise price
equal to
the “AIR Warrant Exercise Price” (as such term is defined in the
Additional Investment Rights) (collectively, the “Amendment No. 3
Additional AIR Warrants”). The “conversion price” of the Amendment No. 3
Additional AIR Debentures will equal $1.25, subject to adjustment
in
accordance with the terms thereof.
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2
2. |
[Reserved]
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3. |
Registration
Rights.
To ensure that the registration rights of the Purchasers are not
adversely
affected as a result of the transactions contemplated by this Amendment
and to provide registration rights consistent with the existing
registration rights in respect of the securities issuable upon exercise
of
the Amendment No. 3 Additional AIR, Amendment No. 3 AIR Debentures
and
Amendment No. 3 AIR Warrants, the parties agree as follows with respect
to
registration rights:
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3.1. |
The
definition of “Additional Investment Right” under the Purchase Agreement
is hereby amended to include the Amendment No. 3 Additional
AIRs.
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3.2. |
The
definition of “Additional Investment Right Securities” under the Purchase
Agreement is hereby amended to include the Amendment No. 3 Additional
AIR
Debentures and Amendment No. 3 Additional AIR Warrants and the Amendment
No. 3 Underlying Shares (as hereinafter defined) issuable in connection
therewith.
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3.3. |
The
parties hereby confirm that the definition of “Registrable Securities”
under the Registration Rights Agreement includes (a) the additional
shares
of Common Stock as may be issuable upon a conversion of the Amendment
No.
3 AIR Debentures, (b) the additional shares of Common Stock as may
be
issuable upon an exercise of the Amendment No. 3 AIR Warrants, and
(c) the
Additional Investment Right Securities contemplated in Section
3.2.
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3.4. |
Generex
will prepare and file a registration statement to cover all shares
of
Common Stock issuable under the Additional Investment Rights, including
shares of Common Stock issuable upon conversion of the Amendment
No. 3
Additional AIR Debentures and the Common Stock issuable upon the
exercise
of the Amendment No. 3 Additional AIR Warrants.
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3
3.5. |
The
registration statement contemplated in Section 3.4 will constitute
a
“Registration Statement” under the Registration Rights Agreement, afforded
all of the rights and obligations of and upon each of Generex and
the
“Purchasers” thereunder, including Sections 2(b) and 3(c) thereof. With
respect to the Registration Statement contemplated by Section 3.4
the
Filing Date shall be the 45th
calendar day following the date hereof. The calculation of the
Effectiveness Date with respect to the Registration Statement contemplated
by Section 3.4 shall be the same as for the initial Registration
Statement
under the Registration Rights Agreement. In addition, such Registration
Statement may include some or all of the shares set forth in Schedule
3.5
hereto, in addition to the shares referenced in Section 3.4 above.
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4. |
Representation
and Warranties of Generex.
Generex hereby represents and warrants to each Purchaser as follows,
except as may be set forth on the Additional Disclosure Schedules
hereto:
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(a) Authorization;
Enforcement.
Generex
has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Amendment and each other Transaction
Document (as hereinafter defined) and to carry out its obligations under
each.
The execution and delivery of each Transaction Document by Generex and the
consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of Generex and no further
action
is required by Generex in connection therewith other than the Required Approvals
(as hereinafter defined). Each of this Amendment, the Amendment No. 3 Additional
AIRs, the Amendment No. 3 AIR Debentures, the Amendment No. 3 AIR Warrants,
the
Amendment No. 3 Additional AIR Debentures and Amendment No. 3 Additional
AIR
Warrants (collectively, the “Transaction Documents”) has been (or upon delivery
will have been) duly executed by Generex and, when delivered in accordance
with
the terms hereof, will constitute the valid and binding obligation of Generex,
enforceable against Generex in accordance with their respective terms except
(i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
(b) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by Generex
and
the consummation by Generex of the other transactions contemplated thereby
do
not and will not: (i) conflict with or violate any provision of Generex’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute
a
default (or an event that with notice or lapse of time or both would become
a
default) under, result in the creation of any Lien upon any of the properties
or
assets of Generex or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which Generex or any Subsidiary is a party or by which any
property or asset of Generex or any Subsidiary is bound or affected, or (iii)
subject to the Required Approvals, conflict with or result in a violation
of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which Generex or a Subsidiary is
subject (including federal and state securities laws and regulations), or
by
which any property or asset of Generex or a Subsidiary is bound or affected,
or
(iv) conflict with or result in a violation of the rules or regulations of
the
Nasdaq Stock Market.
