Unassociated Document


     

     

    
      Exhibit
10.2

      


      AGREEMENT

      


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

      


      RECITALS

      


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

      


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

      


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

      


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

      


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

      


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

      


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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      AGREEMENT

       

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

      


      
        
          	
                	
                  21.

                	
                  The
      exercise price of each of the Series Warrants is hereby reduced from $1.21
      to $0.50, subject to further adjustment provided therein, effective from
      and after the Effective Date.

                


        

      

      


      
        
          	
                	
                  22.

                	
                  The
      exercise price of each of the Pre-Extant Warrants is hereby reduced from
      $1.10 to $0.50, subject to further adjustment provided therein, effective
      from and after the Effective
Date.

                


        

      

      


      
        
          	
                	
                  23.

                	
                  The
      Investor hereby agrees that the number of shares of Common Stock issuable
      upon exercise of the Series Warrants and the Pre-Extant Warrants shall not
      be increased solely as a result of the reductions of the exercise prices
      thereof contemplated by Section 1 and 2 above. The Investor hereby agrees
      that the Conversion Price shall not be reduced solely as a result of the
      reductions of the exercise prices of the Series Warrants and the
      Pre-Extant Warrants contemplated by Section 1 and 2
  above.

                


        

      

      


      
        
          	
                	
                  24.

                	
                  The
      Company may, at its option and exercisable in its sole discretion, on one
      occasion, upon not less than five (5) Business Days’ prior written notice
      delivered to the Investor  (the “Call Notice”),
      require the Investor to exercise all and not less than all of the
      Investor’s then outstanding Series Warrants and Pre-Extant Warrants if the
      arithmetic average of the VWAP of the Common Stock on the Principal Market
      for a twenty-one (21) consecutive Trading Day period is equal to or
      greater than $1.00 (as adjusted for
      stock splits, combinations and the like from and after the Effective Date)
      (the “Trigger
      Price”) from and after the Effective Date. To be effective, the
      Call Notice must be given within two (2) Business Days after the
      aforementioned twenty-one (21) consecutive Trading Day period. The Call
      Notice shall state the date on which exercise shall be required (the
      “Required
      Exercise Date”), which shall be no less than five (5) Business Days
      after the date of such notice (or, if such date is not a Business Day, on
      the next succeeding Business Day), provided that a Call Notice shall not
      be valid if (i) the Equity Conditions (as defined on Schedule 1 attached
      hereto, which is hereby incorporated by reference into, and made a part
      of, this Agreement) are not satisfied on each day during the period
      commencing on the date of the Call Notice and ending on the Required
      Exercise Date or (ii) as otherwise contemplated below, and in either such
      case any such Call Notice that is not so valid shall be invalid and of no
      force or effect.  The rights and privileges granted pursuant to
      the Series Warrants and the Pre-Extant Warrants which are subject to a
      valid Call Notice shall terminate at 12:00 a.m. on the first Business Day
      following the Required Exercise Date if all of the Series Warrants and the
      Pre-Extant Warrants are not exercised by the Investor (or the successor
      holder thereof) on or prior to 11:59 p.m. (New York time) on the Required
      Exercise Date. If the Company elects to issue a Call Notice, then it must
      simultaneously take the same action with respect to all other similar
      warrants originally issued to holders of the Other Notes. If the Company
      does not comply with the immediately preceding sentence, then the Call
      Notice issued by the Company to the Investor shall be invalid and of no
      force or effect. For clarification purposes, nothing contained in this
      paragraph shall limit the right of the Investor to exercise any of the
      Series Warrants or any of the Pre-Extant Warrants on a cashless
      basis.

                


        

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        
          	
                	
                  25.

                	
                  Promptly
      following the Effective Date, the Company shall issue to the Investor a
      warrant (which will expire on the seven year anniversary of the Required
      Exercise Date) to acquire up to that number of shares of Common Stock that
      is equal to the number of shares of Common Stock acquired by such Investor
      in connection with the Investor’s exercise of the Series Warrants and the
      Pre-Extant Warrants pursuant to a Call Notice (the “Reload
      Warrants”). The per share exercise price of the Reload Warrants
      shall be $1.00 (as adjusted for stock splits, combinations and the like
      from and after the Effective Date). The Reload Warrants shall contain
      standard terms and conditions (including, without limitation, full-ratchet
      anti-dilution protection) and shall be in the same form as the form of the
      Series Warrants.

