Unassociated Document

 

    LIMITED
LIABILITY COMPANY OWNERSHIP INTEREST

    PURCHASE
AGREEMENT

    


    BY
AND AMONG

    


    GENEREX
BIOTECHNOLOGY CORPORATION

    (“GENEREX”
or “BUYER”),

     

    GLOBAL
MEDICAL DIRECT, LLC

    (“COMPANY”)

    


    AND

    


    JOSEPH
CORSO, JR.,

    ROBERT
S. SHEA

    &

    MARK
FRANZ

    


    (“SELLERS”)

    


    October
8, 2010


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    TABLE OF
CONTENTS

    


    
      
        
          	 
      	 
      	
                  Page

                
	 
      	 
      	 
      
	
                  ARTICLE
      I SALE AND TRANSFER OF MEMBERSHIP INTEREST; CLOSING

                	 
      	
                  1

                
	 
      	 
      	 
      	 
      
	
                  1.1

                	
                  Sale
      and Purchase of Membership Interest

                	 
      	
                  1

                
	
                  1.2

                	
                  Purchase
      Price

                	 
      	
                  1

                
	
                  1.3

                	
                  Definitions

                	 
      	
                  2

                
	
                  1.4

                	
                  Closing
      Date Consideration

                	 
      	
                  2

                
	
                  1.5

                	
                  Indemnification
      Holdback Amount

                	 
      	
                  2

                
	
                  1.6

                	
                  Anniversary
      Date Consideration

                	 
      	
                  3

                
	
                  1.7

                	
                  Issuance
      of Closing Date Shares

                	 
      	
                  3

                
	
                  1.8

                	
                  Closing

                	 
      	
                  3

                
	
                  1.9

                	
                  Closing
      Obligations

                	 
      	
                  3

                
	 
      	 
      	 
      	 
      
	
                  ARTICLE
      II REPRESENTATIONS AND WARRANTIES OF SELLERS

                	 
      	
                  5

                
	 
      	 
      	 
      	 
      
	
                  2.1

                	
                  Organization,
      Existence and Good Standing

                	 
      	
                  5

                
	
                  2.2

                	
                  Power,
      Authority and Enforceability of the Company

                	 
      	
                  6

                
	
                  2.3

                	
                  Power,
      Authority and Enforceability of Sellers

                	 
      	
                  6

                
	
                  2.4

                	
                  No
      Conflict

                	 
      	
                  6

                
	
                  2.5

                	
                  Capitalization

                	 
      	
                  7

                
	
                  2.6

                	
                  Subsidiaries

                	 
      	
                  7

                
	
                  2.7

                	
                  Financial
      Statements

                	 
      	
                  7

                
	
                  2.8

                	
                  Books
      and Records

                	 
      	
                  8

                
	
                  2.9

                	
                  Title
      to Properties; Encumbrances

                	 
      	
                  8

                
	
                  2.10

                	
                  Real
      Property

                	 
      	
                  8

                
	
                  2.11

                	
                  Condition
      and Sufficiency of Assets

                	 
      	
                  9

                
	
                  2.12

                	
                  Accounts
      Receivable

                	 
      	
                  9

                
	
                  2.13

                	
                  Inventory

                	 
      	
                  9

                
	
                  2.14

                	
                  No
      Undisclosed Liabilities

                	 
      	
                  9

                
	
                  2.15

                	
                  Taxes

                	 
      	
                  9

                
	
                  2.16

                	
                  Bank
      Accounts

                	 
      	
                  10

                
	
                  2.17

                	
                  Employee
      Benefits

                	 
      	
                  10

                
	
                  2.18

                	
                  Compliance
      with Legal Requirements

                	 
      	
                  12

                
	
                  2.19

                	
                  Governmental
      Authorizations

                	 
      	
                  13

                
	
                  2.20

                	
                  Legal
      Proceedings; Orders

                	 
      	
                  14

                
	
                  2.21

                	
                  Absence
      of Certain Changes and Events

                	 
      	
                  14

                
	
                  2.22

                	
                  Contracts;
      No Defaults

                	 
      	
                  16

                
	
                  2.23

                	
                  Material
      Adverse Changes

                	 
      	
                  18

                
	
                  2.24

                	
                  Insurance

                	 
      	
                  18

                
	
                  2.25

                	
                  Environmental
      Matters

                	 
      	
                  19

                
	
                  2.26

                	
                  Employees/Representatives

                	 
      	
                  19

                
	
                  2.27

                	
                  Labor
      Relations; Compliance

                	 
      	
                  20

                
	
                  2.28

                	
                  Intellectual
      Property

                	 
      	
                  20

                


        

      

    

     

    
      
         


      

      
        i

        
          

        

      

      
         


      

    

    
    

    
      
        
          
            	
                    2.29

                  	
                    Finders
      or Broker Fees

                  	 
      	
                    22

                  
	
                    2.30

                  	
                    Competitive
      Interest

                  	 
      	
                    22

                  
	
                    2.31

                  	
                    Related
      Party Transactions

                  	 
      	
                    23

                  
	
                    2.32

                  	
                    Related
      Party Obligations

                  	 
      	
                    23

                  
	
                    2.33

                  	
                    Name;
      Prior Transactions

                  	 
      	
                    23

                  
	
                    2.34

                  	
                    Permits

                  	 
      	
                    23

                  
	
                    2.35

                  	
                    Litigation
      and Claims

                  	 
      	
                    23

                  
	
                    2.36

                  	
                    Decrees,
      Orders or Arbitration Awards

                  	 
      	
                    23

                  
	
                    2.37

                  	
                    Securities
      Laws

                  	 
      	
                    23

                  
	
                    2.38

                  	
                    Disclaimer
      of Other Representations or Warranties

                  	 
      	
                    26

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      III REPRESENTATIONS AND WARRANTIES OF BUYER

                  	 
      	
                    26

                  
	 
      	 
      	 
      	 
      
	
                    3.1

                  	
                    Organization,
      Existence and Good Standing

                  	 
      	
                    26

                  
	
                    3.2

                  	
                    Authority;
      No Conflict

                  	 
      	
                    26

                  
	
                    3.3

                  	
                    Certain
      Proceedings

                  	 
      	
                    27

                  
	
                    3.4

                  	
                    Generex
      Documents

                  	 
      	
                    27

                  
	
                    3.5

                  	
                    Authorization
      of Generex Shares

                  	 
      	
                    28

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      IV COVENANTS OF COMPANY AND SELLERS

                  	 
      	
                    28

                  
	 
      	 
      	 
      	 
      
	
                    4.1

                  	
                    Access
      and Investigation

                  	 
      	
                    28

                  
	
                    4.2

                  	
                    Operation
      of the Business of Company and Subsidiaries

                  	 
      	
                    28

                  
	
                    4.3

                  	
                    Requirement;
      Approvals

                  	 
      	
                    29

                  
	
                    4.4

                  	
                    Notification

                  	 
      	
                    29

                  
	
                    4.5

                  	
                    Corso
      Indebtedness

                  	 
      	
                    29

                  
	
                    4.6

                  	
                    No
      Solicitation or Negotiation

                  	 
      	
                    29

                  
	
                    4.7

                  	
                    Best
      Efforts

                  	 
      	
                    30

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      V COVENANTS OF BUYER PRIOR TO CLOSING DATE

                  	 
      	
                    30

                  
	 
      	 
      	 
      	 
      
	
                    5.1

                  	
                    Approvals
      of Governmental Bodies

                  	 
      	
                    30

                  
	
                    5.2

                  	
                    Best
      Efforts

                  	 
      	
                    30

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      VI CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

                  	 
      	
                    30

                  
	 
      	 
      	 
      	 
      
	
                    6.1

                  	
                    Accuracy
      of Representations

                  	 
      	
                    30

                  
	
                    6.2

                  	
                    Satisfaction
      of Due Diligence Investigation

                  	 
      	
                    31

                  
	
                    6.3

                  	
                    Sellers’
      Performance

                  	 
      	
                    31

                  
	
                    6.4

                  	
                    Consents

                  	 
      	
                    31

                  
	
                    6.5

                  	
                    Amended
      Operating Agreement

                  	 
      	
                    31

                  
	
                    6.6

                  	
                    Corso
      Indebtedness Release and Lease Termination

                  	 
      	
                    32

                  
	
                    6.7

                  	
                    Release
      of Liens

                  	 
      	
                    32

                  
	
                    6.8

                  	
                    Additional
      Documents

                  	 
      	
                    32

                  


          

        

      

       

      
        
           


        

        
          ii

          
            

          

        

        
           


        

      

       

      
        
          
            
              	
                      6.9

                    	
                      No
      Proceedings

                    	 
      	
                      32

                    
	
                      6.10

                    	
                      No
      Claim Regarding Unit Ownership or Sale Proceeds

                    	 
      	
                      32

                    
	
                      6.11

                    	
                      No
      Prohibition

                    	 
      	
                      32

                    
	
                      6.12

                    	
                      Termination
      of Certain Contracts and Releases of Liability

                    	 
      	
                      33

                    
	
                      6.13

                    	
                      Acquisition
      Financing

                    	 
      	
                      33

                    
	
                      6.14

                    	
                      NASDAQ
      Approval for Issuance of Generex Shares

                    	 
      	
                      33

                    
	 
      	 
      	 
      	 
      
	
                      ARTICLE
      VII CONDITIONS PRECEDENT TO OBLIGATION OF  COMPANY AND THE
      SELLERS TO CLOSE

                    	 
      	
                      33

                    
	 
      	 
      	 
      	 
      
	
                      7.1

                    	
                      Accuracy
      of Representations

                    	 
      	
                      33

                    
	
                      7.2

                    	
                      Satisfaction
      of Due Diligence Investigation

                    	 
      	
                      33

                    
	
                      7.3

                    	
                      Buyer’s
      Performance

                    	 
      	
                      33

                    
	
                      7.4

                    	
                      Amended
      Operating Agreement

                    	 
      	
                      34

                    
	
                      7.5

                    	
                      Additional
      Documents

                    	 
      	
                      34

                    
	
                      7.6

                    	
                      No
      Injunction

                    	 
      	
                      35

                    
	
                      7.7

                    	
                      NASDAQ
      Approval for Issuance of Generex Shares

                    	 
      	
                      34

                    
	 
      	 
      	 
      	 
      
	
                      ARTICLE
      VIII TERMINATION

                    	 
      	
                      34

                    
	 
      	 
      	 
      	 
      
	
                      8.1

                    	
                      Termination
      Events

                    	 
      	
                      34

                    
	
                      8.2

                    	
                      Effect
      of Termination

                    	 
      	
                      35

                    
	 
      	 
      	 
      	 
      
	
                      ARTICLE
      IX INDEMNIFICATION, REMEDIES AND POST CLOSING COVENANTS

                    	 
      	
                      35

                    
	 
      	 
      	 
      	 
      
	
                      9.1

                    	
                      Survival
      of Representations and Warranties

                    	 
      	
                      35

                    
	
                      9.2

                    	
                      Indemnification
      and Payment of Damages by Sellers

                    	 
      	
                      36

                    
	
                      9.3

                    	
                      Indemnification
      and Payment of Damages by Buyer

                    	 
      	
                      37

                    
	
                      9.4

                    	
                      Buyer
      Indemnification Limitation

                    	 
      	
                      37

                    
	
                      9.5

                    	
                      Claims

                    	 
      	
                      37

                    
	
                      9.6

                    	
                      Third
      Party Claims

                    	 
      	
                      37

                    
	
                      9.7

                    	
                      Other
      Claims

                    	 
      	
                      38

                    
	
                      9.8

                    	
                      Payments

                    	 
      	
                      38

                    
	
                      9.9

                    	
                      Tax
      Treatment

                    	 
      	
                      38

                    
	 
      	 
      	 
      	 
      
	
                      ARTICLE
      X DEFINITIONS

                    	 
      	
                      39

                    
	 
      	 
      	 
      	 
      
	
                      10.1

                    	
                      “Accounts
      Receivable”

                    	 
      	
                      39

                    
	
                      10.2

                    	
                      “Affiliate”

                    	 
      	
                      39

                    
	
                      10.3

                    	
                      “Agreement”

                    	 
      	
                      39

                    
	
                      10.4

                    	
                      “Amended
      Operating Agreement”

                    	 
      	
                      39

                    
	
                      10.5

                    	
                      “Best
      Efforts”

                    	 
      	
                      39

                    
	
                      10.6

                    	
                      “Breach”

                    	 
      	
                      39

                    
	
                      10.7

                    	
                      “Buyer”

                    	 
      	
                      39

                    


            

          

        

      

       

      
        
           


        

        
          iii

          
            

          

        

        
           


        

      

       

      
        
          
            	
                    10.8

                  	
                    “Buyer’s
      Advisors”

                  	 
      	
                    39

                  
	
                    10.9

                  	
                    “Buyer’s
      Closing Documents”

                  	 
      	
                    40

                  
	
                    10.10

                  	
                    “Closing”

                  	 
      	
                    40

                  
	
                    10.11

                  	
                    “Closing
      Date”

                  	 
      	
                    40

                  
	
                    10.12

                  	
                    “Code”

                  	 
      	
                    40

                  
	
                    10.13

                  	
                    “Control,
      Controls and Controlled”

                  	 
      	
                    40

                  
	
                    10.14

                  	
                    “Company
      Assets”

                  	 
      	
                    40

                  
	
                    10.15

                  	
                    “Consent”
      or “Consents”

                  	 
      	
                    40

                  
	
                    10.16

                  	
                    “Contemplated
      Transactions”

                  	 
      	
                    40

                  
	
                    10.17

                  	
                    “Contract”

                  	 
      	
                    40

                  
	
                    10.18

                  	
                    “Corso
      Indebtedness”

                  	 
      	
                    41

                  
	
                    10.19

                  	
                    “Damages”

                  	 
      	
                    41

                  
	
                    10.20

                  	
                    “Employee
      Benefit Plan”

                  	 
      	
                    41

                  
	
                    10.21

                  	
                    “Encumbrance”

                  	 
      	
                    41

                  
	
                    10.22

                  	
                    “Environment”

                  	 
      	
                    41

                  
	
                    10.23

                  	
                    “Environmental,
      Health, and Safety Liabilities”

                  	 
      	
                    41

                  
	
                    10.24

                  	
                    “Environmental
      Law”

                  	 
      	
                    42

                  
	
                    10.25

                  	
                    “ERISA”

                  	 
      	
                    42

                  
	
                    10.26

                  	
                    “Escrow
      Agent”

                  	 
      	
                    42

                  
	
                    10.27

                  	
                    “Escrow
      Agreement”.

                  	 
      	
                    42

                  
	
                    10.28

                  	
                    “Exchange
      Act”

                  	 
      	
                    42

                  
	
                    10.29

                  	
                    “Exempt
      Damages”

                  	 
      	
                    43

                  
	
                    10.30

                  	
                    “Exempt
      Provisions”

                  	 
      	
                    43

                  
	
                    10.31

                  	
                    “Facilities”

                  	 
      	
                    43

                  
	
                    10.32

                  	
                    “Fiduciary”

                  	 
      	
                    43

                  
	
                    10.33

                  	
                    “Financial
      Statements”

                  	 
      	
                    43

                  
	
                    10.34

                  	
                    “GAAP”

                  	 
      	
                    43

                  
	
                    10.35

                  	
                    “Governmental
      Authorization”

                  	 
      	
                    43

                  
	
                    10.36

                  	
                    “Governmental
      Body”

                  	 
      	
                    43

                  
	
                    10.37

                  	
                    “Hazardous
      Activity”

                  	 
      	
                    43

                  
	
                    10.38

                  	
                    “Hazardous
      Materials”

                  	 
      	
                    43

                  
	
                    10.39

                  	
                    “Indebtedness”

                  	 
      	
                    43

                  
	
                    10.40

                  	
                    “Indemnified
      Persons”

                  	 
      	
                    43

                  
	
                    10.41

                  	
                    “Intellectual
      Property”

                  	 
      	
                    44

                  
	
                    10.42

                  	
                    “Intellectual
      Property Assets”

                  	 
      	
                    44

                  
	
                    10.43

                  	
                    “Interim
      Financial Statements”

                  	 
      	
                    44

                  
	
                    10.44

                  	
                    “IRC”

                  	 
      	
                    44

                  
	
                    10.45

                  	
                    “IRS”

                  	 
      	
                    44

                  
	
                    10.46

                  	
                    “Knowledge”

                  	 
      	
                    44

                  
	
                    10.47

                  	
                    “Leased
      Property”

                  	 
      	
                    44

                  
	
                    10.48

                  	
                    “Legal
      Requirement”

                  	 
      	
                    44

                  
	
                    10.49

                  	
                    “Liability”

                  	 
      	
                    44

                  
	
                    10.50

                  	
                    “Limitation”

                  	 
      	
                    44

                  
	
                    10.51

                  	
                    “Material
      Adverse Change (or Effect)”

                  	 
      	
                    45

                  
	
                    10.52

                  	
                    “Membership
      Interest”

                  	 
      	
                    45

                  
	
                    10.53

                  	
                    “Occupational
      Safety and Health Law”

                  	 
      	
                    45

                  


          

        

      

       

      
        
           


        

        
          iv

          
            

          

        

        
           


        

      

       

      
        
          
            	
                    10.54

                  	
                    “Operating
      Agreement”

                  	 
      	
                    45

                  
	
                    10.55

                  	
                    “Order”

                  	 
      	
                    45

                  
	
                    10.56

                  	
                    “Ordinary
      Course of Business”

                  	 
      	
                    45

                  
	
                    10.57

                  	
                    “Organizational
      Documents”

                  	 
      	
                    45

                  
	
                    10.58

                  	
                    “Person”

                  	 
      	
                    46

                  
	
                    10.59

                  	
                    Proceeding”

                  	 
      	
                    46

                  
	
                    10.60

                  	
                    “Purchase
      Price”

                  	 
      	
                    46

                  
	
                    10.61

                  	
                    “Records”

                  	 
      	
                    46

                  
	
                    10.62

                  	
                    “Release”

                  	 
      	
                    46

                  
	
                    10.63

                  	
                    “Sale
      Transaction”

                  	 
      	
                    46

                  
	
                    10.64

                  	
                    “Securities
      Act”

                  	 
      	
                    46

                  
	
                    10.65

                  	
                    “Seller”
      or “Sellers”

                  	 
      	
                    46

                  
	
                    10.66

                  	
                    “Sellers’
      Closing Documents”

                  	 
      	
                    46

                  
	
                    10.67

                  	
                    “Subsidiary”

                  	 
      	
                    46

                  
	
                    10.68

                  	
                    “Tax”

                  	 
      	
                    46

                  
	
                    10.69

                  	
                    “Tax
      Return”

                  	 
      	
                    47

                  
	
                    10.70

                  	
                    “Threat
      of Release”

                  	 
      	
                    47

                  
	
                    10.71

                  	
                    “Threatened”

                  	 
      	
                    47

                  
	
                    10.72

                  	
                    “Units”

                  	 
      	
                    47

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      XI GENERAL PROVISIONS

                  	 
      	
                    47

                  
	 
      	 
      	 
      	 
      
	
                    11.1

                  	
                    Obligations
      of Sellers

                  	 
      	
                    47

                  
	
                    11.2

                  	
                    Audited
      Company Financial Statements

                  	 
      	
                    47

                  
	
                    11.3

                  	
                    Expenses

                  	 
      	
                    47

                  
	
                    11.4

                  	
                    Schedules

                  	 
      	
                    48

                  
	
                    11.5

                  	
                    Public
      Announcements

                  	 
      	
                    48

                  
	
                    11.6

                  	
                    Notices

                  	 
      	
                    48

                  
	
                    11.7

                  	
                    Certain
      Taxes

                  	 
      	
                    49

                  
	
                    11.8

                  	
                    Recoupment

                  	 
      	
                    49

                  
	
                    11.9

                  	
                    Further
      Assurances

                  	 
      	
                    50

                  
	
                    11.10

                  	
                    Waiver

                  	 
      	
                    50

                  
	
                    11.11

                  	
                    Entire
      Agreement and Modification

                  	 
      	
                    50

                  
	
                    11.12

                  	
                    Construction

                  	 
      	
                    50

                  
	
                    11.13

                  	
                    Assignments;
      Successors; No Third Party Rights

                  	 
      	
                    51

                  
	
                    11.14

                  	
                    Severability

                  	 
      	
                    51

                  
	
                    11.15

                  	
                    Headings

                  	 
      	
                    51

                  
	
                    11.16

                  	
                    Time
      of Essence

                  	 
      	
                    51

                  
	
                    11.17

                  	
                    Governing
      Law

                  	 
      	
                    51

                  
	
                    11.18

                  	
                    Arm’s
      Length Negotiations

                  	 
      	
                    51

                  
	
                    11.19

                  	
                    Counterparts/Facsimile
      Signatures

                  	 
      	
                    51

                  
	
                    11.20

                  	
                    Dispute
      Resolution

                  	 
      	
                    52

                  


          

        

      


      
        
           


        

        
          v

          
            

          

        

        
           


        

      
  

    LIMITED LIABILITY COMPANY
OWNERSHIP INTEREST

     

    PURCHASE
AGREEMENT

     

    THIS LIMITED LIABILITY COMPANY
OWNERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”) is made and
entered into as of this 8th day of October, 2010, by and among Generex Biotechnology
Corporation, a Delaware corporation (“Generex” or “Buyer”), Global Medical Direct, LLC, a
Kansas limited liability company (“Company”), and Joseph Corso, Jr., a New York
resident (“Corso”), Robert S.
Shea, a Kansas resident (“Shea”) and Mark Franz, a Kansas resident
(“Franz”).  Corso, Shea and Franz are each individually referred to
herein as a “Seller” and collectively and jointly and severally referred to
herein as the “Sellers”.  Certain other capitalized terms used herein
are defined in Article X and throughout this Agreement.