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(c) Filings,
Consents and Approvals.
Generex
is not required to obtain any consent, waiver, authorization or order of,
give
any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in
connection with its execution, delivery and performance of the Transaction
Documents, other than (i) filings required pursuant to Section 7.4, (ii)
the
filing with the Commission of the Registration Statement contemplated in
Section
3.4, (iii) the notice and/or application(s) to the Nasdaq Stock Market of
the
issuance and sale of the Amendment No. 3 Additional AIR and the listing of
the
shares of Common Stock ultimately issuable in respect thereof for trading
thereon in the time and manner required thereby, and (iv) the filing of Form
D
with the Commission and such filings as are required to be made under applicable
state securities laws (collectively, the “Required Approvals”).
(d) Stockholder
Approval.
No
approval of the stockholders of Generex is required in order for Generex
to
enter into this Amendment and to issue and deliver to the Purchasers the
Securities (as hereinafter defined). At a meeting of the stockholders of
Generex
duly convened and held April 5, 2005, the stockholders of Generex approved
the
Purchase Agreement and the transactions entered into in connection therewith,
and approved the issuance and potential issuance by Generex of 20% or more
of
its then outstanding Common Stock in connection therewith at a price lower
than
the market price of the Common Stock at such time (the “Stockholder Approval”).
The Stockholder Approval satisfied the requirements of Nasdaq Rule
4350(i)(1)(D)(ii). The Stockholder Approval extends to this Amendment and
the
transactions contemplated by the Transaction Documents so that additional
stockholder approval is not required in order for Generex to enter into and
consummate the transactions contemplated by the Transaction Documents, including
without limitation, modifying the conversion price of the AIR Debentures,
issuing the additional Amendment No. 3 Underlying Shares as a result thereof
and
granting and issuing the Amendment No. 3 Additional AIRs and the other
Securities (as hereinafter defined) thereunder.
(e) Issuance
of the Securities.
The
Amendment Xx. 0 XXX Xxxxxxxxxx, Xxxxxxxxx Xx. 0 XXX Xxxxxxxx, Amendment No.
3
Additional AIRs, Amendment No. 3 Additional AIR Debentures, Amendment No.
3
Additional AIR Warrants, and the shares of Common Stock issuable upon the
exercise and conversion of each the foregoing (collectively, the “Securities”)
are duly authorized and, when issued and paid for in accordance with their
respective terms, will be duly and validly issued, fully paid and nonassessable,
free and clear of all Liens other than restrictions on transfer under applicable
securities laws. Generex has reserved from its duly authorized capital stock
a
number of shares of Common Stock for issuance upon exercise and conversion
of
the Amendment Xx. 0 XXX Xxxxxxxxxx, Xxxxxxxxx Xx. 0 XXX Xxxxxxxx, Amendment
No.
3 Additional AIR Debentures and Amendment No. 3 Additional AIR Warrants,
and as
payment of interest in shares of Common Stock under the Amendment No. 3 AIR
Debentures and Amendment No. 3 Additional AIR Debentures (collectively, such
shares of Common Stock are the “Amendment No. 3 Underlying Shares”) at least
equal to the Required Minimum on the date hereof. “Required Minimum” means, as
of any date, the maximum aggregate number of shares of Common Stock then
issued
or potentially issuable in the future pursuant to the Transaction Documents,
including any Amendment No. 3 Underlying Shares issuable upon exercise or
conversion in full of all Amendment No. 3 AIR Warrants, Amendment No. 3
Additional AIR Warrants, Amendment No. 3 AIR Debentures and Amendment No.