                


        

      

      


      
        
          	
                	
                  26.

                	
                  The
      expiration dates of the Series A Warrants and the Series A-1 Warrants are
      hereby extended to March 31, 2016, and such warrants are hereby amended to
      reflect the foregoing.

                


        

      

      


      
        
          	
                	
                  27.

                	
                  The
      expiration date of the Series C Warrants is hereby extended to September
      30, 2016, and such warrants are hereby amended to reflect the
      foregoing.

                


        

      

      


      
        
          	
                	
                  28.

                	
                  The
      expiration dates of each of the Pre-Extant Warrants are hereby extended to
      March 31, 2016, and such warrants are hereby amended to reflect the
      foregoing.

                


        

      

      


      
        
          	
                	
                  29.

                	
                  The
      Investor hereby waives (a) the Event of Default under Section 4(a)(xv) of
      the Note with respect to the Company’s failure to meet Net Cash Balance
      Test in respect of any and all periods prior to the Effective Date, and
      (b) compliance by the Company with the first sentence of Section 13(f) of
      the Note for the period commencing on the Effective Date and ending on the
      30th
      day of January 2009 (the “Reassessment
      Date”).

                


        

      

      


      
        
          	
                	
                  30.

                	
                  The
      Investor hereby rescinds the Redemption
      Notice.

                


        

      

      


      
        
          	
                	
                  31.

                	
                  The
      Company shall honor the Company Installment Notices delivered by the
      Company on December 1, 2008 in respect of the January 1, 2009 Installment
      Date pursuant to which the Company confirmed its intention to redeem 100%
      of the January 1, 2009 Installment Amounts pursuant to a Company
      Redemption, and the Company shall promptly pay the applicable Company
      Redemption Amount when due.

                


        

      

      


      
        
          	
                	
                  32.

                	
                  In
      addition to the redemption of the January 1, 2009 Installment Amount, on
      January 12, 2009 (the “Additional Installment
      Date”), the Company will repay to the Investor an additional
      portion of the outstanding principal amount of the Note equal to
      $243,333.33, which amount shall be converted in whole pursuant to a
      Company Conversion (such amount is referred to herein as the “Additional Conversion
      Amount” and such additional repayment is referred to herein as the
      “Additional
      Repayment”) in accordance with the remainder of this Section 11. In
      connection with the foregoing, (i) notwithstanding the terms of the Note,
      (a) the Effective Date shall constitute the Installment Notice Due Date
      and the Company Installment Notice Date, in each case, with respect to the
      Additional Installment Date, (b) this Agreement shall constitute (I) the
      Company Installment Notice with respect to the Additional Installment
      Date, (II) the Company’s election of a Company Conversion with respect to
      the Additional Conversion Amount and the Additional Installment Date and
      (III) the Company’s confirmation of the matters required to be confirmed
      in Section 8 of the Note in connection with the Company’s election of a
      Company Conversion with respect to the Additional Conversion Amount and
      the Additional Installment Date and (c) the Pre-Installment Conversion
      Shares with respect to the Additional Conversion Amount and the Additional
      Installment Date shall be delivered no later than December 23, 2008 in
      accordance with Section 8(a) of the Note, (ii) notwithstanding the
      Pre-Installment Conversion Price set forth in the Note, the
      Pre-Installment Conversion Price with respect to the Additional Repayment
      and the Additional Conversion Amount shall be equal to the price which
      shall be computed as 90% of the arithmetic average of the VWAP of the
      Common Stock on each of the twenty (20) consecutive Trading Days
      immediately preceding the Effective Date and (iii) notwithstanding the
      Company Conversion Price set forth in the Note, the Company Conversion
      Price with respect to the Additional Repayment and the Additional
      Conversion Amount shall be equal to the price which shall be computed as
      90% of the arithmetic average of the VWAP of the Common Stock on each of
      the twelve (12) consecutive Trading Days immediately preceding the
      Additional Installment Date. All such determinations to be appropriately
      adjusted for any stock split, stock dividend, stock combination or other
      similar transaction during such measuring periods. Other than as expressly
      set forth in this Agreement, the Company shall deliver Pre-Installment
      Conversion Shares and Conversion Shares in accordance with the terms of
      the Note.