     

    RECITALS:

     

    A.           The
Company and the Subsidiaries are engaged in the business of providing direct to
consumer diabetic supplies, diabetic shoes/inserts, insulin pumps, and
pharmaceutical products under the names of “Global Medical Direct” and “Global
Medical Direct Pharmacy” (the “Business”).

     

    B.           The
Sellers are the owners of all the issued and outstanding units, ownership
interests and other equity securities of the Company (collectively, the
“Units”).

     

    C.           Sellers
desire to sell and Buyer desires to purchase an aggregate of fifty-one percent
(51%) of the issued and outstanding Units (collectively, the “Membership
Interest”) upon the terms and subject to the conditions, representations,
warranties and covenants contained in this Agreement.

     

    AGREEMENT

     

    NOW, THEREFORE, in
consideration of the premises and the mutual promises representations,
warranties and covenants herein contained, the parties agree as
follows:

     

    ARTICLE
I

    SALE
AND TRANSFER OF MEMBERSHIP INTEREST; CLOSING

     

    1.1           Sale and Purchase of
Membership Interest.   Subject
to the terms and conditions set forth in this Agreement, at the Closing, each
Seller will sell, convey, assign, transfer and deliver his pro rata share of
Units comprising the Membership Interest as delineated in Schedule 1.1, free
and clear of any Encumbrances, to Buyer, and Buyer will purchase the Membership
Interest from Sellers.

     

    1.2           Purchase Price.
  The
“Purchase Price” for the Membership Interest shall be equal to the sum of the
“Closing Date Consideration” and the “Anniversary Date Consideration,” if
any.  The Purchase Price shall be allocated among the Sellers in the
manner set forth in Schedule
1.2.  The parties agree that no fractional shares will be
issued under the terms hereof and the number of Closing Date Shares will be
rounded up to the nearest whole share.  In the event of changes in the
outstanding common stock, par value $.001 per share of Generex (“Common Stock”),
after the date of this Agreement and prior to the Closing by reason of a
“Capital Adjustment”, the number of Closing Date Shares shall be adjusted by
Buyer consistent with such Capital Adjustment.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    1.3         Definitions. 
The following defined terms are used to describe the calculation of the
component parts of the Purchase Price:

     

    1.3.1     “Anniversary
Date” shall mean the first business day one calendar year after
Closing.

     

    1.3.2     “Anniversary
Date Proceeds” shall mean the aggregate gross proceeds received at any time
prior to the Anniversary Date by a Seller for the public resale of all, and not
less than all, of the Closing Date Shares issued to such Seller at the
Closing.

     

    1.3.3     “Generex
Shares” shall mean shares of Common Stock in Generex.

     

    1.3.4     “Capital
Adjustment” shall mean any stock dividend, stock split, reverse stock split,
reorganization, recapitalization, merger, consolidation, liquidation,
separation, combination or exchange of stock, change in Generex’s business
structure or sale or transfer of all or any part of Generex’s business or
assets.

     

    1.3.5     “Closing
Date Price” shall mean the value weighted average closing price per Generex
Share on the then principal trading market for each of the last twenty (20)
trading days prior to the Closing Date.

     

    1.3.6     “Closing
Date Shares” shall mean that number of restricted Generex Shares arrived at by
dividing Five Million Dollars ($5,000,000) by the Closing Date
Price.

     

    1.3.7     “Seller’s
Percentage” shall mean the percentage of the Closing Date Shares issued to each
Seller in accordance with the allocation set forth in Schedule
1.2.

     

    1.4         Closing
Date Consideration.  The
Closing Date Consideration shall consist of (i) Eighteen Million
($18,000,000.00) Dollars payable by wire transfer of immediately available funds
to Sellers at the Closing, (ii) the Indemnification Holdback Amount, and (iii)
the Closing Date Shares, which shall be issued by Generex to Sellers at Closing
in the manner described in Section 1.7 below.

     

    1.5         Indemnification
Holdback Amount. Buyer shall
transfer Two Million ($2,000,000.00) Dollars of the Purchase Price allocated to
Joseph Corso, Jr. by wire transfer of immediately available funds (the
“Indemnification Holdback Amount”) to Eckert Seamans Cherin & Mellott, LLC
as escrow agent ("Escrow Agent") on the Closing Date. The Escrow Agent shall
release and transfer without undue delay the Indemnification Holdback Amount in
accordance with Section 9.5 of this Agreement and the Escrow Agreement to be
entered into by and among the Escrow Agent, Sellers and Buyer at the Closing
(“Escrow Agreement”).

     

    
      
         


      

      
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    1.6         Anniversary Date
Consideration.  If
a Seller (i) has not sold all of such Seller’s Closing Date Shares or (ii) a
Seller has sold all of such Seller’s Closing Date Shares on or before the
Anniversary Date and the Anniversary Date Proceeds received by that Seller are
equal to or exceed the product of Five Million Dollars ($5,000,000.00)
multiplied by the Seller’s Percentage, there shall be no Anniversary Date
Consideration payable to that Seller.  In all other circumstances, the
Anniversary Date Consideration payable to a Seller shall be the difference
between (x) the product of Five Million Dollars ($5,000,000.00) multiplied by
the Seller’s Percentage and (y) the Anniversary Date Proceeds.  Any
Seller claiming Anniversary Date Consideration shall demonstrate that such
Seller used commercially reasonable methods in the public resale of the Closing
Date Shares without taking into account the possibility of
receiving  Anniversary Date Consideration, including employing the
manner and timing of sales that a reasonable person would use in attempting to
maximize the proceeds of such sales.  The Anniversary Date
Consideration, if any, due to each Seller, shall be paid by Buyer to each Seller
by wire transfer of immediately available funds within ten (10) days of the
Anniversary Date.

     

    1.7         Issuance of Closing Date
Shares.  All
of the Generex Shares to be issued to the Sellers in satisfaction of the Closing
Date Consideration shall be delivered by Generex at the Closing or, in the
alternative, Generex shall deliver an irrevocable transfer agent instruction for
the Generex Shares to be issued and delivered and the certificates for such
Generex Shares shall be delivered to the Sellers within three (3) business days
following the Closing.  Sellers and Buyer agree that notwithstanding
anything contained within this Agreement to the contrary, under no circumstances
shall Buyer be required to issue Generex Shares to the Sellers under the terms
of this Agreement, which would constitute more than 19.99% of all of the issued
and outstanding Generex Shares as of the Closing Date (the “Generex Share
Maximum”).  To the extent that the application of the restriction in
this Section 1.7 results in a shortfall in the satisfaction of the Closing Date
Consideration, Generex shall satisfy such shortfall with the issuance of
unsecured promissory notes to the Sellers (in accordance with the written
designation of Sellers) for the portion of the dollar amount, if any, that
Generex is precluded from satisfying with Generex Shares due to such restriction
(“Promissory Notes”).  Such Promissory Notes shall be due and payable
in full on the first business day that is three (3) calendar months following
the Closing Date and shall bear interest at the rate of five percent (5%) per
annum.

     

    1.8         Closing.  Unless
this Agreement is terminated pursuant to Section 8.1, the closing for the
purchase and sale (the “Closing”) provided for in this Agreement will take place
at  10:00 a.m. (local time) on (a) the later of (i) January 14, 2011,
(assuming all conditions precedent set forth in Articles VI and
VII  have been satisfied or waived), and (ii) the date that is one
business day following the date on which all the conditions precedent set forth
in Articles VI and VII have been satisfied or waived, or (b) at such other time
and place as the parties may mutually agree.  Subject to the
provisions of Article VIII, failure to consummate the purchase and sale provided
for in this Agreement on the date and time and at the place determined pursuant
to this Section 1.8 will not result in the termination of this Agreement and
will not relieve any party of any obligation under this Agreement.

     

    1.9         Closing
Obligations.

     

    At the Closing:

         

    1.9.1     Sellers
will deliver the following to Buyer (collectively the “Sellers’ Closing
Documents”):
 

    
      
         


      

      
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    (a)       Assignments,
in accordance with the terms of this Agreement, assigning all of Sellers’ right,
title and interest in and to the Membership Interest;

     

    (b)      Release
in form reasonably acceptable to Corso and Buyer, executed by Corso and his
Affiliates indicating that Corso and his Affiliates have fully discharged and
released the Company and its Subsidiaries from any and all Encumbrances and
Liabilities relating to the Corso Indebtedness as set forth in such release (the
“Corso Indebtedness Release”);

     

    (c)       Termination
of the NYC Lease, in form reasonably acceptable to Corso and Buyer, executed by
the Company and 16233, LLC, the lessor without further obligation or liability
on the part of the Company (“Lease Termination”);

     

    (d)      Evidence
reasonably satisfactory to Buyer that Corso and his Affiliates have executed,
and caused to filed, all UCC termination statements and other written releases
necessary to effect the Corso Indebtedness Release;

     

    (e)       Amended
employment agreement in form and specifying compensation reasonably acceptable
to Shea and Buyer, executed by Shea (the “Shea Amended Employment
Agreement”);

     

    (f)       Amended
employment agreement  in  form and specifying compensation
reasonably acceptable to Franz and Buyer,  executed by Franz (the
“Franz Amended Employment Agreement”);

     

    (g)      Amended
Operating Agreement of the Company generally consistent with the provisions of
Section 6.5 of this Agreement and  in form reasonably acceptable to
Sellers and Buyer,, executed by Sellers (the “Amended Operating
Agreement”);

     

    (h)      Escrow
Agreement executed by Escrow Agent and Sellers in the form reasonably acceptable
to Sellers, Buyer and Escrow Agent (“Escrow Agreement”);

     

    (i)        The
Consents;

     

    (j)        All
of the documents, instruments or writings required to be delivered to Buyer at
or prior to the Closing pursuant to this Agreement and such other certificates
of authority and documents as Buyer may reasonably request;

     

    (k)       A
certificate executed by Sellers representing and warranting to Buyer that each
of Sellers’ representations and warranties in this Agreement were accurate in
all respects as of the date of this Agreement and are accurate in all respects
as of the Closing Date as if made on the Closing Date;

     

    (l)        Legal
opinions from each of Sellers’ Counsel in form and covering the matters
reasonably acceptable to Buyer; and


    
      
         


      

      
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    (m)      A
legal opinion from Counsel to the Company in form and covering the matters
reasonably acceptable to Buyer.

     

    1.9.2     Buyer
will deliver the following to Sellers (collectively the “Buyer’s Closing
Documents”):

     

    (a)       A
copy of the irrevocable stock transfer instructions relating to the issuance of
the Closing Date Shares, together with evidence that such instructions have been
delivered to the transfer agent;

     

    (b)      Amended
Operating Agreement  executed by Buyer;

     

    (c)       Escrow
Agreement executed by Buyer ;

     

    (d)      A
legal opinion from Buyer’s counsel in form and covering the matters reasonably
acceptable to Sellers;

     

    (e)       A
certificate executed by Buyer representing and warranting to Sellers that each
of Buyer’s representations and warranties in this Agreement were accurate in all
respects as of the date of this Agreement and are accurate in all respects as of
the Closing Date as if made on the Closing Date; and

     

    (f)       The
Registration Rights Agreement in form reasonably acceptable to Buyer and Sellers
(the “Registration Rights Agreement”).

     

    ARTICLE
II

    REPRESENTATIONS
AND WARRANTIES OF SELLERS

     

    As a material inducement to Buyer
entering into this Agreement and knowing and acknowledging that Buyer is relying
upon the same, the Company and each Seller hereby make to Buyer, as of the date
hereof and as of the Closing Date, the representations and warranties set forth
in this Article II.  All such representations and warranties set forth
herein or in any other closing document delivered by Sellers to Buyer in
connection herewith shall survive the Closing (and none shall merge into any
instrument of conveyance), for the period of time set forth in Section 9.5 of
this Agreement.  Any representation or warranty made with respect to
an individual Seller is and shall be made solely by such individual and not by
all Sellers.  No specific representation or warranty shall limit the
generality or applicability of a more general representation or
warranty.  Each section of a Schedule shall be numbered to correspond
to the paragraph or section  of this Agreement to which it
relates.

     

    2.1         Organization, Existence and
Good Standing.  The
Company is a limited liability company duly organized, validly existing, and in
good standing under the laws of the state of its organization, with full power
and authority to conduct its business as it is now being conducted, to own,
lease and use the properties and assets that it purports to own, lease or use,
and has the full power and authority to perform all of its material
Contracts.  The Company is duly qualified to do business as a foreign
limited liability company and is in good standing under the laws of each state
or other jurisdiction in which either the ownership, leasing or use of the
properties owned, leased or used by it, or the nature of the activities
conducted by it, require such qualification.

     

    
      
         


      

      
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    2.2         Power, Authority and
Enforceability of the Company.   This Agreement and
all related agreements have been duly authorized and approved by the Company by
all necessary action in accordance with its Organizational
Documents.  Assuming the due execution and delivery hereof by Buyer,
this Agreement and the related agreements executed and delivered in connection
herewith constitute the valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as the same may be limited by bankruptcy, insolvency reorganization or
similar laws affecting creditors' rights generally or by general equitable
principles.

     

    2.3         Power, Authority and
Enforceability of Sellers.  Sellers
have the absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and the Sellers’ Closing Documents and to
perform their obligations under this Agreement and the Sellers’ Closing
Documents.  This Agreement constitutes the legal, valid, and binding
obligation of Sellers, enforceable against each of them in accordance with its
terms.  Upon the execution and delivery by Sellers of the Sellers’
Closing Documents, the Sellers’ Closing Documents will constitute the legal,
valid, and binding obligations of Sellers, enforceable against each of them in
accordance with their respective terms, except as the same may be limited by
bankruptcy, insolvency reorganization or similar laws affecting creditors'
rights generally or by general equitable principles.

     

    2.4         No Conflict.
  Except
as set forth in Schedule 2.4, neither the execution and delivery of this
Agreement by Sellers and the Company, nor the consummation or performance by
Sellers and the Company, of any of the Contemplated Transactions will, directly
or indirectly (with or without notice or lapse of time):  (a)
contravene, conflict with, result in a violation of or have any material adverse
affect upon (i) any provision of the Organizational Documents of the Company, or
(ii) any resolution adopted by the members of the Company; (b) contravene,
conflict with, or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under any Legal Requirement, any Order
to which the Company or Sellers, or any of the assets owned or used by the
Company, may be subject; (c) contravene, conflict with, or result in a violation
of any of the terms or requirements of, or give any Governmental Body the right
to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by the Company or that otherwise relates to the
business of, or any of the assets owned or used by, the Company; (d) contravene,
conflict with, or result in a violation or Breach of any provision of, or give
any Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any Contract; or (e) result in the imposition or creation of any Encumbrance
upon or with respect to any of the assets owned or used by the
Company.  Except as set forth in Schedule 2.4 neither Sellers nor the
Company is or will be required to give any notice to or obtain any Consent from
any Person in connection with the execution and delivery of this Agreement or
the consummation or performance of any of the Contemplated
Transactions.

     

    
      
         


      

      
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    2.5         Capitalization.  The
outstanding Units in the Company and the outstanding capital stock of the
Subsidiaries and the beneficial and record owners of such Units and shares are
set forth on Schedule 2.5.  All outstanding Units of the Company are
validly issued, fully paid and non-assessable, and consist solely of the Units
described in Schedule 2.5.  At the Closing, the Membership Interest
shall represent fifty-one percent (51%) of the issued and outstanding Units of
the Company.  Sellers are and will be on the Closing Date, the legal,
record and beneficial owners and holders of the Units comprising the Membership
Interest, free and clear of all Encumbrances, and shall, at the Closing,
transfer ownership and marketable title to the Units comprising the Membership
Interest to the Buyer, free of all Encumbrances.  The Company is and
will be on the Closing Date the legal record and beneficial owner of all
outstanding equity securities of the Subsidiaries, free and clear of all
Encumbrances.  There are no Contracts relating to the issuance, sale,
or transfer of any Units or other securities of the Company, no Person has any
rights to acquire any Units or securities of the Company, and there are no
options, calls, warrants or other securities or rights outstanding which relate
to, are convertible into or exercisable for any Units or other securities of the
Company.  Schedule 2.5 sets forth, with respect to the Company, the
name, address and federal taxpayer identification number of, and the number of
outstanding Units legally and beneficially owned by each Seller as of the date
hereof and the Closing Date.