3
Additional AIR Debentures (including Amendment No. 3 Underlying Shares issuable
as payment of interest), ignoring any conversion or exercise limits set forth
therein, and assuming that the applicable conversion and exercise prices
are at
all times on and after the date of determination 75% of the then conversion
or
exercise price on the Trading Day immediately prior to the date of
determination.
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(f) Valid
Private Placement.
Assuming the accuracy of the Purchasers’ representations and warranties set
forth in Section 4.2, no registration under the Securities Act is required
for
the offer and sale of the Securities by Generex to the Purchasers as
contemplated by the Transaction Documents.
(g) Acknowledgment
Regarding Purchaser’ Purchase of Securities.
Generex
acknowledges and agrees that each Purchaser is acting solely in the capacity
of
an arm’s length purchaser with respect to the Transaction Documents. Generex
further acknowledges that no Purchaser is acting as a financial advisor or
fiduciary of Generex (or in any similar capacity) with respect to any
Transaction Document or the transactions contemplated thereby, and any advice
given by any Purchaser or any of their respective representatives or agents
in
connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Purchasers’ respective purchase of the
Securities. Generex further represents that Generex’s decision to enter into the
Transaction Documents has been based solely on the independent evaluation
of the
transactions contemplated thereby by Generex and its
representatives.
(h) Compliance
with Existing Agreements.
Generex
is in compliance with the respective terms and conditions of the Purchase
Agreement and “Transaction Documents” (as therein defined) entered into in
connection therewith (including those pertaining to Amendment No. 1). No
“Event
of Default” (as defined under the Debentures and the AIR Debentures) has
occurred, and no event has occurred that with notice or lapse of time or
both
would become an Event of Default under the Debentures or AIR
Debentures.
(i) Certain
Fees.
Except
for fees payable to the Shemano Group, described in the Disclosure Schedules
to
the Purchase Agreement, no brokerage or finder’s fees or commissions are or will
be payable by Generex to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to
the
transactions contemplated by this Amendment. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by
or on
behalf of other Persons for fees of a type contemplated in this Section that
may
be due in connection with the transactions contemplated by this
Amendment.
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(j)
Listing and Maintenance Requirements.
The
Common Stock is registered pursuant to Section 12(g) of the Exchange Act,
and
Generex has taken no action designed to, or which to its knowledge is likely
to
have the effect of, terminating the registration of the Common Stock under
the
Exchange Act, nor has Generex received any notification that the Commission
is
contemplating terminating such registration. Except as disclosed in Generex’s
publicly available periodic reports and Form 8-K’s under the Exchange Act,
Generex has not, in the 12 months preceding the date hereof, received notice
from any Trading Market on which the Common Stock is or has been listed or
quoted to the effect that Generex is not in compliance with the listing or
maintenance requirements of such Trading Market. Other than as to minimum
stock
price requirements, Generex is, and has no reason to believe that it will
not in
the foreseeable future continue to be, in compliance with all such listing
and
maintenance requirements.
(k) Bring
Down of Certain Representations and Warranties.
Generex
hereby restates, as if first made as of and on the date of this Amendment,
the
representations and warranties set forth in the Purchase Agreement (as modified
by the Disclosure Schedules to the extent they apply thereto) in Sections
3.1(a), (b), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r),
(u),
(v), (x), (aa), (cc), (ee), and (hh); provided that (1) the term “Transaction
Documents” therein shall refer not only to such term as defined in the Purchase
Agreement but also to the Transaction Documents defined in this Amendment,
and
(2) the term the “Company” defined in such Purchase Agreement shall also refer
to “Generex” as used herein.
(l) Disclosure.
Generex
confirms that neither it nor any other Person acting on its behalf has provided
any of the Purchasers or their agents or counsel with any information that
constitutes or might constitute material, nonpublic information (except to
the
extent that the existence of this Amendment may be material). Generex
understands and confirms that the Purchasers will rely on the foregoing
representations in effecting transactions in securities of Generex. All
disclosure provided to the Purchasers regarding Generex, its business and
the
transactions contemplated hereby, including any disclosure schedules to this
Amendment, furnished by or on behalf of Generex with respect to the
representations and warranties made herein are true and correct in all material
respects with respect to such representations and warranties and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Generex acknowledges
and agrees that each Purchaser does not make or has not made any representations
or warranties with respect to the transactions contemplated hereby other
than
those specifically set forth in this Section 4.2.