                


        

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        
          	
                	
                  33.

                	
                  The
      Investor hereby waives satisfaction of only the Listing Maintenance Equity
      Condition solely with respect to (a) the Additional Repayment and the
      Additional Installment Date, and (b) the Installment Date that is February
      1, 2009 (the “February 1st Installment
      Date”) such that the Company will be entitled to deliver a Company
      Installment Notice in respect of the February 1st
      Installment Date confirming that the applicable Installment Amount due in
      respect of the February 1st
      Installment Date will be converted in whole pursuant to a Company
      Conversion if (i) all other Equity Conditions and (ii) all other
      conditions relating to a Company Conversion, in each case, are satisfied
      in accordance with the terms of the
Note.

                


        

      

      


      
        
          	
                	
                  34.

                	
                  Solely
      for the purposes of the February 1st
      Installment Date, (a) notwithstanding the terms of the Note, the
      Installment Notice Due Date shall be January 9, 2009 (provided that the
      Company Installment Notice with respect to the February 1st
      Installment Date shall be delivered on January 9, 2009 after 4:00 p.m.
      (New York time)), (b) notwithstanding the Pre-Installment Conversion Price
      set forth in the Note, the Pre-Installment Conversion Price with respect
      to the February 1st
      Installment Date shall be equal to the price which shall be computed as
      90% of the arithmetic average of the VWAP of the Common Stock on each of
      the twelve (12) consecutive Trading Days immediately preceding and ending
      on (and including) January 9, 2009 and (c) notwithstanding the Company
      Conversion Price set forth in the Note, the Company Conversion Price with
      respect to the February 1st
      Installment Date shall be equal to the price which shall be computed as
      90% of the arithmetic average of the VWAP of the Common Stock on each of
      the fourteen (14) consecutive Trading Days immediately preceding the
      February 1st
      Installment Date. All such determinations to be appropriately adjusted for
      any stock split, stock dividend, stock combination or other similar
      transaction during such measuring periods. Other than as expressly set
      forth in this Agreement, the Company shall deliver Pre-Installment
      Conversion Shares and Conversion Shares in accordance with the terms of
      the Note.

                


        

      

      


      
        
          	
                	
                  35.

                	
                  Prior
      to the opening of the Principal Market on December 23, 2008, the Company
      shall file with the SEC a Form 8-K Current Report describing all of the
      material terms of the transactions contemplated by this Agreement in the
      form required by the 1934 Act and attaching a form of this
      Agreement.

                


        

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        
          	
                	
                  36.

                	
                  On
      or before the Reassessment Date, the Company will procure and deliver to
      the Investor an authenticated Control Agreement in respect of each Deposit
      Account of each Grantor. For the purposes of this paragraph, the terms
      “Control Agreement,” “Deposit Account,” and “Grantor” shall have the
      meanings ascribed thereto in the Security Agreement. The Company’s breach
      of the provisions of this paragraph shall constitute, and be deemed to be,
      an Event of Default under Section 4(a)(xiv) of the Note, and the Company
      agrees that such a breach shall be deemed a breach which is not
      curable.  This Agreement shall be deemed to be a Transaction
      Document for purposes of the Purchase Agreement, the Note and all other
      Transaction Documents.

                


        

      

      


      
        
          	
                	
                  37.

                	
                  Except
      as otherwise expressly provided herein, the Note, the Series Warrants, the
      Pre-Extant Warrants and all other Transaction Documents are, and shall
      continue to be, in full force and effect and are hereby ratified and
      confirmed in all respects. All dollar amounts referred to in this
      Agreement are in United States
Dollars.

                


        

      

      


      
        
          	
                	
                  38.

                	
                  If
      requested by the Investor, the Company will deliver to the Investor
      amended warrant certificates to the address specified by the Investor that
      reflect the amendments set forth herein within five (5) days after such
      request, and such amended warrant certificates shall replace the Series
      Warrants and the Pre-Extant Warrants and the Investor shall not be
      obligated to return any of such warrants to the Company. For clarification
      purposes, it is understood and agreed that the amendments set forth herein
      are effective as of the date hereof regardless of whether such amended
      warrant certificates are so requested or
  delivered.

                


        

      

      


      
        
          	
                	
                  39.