     

    2.6         Subsidiaries.  Each
Subsidiary of the Company is listed on Schedule 2.6.  Each Subsidiary
is a corporation duly organized, validly existing and in good standing under the
laws of the state set forth on Schedule 2.6, and has full corporate power to own
all of its properties and assets and to carry on its business as it is now
conducted, and is qualified as a foreign limited liability company and is in
good standing in all jurisdictions where the nature of its business or the
nature and location of its assets requires such qualification.  Other
than the Subsidiaries, the Company does not own or hold, directly or indirectly,
beneficially or of record, any other direct or indirect interest (whether it be
limited liability company interests, partnership interests, common or preferred
stock or any comparable ownership interest in any Person), or any subscriptions,
options, warrants, rights, calls, convertible securities or other agreements or
commitments for any interest, in any Person.

     

    2.7         Financial
Statements.  Attached
hereto as Schedule 2.7 are the following financial statements of the Company
(collectively “Financial Statements”): (a) the consolidated, balance sheet of
the Company and Subsidiaries as of December 31, 2009, the (the “December 31,
2009 Balance Sheet”) and the related consolidated statements of operations, and
statements of cash flows for the year then ended (together with the December 31,
2009 Balance Sheet, the “2009 Financial Statements”), and (b) the consolidated
balance sheets of the Company and Subsidiaries as of  August 31, 2010,
and the related , consolidated statements of operations, and statements of cash
flows for the quarter or months then ended (collectively the “Interim Financial
Statements”).  All Financial Statements are true, accurate, complete,
and fully and accurately present the properties, financial condition and results
of operations, changes in members' equity, and cash flow of the Company as of
the respective dates and for the periods referred to in such Financial
Statements in all material respects.  The Financial Statements have
not been reviewed or audited by independent accountants, but Seller’s have no
Knowledge of any changes to the 2009 Financial Statements which may be required
upon audit, or any changes the Financial Statements necessary to conform to
GAAP, in either case which would materially reduce reported income or
stockholders’ equity.

     

    
      
         


      

      
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    2.8         Books and
Records.  The
books of account, business and accounting records, minute books and other
records of the Company (collectively “Records”), are complete, accurate and
correct in all material respects and have been maintained in accordance with
reasonable business practices.  All Records have been made available
to Buyer for review.  The minute books of the Company contain accurate
and complete records in all material respects of all meetings held and corporate
action taken by, the members of the Company, and no meeting or action of any
such members has been held or taken for which minutes or written consents have
not been prepared and maintained in such minute books.  Buyer has been
provided with true, correct and complete copies of the Organization Documents
(and all amendments thereto), and Records of the Company and the Subsidiaries,
respectively.

     

    2.9         Title to Properties;
Encumbrances.   Except
as indicated in Schedule 2.9, the Company and the Subsidiaries own and have
absolute, good and marketable title to all of the properties and assets (whether
real, personal, or mixed and whether tangible or intangible) located in the
Facilities owned, leased or operated by the Company and the Subsidiaries, used
in the business or operations of the Company and the Subsidiaries, or reflected
in the books, Records or Financial Statements of the Company, and all properties
and assets purchased or otherwise acquired by the Company and the Subsidiaries
since the date of the Interim Financial Statements, except for inventory sold
since said dates in the Ordinary Course of Business and consistent with past
practice or other immaterial dispositions (collectively “Company
Assets”).  All Company Assets are free and clear of all Encumbrances,
except those Encumbrances described in Schedule 2.9, and except for such minor
encumbrances as would not have a material effect on the value or use of such
assets.

     

    2.10       Real
Property.

     

    2.10.1  Neither the
Company nor any Subsidiary owns any real property;

     

    2.10.2  Schedule 2.10.2
lists and describes all real property or interests in real property leased or
subleased to or by the Company and the Subsidiaries (“Leased
Property”).  The Company has delivered to the Buyer correct and
complete copies of the leases and subleases listed in Schedule 2.10.2 and with
respect to each such lease and sublease:

     

    (a)       Each
is legal, valid, binding, enforceable, and in full force and
effect;

     

    (b)       No
Person is in Breach or default, and no event has occurred which, with or without
notice or lapse of time, would constitute a breach or default or permit
termination, modification, or acceleration thereunder;

     

    (c)       There
are no disputes, oral agreements, or forbearance arrangements in effect as to
any lease or sublease;

     

    (d)       The
Company has received all Governmental Authorizations required in connection with
the use or operation thereof and have been operated and maintained in accordance
with applicable Legal Requirements; and


    
      
         


      

      
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    (e)       There
are no parties (other than the Company) in possession or control of any parcel
of Leased Property.

     

    2.11       Condition and Sufficiency of
Assets.  Except
as disclosed in Schedule 2.11, to the knowledge of the Sellers the Facilities
and the Company Assets are structurally sound, in good operating condition and
repair, and are adequate for the uses to which they are being put and to conduct
the Business, and none of such Facilities or the Company Assets are in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or cost.  All personal property, fixtures,
machinery and equipment owned or used by the Company and the Subsidiaries are in
good operating condition and repair.

     

    2.12       Accounts
Receivable.  All
accounts receivable of the Company that are reflected in the Interim Financial
Statements or in the accounting records of the Company as of the Closing Date
represent and, at the Closing, will represent valid obligations arising from
sales actually made or services actually performed in the Ordinary Course of
Business.  Unless paid prior to the Closing Date, the Accounts
Receivable are and at the Closing will be current and collectible, in full,
subject to no offsets or defenses, except for the amount of any respective
reserves shown in the Interim Financial Statements (which reserves are adequate
and calculated in accordance with past practice and, in the case of the reserve
as of the Closing Date, will not represent a greater percentage of the Accounts
Receivable as of the Closing Date than the reserve reflected in the Interim
Financial Statements represented and will not represent a Material Adverse
Change in the composition of such Accounts Receivable in terms of
aging).

     

    2.13       Inventory. 
 All inventory of the Company and the Subsidiaries, whether or not
reflected in the Financial Statements, consists and, at the Closing, will
consist of good quality and reasonable quantity, fully usable and salable within
the six (6) month period following the Closing Date in the Ordinary Course of
Business.  All inventories of the Company and the Subsidiaries have
been priced at the lower of cost or market on a first in, first out basis in
accordance with reasonable and consistent accounting practices.  The
quantities of each item of inventory of the Company and the Subsidiaries are not
excessive and are reasonable in the present circumstances of the Company and the
Subsidiaries.

     

    2.14       No Undisclosed
Liabilities.  Except
as set forth in Schedule 2.14, the Company has no Liabilities except for
liabilities reflected in the Interim Financial Statements and current
liabilities for trade payables and accrued operating expenses incurred in the
Ordinary Course of Business since the date of the Interim Financial
Statements.

     

    2.15       Taxes.

     

    2.15.1   The
Company and the Subsidiaries have filed or caused to be filed, on a timely basis
including lawful extensions, all Tax Returns that are or were required to be
filed by or with respect to them, pursuant to applicable Legal
Requirements.  The Company and the Subsidiaries have paid all Taxes
that have or may have become due pursuant to those Tax Returns, any Legal
Requirement or otherwise, or pursuant to any assessment received by Sellers or
the Company.


    
      
         


      

      
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    2.15.2   Neither
the Company nor any Subsidiary has never been audited by the Internal Revenue
Service.  Neither Sellers nor the Company have given or been requested
to give waivers or extensions (or are or would be subject to a waiver or
extension given by any other Person) of any statute of limitations relating to
the payment of Taxes by the Company or any Subsidiary or for which the Company
or a Subsidiary may be liable.

     

    2.15.3   All
Taxes that the Company and the Subsidiaries are or were required by Legal
Requirements to pay, withhold or collect have been duly paid, withheld or
collected and, to the full extent required, have been timely paid to the proper
Governmental Body or other Person.  The Company and the Subsidiaries
have no Liability for Taxes, except for Taxes reserved in its Interim Financial
Statement and accrued in the Ordinary Course of Business since the date
thereof.

     

    2.15.4   All
Tax Returns filed by the Company and the Subsidiaries are true, correct, and
complete in all material respects and exact copies of all Tax Returns filed by
the Company and the Subsidiaries during the six (6) year period preceding the
date hereof have been delivered to Buyer, or such shorter period as the Company
and its Subsidiaries have been in existence.

     

    2.15.5   Schedule
2.15.5 describes all tax elections and consents filed by the Company and the
Subsidiaries with any Governmental Body.

     

    2.15.6   No
issues have been raised and are currently pending by any taxing authority in
connection with any of the Returns and none of the Sellers has Knowledge of any
such issues based upon personal contact of any employee of the Company and the
Subsidiaries with any agent of a taxing authority.

     

    2.15.7   No
Seller is a Person other than a United States person within the meaning of the
Code and the Contemplated Transactions are not subject to the withholding
provisions of section 3406 or subchapter A of Chapter 3 of the
Code.

     

    2.15.8   The
Company and the Subsidiaries have withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, member, stockholder, or other third
party.

     

    2.16       Bank
Accounts.  Schedule
2.16 contains a list showing: (1) the name of each bank, safe deposit company or
other financial institution in which the Company or any of the Subsidiaries has
an account, lock box or safe deposit box; (2) the names of all Persons
authorized to draw thereon or to have access thereto and the names of all
Persons, if any, holding powers of attorney from the Company or any of the
Subsidiaries; and (3) all instruments or agreements to which the Company or any
of the Subsidiaries is a party as an endorser, surety or guarantor, other than
checks endorsed for collection or deposit in the Ordinary Course of
Business.

     

    2.17       Employee
Benefits.

     

    2.17.1   Schedule
2.17.1 describes each Employee Benefit Plan that the Company or any Subsidiary
maintains or to which the Company or any Subsidiary contributes and each
Employee Benefit Plan that the Company or any Subsidiary formerly maintained or
to which the Company or any Subsidiary ever contributed in the past five (5)
years.


    
      
         


      

      
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    2.17.2   Each
Employee Benefit Plan (and each related trust, insurance contract or fund)
complies in form and in operation in all material respects with the applicable
requirements of ERISA, the IRC and all other Legal Requirements and all required
filings, returns, reports and descriptions (including Form 5500 Annual Reports,
Summary Annual Reports, PBGC-1's and Summary Plan Descriptions) have been timely
filed or distributed appropriately with respect to each such Employee Benefit
Plan as required by ERISA, the IRC and all Legal Requirements.

     

    2.17.3   All
required contributions (including all employer contributions and employee salary
reduction contributions) have been paid to each Employee Benefit Plan and all
required contributions for any period ending on or before the Closing Date which
are not yet due have been and shall be accrued and reserved in each of the
Company’s and any Subsidiary’s respective Interim Financial Statements and books
and records.  All premiums or other payments for all periods ending on
or before the Closing Date have been paid with respect to each such Employee
Benefit Plan.

     

    2.17.4   No
funding or asset deficiency of any kind exists under any Employee Benefit
Plan.

     

    2.17.5   Sellers
have delivered to Buyer correct and complete copies of all Employee Benefit
Plans, including without limitation, all agreements, plan documents and summary
plan descriptions, the most recent determination letter received from the IRS,
the five (5) most recent Form 5500 Annual Reports, and all related trust
agreements, insurance contracts and other funding agreements which implement or
relate to each Employee Benefit Plan.

     

    2.17.6   No
such Employee Benefit Plan has been completely or partially terminated or been
the subject of a reportable event as to which notices would be required to be
filed with the PBGC within the past five (5) years.  No proceeding by
the PBGC to terminate any such Employee Benefit Plan has been instituted or
threatened.

     

    2.17.7   To the
knowledge of the Sellers and the Company, there have been no prohibited
transactions with respect to any such Employee Benefit Plan.  To the
knowledge of the Sellers and the Company, no Fiduciary has any Liability for
breach of fiduciary duty or any other failure to act or comply in connection
with the administration or investment of the assets of any such Employee Benefit
Plan.  No action, suit, proceeding, complaint, grievance, hearing or
investigation with respect to the administration or the investment of the assets
of any such Employee Benefit Plan (other than routine claims for benefits) is
pending or to the knowledge of the Sellers and the Company
threatened.  Neither the Company (or employees with responsibility for
employee benefits matters) nor the Sellers have any Knowledge of any basis for
any such action, suit, grievance, complaint, proceeding, hearing or
investigation.


    
      
         


      

      
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    2.17.8   
 The Company has not incurred, and neither the Sellers nor the members,
managers, directors or officers (and employees with responsibility for employee
benefits matters) of any Subsidiary have any reason to expect that the Company
or any Subsidiary will incur any Liability to the PBGC (other than PBGC premium
payments) or otherwise under Title IV of ERISA (including any withdrawal
Liability) or under the Code with respect to any such Employee Benefit Plan
which is an Employee Benefit Plan.

     

    2.17.9    
Neither the Company nor any Subsidiary contributes to, ever has contributed to,
or ever has been required to contribute to any Multi-Employer Plan or has any
Liability (including withdrawal Liability) under any Multi-Employer
Plan.

     

    2.17.10   Except as
disclosed in Schedule 2.17.10, neither the Company nor any Subsidiary maintains,
has ever maintained, has ever contributed, or has ever been required to
contribute to any Defined Benefit Plan, Employee Benefit Plan or any arrangement
providing medical, health or life insurance or other welfare-type benefits for
current or future retired or terminated employees, their spouses or their
dependents, other than continuation coverage required by ERISA, the IRS and
applicable state law.

     

    2.17.11   Neither
the Company nor any Subsidiary has any Liability arising from any Employee Plan,
except for any liability reflected in the Company’s Interim Financial Statement
or as accrued in the Ordinary Course of Business since the date of such Interim
Financial Statement.

     

    2.18       Compliance with Legal
Requirements.  Except
as set forth in Schedule 2.18:

     

    2.18.1      The
Company and each Subsidiary is, and at all times has been, in full compliance
with each Legal Requirement that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its assets, except
where the failure to be in compliance would not have a Material Adverse
Effect.

     

    2.18.2      No
event has occurred or circumstance exists that (with or without notice or lapse
of time) (i) may constitute or result in a violation by the Company or any
Subsidiary under, or a failure on the part of the Company or any Subsidiary to
comply with, any Legal Requirement, except where such violation would not have a
Material Adverse Effect, or (ii) may give rise to any obligation on the part of
the Company or any Subsidiary to undertake, or to bear all or any portion of the
cost of, any remedial action of any nature.

     

    2.18.3      No
Seller or the Company or any subsidiary has received any notice nor other
communication (whether oral or written) from any Governmental Body or any other
Person regarding (i) any actual, alleged, possible, or potential violation of,
or failure to comply with, any Legal Requirement, or (ii) any actual, alleged,
possible, or potential obligation on the part of the Company or any Subsidiary
to undertake, or to bear all or any portion of the cost of, any remedial action
of any nature.


    
      
         


      

      
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    2.18.4     The
Company is qualified for participation in the Medicare and certain Medicaid
programs.  The Company has not received any notice indicating that
such qualification may be terminated or withdrawn, nor does the Company or any
Seller have any reason to believe that such qualification may be terminated or
withdrawn.  The Company has timely filed, in all material respects,
all claims or reports required to be filed with respect to the purchase of
products or services by third party payors (including, without limitation,
Medicare and Medicaid), and all such claims or reports are complete and accurate
in all material respects.  Neither the Company nor any Subsidiary has
any material liability to any payor with respect thereto.

     

    2.18.5     The
Company and the Subsidiaries have complied with all applicable health care laws
(including, in each case, any regulations issued pursuant thereto) including (i)
the Social Security Act, as amended, including criminal penalties for acts
involving Federal health care programs, commonly referred to as the “Federal
Anti-Kick-Back Statute”, (ii) Federal laws prohibiting certain referrals,
commonly referred to as the “Stark Statute”, (iii) the Federal False Claims Act,
as amended (iv) the Health Insurance Portability and Accountability Act of 1996,
and (v) all statutes and regulations relating to the possession, distribution,
maintenance and documentation of controlled substances.

     

    2.18.6     No
personnel of the Company or any Subsidiary during such person’s employment
therewith has been convicted of, charged with or investigated for (a) Medicare,
Medicaid or other Federal Health Care Program (as defined in 42 U.S.C. section
1320a-7b(f)) related offense, or, convicted of, charged with or investigated for
a violation of any federal or state law relating to fraud, theft embezzlement,
breach of fiduciary responsibility, financial misconduct, obstruction of
investigation or controlled substances in connection with the Company or any
Subsidiary’s activities, or, to the Sellers’ Knowledge, in connection with any
other activities.  To the Knowledge of the Sellers, no personnel of
the Company or any Subsidiary during such person’s employment therewith has been
excluded or suspended from participation in Medicare, Medicaid or any other
Federal Heath Care Program or has been debarred, suspended or otherwise
ineligible to participate in federal programs.  No personnel of the
Company or any Subsidiary during such persons employment therewith has, in
connection with the Company or any Subsidiary’s activities, or, to the Sellers’
Knowledge, in connection with any other activities, committed any offense which
may reasonably serve as the basis for any such exclusion, suspension debarment
or other ineligibility.  To the Knowledge of the Sellers, the Company
and the Subsidiaries have not arranged or contracted with any individual that is
suspended, excluded or debarred from participation in, or otherwise ineligible
to participate in, a Federal Health Care Program or other federal
program.

     

    2.19       Governmental
Authorizations.

     

    2.19.1     Schedule
2.19.1 contains a complete and correct list of each Governmental Authorization
that is held by the Company and the Subsidiaries or that otherwise relates to
the business of, or to any of the assets owned or used by, the Company and the
Subsidiaries.  Each Governmental Authorization listed or required to
be listed in Schedule 2.19.1 is valid and in full force and
effect.  The Company and each Subsidiary has complied in all material
respects with all conditions and requirements for, or relating to, all
Governmental Authorizations.


    
      
         


      

      
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    2.19.2     The
Governmental Authorizations listed in Schedule 2.19.2 collectively constitute
all of the Governmental Authorizations necessary to permit the Company and the
Subsidiaries to lawfully conduct and operate their respective businesses in the
manner as currently conducted and as conducted during the previous five (5)
years, and to permit the Company and the Subsidiaries to own and use their
assets in the manner in which they currently own and use such
assets.

     

    2.19.3     No
Seller or the Company or any Subsidiary has received any notice or other
communication regarding any actual, alleged or potential (i) violation or
failure to comply with any Governmental Authorization by the Company or any
Subsidiary or (ii) revocation, withdrawal, suspension, cancellation, termination
or modification of any Governmental Authorization held by the Company or any
Subsidiary.