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4.2. Representations
and Warranties of the Purchasers.
Each
Purchaser hereby, for itself and for no other Purchaser, represents and warrants
as of the date hereof to Generex as follows:
(a) Organization;
Authority.
Such
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with the requisite
right,
corporate or partnership power and authority to enter into and to consummate
the
transactions contemplated by this Amendment and to carry out its obligations
hereunder. The execution, delivery and performance by such Purchaser of the
transactions contemplated by this Amendment have been duly authorized by
all
necessary corporate or similar action on the part of such Purchaser. This
Amendment has been duly executed by such Purchaser, and when delivered by
such
Purchaser in accordance with the terms hereof, will constitute the valid
and
legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other
laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
(b) Investment
Intent.
Such
Purchaser understands that the Securities are “restricted securities” and have
not been registered under the Securities Act or any applicable state securities
law and is acquiring the Securities as principal for its own account and
not
with a view to or for distributing or reselling such Securities or any part
thereof (this representation and warranty not limiting such Purchaser’s right to
sell the Securities pursuant to the Registration Statement or otherwise in
compliance with applicable federal and state securities laws). Nothing contained
herein shall be deemed a representation or warranty by such Purchaser to
hold
Securities for any period of time. Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Such Purchaser does not
have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.
(c) Purchaser
Status.
Such
Purchaser is either (i) an “accredited investor” as defined in Rule 501(a) under
the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act. Such Purchaser is not registered as a
broker-dealer under Section 15 of the Exchange Act.
(d) Experience
of Such Purchaser.
Such
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters
so as
to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of
such
investment.
(e) General
Solicitation.
Such
Purchaser is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published
in any
newspaper, magazine or similar media or broadcast over television or radio
or
presented at any seminar or any other general solicitation or general
advertisement.
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(f) Access
to Information.
Such
Purchaser acknowledges that it has reviewed such materials it deems necessary
to
make an informed investment decision and has been afforded (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of Generex concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing therein;
(ii)
access to information about Generex and the Subsidiaries and their respective
financial condition, results of operations, business, properties, management
and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that Generex possesses
or can
acquire without unreasonable effort or expense that is necessary to make
an
informed investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of such
Purchaser or its representatives or counsel shall modify, amend or affect
such
Purchaser’s right to rely on the truth, accuracy and completeness of such
materials it has reviewed and Generex’s representations and warranties contained
in this Amendment.
(g) Limited
Ownership.
The
purchase by such Purchaser of the Securities issuable to it upon the closing
under this Amendment (including the Amendment No. 3 Underlying Shares then
immediately issuable in respect of such Securities) will not result in such
Purchaser (individually or together with any other Person with whom such
Purchaser has identified, or will have identified, itself as part of a “group”
in a public filing made with the Commission involving Generex’s securities)
acquiring, or obtaining the right to acquire, in excess of 19.999% of the
Common
Stock or the voting power of Generex on a post transaction basis that assumes
that the closing shall have occurred. Such Purchaser does not presently intend
to, alone or together with others, make a public filing with the Commission
to
disclose that it has (or that it together with such other Persons have)
acquired, or obtained the right to acquire, as a result of the closing (when
added to any other securities of Generex that it or they then own or have
the
right to acquire), in excess of 19.999% of the Common Stock or the voting
power
of Generex on a post transaction basis that assumes that the closing shall
have
occurred.
(h) Principal
Amount of AIR Debentures.
The
principal amount of AIR Debentures which such Purchaser’s Additional Investment
Right permits it to acquire immediately prior to its execution of this Amendment
is set forth on such Purchaser’s signature page to this Amendment.
(i) Independent
Investment Decision.
Such
Purchaser has independently evaluated the merits of its decision to purchase
Securities pursuant to this Agreement, such decision has been independently
made
by such Purchaser and such Purchaser confirms that it has only relied on
the
advice of its own business and/or legal counsel and not on the advice of
any
other Purchaser’s business and/or legal counsel in making such decision. Such
Purchaser understands that its investment in the Securities involves a high
degree of risk. Such Purchaser has sought such accounting, legal and tax
advice
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the securities.