                	
                  This
      Agreement may be executed in two or more identical counterparts, all of
      which shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered
      to the other party. In the event that any signature is delivered by
      facsimile transmission or by an e-mail which contains a portable document
      format (.pdf) file of an executed signature page, such signature page
      shall create a valid and binding obligation of the party executing (or on
      whose behalf such signature is executed) with the same force and effect as
      if such signature page were an original
thereof.

                


        

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        
          	
                	
                  40.

                	
                  The
      Company represents, warrants and covenants that the Company has not
      entered into, and will not enter into, any agreement with any holder of
      Other Notes or similar warrants on terms or conditions which are more
      favorable to any such holder with respect to the matters addressed
      by this Agreement. To the extent the Company enters into
      any agreement with any holder of Other Notes or similar warrants that
      contains any terms or conditions which are more favorable to any such
      holder with respect to the matters addressed by this Agreement, then
      the Investor, at its option, shall be entitled to the benefit of such more
      favorable terms or conditions (as the case may be) and this Agreement
      shall be automatically amended to reflect such more favorable terms or
      conditions (as the case may
be).

                


        

      

      


      
        
          	
                	
                  41.

                	
                  The
      obligations of the Investor hereunder are several and not joint with the
      obligations of any other holder of Other Notes or similar warrants, and
      the Investor shall not be responsible in any way for the performance of
      the obligations of any other holder of Other Notes or similar warrants
      under any other similar agreement. Nothing contained herein, and no action
      taken by the Investor pursuant hereto, shall be deemed to constitute the
      Investor and the holders of the Other Notes or similar warrants as, and
      the Company acknowledges that the Investor and the holders of the Other
      Notes and similar warrants do not so constitute, a partnership, an
      association, a joint venture or any other kind of group or entity, or
      create a presumption that the Investor or any holder of Other Notes or
      similar warrants are in any way acting in concert or as a group or entity
      with respect to such obligations or the transactions contemplated by this
      Agreement or any matters, and the Company acknowledges that the Investor
      and the holders of the Other Notes and similar warrants are not acting in
      concert or as a group, and the Company shall not assert any such claim,
      with respect to such obligations or the transactions contemplated by this
      Agreement or any other similar agreement. The decision of the Investor to
      enter into this Agreement has been made by the Investor independently of
      any holder of Other Notes or similar warrants. The Company and the
      Investor confirms that the Investor has independently participated with
      the Company in the negotiation of the transaction contemplated hereby with
      the advice of its own counsel and advisors. The Investor shall be entitled
      to independently protect and enforce its rights, including, without
      limitation, the rights arising out of this Agreement or out of any other
      Transaction Documents, and it shall not be necessary for any other holder
      of Other Notes or similar warrants to be joined as an additional party in
      any proceeding for such purpose. To the extent that any holder of Other
      Notes or similar warrants enters into an agreement with the same or
      similar terms and conditions or pursuant to the same or similar documents,
      all such matters are solely in the control of the Company, not the action
      or decision of the Investor, and would be solely for the convenience of
      the Company and not because it was required or requested the
      Investor.

                


        

      

      


      [signature page
follows]

      


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

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

       

      
        	 
      	
                COMPANY:
       

              	 
	 	 	 
	 
      	
                GENEREX
      BIOTECHNOLOGY CORPORATION

              	 
	 
      	 
      	 
      	 
      	 
	 
      	
                By:

              	           
      	 
	 
      	 
      	
                Name:  

              	
                Rose
      C. Perri

              	 
	 
      	 
      	
                Title:

              	
                Chief
      Financial Officer

              	 
	 
      	 
      	 
      	 
      	 
	 
      	
                By:

              	                       
      	 
	 
      	 
      	
                Name:

              	
                Mark
      A. Fletcher

              	 
	 
      	 
      	
                Title:

              	
                Executive
      Vice President and General Counsel

              	 


      

      


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

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

       

      
        
          
            
              
                
                  	 	
                          INVESTOR:
       

                        
	 	 
	 	
                          IROQUOIS
      MASTER FUND LTD.    

                        
	 	 
	 	
                          By:

                        	            
      
	 	 
      	
                          Joshua
      Silverman, Authorized
Signatory

                        


                

              

            

          

        

      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      Schedule
1

      


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

       

      
        
          
          

        

        
          9