     

    2.20       Legal Proceedings;
Orders.

    
    

    2.20.1     Except
as disclosed in Schedule 2.20, there is no pending Proceeding:  (a)
that has been commenced by or against the Company or any Subsidiary or that
otherwise relates to or may affect the business of, or any of the assets owned,
leased or used by the Company or any Subsidiary; or (b) that challenges, or that
may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions.  No such
Proceeding has been Threatened in writing, or orally to the Knowledge of the
Sellers or the Company, and no Proceeding has been terminated (by adjudication,
settlement or otherwise) within the last five (5) years.  To Sellers’
Knowledge, no event has occurred or circumstance exists that could reasonably be
expected to give rise to or serve as a basis for the commencement of any such
Proceeding; and

     

    2.20.2     There
is currently no Order to which the Company, any Subsidiary, Seller (with respect
to the Company or a Subsidiary) or any of the Company’s or any Subsidiary’s
businesses or any of the assets owned, leased or used by the Company or any
Subsidiary, is subject.  Each of the Company and its Subsidiaries has
complied with all Orders to which it, or any of the assets owned or used has
been subject.

     

    2.21       Absence of Certain Changes
and Events.  Except
as set forth in Schedule 2.21, since the date of the Interim Financial
Statements, each of the Company and its Subsidiaries has conducted its business
only in the Ordinary Course of Business and there has not been any:

     

    2.21.1     Change
in the Company’s or any Subsidiary’s authorized or issued Units, equity
securities, grant of any option or right to purchase Units or equity interests
of the Company or any Subsidiary, or declaration or payment of any dividend or
other distribution or payment in respect of Units or equity
securities;

     

    2.21.2     Amendment
to the Organizational Documents of the Company or any Subsidiary;

     

    2.21.3     Payment
of any bonuses to or any increase in any salaries, wages, benefits or other
compensation of any member, director, officer, employee, agent or Representative
of the Company or any Subsidiary or entry into any employment or severance
agreement or arrangement, or any other Contract with such Person, other than in
the Ordinary Course of Business, consistent with past practice;

     

    
      
         


      

      
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    2.21.4     Payment
or accrual of any bonuses, commissions or other distributions to any Seller or
any Affiliate or relative of any Seller, except as provided pursuant to any
agreement between the Company and such Seller and disclosed on Schedule
2.21;

     

    2.21.5     Adoption
of, or increase in the payments to or benefits under, any profit sharing, bonus,
deferred compensation, savings, insurance, pension, retirement, or other
Employee Benefit Plan;

     

    2.21.6     Damage
to or destruction or loss of any asset or property of the Company or any
Subsidiary, whether or not covered by insurance, in excess of
$5,000;

     

    2.21.7     Entry
into, termination of, or receipt of notice of termination of any Contract or
transaction outside the Ordinary Course of Business or which involves a total
remaining commitment by or to the Company or any Subsidiary of at least
$5,000;

     

    2.21.8     Sale
(other than sales of inventory in the Ordinary Course of Business), license,
lease, or other disposition of any asset or property of the Company or any
Subsidiary in excess of $5,000 or imposition of any Encumbrance on any asset or
property of the Company or any Subsidiary;

     

    2.21.9     Cancellation,
settlement, or waiver of any claims or rights of or against the Company or any
Subsidiary in excess of $5,000;

     

    2.21.10   Change
in any of the accounting methods or principles used by the Company or any
Subsidiary;

     

    2.21.11   Entry
into of any Contract by the Company or any Subsidiary to do any of the
foregoing;

     

    2.21.12   Sale
or transfer of any portion of the Company’s or any Subsidiary’s assets or
property that would be material to any of the Company or the Subsidiaries,
individually or taken as a whole, except for sales of its inventory and
transfers of cash in payment of trade payables, all in the Ordinary Course of
Business;

     

    2.21.13   Loss,
or any interruption in use, of any assets or property (whether or not covered by
insurance), on account of fire, flood, riot, strike or other hazard or Act of
God;

     

    2.21.14   Payment
or declaration of any dividends or distributions or other payments to its
members or Affiliates, other than normal employment compensation paid in the
Ordinary Course of Business;

     

    2.21.15   Material
change in the conduct or nature of any aspect of the Business, whether or not
made in the Ordinary Course of Business and whether or not the change had a
Material Adverse Effect;


    
      
         


      

      
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    2.21.16   Payment
of accounts payable or delay in collection of accounts receivables, in each case
other than in the Ordinary Course of Business;

     

    2.21.17   Hiring
of any employee who has an annual salary of $ 75,000 or more;

     

    2.21.18   Termination
of any employee who had an annual salary of $75,000 or more; or

     

    2.21.19   Without
limitation by the enumeration of any of the foregoing, entered into any material
transaction other than in the Ordinary Course of Business.  The
foregoing representations and warranties shall not be deemed to be breached by
virtue of the entry by Sellers into this Agreement or their consummation of the
Contemplated Transactions.

     

    2.22       Contracts; No
Defaults.  Schedule
2.22.1 contains a true, correct and complete list, and Sellers have delivered to
Buyer true, correct and complete copies, of:

     

    (a)       Each
existing Contract that involves the furnishing or performance of services, or
the delivery, sale, lease or transfer of goods, materials or products, by the
Company or any Subsidiary in an amount or value in excess of
$10,000;

     

    (b)      Each
existing Contract that involves the furnishing or performance of services to, or
the purchase, lease or receipt of goods, materials, inventory, supplies,
products or other personal property by the Company or any Subsidiary in an
amount or value in excess of $10,000;

     

    (c)       Each
existing lease, rental or occupancy agreement, license, installment and
conditional sale agreement, and other Contract affecting the ownership of,
leasing of, title to, use of, or any leasehold or other interest in, any
personal property;

     

    (d)      Each
existing Contract under which the Company or any Subsidiary has created,
incurred, assumed or guaranteed any indebtedness for borrowed money, has
incurred any capitalized lease obligation, or under which any of its tangible or
intangible assets, are Encumbered;

     

    (e)       Each
existing licensing agreement or other Contract with respect to any Intellectual
Property Assets, including, without limitation, agreements with current or
former employees, consultants, or contractors regarding the appropriation or the
non-disclosure of any of the Intellectual Property Assets;

     

    (f)       Each
existing profit sharing, stock option, stock purchase, stock appreciation,
deferred compensation, severance, or other plan, arrangement, contract or
Employee Benefit Plan for the benefit of its current or former directors,
officers, and employees, except for Employee Benefits Plans disclosed in
Schedule 2.17;


    
      
         


      

      
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    (g)      Each
offer or agreement for the employment of or receipt of any services from any
Person on a full-time, part-time, consulting, commission or any other basis,
except for offers or agreements which could not require the payment of more than
$75,000 per annum and oral agreements of employment that are terminable by the
Company and the Subsidiaries at will and without any Liability;

     

    (h)      Each
existing joint venture or partnership agreement or other Contract involving any
joint conduct or sharing of any business, venture or enterprise, or a sharing of
profits, losses, costs, or liabilities by the Company or any Subsidiary with any
other Person;

     

    (i)        Each
existing Contract containing covenants that in any way purport to restrict the
business activity of the Company or any Subsidiary or limit the freedom of the
Company or any Subsidiary to engage in any line of business or to compete with
any Person;

     

    (j)        Each
existing Contract for capital expenditures in excess of $10,000;

     

    (k)       Each
existing warranty, guaranty, or other similar undertaking extended by the
Company or any Subsidiary for or with respect to any Person;

     

    (l)        Each
existing Contract under which the Company or any Subsidiary has advanced,
guaranteed or loaned any amount to or for the benefit of any of its respective
directors, officers, employees or Representatives;

     

    (m)      Each
existing Contract with any employee, officer, director, members, sales
representative, consultant, distributor, Representative or agent of the Company
or any Subsidiary;

     

    (n)      Each
existing Contract relating to Intellectual Property Assets;

     

    (o)      Each
existing Contract not entered into in the Ordinary Course of Business;
and

     

    (p)      Each
existing Contract relating to confidentiality or noncompetition.

     

    2.22.2     Except
as set forth in Schedule 2.22.2, each Contract is in full force and effect and
is valid and enforceable in accordance with its terms.

     

    2.22.3     Except
as set forth in Schedule 2.22.3 with respect to each Contract (including,
without limitation, those Contracts and agreements disclosed or required to be
disclosed in Schedule 2.22.1):

     

    (a)       Each
of the Company and the Subsidiaries is, and at all times has been, in full
compliance with all applicable terms and requirements of each Contract, except
to the extent that noncompliance could not reasonably be expected to have a
Material Adverse Effect on the Business;


    
      
         


      

      
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      (b)           To
Seller’s Knowledge, each other Person that has or had any obligation or
liability under any Contract is, and at all times has been, in full compliance
with all applicable terms and requirements of such Contract; except to the
extent that noncompliance could not reasonably be expected to have a Material
Adverse Effect on the Business;

       

      (c)           To
Seller’s Knowledge, no event has occurred or circumstance exists that (with or
without notice or lapse of time) may contravene, conflict with, or result in a
violation or breach of, or give the Company or any Subsidiary or other Person
the right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate, or modify, any
Contract; and

       

      (d)           To
Seller’s Knowledge, neither the Company nor any Subsidiary has given to or
received from any other Person any notice or other communication (whether oral
or written) regarding any actual, alleged, possible, or potential violation or
breach of, default under or termination or cancellation of, any
Contract.

       

      2.23           Material Adverse
Changes.  Neither
the Company nor any Subsidiary has suffered or been threatened with, and Sellers
have no Knowledge of any facts which may cause or result in, any Material
Adverse Change to the Company or any Subsidiary or its business or assets and no
event has occurred or circumstance exists that may result in a Material Adverse
Change to the Company or any Subsidiary.  Since the Financial
Statement Date, there has not been  a material change in the aggregate
amount of trade receivables of the Company and the Subsidiaries or the aging
thereof, or a material change in the level of the inventory of the Company and
the Subsidiaries.

       

      2.24           Insurance.  Schedule
2.24 sets forth a description with respect to each insurance policy (including
policies providing property, casualty, liability and workers’ compensation
coverage and bond and surety arrangements) to which the Company and any
Subsidiary has been a party, a named insured or otherwise the beneficiary of
coverage at any time within the past six (6) years, including (a) the name,
address and telephone number of the agent; (b) the name of the insurer, the name
of the policyholder, and the name of each covered insured;(c) the policy number
and the period of coverage; (d) the scope (including an indication of whether
the coverage was on a claims made, occurrence or other basis) and amount
(including a description of how deductibles and ceilings are calculated and
operate) of coverage; and (e) a description of any retroactive premium
adjustments or other loss-sharing arrangements.  With respect to each
such insurance policy:  (i) the policy is legal, valid, binding,
enforceable and in full force and effect; (ii) the policy will continue to be
legal, valid, binding, enforceable and in full force and effect on identical
terms following the consummation of the Contemplated Transactions; (iii) neither
the Company nor any Subsidiary or any other Person is in breach or default
(including with respect to the payment of premiums or the giving of notices),
and no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination, modification or
acceleration, under the policy; and (iv) no Person has repudiated any provision
thereof.  Each of the Company and its Subsidiaries has been covered
since its inception by insurance in scope and amount customary and reasonable
for the business in which it has engaged during the aforementioned
period.  Schedule 2.24 describes any self-insurance arrangements
affecting the Company and any Subsidiary.


      
        
           


        

        
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      2.25           Environmental
Matters.  Except
as set forth in Schedule 2.25:

       

      2.25.1   Each
of the Company and its Subsidiaries is, and at all times has been, in compliance
with, and is not in violation of or liable under, any Environmental Law and has
never engaged in any Hazardous Activity.  No Seller or the Company or
any Subsidiary, has any basis to expect, nor has any of them or any other Person
for whose conduct they are or may be held to be responsible, received, any
actual or Threatened Order, notice or other communication from any Governmental
Body or Person, or the current or prior owner or operator of any Facilities, of
any actual or potential violation or failure to comply with any Environmental
Law, or of any actual or Threatened obligation to undertake or bear the cost of
any Environmental, Health, and Safety Liabilities with respect to any of the
Facilities or any other properties or assets (whether real, personal, or mixed)
in which Seller, the Company or any Subsidiary has had an interest.

       

      2.25.2   To the
Knowledge of Sellers there are no pending, potential or Threatened claims or
Encumbrances arising under or pursuant to any Environmental Law, or any
Environmental, Health and Safety Liabilities, with respect to or affecting any
of the Facilities or any other properties and assets (whether real, personal, or
mixed) in which Sellers, the Company or any Subsidiary have ever used, possessed
or occupied.

       

      2.25.3   To the
Knowledge of Sellers neither the Company nor any Subsidiary, or any other Person
for whose conduct they are or may be held responsible, has any Environmental,
Health and Safety Liabilities, including without limitation, those with respect
to the Facilities or with respect to any other properties or assets (whether
real, personal, or mixed) in which Sellers, the Company or any Subsidiary (or
any predecessor), have ever used, possessed or occupied.

       

      2.26           Employees/Representatives.

       

      2.26.1   Schedule
2.26.1 contains a complete and accurate list of the following information for
each employee, officer, director, member or manager of the Company or any
Subsidiary, including each employee on leave of absence or layoff status: (a)
name; (b) date of hire, (c) job title; (d) current compensation and bonus
paid or payable; (e) vacation accrued; (f) service credited for purposes of
vesting and eligibility to participate under any Employee Benefit Plan and
(g) all other unpaid compensation, bonus and overtime pay, accrued or
payable for any period prior to the Closing.

       

      2.26.2   No
employee, officer, director, member or manager of the Company or any Subsidiary
is a party to, or is otherwise bound by, any agreement or arrangement, including
any confidentiality, noncompetition, or proprietary rights agreement, between
such employee, officer or director and any other Person.

       

      2.26.3   Schedule
2.26.3 also contains a complete and accurate list of the following information
for each retired employee or director of the Company and any Subsidiary, or
their dependents, receiving benefits or eligible to receive benefits in the
future: (a) name, (b) benefit, (c) payment option election, (d) retiree
medical insurance coverage, (e) retiree life insurance coverage, and (f) other
benefits.


      
        
           


        

        
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      2.26.4   Schedule
2.26.4 lists each current sales representative, commissioned salesperson,
consultant or other agent or representative of the Company or any
Subsidiary(“Representatives”) and all former Representatives terminated within
the last three (3) years or to which the Company or any Subsidiary owes any
Liability, along with a complete description of the compensation or Liability
payable to such Representatives and all Contracts relating thereto, and Sellers
have delivered to Buyer a true and complete copy of each such Contract and/or
all amendments thereto.

       

      2.26.5   Except
for the written resignations expressly required by this Agreement, to Sellers’
Knowledge, no Representative, director, officer, or other employee of the
Company or any Subsidiary intends to terminate or materially alter his or her
employment or other business relationship with the Company or any
Subsidiary.  Neither Sellers, the Company nor any Subsidiary has
received any notice of termination or resignation from any current director,
officer, employee, agent or Representative of the Company or any
Subsidiary.

       

      2.27           Labor Relations;
Compliance.  Each
of the Company and its Subsidiaries has not been nor is a party to any
collective bargaining or other labor Contract.  There has not been,
there is not presently pending or existing, and there is not Threatened, (a) any
strike, slowdown, picketing, work stoppage, or employee grievance process, (b)
any Proceeding against or affecting the Company or any Subsidiary relating to
the alleged violation of any Legal Requirement pertaining to labor relations or
employment matters, including any charge or complaint filed by an employee or
union with the National Labor Relations Board, the Equal Employment Opportunity
Commission, or any comparable Governmental Body, organizational activity, or
other labor or employment dispute against or affecting the Company or any
Subsidiary or its premises, or (c) any application for certification of a
collective bargaining agent. To the Knowledge of the Sellers and the Company, no
event has occurred or circumstance exists that could provide the basis for any
work stoppage or other labor dispute.  There is no lockout of any
employees by the Company or any Subsidiary, and no such action is contemplated
by the Company or any Subsidiary.  Each of the Company and its
Subsidiaries has complied in all respects with all Legal Requirements relating
to employment, equal employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, collective bargaining, the payment of social security
and similar taxes, occupational safety and health, and plant
closing.  None of the Company or its Subsidiaries is liable for the
payment of any compensation, damages, taxes, fines, penalties, or other amounts,
however designated, for failure to comply with any of the foregoing or other
Legal Requirements.

       

      2.28           Intellectual
Property.

       

      2.28.1   Excluding
licenses for non-customized commercial software having an annual license fee of
less than $1,000 per seat, per user, per CPU, or per site, as applicable, Schedule 2.28.1
contains a complete and accurate list of all Contracts in which third
parties grant rights in Intellectual Property to the Company or any
Subsidiary.


      
        
           


        

        
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      2.28.2   Schedule 2.28.2
contains a complete and accurate list of all Contracts in which the Company or
any Subsidiary has granted rights in Intellectual Property Assets to third
parties.

       

      2.28.3   Schedule 2.28.3
contains a complete and accurate list of all Intellectual Property Assets that
are registered, or for which an application to register has been filed, with the
USPTO or the U.S. Copyright Office.  Except as set forth in Schedule 2.28.3, the
Company and its Subsidiaries are the owners of all right, title, and interest in
and to each of the Intellectual Property Assets, free and clear of all
Encumbrances, and the Company and its Subsidiaries collectively have the sole
and undiminished right to the Intellectual Property Assets without any Liability
for royalties or other payments to a third party.  Neither the
Sellers, nor the Sellers' agents or employees, hold any Encumbrance, or have any
ownership or other claim of right, enjoyment, or interest in any of the
Intellectual Property Assets set forth in Schedule 2.28.3, and
all such Intellectual Property Assets created by an employee of the Company or
any Subsidiary were created during the term of and in the course of such
employee’s employment.

       

      (a)           Except
as set forth in Schedule 2.28.3, all
of the issued Patents,  registered Marks and registered Copyrights
owned by the Company and its Subsidiaries are properly filed and registered, are
in compliance with all current Legal Requirements (including payment of filing
and examination fees and proofs of use) which cannot be subsequently complied
with, are not subject to past due maintenance fees, royalty fees, Taxes or
Proceedings or Liabilities, and to the Knowledge of Sellers are valid and
enforceable.

       

      (b)           No
Patent, Mark, or Copyright of the Intellectual Property Assets has been or is
now involved in any interference, reissue, reexamination, or opposition
Proceeding.

       

      (c)           Except
as described in Schedule 2.28.3 no
Intellectual Property Asset violates or infringes upon any rights of any Person
or has been challenged or threatened in any way other than by official actions
of the USPTO.

       

      (d)           All
products sold under an issued patent of Intellectual Property Assets have been
marked with the proper notice of the Patent.

       

      (e)           The
Company and each Subsidiary has taken such precautions to protect the secrecy
and confidentiality of Trade Secrets of the Intellectual Property Assets as are
required to maintain trade secret status under applicable state
law.

       

      2.28.4   Schedule 2.28.4 sets
forth a complete and accurate list of all material unregistered trademarks and
service marks of the Intellectual Property Assets and included in the operation
of its business.

       

      2.28.5   The
Company and its Subsidiaries are properly licensed to use the non-customized
commercially available software currently in use by them.


      
        
           


        

        
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      2.28.6   Except
as set forth in Schedule
2.28.6,  the conduct of the Company’s and the Subsidiaries’
respective Businesses and the exercise of their respective rights relating to
the Intellectual Property Assets does not infringe upon or otherwise violate the
Intellectual Property of any Person.