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(j) Reliance
on Exemptions.
Such
Purchaser understands that the Securities are being offered and sold to it
in
reliance on Regulation D and that Generex is relying upon the truth and accuracy
of, and such Purchaser’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Purchaser set forth
herein in order to determine the availability of Regulation D and the
eligibility of such Purchaser to acquire such Securities.
(k) No
Governmental Review.
Such
Purchaser understands that no United States federal or state agency or any
other
government or governmental agency has passed on or made any recommendation
or
endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits
of the offering of the Securities.
(l) Residency.
Such
Purchaser certifies that it resides or has a bona fide place of business
at the
address set forth below such Purchaser’s name on its signature page to this
Amendment.
5. |
Continued
Validity of Transaction Documents under Purchase Agreement.
The parties hereto agree that the Purchase Agreement and the Transaction
Documents entered into in connection therewith (as amended by Amendment
No. 1), remain in full force and effect, modified to the extent and
only
to the extent necessary to give effect to this Amendment and the
transactions herein contemplated. Article IV of the Purchase Agreement
is
hereby incorporated by reference in its entirety, except for Sections
4.6
and 4.15 therein, into this Amendment with the understanding that
if any
term is identified in each of Article IV of the Purchase Agreement
and in
this Amendment, the term shall have the meaning set forth in this
Amendment and references in such Article IV to “the Company” shall mean
Generex.
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6. |
Closing.
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6.1. |
Closing.
On the Trading Day following the date on which the conditions set
forth in
Section 6.3 are satisfied, or on such other date as the parties may
agree
(the “Closing Date”), the closing of the transactions contemplated by this
Amendment shall occur (the “Closing”).
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6.2. |
Deliveries
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a) |
On
the Closing Date, Generex shall deliver or cause to be delivered
to each
Purchaser the following:
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10
(1) |
this
Amendment, duly executed by Generex;
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(2) |
an
Amendment No. 3 AIR Debenture, registered in the name of such Purchaser
in
the correct principal amount;
|
(3) |
an
Amendment No. 3 AIR Warrant, registered in the name of such
Purchaser;
|
(4) |
an
Amendment No. 3 Additional AIR, registered in the name of such Purchaser;
and
|
(5) | a legal opinion issued by Company counsel. |
b) |
On
the Closing Date, each Purchaser shall deliver or cause to be delivered
to
Generex the following:
|
(1) |
this
Amendment, duly executed by such Purchaser;
and
|
(2) |
100%
of the principal amount of AIR Debentures issuable upon exercise
in full
of such Purchaser’s Additional Investment Right by wire transfer to the
account as specified in writing by the Company.
|
6.3. |
Closing
Conditions.
|
a) |
The
obligations of Generex hereunder in connection with the Closing are
subject to the following conditions being
met:
|
(1) |
the
accuracy in all material respects when made and on the Closing Date
of the
representations and warranties of the Purchasers contained
herein;
|
(2) |
all
obligations, covenants and agreements of the Purchasers required
to be
performed at or prior to the Closing Date shall have been performed;
and
|
(3) |
the
delivery by the Purchasers of the items set forth in Section 6.2(b)
of
this Amendment.
|
b) |
The
respective obligations of the Purchasers hereunder in connection
with the
Closing are subject to the following conditions being
met:
|
(4) |
the
accuracy in all material respects on the Closing Date of the
representations and warranties of Generex
contained herein;
|
(5) |
all
obligations, covenants and agreements of Generex required to be performed
at or prior to the Closing Date shall have been performed;
|
11
(6) |
the
delivery by Generex
of
the items set forth in Section 6.2(a) of this Amendment;
|
(7) |
there
shall have been no Material Adverse Effect with respect to Generex
since the date hereof; and
|
(8) |
From
the date hereof to the Closing Date, trading in the Common Stock
shall not
have been suspended by the Commission (except for any suspension
of
trading of limited duration agreed to by Generex, which suspension
shall
be terminated prior to the Closing), and, at any time prior to the
Closing
Date, trading in securities generally as reported by Bloomberg Financial
Markets shall not have been suspended or limited, or minimum prices
shall
not have been established on securities whose trades are reported
by such
service, or on any Trading Market, nor shall a banking moratorium
have
been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation
of
hostilities or other national or international calamity of such magnitude
in its effect on, or any material adverse change in, any financial
market
which, in each case, in the reasonable judgment of each Purchaser,
makes
it impracticable or inadvisable to exercise its Additional Investment
Right at the Closing.
|
7. |
Miscellaneous.
|
7.1. |
Fees
and Expenses.