       

      2.28.7   Except
as set forth in Schedule 2.28.7, to
the Sellers’ Knowledge, no Person is infringing upon or otherwise violating any
of the Intellectual Property Assets listed by Sellers in Schedules 2.28.2,
2.28.3 or 2.28.4.

       

      2.28.8   Except
as set forth in Schedule 2.28.8,
there are no pending claims, of any Persons, other than official actions of the
USPTO, relating to the scope, ownership or use of any of the Intellectual
Property Assets scheduled by Sellers in Schedule
2.28.3.

       

      2.28.9   Except
as indicated in Schedule 2.28.3, the Company
or one of its Subsidiaries are listed in the records of the USPTO or U.S.
Copyright Office as the sole owner of record of the Patents, registered Marks,
or registered Copyrights listed in Schedule 2.28.3.

       

      2.28.10  Except as
indicated in Schedule
2.28.3, each copyright registration, patent, registered trademark and
application therefore listed in Schedule 2.28.3 has
been duly maintained, including the submission of all necessary filings to date
in accordance with the legal and administrative requirements of the USPTO or the
U. S. Copyright Office, as applicable, to avoid abandonment.

       

      2.28.11  All
software owned by the Company or one of its Subsidiaries was either developed by
employees of the Company or of one of the Subsidiaries within the scope of their
employment; or by independent contractors who have assigned their rights to the
Company or one of the Subsidiaries pursuant to written agreements.

       

      2.28.12  Schedule 2.28.12 sets
forth a complete and accurate list of all domain names used by the Company or
any Subsidiary and the applicable registrar and expiration date of the current
registration.  Each domain name set forth in Schedule 2.28.14 is
currently registered with an ICANN-sanctioned registrar, and to the Sellers’
Knowledge, no third party other than ICANN has rights in the domain names
superior to the Acquired Companies.

       

      2.29           Finders or
Broker Fees.  Except
as set forth on Schedule 2.29, there
are no broker commissions, finder’s fees or other payments of like nature
payable to any Person in connection with the Contemplated Transactions, and in
no event will Buyer or the Company have any Liability for any fee or commission
including, but not limited to, any finders’, originators’ or brokers’ fee in
connection with the Contemplated Transactions.

       

      2.30           Competitive
Interest.  Except
as otherwise set forth in Schedule 2.30, none of the Sellers and no officer,
director or, to the Knowledge of the Sellers and the Company, no other employee
of the Company or any Subsidiary, owns, directly or indirectly, any interests or
has any business or enterprise which is a competitor or potential competitor of
the Company or any Subsidiary (excluding ownership of less than five percent
(5%) of any public company).


      
        
           


        

        
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      2.31           Related Party
Transactions.  Except
as set forth on Schedule 2.31, during the past five (5)  years, all of
the transactions by the Company and each Subsidiary has been conducted on an
arm’s length basis.  No portions of the sales or other ongoing
business relationship of the Company or any Subsidiary is dependent upon any
familial relationship of Sellers or of any of the managers, officers, directors
or other employees of the Company or any Subsidiary.  Neither the
Company nor any Subsidiary has engaged in any purchase, lease, sale or other
transaction involving any Seller, any officer, director, employee or
Representative of the Company or any Subsidiary, any of their respective
representatives, or any Person owned or controlled, in whole or in part, by any
such parties, within the last five (5) years.  No property or interest
in any property (including designs and drawings concerning machinery) which
relates to and is or will be necessary or useful in the present or currently
contemplated future operation of the Business, is presently owned by or leased
by or to any Related Party. Neither the Company, any of the Subsidiaries nor any
Related Party has an interest, directly or indirectly, in any business,
corporate or otherwise, which is in competition with the
Business (excluding ownership of less than five percent (5%) of any public
company).

       

      2.32           Related Party
Obligations.  Schedule
2.32 is a list of all amounts owed by or to the Company and Subsidiary to or
from a Seller and a description of the nature or reason for such obligation
(“Related Party Obligations”).  The Related Party Obligations owed to
the Company and any Subsidiary are current and collectible, in full, subject to
no off-sets or defenses, and will be collected in full without any set-off, in
accordance with their terms.

       

      2.33           Name; Prior
Transactions.  All
names under which the Company and Subsidiary does business as of the date hereof
is specified on Schedule 2.33.  Except as set forth on Schedule 2.33,
neither the Company nor any Subsidiary has changed its name or used any assumed
or fictitious name, or been the surviving entity in a merger, acquired any
business or changed its principal place of business or chief executive office,
within the past five (5) years.

       

      2.34           Permits.  Schedule
2.34 contains a true and correct list of, and the Company and the Subsidiaries
possess, all Permits which are required in order for the Company and the
Subsidiaries to conduct their Business as presently conducted or proposed to be
conducted.  The Company has delivered complete and accurate copies of
each Permit to Buyer.

       

      2.35           Securities
Laws.   Each
Seller represents and warrants to Buyer as follows as to such
Seller:

       

      2.35.1   Such
Seller that is an individual is a citizen of the United States and either a
resident of the State of Kansas or the State of New York.

       

      2.35.2   Such
Seller is an “accredited investor” as defined in Rule 501(a) of Regulation D
under the Securities Act.  Such Seller is knowledgeable, sophisticated
and experienced in making, and is qualified to make decisions with respect to,
investments in securities presenting an investment decision similar to that
involved in the purchase of Generex Shares, and has requested, received,
reviewed and considered all information it deemed relevant to evaluating the
merits and risks of the prospective investment in and making an informed
decision to purchase Generex Shares.


      
        
           


        

        
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      2.35.3   The
following legend will be placed on each certificate or statement representing
Generex Shares now or hereafter held by each Seller:

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAW AND SHALL NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE
TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER HEREOF UNLESS AND
UNTIL THEY ARE SO REGISTERED OR THEY ARE DETERMINED TO BE EXEMPT FROM
REGISTRATION ON THE BASIS OF A FAVORABLE OPINION OF THE COMPANY’S COUNSEL AND/OR
SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO SUCH
COUNSEL THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW.

       

      2.35.4   Except
as specified in this Agreement and the Registration Rights Agreement, Generex
has not agreed to register any of the Generex Shares for distribution in
accordance with the provisions of the Securities Act or any applicable State
securities law, and Generex has not agreed to comply with any exemption from
registration under the Securities Act or any applicable State securities law for
the resale of such stock.  Consequently, each Seller may be required
to hold the Generex Shares indefinitely, unless and until such registration is
effective under the Securities Act and any applicable State securities law,
unless an exemption from registration is available, in which case each Seller
may still be limited as to the number of shares of stock that may be sold by
it.  In any case, each Seller will not sell, assign, pledge,
hypothecate, donate or otherwise transfer (whether or not for consideration)
unless and until such stock is registered or determined to be exempt from
registration on the basis of a favorable opinion of Generex’s counsel and/or
submission to Generex of such other evidence as may be reasonably satisfactory
to Generex or such counsel that any such transfer shall not be in violation of
the Securities Act or any applicable State securities law.

       

      2.35.5   Due to
restrictions on the transferability of Generex Shares pursuant to applicable
federal and state securities laws in the absence of registration, the terms of
this Agreement, and the Registration Rights Agreement, it may not be possible to
liquidate the stock readily (or at all) in case of an emergency or otherwise,
and the investment in Generex Shares involves a certain degree of risk and each
Seller has taken full cognizance of and understands all of the risks associated
therewith.

       

      2.35.6   Such
Seller has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks associated with the investment
in Generex Shares or that it has obtained the advice of an attorney, certified
public accountant or registered investment advisor with respect
thereto.


      
        
           


        

        
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      2.35.7   Such
Seller has adequate means of providing for his own current needs and possible
personal contingencies and that he has no need for liquidity in his investment
in Generex Shares and he is able to bear the economic risks of such an
investment for an indefinite period, including a complete loss of such
investment.

       

      2.35.8   Each
Seller has acquired Generex Shares for his own account for investment purposes
only and not for the account of others and not with a view to the distribution
or public resale thereof, except pursuant to a registration statement effective
under the Securities Act and applicable state securities laws.

       

      2.35.9   Each
Seller has had an opportunity to ask questions and receive answers concerning
his investment in Generex Shares and to obtain any additional information which
Buyer possesses or can obtain without unreasonable effort and expense that might
be necessary in his judgment to verify any information which has been provided
to him.

       

      2.35.10 Each Seller
acknowledges that Generex has the authority to issue additional shares of stock
and that Generex may issue additional shares of stock from time to
time.  The issuance of additional shares of stock may cause dilution
of the existing shares of common stock and may decrease the purchase price of
the shares of common stock.

       

      2.35.11 Each Seller is
not purchasing the Generex Shares as a result of any advertisement, article,
notice or other communication regarding Generex Shares 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.

       

      2.35.12 Each Seller
acknowledges that the Generex Shares are being offered and sold to him by Buyer
in reliance on specific exemptions from the registration requirements of the
Securities Act and applicable state securities laws and that Buyer is relying on
the truth and accuracy of, and each Seller’s compliance with, the
representations, covenants, warranties, agreements, acknowledgments and
understandings of each Seller set forth herein in order to determine the
availability of such exemptions and the eligibility of each Seller to acquire
the Generex Shares.

       

      2.35.13 Such Seller has
thoroughly reviewed the representations, warranties and covenants of Buyer
contained in this Agreement, together with the Schedules thereto and the reports
filed under the Exchange Act by Generex (the “Generex Documents” and together
with this Agreement and the Schedules thereto, collectively the “Disclosure
Documents”) prior to making this investment in the Generex
Shares.  Such Seller has been granted a reasonable time prior to the
date hereof during which it has had the opportunity to obtain such additional
information as it deems necessary to permit it to make an informed decision with
respect to the purchase of Generex Shares.  After examination of the
Disclosure Documents, each Seller is fully aware of the business prospects,
financial condition, risks associated with investment and the operating history
relating to Generex as disclosed in such Disclosure Documents, and therefore in
purchasing Generex Shares, each Seller is not relying upon any information other
than information contained in the Disclosure Documents.  Such Seller
acknowledges that he has independently evaluated the merits of the transactions
contemplated by this Agreement, that he has independently determined to enter
into the transactions contemplated hereby, that he is not relying on any advice
from or evaluation by any other Seller, and that he is not acting in concert
with any other Seller in making its purchase of Generex Shares
hereunder.


      
        
           


        

        
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      2.35.14 Each Seller
covenants, for himself and his professional advisors and agents, that he has and
will from the date hereof maintain in confidence all Disclosure Documents (other
than the Generex Documents) received from Buyer, unless and until such
information (a) is or becomes generally publicly available other than through a
violation of this provision by any Seller or his agents or (b) is required to be
disclosed in legal proceedings (such as by deposition, interrogatory, request
for documents, subpoena, civil investigation demand, filing with any
governmental authority or similar process); provided, however, that before
making any disclosure in reliance on this Section, each Seller will give Buyer
at least fifteen (15) days prior written notice (or such shorter period as
required by law) specifying the circumstances giving rise thereto and will
furnish only that portion of the non-public information which is legally
required and will exercise his commercially reasonable efforts to ensure that
confidential treatment will be accorded any non-public information so
furnished.

       

      2.36           Disclaimer of Other
Representations or Warranties.  No
representation or warranty of Sellers in this Agreement and no statement in the
Schedules omits to state any fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not
misleading.  No notice given pursuant to this Agreement will contain
any untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading.  Except as expressly set forth in this
Article II, the Company and Sellers make no representation or warranty, express
or implied, at law or equity, in respect to the Company, its Subsidiaries, or
any of their respective assets, liabilities or operations.

       

      ARTICLE
III

      REPRESENTATIONS
AND WARRANTIES OF BUYER

       

      As a
material inducement to the Sellers and Company entering into this Agreement and
knowing and acknowledging that the Sellers and Company are relying upon the
same, Buyer makes, as of the date hereof and as of the Closing Date, the
following representations and warranties to the Sellers and
Company:

       

      3.1             Organization, Existence and
Good Standing.  Buyer
is a corporation duly organized, validly existing and in good standing under the
laws of the state of Delaware.

       

      3.2             Authority; No
Conflict.

       

      3.2.1     This
Agreement constitutes the legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.  Upon the
execution and delivery by Buyer of the Buyer's Closing Documents, the Buyer's
Closing Documents executed by Buyer will constitute the legal, valid, and
binding obligations of Buyer, enforceable against Buyer in accordance with their
respective terms.  Buyer has the absolute and unrestricted right,
power, and authority to execute and deliver this Agreement and the Buyer's
Closing Documents and to perform its obligations under this Agreement and the
Buyer's Closing Documents.


      
        
           


        

        
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      3.2.2     Except
as set forth in Schedule 3.2.2, neither the execution and delivery of this
Agreement by Buyer, nor the consummation or performance of any of the
Contemplated Transactions by Buyer will give any Person the right to prevent,
delay, or otherwise interfere with any of the Contemplated Transactions pursuant
to:

       

      (a)           Any
provision of Buyer's Organizational Documents;

       

      (b)           Any
resolution adopted by the board of directors or the stockholders of
Buyer;

       

      (c)           Any
Legal Requirement or Order to which Buyer may be subject; or

       

      (d)           Any
Contract to which Buyer is a party or by which Buyer may be bound.

       

      Except as
set forth in Schedule 3.2.2, Buyer is not required to obtain any Consent from
any Person in connection with the execution and delivery of this Agreement or
the consummation or performance of any of the Contemplated
Transactions.

       

      3.3             Certain
Proceedings.  There
is no pending Proceeding that has been commenced against Buyer that challenges,
or may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions.  To the
knowledge of Buyer, no such Proceeding has been Threatened.

       

      3.4             Generex
Documents.

       

      3.4.1     As
of the date hereof, none of the Generex Documents contained or contains, and
none of the filings to be made by Generex with the Securities and Exchange
Commission (the “SEC”) under the Exchange Act between the date hereof and the
Closing Date will contain, any untrue statement of material fact or omits or
will omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading.

       

      3.4.2     As
of their respective dates, the audited and unaudited consolidated financial
statements of Generex include (or incorporated by reference) in the Generex
Documents were prepared (or will have been prepared) in all material respects in
accordance with GAAP applied on a consistent basis during the periods therein
indicated (except as may be indicated in the notes thereto) and presented fairly
(or will present fairly) the consolidated financial position of Generex and the
consolidated results of operations and changes in consolidated financial
position or cash flows for the periods presented therein, subject, in the case
of the unaudited interim financial statements, to normal year-end audit
adjustments.


      
        
           


        

        
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      3.4.3     The
representations made in Sections 3.4.1 and 3.4.2 are subject to the
understanding that there may be SEC comments outstanding with respect to
Generex’s SEC filings from time to time.  On the business day prior to
Closing, Generex will provide copies of any comments and responses outstanding
at such time.

       

      3.5             Authorization of Generex
Shares. The
Generex Shares to be issued and delivered to the Sellers under the terms of this
Agreement will be when issued, validly issued, fully paid and non
assessable.

       

      ARTICLE
IV

      COVENANTS
OF COMPANY AND SELLERS

       

      The
Company and Sellers, jointly and severally, make the following covenants to
Buyer:

       

      4.1             Access and
Investigation.  Between
the date of this Agreement and the Closing Date, Sellers, the Company and the
Subsidiaries will during normal business hours and upon reasonable notice (a)
afford Buyer and its representatives, attorneys, accountants, auditors and
prospective lenders and their representatives (collectively “Buyer's Advisors”)
full and free access to the Company’s and the Subsidiaries’ personnel,
properties, suppliers, vendors, customers, employees, Contracts, books and
records, and other documents and data, (b) furnish Buyer and Buyer's Advisors
with copies of all such Contracts, books and records, and other existing
documents and data as Buyer may reasonably request, and (c) furnish Buyer and
Buyer's Advisors with such additional financial, operating, and other data and
information as Buyer may reasonably request.

       

      4.2             Operation of the Business of
Company and Subsidiaries.  Between
the date of this Agreement and the Closing Date, Sellers, the Company and each
Subsidiary shall:

       

      4.2.1     Conduct
the business of the Company and each Subsidiary only in the Ordinary Course of
Business;

       

      4.2.2     Use
the same efforts as they would use in the absence of this Agreement, and in any
event no less than reasonable efforts to preserve intact the current business
organization of the Company and each Subsidiary, keep available the services of
the current officers, key employees, and Representatives of the Company and each
Subsidiary, and maintain the relations and goodwill with suppliers, customers,
landlords, creditors, employees, agents, and others having material business
relationships with the Company and each Subsidiary;

       

      4.2.3     Confer
with Buyer concerning operational matters of a material nature;

       

      4.2.4     Report
periodically to Buyer concerning the status of the business, operations, and
finances of the Company and each Subsidiary, including, without limitation,
promptly providing monthly financial statements to the Buyer;

       

      4.2.5     Not
permit the Company or any Subsidiary to materially increase the amounts of any
Related Party Obligations owed by the Company or such Subsidiary or enter into
any new Related Party Transactions;


      
        
           


        

        
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      4.2.6     Not
take any affirmative action, or fail to take any action which may reasonably
result in any Breach, failure, error or misrepresentation under any
representation, warranty, covenant or provision of this Agreement or in any
Material Adverse Effect to the Company or any Subsidiary or its business,
prospects, assets, liabilities or rights; and

       

      4.2.7     Not
pay or declare any dividends or distributions in excess of the Company’s net
profits through the date of Closing.  .

       

      4.3             Requirement;
Approvals.  As
promptly as practicable after the date of this Agreement, Sellers will, and will
cause the Company and each Subsidiary to, make all filings required by Legal
Requirements to be made by it in order to consummate the Contemplated
Transactions.  Between the date of this Agreement and the Closing
Date, Sellers will, and will cause the Company and each Subsidiary to, (a)
cooperate with Buyer with respect to all filings that Buyer elects to make or is
required by Legal Requirements to make in connection with the Contemplated
Transaction, and (b) cooperate with Buyer in obtaining all Consents identified
in Schedule
2.4.

       

      4.4             Notification.  Between
the date of this Agreement and the Closing Date, the Sellers will promptly
notify Buyer in writing if any Seller, the Company or any Subsidiary becomes
aware of a material Breach of any of Sellers’ representations and warranties as
of the date of this Agreement. During the same period, each Seller will promptly
notify Buyer of the occurrence of any Breach of any covenant of a Seller in this
Article IV or of the occurrence of any event that may make the satisfaction of
the conditions in Article VI impossible or unlikely.  Notwithstanding
anything contained in this Section 4.4, no disclosure, supplement to Schedule or
other action taken by Sellers as required or described herein shall be deemed to
amend or supplement this Agreement or any Schedule, or to cure any
misrepresentation, Breach or failure of Sellers under this Agreement or to waive
any right or remedy of Buyer for such misrepresentation, Breach or
failure.

       

      4.5             Corso
Indebtedness. All
Indebtedness of the Company and any Subsidiary owed (directly or indirectly) to
Corso or any Affiliates of Corso, and all past and future obligations under any
contract between the Company and any Subsidiary and Corso of any Affiliate of
Corso, including but not limited to the existing lease for premises in New York,
New York (“NYC Lease”), and any Encumbrances or Liabilities related thereto
(collectively, “Corso Indebtedness”), shall be terminated, discharged and
released by Corso and Affiliates of Corso in their entirety on or before Closing
as set forth in the Corso Indebtedness Release and the Lease
Termination.

       

      4.6             No Solicitation or
Negotiation.  Until
such time, if any, as this Agreement is terminated pursuant to Article VIII, the
Company, the Subsidiaries and the Sellers shall not, and will cause each member,
director, officer, employee, agent or representative of the Company or any
Subsidiary not to, directly or indirectly (a) present any expression of
interest, request for proposal, offer, proposal, inquiry, information or
agreement to, or have any contact with, any Person (other than Buyer) regarding
any actual or potential Sale Transaction, or (b) invite, solicit, initiate,
facilitate or encourage any inquiries, proposals or offers from, discuss or
negotiate with, provide any information or response to, cooperate in any way
regarding, or consider the merits of, any request, offer, information, inquiry
or proposal from any Person (other than Buyer) relating in any way to any Sale
Transaction. The Company and the Sellers jointly and severally agree that
immediately upon the receipt of any inquiry, proposal or other communication
relating in any way to a Sale Transaction, they shall notify Buyer of same and
shall provide copies of all such inquiries, proposals and communications to
Buyer, together with a detailed summary of all such discussions and
communications relating thereto.


      
        
           


        

        
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      4.7             Best
Efforts.  Between
the date of this Agreement and the Closing Date, Sellers will use their Best
Efforts to cause the conditions in Article VI to be satisfied.

       

      ARTICLE
V

      COVENANTS
OF BUYER PRIOR TO CLOSING DATE

       

      Buyer
makes the following covenants to Sellers and the Company:

       

      5.1             Approvals of Governmental
Bodies.  As
promptly as practicable after the date of this Agreement, Buyer will make all
filings required by Legal Requirements to be made by it to consummate the
Contemplated Transactions.  Between the date of this Agreement and the
Closing Date, Buyer will cooperate with Sellers with respect to all filings that
Sellers are required by Legal Requirements to make in connection with the
Contemplated Transactions, and cooperate with Sellers in obtaining all Consents
identified in Schedule
2.4; provided that this Agreement will not require Buyer to dispose of or
make any change in any portion of its business or to incur any other burden to
obtain a Governmental Authorization.

       

      5.2             Acquisition
Financing. Prior
to the Closing, Buyer shall seek to obtain financing to fund the Contemplated
Transaction as well as the to fund Buyer’s anticipated funding requirements for
clinical trials and other current initiatives during the twelve months following
Closing (the “Acquisition Financing”), which financing may include a debt
component under which Buyer and/or its Subsidiaries will be the sole borrower(s)
(the “Debt Component”) and that such Debt Component shall be secured by, inter alia, an irrevocable
and unconditional pledge of the Membership Interest by Buyer.  The
parties agree that the Company shall not be a borrower or a guarantor of the
Debt Component.

       

      5.2             Best
Efforts.  Between
the date of this Agreement and the Closing Date, Buyer will use its Best Efforts
to cause the conditions in Article VII to be satisfied.

       

      ARTICLE
VI

      CONDITIONS
PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

       

      All of
Buyer's obligations under this Agreement, including, without limitation, Buyer’s
obligations to purchase the Membership Interest and to take the other actions
required to be taken by Buyer under this Agreement or at the Closing, including
the payment of the Purchase Price and issuance or delivery of the Closing Date
Shares, are subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived in writing by Buyer, in
whole or in part):

       

      6.1             Accuracy of
Representations.  All
of Sellers’ representations and warranties in this Agreement, individually and
in the aggregate, must be and remain accurate in all material respects as of the
date of this Agreement, and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date.


      
        
           


        

        
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      6.2             Satisfaction
of Due Diligence Investigation. Buyer and
Buyer’s Advisors shall have undertaken their own investigation of the condition
of the Company and the Subsidiaries, including personnel, properties, suppliers,
vendors, customers, employees, Contracts, Records and other financial,
operating, and other data and information and any such matters relating to the
Company and the Subsidiaries as Buyers and Buyer’s Advisors deem relevant with
respect to the Membership Interest, and Buyer shall be satisfied, in its
reasonable discretion, with the results of such investigation.

       

      6.3             Sellers’
Performance.

       

      6.3.1     All
of the covenants and obligations that Sellers are required to perform or to
comply with pursuant to this Agreement at or prior to the Closing, individually
and in the aggregate, must have been duly and fully performed and complied with
in all material respects.

       

      6.3.2     Each
document, agreement, instrument or certificate required to be executed and/or
delivered by Sellers shall have been duly executed and/or delivered, as
applicable.

       

      6.4             Consents.  Each
of the Consents must have been obtained and must be in full force and
effect.

       

      6.5             Amended Operating
Agreement.  The
Parties shall have entered into the Amended Operating Agreement Amended
Operating Agreement shall include the provisions enumerated below and any
necessary conforming revisions:

       

      6.5.1     Right
of First Refusal.  As long as
Buyer or its Affiliates hold the Membership Interest, (i) Buyer shall have a
right of first refusal in respect of any proposed transfer or disposition of
Units held by any Seller and (ii) Sellers shall have a right of right of first
refusal in respect of any proposed transfer or disposition of the Membership
Interest (other than to an Affiliate of Buyer) exercisable by each Seller on a
pro rata
basis.

       

      6.5.2     Option to
Purchase.  Following the Closing and for a
period  specified in the Amended Operating Agreement, Buyer shall have
an option to purchase all, and not less than all, of the remaining forty-nine
percent (49%) of the Units of the Company on the terms and conditions set forth
in the Amended Operating Agreement.

       

      6.5.3      Company’s
Board of Managers.  The Company shall be governed by a Board of
Managers, rather than the members of the Company.  The Board of
Managers shall be comprised of six Managers, three of whom shall be appointed by
Buyer and three of whom shall be the Sellers.  A majority vote of the
Managers shall be required for all actions of the Company, with the exception of
the actions set forth in Section 7.2 of Operating Agreement which shall require
unanimous consent of the Managers.


      
        
           


        

        
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      6.5.4     No
Encumbrances on Company Assets.  Neither Buyer, on the one
hand, nor Sellers, on the other, shall have a right to encumber the Company’s
assets without unanimous prior consent of the other.

       

      6.6             Corso Indebtedness Release
and Lease Termination.  The
Corso Indebtedness shall have been fully discharged and released, and Corso and
Affiliates of Corso shall have executed and delivered the Corso Indebtedness
Release.

       

      6.7             Release
of Liens.  The security interests and liens on the assets of
the Company and the Subsidiaries held by the secured parties listed on Schedule 6.7 other
than security interest of CoreFirst Bank shall have been terminated on or before
closing or Buyer shall otherwise be satisfied based upon written confirmation
from such secured parties that they will terminate such security interests
immediately following the Closing..

       

      6.8             Additional
Documents.  Each of
the following documents must have been delivered to Buyer:

       

      6.8.1     An
opinion from each of Sellers’ legal counsel as described in Section
1.9;

       

      6.8.2     An
opinion of counsel to the Company, as described in Section 1.9; and

       

      6.8.3     Such
other documents as Buyer may reasonably request for the purpose of (i)
evidencing the accuracy of any of Sellers’ representations and warranties, (ii)
evidencing the performance by any Seller of, or the compliance by any Seller
with, any covenant or obligation required to be performed or complied with by
such Seller, (iii) evidencing the satisfaction of any condition referred to in
this Article VI, or (iv) otherwise facilitating the consummation or performance
of any of the Contemplated Transactions.

       

      6.9             No
Proceedings.  Since
the date of this Agreement, there must not have been commenced or Threatened
against Buyer, or against any Person affiliated with Buyer, any Proceeding (a)
involving any challenge to, or seeking damages or other relief in connection
with, any of the Contemplated Transactions, or (b) that may have the effect
of preventing, delaying, making illegal, or otherwise interfering with any of
the Contemplated Transactions.

       

      6.10           No Claim Regarding Unit
Ownership or Sale Proceeds.  There
must not have been made or Threatened by any Person any claim asserting that
such Person (a) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any Units or any other voting,
equity, or ownership interest in, the Company, or (b) is entitled to all or any
portion of the Purchase Price payable for the Membership Interest.

       

      6.11           No
Prohibition.  Neither
the consummation nor the performance of any of the Contemplated Transactions
will, directly or indirectly (with or without notice or lapse of time),
materially contravene, or conflict with, or result in a material violation of,
or cause Buyer or any Person affiliated with Buyer to suffer any adverse
consequence under, (a) any applicable Legal Requirement or Order, or (b) any
Legal Requirement or Order that has been published, introduced, or otherwise
proposed by or before any Governmental Body.


      
        
           


        

        
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      6.12           Acquisition
Financing. Buyer
shall have secured the Acquisition Financing on terms satisfactory to Buyer in
its sole and unfettered discretion.

       

      6.13           NASDAQ Approval for Issuance
of Generex Shares.  Receipt
of approval by Generex from the NASDAQ Stock Market for the issuance of the
Generex Shares.

       

      6.14           Resolution of CoreFirst
Bank.  The
Sellers and Buyer shall have mutually agreed upon the disposition of the
Company’s Line of Credit with CoreFirst Bank.

       

      6.15           Funding of Working
Capital.  The
Sellers and Buyer shall have mutually agreed to the amount of working capital
required to by the Company upon Closing; Generex shall have funded 51% of such
amount and the Sellers’ shall have funded 49%.

       

      ARTICLE
VII

      CONDITIONS
PRECEDENT TO OBLIGATION OF

      COMPANY
AND THE SELLERS TO CLOSE

       

      All of
the obligations of the Company and the Sellers under this Agreement, including,
without limitation, Sellers’ obligation to sell the Membership Interest and to
take the other actions required to be taken by Sellers at the Closing are
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived in writing by all of the
Sellers, in whole or in part):

       

      7.1             Accuracy of
Representations.  All
of Buyer's representations and warranties in this Agreement, individually and in
the aggregate, must be and remain accurate in all material respects as of the
date of this Agreement and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date.

       

      7.2             Satisfaction
of Due Diligence Investigation. Sellers and their representatives shall
have undertaken their own investigation of the condition of Buyer, including the
Disclosure Documents and other data and information and any such matters as
Sellers and their representatives deem relevant with respect to Buyer, and
Sellers shall be satisfied, in their reasonable discretion, with the results of
such investigation.

       

      7.3             Buyer’s
Performance.

       

      7.3.1     All
of the covenants and obligations that Buyer is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing, individually and in
the aggregate, must have been duly and fully performed and complied with in all
material respects.

       

      7.3.2     Each
document, agreement, instrument or certificate required to be executed and/or
delivered by Buyer shall have been duly executed and/or delivered, as
applicable.


      
        
           


        

        
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      7.4             Amended Operating
Agreement.  The
Parties shall have entered into the Amended Operating Agreement which Amended
Operating Agreement shall include the provisions set forth in Sections 6.4.1
through 6.4.4.

       

      7.5              Additional
Documents.

       

      7.5.1     An
opinion from Buyer’s legal counsel as described in Section 1.9; and

       

      7.5.2     Buyer
must have caused to be delivered to Sellers such documents as Sellers may
reasonably request for the purpose of (i) evidencing the accuracy of any
representation or warranty of Buyer, (ii) evidencing the performance by Buyer
of, or the compliance by Buyer with, any covenant or obligation required to be
performed or complied with by Buyer, (iii) evidencing the satisfaction of any
condition referred to in this Article VII, or (iv)  otherwise
facilitating the consummation of any of the Contemplated
Transactions.

       

      7.6             No
Injunction.  There
must not be in effect any Legal Requirement or any injunction or other Order
that (a) prohibits the sale of the Membership Interests by Sellers to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.

       

      7.7             NASDAQ Approval for Issuance
of Generex Shares.  Receipt
of approval by Generex from the NASDAQ Stock Market for the issuance of the
Generex Shares.

       

      7.8             Corso
Consulting Agreement.  The Company shall
have entered into a Consulting Agreement in form reasonably acceptable to Buyer
and Corso (the “Corso Consulting Agreement”).

       

      7.9             Resolution of CoreFirst
Bank.  The
Sellers and Buyer shall have mutually agreed upon the disposition of the
Company’s Line of Credit with CoreFirst Bank.

       

      7.10           Funding of Working
Capital.  The
Sellers and Buyer shall have mutually agreed to the amount of working capital
required to by the Company upon Closing; Generex shall have funded 51% of such
amount and the Sellers’ shall have funded 49%.

       

      ARTICLE
VIII

      TERMINATION

       

      8.1             Termination
Events.  This
Agreement may, by notice given prior to or at the Closing, be
terminated:


      
        
           


        

        
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      8.1.1     By
either Buyer or Sellers if a Breach of any provision of this Agreement has been
committed by the other party and such Breach has not been cured within twenty
(20) days of written notice form the non Breaching Party or otherwise waived in
writing;

       

      8.1.2     By
(a) Buyer if any of the conditions in Article VI have not been satisfied as of
the Closing Date or if satisfaction of such a condition is or becomes impossible
(other than through the failure of Buyer to comply with its obligations under
this Agreement) and Buyer has not waived in writing such condition on or before
the Closing Date; or (b) Sellers, if any of the conditions in Article VII has
not been satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of Sellers to comply
with their obligations under this Agreement) and Sellers have not waived in
writing such condition on or before the Closing Date;

       

      8.1.3     By
mutual written consent of Buyer and Sellers;

       

      8.1.4     By
either Buyer or Seller if agreement cannot be reasonably reached between the
parties as to the final form of the Shea Amended Employment Agreement, the Franz
Amended Employment Agreement, the Corso Consulting Agreement or the Amended
Operating Agreement of the Company; or

       

      8.1.5     By
either Buyer or Sellers if the Closing has not occurred (other than through the
failure of any party seeking to terminate this Agreement to fully comply with
its obligations under this Agreement) on or before January 31, 2011 or such
later date as the parties may agree upon.

       

      8.2             Effect of
Termination.  Each
party's right of termination under Section 8.1 is in addition to any other
rights it may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies.  If this
Agreement is terminated pursuant to Section 8.1, all further obligations of the
parties under this Agreement will terminate, except that the obligations in
Sections 2.37.14, 11.1, 11.3 and 11.5 will survive; provided, however, that if
this Agreement is terminated by a party because of the Breach of the Agreement
by the other party or because one or more of the conditions to the terminating
party's obligations under this Agreement is not satisfied as a result of the
other party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.

       

      ARTICLE
IX

      INDEMNIFICATION,
REMEDIES AND POST CLOSING COVENANTS

       

      9.1             Survival of Representations
and Warranties.  All
of the representations and warranties of Sellers contained in this Agreement
shall survive the Closing and continue in full force and effect for a period of
eighteen (18) months thereafter, except for the representations and warranties
contained in Sections 2.15 and 2.25 which shall survive the Closing and continue
in full force and effect until the expiration of the applicable statute of
limitations for governmental or other third party claims which would constitute
a breach of such representations, and except for the representations and
warranties contained in Sections 2.2, 2.3, 2.4, 2.5, 2.6 and 2.9 (“Exempt
Provisions”) which shall survive the Closing and continue in full force and
effect forever thereafter in perpetuity. Each representation, warranty, covenant
and agreement of the Sellers contained in this Agreement is independent of each
other representation, warranty, covenant and agreement.  All
representations and warranties of Buyer under this Agreement, shall survive the
Closing and continue for a period of eighteen (18) months
thereafter.


      
        
           


        

        
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      9.2             Indemnification
and Payment of Damages by Sellers.  Subject
to Section 9.4 hereof, Sellers, jointly and severally, will indemnify, defend
and hold harmless Buyer, its subsidiaries and Affiliates, and their respective
representatives, stockholders, members, partners, officers, directors,
attorneys, employees, agents and controlling Persons, and each of their
Affiliates (collectively the “Buyer Indemnified Persons”) for, and will pay to
the Buyer Indemnified Persons the amount of, any Damages, arising, directly or
indirectly, from or in connection with:

       

      9.2.1     Any
Breach of any representation or warranty made by Sellers in this Agreement, the
Schedules, the supplements to the Schedules, or any other agreement, certificate
or document executed or delivered by Sellers pursuant to this
Agreement;

       

      9.2.2     Any
Breach of any covenant or obligation of Sellers or the Company in this
Agreement;

       

      9.2.3     Any
Liability or claim for any Tax which relates to any period prior to or including
the Closing Date and not reserved in the Interim Financial Statements or accrued
from the operations of the Company or any Subsidiary in the Ordinary Course of
Business since the date of the Interim Financial Statements and reflected in the
books and records of the Company or such Subsidiary;

       

      9.2.4     Any
Liability of the Company or any Subsidiary incurred or arising from any
circumstances or events prior to or as of the Closing Date which is not
reflected on the Interim Financial Statement, except for accounts payable and
accrued expenses incurred from the operations of the Company or any Subsidiary
in the Ordinary Course of Business since the date of the Interim Financial
Statement and reflected in the books and records of the Company or such
Subsidiary;

       

      9.2.5     Any
claim by any Person for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made by
any such Person with Sellers or the Company (or any Person acting on their
behalf) in connection with any of the Contemplated Transactions or any other
transaction; and

       

      9.2.6     Any
Liability or claim for workers' compensation benefits, health, life or other
insurance benefits, or any other employee benefits or claims by or for any of
the employees or Representatives of the Company or any Subsidiary arising from
or relating to any occurrence during any period prior to or including the
Closing Date, except to the extent fully covered and paid for by
insurance.


      
        
           


        

        
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      9.3             Indemnification and Payment
of Damages by Buyer.  Buyer
will indemnify and hold Sellers, their heirs and successors (“Seller Indemnified
Parties”) harmless, and will pay to Seller Indemnified Persons the amount of any
Damages arising, directly or indirectly, from or in connection with (a) any
Breach of any representation or warranty made by Buyer in this Agreement or in
any agreement, certificate or document executed or delivered by Buyer pursuant
to this Agreement, and (b) any Breach by Buyer of any covenant or obligation of
Buyer in this Agreement. Notwithstanding the forgoing, except for the “Seller
Exempt Damages” (as hereinafter defined), Buyer shall not have any obligation to
indemnify, defend and hold any Seller Indemnified Persons harmless from and
against any Damages until Seller Indemnified Persons collectively have suffered
Damages on a combined basis in excess of Fifty Thousand ($50,000.00) Dollars
(the “Seller Basket”), after which point Buyer will be obligated to indemnify,
defend and hold Seller Indemnified Persons harmless from and against all Damages
in excess of the Seller Basket.  For purposes of this Agreement, the
“Seller Exempt Damages” shall mean Damages arising out of any intentional Breach
or fraud by Buyer. Except as otherwise provided herein, the maximum liability of
Buyer for indemnification under this Article IX shall be limited to Five Million
($5,000,0000.00) Dollars (the “Seller Limitation”).  The Seller
Limitation, however shall not apply to any Seller Exempt Damages .