Generex has agreed to reimburse Cranshire Capital, L.P. (“Cranshire”)
$15,000 for its legal fees and expenses in connection with this Amendment.
Accordingly, the amount Cranshire must pay to Generex to exercise
its
Additional Investment Right under Section 1 shall be reduced by $15,000.
Except for the foregoing, each party hereto will bear the fees and
expenses of its own counsel and advisors in connection with the
negotiation and entering into of this Amendment. Generex shall pay
all
transfer agent fees, stamp taxes and other taxes and duties levied
in
connection with the issuance of any
Securities.
|
7.2. |
Entire
Agreement.
This Amendment and the Transaction Documents, together with the exhibits
and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
|
7.3. |
Equal
Treatment of Purchasers.
No consideration shall be offered or paid to any person to amend
or
consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration is also offered
to all
of the parties to the Transaction Documents. Further, Generex shall
not
make any payment of principal or interest on the Debentures, AIR
Debentures or Amendment
No. 3 AIR Debentures
in
amounts which are disproportionate to the respective principal amounts
outstanding on the Debentures, AIR Debentures or Amendment No. 3
AIR
Debentures at any applicable time. For clarification purposes, this
provision constitutes a separate right granted to each Purchaser
by
Generex and negotiated separately by each Purchaser, and is intended
to
treat for Generex the Debenture, AIR Debenture and Amendment No.
3 AIR
Debenture holders as a class and shall not in any way be construed
as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or
otherwise.
|
12
7.4. |
Public
Announcement.
Generex shall, by 8:30 a.m. Eastern time on the Trading Day following
the
date hereof, issue a press release disclosing the material terms
of the
transactions contemplated hereby and by 4:30 p.m. Eastern time on
such
date, file a Current Report on Form 8-K, attaching such press release
and
the Transaction Documents thereto, each reasonably acceptable to
each
Purchaser. Generex and each Purchaser shall consult with each other
in
issuing any other press releases with respect to the transactions
contemplated hereby, and neither Generex nor any Purchaser shall
issue any
such press release or otherwise make any such public statement without
the
prior consent of Generex, with respect to any press release of any
Purchaser, or without the prior consent of each Purchaser, with respect
to
any press release of Generex, which consent shall not unreasonably
be
withheld, except if such disclosure is required by law, in which
case the
disclosing party shall promptly provide the other party with prior
notice
of such public statement or communication. Notwithstanding the foregoing,
Generex shall not publicly disclose the name of any Purchaser, or
include
the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent
of
such Purchaser, except (i) as required by federal securities law
in
connection with the registration statement contemplated by the
Registration Rights Agreement and (ii) to the extent such disclosure
is
required by law or Trading Market regulations, in which case Generex
shall
provide the Purchasers with prior notice of such disclosure permitted
under subclause (i) or (ii).
|
7.5. |
Notices.
Any and all notices or other communications or deliveries required
or
permitted to be provided hereunder shall be in writing and shall
be deemed
given and effective as specified in the Purchase Agreement. The address
for such notices and communications shall be as set forth on the
signature
pages attached to the Purchase Agreement.
|
7.6. |
Amendments;
Waivers.
No provision of this Amendment may be waived or amended except in
a
written instrument signed, in the case of an amendment, by Generex
and
each Purchaser or, in the case of a waiver, by the party against
whom
enforcement of any such waiver is sought. No waiver of any default
with
respect to any provision, condition or requirement of this Amendment
shall
be deemed to be a continuing waiver in the future or a waiver of
any
subsequent default or a waiver of any other provision, condition
or
requirement hereof, nor shall any delay or omission of either party
to
exercise any right hereunder in any manner impair the exercise of
any such
right.
|
13
7.7. |
Amendment
Controls.