       

      9.4             Buyer Indemnification
Limitations.  Except
for the “Exempt Damages” (as hereinafter defined), Sellers shall not have any
obligation to indemnify, defend and hold Buyer Indemnified Persons harmless from
and against any Damages until Buyer Indemnified Persons have suffered Damages on
a combined basis in excess of Fifty Thousand ($50,000.00) Dollars (the
“Basket”), after which point Sellers will be jointly and severally obligated to
indemnify, defend and hold Buyer Indemnified Persons harmless from and against
all Damages in excess of the Basket.  For purposes of this Agreement,
the “Exempt Damages” shall mean Damages arising out of (i) any intentional
Breach or fraud by Sellers, (ii) any Breach in any of the Exempt Provisions,
and/or (iii) any Breach under Sections 4.1, 4.2, 4.5, 4.6 or 4.7
hereof.  Notwithstanding anything contained herein to the contrary, it
is expressly agreed that Buyer shall be indemnified from the first dollar of
Damages which are Exempt Damages and the Exempt Damages shall not be subject to
the Basket.  Except as otherwise provided herein, Corso shall have no
liability for indemnification under this Article IX in excess of the
Indemnification Holdback Account (the “Corso Limitation”) and the maximum
liability of the other Sellers for indemnification under this Article IX shall
be limited to the Purchase Price (the “Limitation”).  The Corso
Limitation, however, shall not apply to any fraud by Sellers or intentional
breach by Corso and the Limitation shall not apply to any Exempt Damages other
than Damages arising from a breach of Sections 4.1, 4.2 or 4.7.

       

      9.5             Claims. Sellers
and Buyer shall, in a timely manner, provide each other notice of (a) all third
party actions, suits, proceedings, claims, demands and assessments subject to
the indemnification provisions of this Article IX (collectively, “Third Party
Claims”) brought at any time following the date hereof, and (b) all other claims
or demands for indemnification pursuant to the provisions of this Article
IX.

       

      9.6             Third
Party Claims.  A
Party against whom a Third Party Claim is brought shall make available to the
indemnifying party (at the cost of the indemnifying party) all relevant
information material to the defense of such claim. The indemnifying party shall
have the right to control the defense of all Third Party Claims with counsel of
its choice.  The indemnified party shall have the right to elect to
join in the defense of any Third Party Claim at its sole expense, and no claim
shall be settled or compromised without the consent of the indemnified party,
which consent shall not be unreasonably withheld or delayed.


      
        
           


        

        
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      9.7             Other
Claims.  A party who
asserts a claim for indemnification other than a Third Party Claim shall provide
in the notice to the indemnifying parties the nature and the amount of the
Damages asserted.  If the indemnifying parties, within a period of
fifteen (15) days after the giving of the indemnitee’s notice, shall not give
written notice to the indemnitee announcing their intention to contest such
assertion of the indemnitee, such assertion of the indemnitee shall be deemed
accepted and the amount of the Damages shall be deemed
established.  If, however, the indemnifying parties contest the
assertion of the Damages, within the 15-day period, the indemnitee shall have
the right to bring suit to resolve the contested assertion.  The
indemnitee and the indemnifying parties may agree in writing, at any time, as to
the existence and the amount of the Damages, and upon the execution of such
agreement, such Damages shall be deemed established.  Notwithstanding
anything to the contrary contained in this Agreement, for purposes of satisfying
Sellers’ indemnification obligations, if any indemnification claim is made
against one or more of the Sellers, such Seller(s) shall have the option to
satisfy such Seller’s obligations paying all or any portion of the claim by
reconveying Generex Shares received hereunder.  If a Seller opts to
reconvey any Generex Shares, each Generex Share shall have a value equal to the
average closing price per Generex Share for each of the last ten (10) trading
days prior to the date such shares are tendered for reconveyance.  If
a Seller opts to reconvey any Generex Shares prior to the Anniversary Date
pursuant to this Section 9.8, such Seller shall have no right to recover any
Anniversary Date Consideration with respect to such reconveyed Generex Shares,
and if the Seller otherwise sells all of such Seller’s Closing Date Shares, the
amount of Anniversary Date Consideration, if any, due to such Seller shall be
calculated by reducing such Sellers proportionate share of the Closing Date
Shares taking into account the reconveyance.  .

       

      9.8             Payments.  Payment
of any Damages by an indemnifying party to an Indemnified Person shall first be
made by a release from the Indemnification Holdback Account by the Escrow Agent
in accordance with the terms and conditions of the Escrow Agreement and, after
such time as all of the Indemnification Holdback Amount has been released by the
Escrow Agent, then shall be made within 10 days of written notice of the claim
or the resolution of any dispute as to such claim.

       

      9.9             Kingdom
Business Services Arbitration.  The
Company is the respondent to a demand for arbitration filed with the American
Arbitration Association by Kingdom Business Services, LLC (the "Arbitration")
relating to claims arising prior to the Closing Date.  The Company
shall continue to pay the reasonable attorneys’ fees and other costs of the
Arbitration after Closing up to a maximum aggregate amount of $100,000
(inclusive of amounts spent prior to Closing); if such cap is reached, the
Company shall not pay any further fees or costs without the consent of the
Buyer, which consent will not be unreasonably withheld.  Any monetary
recovery in favor of the Company shall first be applied to reimburse the Company
for all of its expenses, and any remainder shall be paid to the Sellers, in such
proportion as they may agree.  Any monetary award against the Company
shall be paid by the Sellers, jointly and severally.  In addition, in
the event of a monetary award against the Company, the Sellers shall reimburse
the Company for all attorneys fees’ and other costs of the Arbitration incurred
by the Company after Closing, or, alternatively, will pay Buyer an amount equal
to 51% of such attorneys’ fees and costs.  The obligations of the
Sellers under this Section 9.9 shall be in lieu of their obligations to
indemnify Buyer for any award against the Company or costs arising from the
Arbitration; provided that any breach of the Sellers’ obligations under this
Section 9.9 shall be Damages subject to indemnification under Section 9.2, but
shall not be subject to the Basket, the Limitation or the Corso
Limitation.  In the event that such Damages arise from any fraudulent
conduct of a Seller, such Damages shall be Exempt Damages.  The
Company shall not settle the Arbitration, appeal any award against it nor
commence litigation in place of the Arbitration without the consent of the
Buyer, which consent will not be unreasonably withheld.


      
        
           


        

        
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      9.10           Tax
Treatment.  For all Tax purposes, the parties agree to treat
(and will cause each of their respective Affiliates to treat) any
indemnification payment made under this ARTICLE XI as an adjustment to the
Purchase Price.

       

      ARTICLE
X

      DEFINITIONS

       

      For
purposes of this Agreement, the following terms have the following
meanings:

       

      10.1           “Accounts
Receivable” shall
mean all of the Company’s and the Subsidiaries’ trade accounts receivable, notes
receivable, negotiable instruments and chattel paper.

       

      10.2           “Affiliate” shall mean with
respect to any Person means any other Person who directly or indirectly
Controls, is Controlled by, or is under common Control with such Person
including in the case of any Person who is an individual, his or her spouse, any
of his or her descendants (lineal or adopted) or ancestors, and any of their
spouses.

       

      10.3           “Agreement” shall
mean this Agreement and all exhibits and Schedules referenced
herein.

       

      10.4           “Amended
Operating Agreement” shall mean the Amended
Operating Agreement in the form attached hereto as Exhibit
1.9.1(g).

       

      10.5           “Best
Efforts” shall
mean the efforts that a prudent Person desirous of achieving a result would use
in similar circumstances to ensure that such result is achieved as expeditiously
as possible.

       

      10.6           “Breach” shall
mean a breach of a representation, warranty, covenant, obligation, or other
provision of this Agreement, any Schedule or any instrument delivered pursuant
to this Agreement and will be deemed to have occurred if there is or has been
(a) any inaccuracy in, failure or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
whether material or otherwise or (b) any claim by any Person or other occurrence
or circumstance that is or was inconsistent with such representation, warranty,
covenant, obligation or other provision.

       

      10.7           “Buyer”shall
mean that entity identified as Buyer in the introductory section of this
Agreement.

       

      10.8           “Buyer’s
Advisors” shall
have the meaning as set forth in Section 4.1 of this Agreement.


      
        
           


        

        
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    10.9           “Buyer’s
Closing Documents” shall
have the meaning as set forth in Section 1.9.2 of this
Agreement.

     

    10.10         “Closing”
shall
have the meaning as set forth in Section 1.8 of this Agreement.

     

    10.11         “Closing
Date” shall
mean the date and time as of which the Closing actually takes
place.

     

    10.12         “Code” means
the Internal Revenue Code of 1986, as amended.

     

    10.13         “Control,
Controls and Controlled” means
the ownership, directly or indirectly of 50.1% or more of the voting equity
securities of a Person.

     

    10.14         “Company
Assets” shall
have the meaning as set forth in Section 2.9 of this Agreement.

     

    10.15         “Consent”
or “Consents” shall
mean any approval, consent, ratification, waiver, or other authorization
(including, without limitation, any Governmental Authorization) of any Person
(i) listed in Schedule 2.4, (ii) Schedule 3.2.2 or (iii) required to be obtained
in order to consummate the Contemplated Transactions.

     

    10.16         “Contemplated
Transactions” shall
mean all of the transactions contemplated by this Agreement, including, without
limitation:

     

    10.16.1          The
sale of the Units by Sellers to Buyer;

     

    10.16.2          The
execution, delivery, and performance of the Corso Indebtedness Release and the
Lease Termination;

     

    10.16.3          The
execution, delivery, and performance of the Amended Operating Agreement and the
Amended Employment Agreements of Shea and Franz;

     

    10.16.4          The
performance by Buyer and Sellers of their respective covenants and obligations
under this Agreement;

     

    10.16.5          Buyer's
acquisition and ownership of the Membership Interest and participation in the
management of the Company;

     

    10.16.6          Generex’s
registration for resale of Generex Shares under the terms of the Registration
Rights Agreement.

     

    10.17         “Contract” shall
mean any agreement (or group of related agreements), contract, obligation,
option, commitment, promise or understanding (whether written or oral and
whether expressed or implied) (a) under which the Company or any Subsidiary has
or may acquire any rights, (b) under which the Company or any Subsidiary has or
may become subject to any obligation or Liability, (c) by which the Company or
any Subsidiary or any of the assets owned or used by it is or may become bound,
or (d) which may relate to, establish or restrict any rights or obligations
affecting the Membership Interest or any present or future securities of the
Company.


    
      
         


      

      
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    10.18         “Corso
Indebtedness” shall mean have the meaning set forth in Section
4.5.

     

    10.19         “Damages” shall
mean all Liabilities, obligations, Taxes, liens, assessments, levies, losses,
fines, penalties, claims, damages (including incidental and consequential
damages), costs, fees and expenses, diminution in value, and any increase in
insurance premiums or rates as a result of such Damages, including reasonable
attorneys’, accountants’, investigators’, and experts’ fees and expenses
incurred in defending any claims, whether or not involving a Third Party claim,
but net of insurance proceeds received in reimbursement of any
Damages.  For purposes of determining the Damages to Buyer, any
Liability, obligations, Taxes, liens, assessments, levies, losses, fines,
penalties, claims, damages (including incidental and consequential damages),
costs, fees and expenses, diminution in value, and any increase in insurance
premiums or rates occurring to the Company shall be deemed Damages suffered by
Buyer.

     

    10.20         “Employee
Benefit Plan” shall
mean any qualified and/or non-qualified fringe benefit, disability, health,
medical, life insurance, supplemental compensation, incentive, wage
continuation, retirement, pension, profit sharing, bonus, deferred compensation,
stock ownership or other plan, trust, policy or arrangement involving any past,
present or future employee, consultant, representative, or agent of the Company
or any Subsidiary, including without limitation any plan, program or arrangement
defined in or relevant to any provision of ERISA.

     

    10.21         “Encumbrance” shall
mean any charge, claim, community property or dower interest, mortgage,
equitable interest, lien, option, pledge, security interest, right of first
refusal, contract, Liability or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership. Encumbrances do not include (a) liens for taxes
not yet due and payable, and (b) liens securing rental payments under capital
lease arrangements,.

     

    10.22         “Environment” shall
mean any soil, land surface or subsurface strata, surface waters (including,
without limitation, navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), ground waters, drinking water supply, stream, sediments,
ambient air (including indoor air), plant and animal life, and any other
environmental medium or natural resource.

     

    10.23         “Environmental,
Health, and Safety Liabilities” shall
mean any cost, damage, expense, Liability, obligation, or other responsibility
arising from or under Environmental Law or Occupational Safety and Health Law
including, without limitation, any costs, damage, financial responsibility,
expenses, liabilities, obligations or other Liability for, arising out of or
relating to:

     

    10.23.1          The
presence, generation, use, handling, transport, recycling, reclamation,
disposal, treatment, storage or release of any Hazardous
Material;


    
      
         


      

      
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    10.23.2          Any
environmental, health, or safety matters or conditions (including on-site or
off-site contamination, occupational safety and health, and regulation of
chemical substances or products);

     

    10.23.3          Fines,
penalties, judgments, awards, settlements, legal or administrative Proceedings,
damages, losses, claims, demands and response, investigative, remedial and
inspection costs and expenses arising under Environmental Law or Occupational
Safety and Health Law;

     

    10.23.4          Any
Environmental Law or Occupational Safety and Health Law for cleanup costs or
corrective action, including any investigation, cleanup, removal, containment,
or other remediation or response actions (“Cleanup”) required by any applicable
Environmental Law or any Occupational Safety and Health Law (whether or not such
Cleanup has been required or requested by any Governmental Body or any other
Person) and for any natural resource damages; and/or

     

    10.23.5          Any
other compliance, corrective, investigative, or remedial measures required under
any Environmental Law or any Occupational Safety and Health Law.

     

    The terms
“removal,” “remedial,” and “response action,” include, without limitation, the
types of activities covered by the United States Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended
(“CERCLA”).

     

    10.24        
“Environmental Law” shall
mean any Legal Requirement that governs, regulates, requires or relates to: (a)
advising appropriate authorities, employees, and the public of intended or
actual releases of Hazardous Materials, violations of permitted discharge
limits, or other prohibitions and of the commencements of activities, such as
resource extraction or construction, that could have significant impact on the
Environment; (b) preventing or reducing to acceptable levels the release of
pollutants or Hazardous Materials into the Environment; (c) reducing the
quantities, preventing the Release, or minimizing the hazardous characteristics
of wastes that are generated; (d) assuring that products are designed,
formulated, packaged, and used so that they do not present unreasonable risks to
human health or the Environment when used or disposed of; (e) protecting natural
resources, species, or ecological amenities; (f) reducing to acceptable levels
the risks inherent in the transportation of Hazardous Materials, pollutants or
oil; (g) cleaning up Hazardous Materials; (h) Hazardous Activities, Hazardous
Materials, pollutants, petroleum products, oil or asbestos.

     

    10.25         “ERISA” shall
mean the Employee Retirement Income Security Act of 1974 or any successor law,
and regulations and rules issued pursuant to that Act or any successor
law.

     

    10.26         “Escrow
Agent” shall have the meaning set forth in Section 1.5

     

    10.27         “Escrow
Agreement” shall have the meaning set forth in Section 1.5.

     

    10.28         “Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended.


    
      
         


      

      
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    10.29         “Exempt
Damages” shall
have the same meaning as set forth in Section 9.4.

     

    10.30         “Exempt
Provisions” shall
have the same meaning as set forth in Section 9.5.

     

    10.31         “Facilities” shall
mean any real property, leaseholds, or other interests currently or formerly
owned, operated or managed by the Company or any Subsidiary and any buildings,
plants, structures, or equipment currently or formerly owned, leased or operated
by the Company or any Subsidiary. 

     

    10.32         “Fiduciary” shall
have the meaning as defined in ERISA §3(21).

     

    10.33         “Financial
Statements” shall
have the meaning set forth in Section 2.7.

     

    10.34         “GAAP” shall
mean the United States generally accepted accounting principles, consistently
applied.

     

    10.35         “Governmental
Authorization” shall
mean any approval, consent, license, permit, waiver, or other authorization
issued, granted, given, or otherwise made available by or under the authority of
any Governmental Body or pursuant to any Legal Requirement.

     

    10.36         “Governmental
Body” shall
mean any: (a) federal, state, local, municipal, foreign, or other government; or
(b) governmental or quasi-governmental authority of any nature, including
without limitation, (i) any governmental agency, branch, department, official,
or entity, (ii) any court, judicial authority or other tribunal, and (iii) any
arbitration body or tribunal;

     

    10.37         “Hazardous
Activity” shall
mean the distribution, generation, handling, importing, management,
manufacturing, processing, production, refinement, Release, storage, transfer,
transportation, treatment, or use of Hazardous Materials in, on, under, about,
or from the Facilities or any part thereof into the Environment.

     

    10.38         “Hazardous
Materials” shall
mean any waste or other substance that is listed, regulated, defined,
designated, or classified under, or otherwise determined to be, hazardous,
radioactive, toxic, or a pollutant or a contaminant pursuant to, any
Environmental Law and shall include materials or equipment containing
polychlorinated biphenyls or asbestos in any form but shall specifically exclude
those substances that are used, stored, distributed, transported or handled by
the Company and the Sellers in the Ordinary Course of Business.

     

    10.39         “Indebtedness” of
the Company and the Subsidiaries means all Liabilities, and all interest, fees,
prepayment penalties, cancellation charges and other costs and charges relating
thereto, of the Company and the Subsidiaries, except for the Current Liabilities
and intercompany payables, including without limitation, all Liabilities which
(i) in accordance with GAAP should be classified upon a balance sheet as
indebtedness; (ii) are for borrowed money or purchase money financing;
(iii) are secured by any Lien or other charge upon any property or assets;
(iv) are created or arise under any conditional sale or other title retention
agreement with respect to any property; and/or (v) arise under any capitalized
leases (as defined under GAAP).

     

    10.40         “Indemnified
Persons” shall
have the meaning as set forth in Section 9.2 of this Agreement.


    
      
         


      

      
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    10.41         “Intellectual
Property” shall
include the following: (a) all trade names, registered and unregistered
trademarks and service marks, including applications for registration of
trademarks (collectively “Marks”); (b) all patents and patent applications
including provisional applications (collectively “Patents”); (c) all copyrights
in both published works and unpublished works (“Copyrights”); and (d) all trade
secrets, and confidential information of any Person (including customer lists,
software, technical information, inventions, discoveries, data, process
technology, plans, drawings, and blue prints maintained as confidential by such
Person) (collectively “Trade Secrets”).

     

    10.42         “Intellectual
Property Assets” shall
mean all Intellectual Property owned by the Company or any
Subsidiary.

     

    10.43         “Interim
Financial Statements” shall
have the meaning as set forth in Section 2.7 of this
Agreement.

     

    10.44         “IRC” shall
mean the Internal Revenue Code of 1986, as amended or any successor law, and all
U. S. Treasury regulations and rulings issued by the IRS or any Governmental
Authority pursuant to the Internal Revenue Code or any successor
law.

     

    10.45         “IRS”
shall
mean the United States Internal Revenue Service or any successor agency, and the
United States Department of the Treasury.

     

    10.46         “Knowledge” of any
Person shall be deemed to include a particular fact or other matter if: (a) such
Person is actually aware of such fact or other matter; or (b) a reasonable
Person could be expected to discover or otherwise become aware of such fact or
other matter in the course of conducting a reasonable investigation concerning
the existence of such fact or other matter.  A Person other than an
individual will be deemed to have “Knowledge” of a particular fact or other
matter if any individual who is serving, or who has at any time served within
the prior twelve (12) months, as a director, officer, partner, executor, or
trustee of such Person (or in any similar capacity) has Knowledge of such fact
or other matter.

     

    10.47         “Leased
Property” shall
have the meaning as set forth in Section 2.10.2 of this Agreement.

     

    10.48         “Legal
Requirement” shall
mean any applicable federal, state, local, municipal, foreign, international,
multinational, or other administrative order, constitution, law, operational
memorandum, guidance documents, policy, charter, ordinance, rule, code,
principle of common law, case, decision, regulation, statute, or treaty
including, without limitation, Environmental Laws, Occupational Safety and
Health Laws, Orders, ERISA and the IRC.

     

    10.49         “Liability” shall
mean any liability or obligation whether known or unknown, foreseeable or
unforeseeable, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due, whether or not required by GAAP to be reserved or provided
for on a balance sheet.

     

    10.50         “Limitation” shall
have the meaning set forth in Section 9.6 of this Agreement.


    
      
         


      

      
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    10.51         “Material
Adverse Change (or Effect)” means
a change (or effect), in the condition (financial or otherwise), properties,
assets, liabilities, rights, obligations, business or prospects of any Person
which change (or effect), individually or in the aggregate, is materially
adverse to such condition, properties, assets, liabilities, rights, obligations,
business of such Person, provided that none of the following shall be deemed to
constitute, or be taken into account in determining whether there has been, a
Material Adverse Change (or Effect):  (a) any adverse change, event,
development, or effect arising from or relating to (1) changes in United States
generally accepted accounting principles, (2) changes in laws, rules,
regulations, orders, or other binding directives issued by any governmental
entity, or (3) the taking of any action contemplated by this Agreement and any
of the other agreements contemplated hereby, (b) any existing event, occurrence,
or circumstance with respect to which Buyer has Knowledge as of the date hereof,
and (c) any adverse change in or effect of the Business of Company and its
Subsidiaries that is cured by Sellers before the earlier of  (1)
Closing Date, and (2) the date on which this Agreement is terminated pursuant to
Section 8.1 hereof.

     

    10.52         “Membership
Interest” shall have the meaning set forth in recital C of this
Agreement.

     

    10.53         “Occupational
Safety and Health Law” shall
mean any Legal Requirement which governs, regulates or relates to safety and
health conditions or is designed to provide safe and healthful working
conditions and to reduce occupational safety and health hazards, and any
program, whether governmental or private (including those promulgated or
sponsored by industry associations and insurance companies), designed to provide
safe and healthful working conditions.

     

    10.54         “Operating
Agreement” shall mean the Operating Agreement of Global Medical Direct,
LLC dated as of June 30, 2008.

     

    10.55         “Order” shall
mean any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any court, administrative agency,
or other Governmental Body or by any arbitrator.

     

    10.56         “Ordinary
Course of Business” shall
mean an action taken by a Person that is consistent with the past practices of
such Person and is taken in the ordinary course of the normal day-to-day
operations of such Person and such action is similar in nature and magnitude to
actions customarily taken, without any authorization by the board of directors
(or by any Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons that are in
the same line of business as such Person.

     

    10.57         “Organizational
Documents” shall
mean, in the case of a corporation, the articles or certificates of
incorporation and the bylaws, including any amendments thereto or restatements
thereof, and all resolutions of the Board of Directors and stockholders of such
corporation, and in the case of a limited liability company, the articles of
organization or certificates of fact, including any amendments thereto or
restatements thereof, the limited liability company agreement, and all
resolutions of the Board of Managers, Board of Governors, members, unit holders
or equity holders.


    
      
         


      

      
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    10.58         “Person” shall
mean any individual, corporation, general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization,
labor union, or other entity or Governmental Body.

     

    10.59         Proceeding” shall
mean any action, arbitration, audit, hearing, investigation, litigation, or suit
(whether civil, criminal, administrative, investigative, or informal) commenced,
brought, conducted, or heard by or before, or otherwise involving, any
Governmental Body or arbitrator or Person.

     

    10.60         “Purchase
Price” shall
have the meaning as set forth in the Section 1.2 of this Agreement.

     

    10.61         “Records” shall
have the meaning as set forth in Section 2.8 of this Agreement.

     

    10.62         “Release” shall
mean any spilling, leaking, emitting, discharging, depositing, escaping,
leaching, dumping, or other releasing into the Environment, whether intentional
or unintentional.

     

    10.63         “Sale
Transaction” shall
mean any transaction or series of transactions involving the sale of the
business or assets (other than sales of inventory in the Ordinary Course of
Business) of the Company or any Subsidiary, or any of the Units or any equity
interest or capital stock of the Company, or any merger, consolidation, joint
venture, partnership, shares exchange, reorganization, business combination, or
similar transaction involving the Company.

     

    10.64         “Securities
Act” shall mean the Securities Act of 1933, as amended.

     

    10.65         “Seller”
or “Sellers” shall
mean those persons identified as Sellers in the introductory Section of this
Agreement and shall mean each and every Seller.

     

    10.66         “Sellers’
Closing Documents” shall
have the meaning as set forth in Section 1.9.1 of this
Agreement.

     

    10.67         “Subsidiary” means,
with respect to the Company, a corporation, partnership, limited liability
company or other entity of which the Company owns, directly or indirectly, such
number of outstanding shares, membership interests or other ownership interests
as have more than 50% of the ordinary voting power for the election of directors
or other managers of such corporation, partnership, limited liability company or
other entity, or which entitles the Company to more than 50% of the assets of
such entity upon liquidation and dissolution.  The term “Subsidiaries”
means each such subsidiary taken together and includes all entities set forth in
Section 2.6 of the Disclosure Schedule.

     

    10.68         “Tax” shall
mean any federal, state, local or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under IRC §59(A)), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated or
other tax, assessment or charge by a Governmental Body of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or
not.


    
      
         


      

      
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    10.69         “Tax
Return” shall
mean any return (including any information return), report, statement, schedule,
notice, form, or other document or information filed with or submitted to, or
required to be filed with or submitted to, any Governmental Body in connection
with the determination, assessment, collection, or payment of any Tax or in
connection with the administration, implementation, or enforcement of or
compliance with any Legal Requirement relating to any Tax.

     

    10.70         “Threat
of Release” shall
mean a reasonable possibility of a Release that may require action in order to
prevent or mitigate damage to the Environment that may result from such
Release.

     

    10.71         “Threatened” shall mean a
claim, Proceeding, dispute, action, or other matter if any demand or statement
has been made (orally or in writing) or any notice has been given (orally or in
writing), or if any other event has occurred or any other circumstances exist,
that would lead a prudent Person to conclude that such a claim, Proceeding,
dispute, action, or other matter may be asserted, commenced, taken, or otherwise
pursued in the future.

     

    10.72         “Units” shall
have the meaning set forth in Recital B of this Agreement.

     

    ARTICLE
XI

    GENERAL
PROVISIONS

     

    11.1           Obligations of
Sellers.  Notwithstanding
anything contained in this Agreement to the contrary, all liabilities and
obligations of Sellers (or any Seller) arising under or in connection with any
term or provision of this Agreement shall be deemed joint and several among all
Sellers, whether or not the particular text or provision so
indicates.

     

    11.2           Audited Company Financial
Statements.  Following
the Closing and at Buyer’s sole cost and expense, Buyer’s independent outside
auditors shall audit the Company’s (i) balance sheets for the fiscal years
ending December 31, 2009 and December 31, 2010, which balance sheets shall be
prepared pursuant to Regulation S-X (17 CFR), and (ii) statements of income and
cash flows for the fiscal years ending December 31, 2008, December 31, 2009 and
December 31, 2010, which statements of income and cash flows shall be prepared
pursuant to Regulation S-X (17 CFR), and prepare an independent auditors’ report
for such balance sheets and statements of income and cash flows, which report
shall be in accordance with Rule 2-02 of  Regulation S-X (17 CFR
210.02-02), and which will also include a consent from such independent auditors
to file such report with Buyer’s public filings.  Sellers represent
and warrant that the Company’s books and Records are sufficient and accurate to
produce the Company financial statements required to be filed with the SEC and
to be audited by such auditors with reasonable effort, taking into account that
the Company was not previously required to report under the Exchange
Act.

     

    11.3           Expenses.  Except
as otherwise expressly provided in this Agreement, the Company, Sellers and
Buyer shall each bear their own respective expenses incurred in connection with
the preparation, execution, and performance of this Agreement and the
Contemplated Transactions, including, but not limited to fees and expenses of
agents, representatives, advisors, consultants, legal counsel, and accountants
(collectively “Transaction Costs”).


    
      
         


      

      
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    11.4           Schedules.  The
Schedules are numbered to correspond to the various sections of this Agreement
relating to the representations and warranties contained in this Agreement and
certain other information called for by this Agreement.  Unless
otherwise specified, no disclosure made in any particular Schedule shall be
deemed made in any other Schedule unless expressly made therein.

     

    11.5           Public Announcements.
 Any
public announcement or similar publicity (excluding regulatory or governmental
filings or other required public company filings) or with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer determines.  Buyer shall provide
Sellers with a copy of any proposed public announcement prior to the release of
such public announcement, including the current report on Form 8-K that Buyer
will be required to file with the SEC within four (4) business days of the
execution of this Agreement.  Unless consented to by Buyer in advance
or required by Legal Requirements, prior to the Closing, Sellers and the Company
shall keep this Agreement strictly confidential and may not make any disclosure`
of this Agreement to any Person.  Sellers and Buyer will consult with
each other concerning the means by which the Company’s employees, customers, and
suppliers and others having dealings with the Company will be informed of the
Contemplated Transactions, and Buyer will have the right to be present for any
such communication.

     

    11.6           Notices.  All
notices, consents, waivers, and other communications under this Agreement must
be in writing and will be deemed to have been duly given when (a) delivered by
hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), or (d) two
(2) business days following the deposit of same in the U.S. mail, in each case
to the appropriate addresses and telecopier numbers set forth below (or to such
other addresses and telecopier numbers as a party may designate by notice to the
other parties):

     

    Company:                   
       Global Medical Direct,
LLC

    14309 West 95th
Street

    Lenexa, KS 66285

    Attn: Robert Shea

    Fax No.(___) ___-_____

    


    With a copy
to:         
        Sichenzia Ross Friedman Ference
LLP

    61 Broadway

    New York, NY 10006

    Attn:  Thomas A.
Rose

    Fax No. (212) 930-9725

    


    Sellers:                                Joseph
Corso, Jr.

    15 Ottavio Prmenade

    Staten Island, NY 10307

    Fax No, 718-227-5454

     

    
      
         


      

      
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    With a copy to:    
            
 Sichenzia Ross Friedman Ference LLP

    61 Broadway

    New York, NY 10006

    Attn:  Thomas A.
Rose

    Fax No. (212) 930-9725

    


    Sellers:                               Robert
S. Shea

     

    14309
West 95th
Street

    Lenexa, KS 66285

    


    Mark Franz

    


    14309
West 95th
Street

    Lenexa, KS 66285

    Buyer:                                Generex
Biotechnology Corporation

    33 Harbour Square, Suite
202

    Toronto, Ontario, Canada M5J
2G2

    Attn:  Mark A. Fletcher,
Executive VP & General Counsel

    Fax No. (416) 364-9363

    


    With a copy to:
           
      Eckert Seamans Cherin & Mellott,
LLC

    Two Liberty Place

    50 South 16th Street,
22nd
Floor

    Philadelphia,
Pennsylvania  19102

    Attn: Gary A. Miller

    Fax No. (215) 851-8383

     

    11.7       
   Certain
Taxes.  All
transfer, documentary, sales, use, stamp, registration and other such Taxes and
fees (including any penalties and interest) incurred in connection with this
Agreement and the Contemplated Transactions, shall be paid by Sellers when due,
and Sellers will, at their own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees.

     

    11.8      
     Recoupment.  Each
Seller hereby agrees and acknowledges that in the event that any amount is or
becomes due or payable by any Seller to the Buyer as Damages or otherwise, Buyer
shall have the option (but not obligation) to elect to reduce, on a
dollar-for-dollar basis, any amount owed, due or payable to one or more Sellers
under this Agreement including any Anniversary Date Consideration or
Indemnification Holdback Amount.  This elective right of setoff shall
be cumulative and in addition to any and all additional remedies to which Buyer
may be entitled at law or in equity.


    
      
         


      

      
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    11.9       
   Further
Assurances.  The
parties agree (i) to furnish upon request to each other such further
information, (ii) to execute and deliver to each other such other documents, and
(iii) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.

     

    11.10         Waiver.  The
rights and remedies of the parties to this Agreement are cumulative and not
alternative.  Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege.  To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged, in whole or in part, by a waiver or renunciation of the claim or
right, unless done so in writing signed by the party asserting such claim or
right; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c)  no notice to or
demand on one party will be deemed to be a waiver of any obligation of such
party or of the right of the party giving such notice or demand to take further
action without notice or demand as provided in this Agreement or the documents
referred to in this Agreement.

     

    11.11         Entire Agreement and
Modification.  This
Agreement supersedes all prior agreements between the parties with respect to
its subject matter and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter.  This
Agreement supersedes and terminates any provision in the Term Sheet dated
September 13, 2010 by and among the parties and the Company.  This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.

     

    11.12         Construction.  The
parties have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumptions or burden of proof shall arise favoring or
disfavoring any party by virtue of the authoring of any of the provisions of
this Agreement.  Any reference to any federal, state, local or foreign
statute of law shall be deemed to also refer to all rules and regulations
promulgated thereunder, unless the context expressly provides
otherwise.  The word “including” shall mean including without
limitation.  All words used in this Agreement will be construed to be
of such gender or number as the circumstances may require.  If any
party has Breached any representation, warranty or covenant contained in this
Agreement, the fact that such party may not have Breached another
representation, warranty or covenant contained in this Agreement which also
relates to the same or similar subject matter shall not detract from or mitigate
the fact that the party is in breach of the first representation, warranty or
covenant (regardless of the relative levels of specificity among such various
representations, warranties or covenants).  In the event of any
inconsistency between the statements in the body of this Agreement and those in
the Schedules, the statements in the body of this Agreement will
control.


    
      
         


      

      
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    11.13         Assignments; Successors; No
Third Party Rights.  No
party may assign any of its rights under this Agreement without the prior
consent of the other parties, except that Buyer may assign any of its rights
under this Agreement to any subsidiary, parent or Affiliate of
Buyer.  Subject to the preceding sentence, this Agreement will apply
to, be binding in all respects upon, and inure to the benefit of the successors
and permitted assigns of the parties.  Nothing contained in this
Agreement will be construed to give any Person other than the parties to this
Agreement (and their successors and assigns) and those Persons expressly
identified herein as receiving or obtaining rights or benefits hereunder, any
legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement.

     

    11.14         Severability.  If
any provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction or arbitrator, the other provisions of this Agreement
will remain in full force and effect.  Any provision of this Agreement
held invalid or unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.

     

    11.15         Headings.  The headings of
Sections in this Agreement are provided for convenience only and will not affect
its construction or interpretation.  All references to “Section” or
“Sections” refer to the corresponding Section or Sections of this
Agreement.

     

    11.16         Time of
Essence.  Time
is of the essence with regard to each party’s performance under this Agreement
and all dates and time periods set forth or referred to in this
Agreement.

     

    11.17         Governing
Law.  This
Agreement will be governed by the internal laws of the State of New York without
regard to conflicts of laws principles.

     

    11.18         Arm’s Length
Negotiations.  Each
party herein expressly represents and warrants to all other parties hereto that
(a) before executing this Agreement, said party has fully informed itself of the
terms, contents, conditions and effects of this Agreement, (b) said party has
relied solely and completely upon its own judgment in executing this Agreement,
(c) said party has had the opportunity to seek and has obtained the advice of
counsel before executing this Agreement, (d) said party has acted voluntarily
and of its own free will in executing this Agreement, (e) said party is not
acting under duress, whether economic or physical, in executing this Agreement,
and (f) this Agreement is the result of arm’s length negotiations conducted by
and among the parties and their respective counsel.

     

    11.19         Counterparts/Facsimile
Signatures.  This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.  A
facsimile signature of any party shall be immediately binding upon such party
and have the same legal effect as an original signature of such
party.


    
      
         


      

      
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    11.20         Dispute
Resolution. The
parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise Breached.  It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
Breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any Court, this being in addition to any other remedy to
which they are entitled at law or in equity.  In addition, each of the
parties hereto (a) consents to submit itself to the personal jurisdiction of any
Court in the event any dispute arises out of this Agreement or any of the
Contemplated Transactions, (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court, and (c) agrees that it will not bring any action relating to this
Agreement or any of the Contemplated Transactions in any Court other than a
Court and the parties irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the Contemplated Transactions in the Court, and hereby further irrevocably
and unconditionally waive and agree not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.  For purposes of this Section 11.20, “Court”
shall mean (a) any state or Federal court located in the State of New
York.

     

    [Signatures
appear on the following pages.]


    
      
         


      

      
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    [Signature
Page to Limited Liability Company Ownership Interest Purchase
Agreement.]

     

    The
parties have executed and delivered this Agreement as of the date first written
above.

     

    BUYER:

     


    Generex
Biotechnology Corporation,

    a
Delaware corporation

    


    
      
        
          	
                  By:

                	
                  /s/ Mark A. Fletcher

                	 
      	
                  By:

                	
                  /s/ Rose C. Perri

                
	 
      	 
      	 
      	 
      	 
      
	
                  Its:

                	
                  Interim President and CEO

                	 
      	
                  Its:

                	
                  COO and CFO

                
	 	 	 	 
	 
      	 
      	 
      	
                  COMPANY:

                
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                  Global Medical Direct, LLC,
      a Kansas

                
	 
      	 
      	 
      	
                  limited
      liability company

                
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                  By:

                	
                  /s/ Robert S. Shea

                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                  Its:

                	
                  President

                
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                  SELLERS:

                
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                  /s/ Joseph Corso, Jr.

                
	 
      	 
      	 
      	
                  JOSEPH
      CORSO, JR.

                
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                  /s/ Robert S. Shea

                
	 
      	 
      	 
      	
                  ROBERT
      S. SHEA

                
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                  /s/ Mark Franz

                
	 
      	 
      	 
      	
                  MARK
      FRANZ

                


        

      

    

     

    
      
         


      

      
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