If any topic is addressed both in the Purchase Agreement (or any
document
related thereto) and in this Amendment, this Amendment shall
control.
|
7.8. |
Construction.
The headings herein are for convenience only, do not constitute a
part of
this Amendment and shall not be deemed to limit or affect any of
the
provisions hereof. The language used in this Amendment will be deemed
to
be the language chosen by the parties to express their mutual intent,
and
no rules of strict construction will be applied against any
party.
|
7.9. |
Governing
Law.
All questions concerning the construction, validity, enforcement
and
interpretation of this Amendment shall be governed by and construed
and
enforced in accordance with the internal laws of the State of New
York,
without regard to the principles of conflicts of law thereof. The
parties
agree that Section 5.9 of the Purchase Agreement shall apply to this
Amendment as if set forth in its entirety
herein.
|
7.10. |
Survival.
The representations and warranties contained herein shall survive
the
delivery, exercise and/or conversion of the Securities, as applicable
for
the applicable statue of limitations.
|
7.11. |
Execution.
This Amendment may be executed in two or more counterparts, all of
which
when taken together shall be considered one and the same document
and
shall become effective when counterparts have been signed by each
party
and delivered to the other party, it being understood that both parties
need not sign the same counterpart.
|
7.12. |
Severability.
If any provision of this Amendment is held to be invalid or unenforceable
in any respect, the validity and enforceability of the remaining
terms and
provisions of this Amendment shall not in any way be affected or
impaired
thereby and the parties will attempt to agree upon a valid and enforceable
provision that is a reasonable substitute therefor, and upon so agreeing,
shall incorporate such substitute provision in this
Amendment.
|
7.13. |
Independent
Nature of Purchasers’ Obligations and Rights.
The obligations of each Purchaser hereunder are several and not joint
with
the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of
any other
Purchaser. Nothing contained herein, and no action taken by any Purchaser
pursuant hereto, shall be deemed to constitute the Purchasers as
a
partnership, an association, a joint venture or any other kind of
entity,
or create a presumption that the Purchasers are in any way acting
in
concert or as a group with respect to such obligations or the transactions
contemplated hereby. Each Purchaser shall be entitled to independently
protect and enforce its rights, including, without limitation, the
rights
arising out of this Amendment and it shall not be necessary for any
other
Purchaser to be joined as an additional party in any proceeding for
such
purpose. The Purchasers have not relied upon the same legal counsel
in
their review and negotiation of this Amendment. Generex has elected
to
provide all Purchasers with the same terms and form of Amendment
for the
convenience of Generex and not because it was required or requested
to do
so by the Purchasers. Each Purchaser represents that it has been
represented by its own separate legal counsel in its review and
negotiations of this Amendment and each party represents and confirms
that
Proskauer Rose LLP represents only Cranshire Capital, L.P. in connection
with this Amendment.
|
14
7.14. |
Exempt
Issuances.
The term “Exempt Issuance” as defined in the Purchase Agreement is hereby
amended to include Common Stock and Common Stock Equivalents to employees,
officers, directors and consultants, if issued pursuant to a resolution
adopted by the majority of the non-employee members of the Board
of
Directors.
|
(Signature
Pages Follow)
15
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized signatories as of the date first
indicated above.
GENEREX
BIOTECHNOLOGY CORPORATION
|
By:__________________________________________
Name:
Title:
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASERS FOLLOWS]
16
IN
WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed
by their respective authorized signatories as of the date first indicated
above.
Name
of
Investing Entity:
________________________________________________________
Signature
of Authorized Signatory of Investing Entity:
__________________________________
Name
of
Authorized Signatory:
____________________________________________________
Title
of
Authorized Signatory:
_____________________________________________________
Email
Address of Authorized
Entity:________________________________________________
The
principal amount of AIR Debentures which such
Purchaser’s
Additional Investment Right permits it to acquire: $______________________
Residency
of Investing Entity: ______________________________
17