Document:

<PAGE>

Exhibit 4.1

Portions of this Exhibit have been omitted pursuant to a Request for
Confidential Treatment

THE SYMBOL "[**]" IS USED TO INDICATE WHERE A PORTION OF THIS EXHIBIT HAS BEEN
OMITTED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS. A COMPLETE COPY OF THIS EXHIBIT, CONTAINING ALL OF THE OMITTED
PORTIONS, HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
TOGETHER WITH THE REQUEST FOR CONFIDENTIAL TREATMENT.

                          SECURITIES PURCHASE AGREEMENT

                  SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of
January 16, 2001, among Generex Biotechnology Corporation, a Delaware
corporation (the "Company"), Elan International Services, Ltd., a Bermuda
exempted limited liability company (and its affiliates, "EIS"), and a wholly
owned subsidiary of Elan Corporation, plc, an Irish public limited company
("Elan").

                                R E C I T A L S:

                  A. The Company desires to issue and sell to EIS, and EIS
desires to purchase from the Company, on the date hereof, (i) 1,000 shares of a
newly-created series of the Company's preferred stock, par value U.S.$.001 per
share, captioned "Series A Preferred Stock" (the "Series A Preferred Stock"),
(ii) 344,116 shares of the Company's common stock, par value U.S.$.001 per share
(the "Company Common Stock") and (iii) a warrant to purchase up to 75,000 shares
of Company Common Stock, as provided therein, in the form attached hereto as
Exhibit A (as amended at any time, the "Warrant"). The Series A Preferred Stock
and the Company Common Stock collectively are referred to herein as the
"Shares". The Shares and the Warrant collectively are referred to herein as the
"Securities". The rights, preferences and privileges of the Series A Preferred
Stock are as set forth in the Company's Certificate of Designations, Preferences
and Rights, the form of which is attached hereto as Exhibit B (the "Certificate
of Designations").

                  B. The Company and EIS have formed Generex (Bermuda), Ltd., an
exempted limited liability company incorporated under the laws of Bermuda
("Newco"), and pursuant to the terms of a Subscription, Joint Development and
Operating Agreement, dated as of the date hereof (as amended at any time, the
<PAGE>

                                      -2-

"JDOA"), simultaneously with the transactions contemplated by this Agreement,
(i) the Company shall acquire 100% voting common shares of Newco, par value
U.S.$1.00 per share (the "Newco Common Shares"), representing 100% of the issued
and outstanding Newco Common Shares for $7.5 million, and 60.2% non-voting
convertible preference shares of Newco, par value of U.S.$1.00 per share (the
"Newco Preferred Shares"; together with the Newco Common Shares, the "Newco
Shares"), representing 30.1% of the outstanding Shares for $4.515 million and
(ii) EIS shall acquire 39.8% of the Preferred Shares, representing 19.9% of the
outstanding Shares, on an as converted basis, for $2.985 million. Additionally,
as of the date hereof, Newco has entered into license agreements with (i) Elan
(the "Elan License Agreement") and (ii) the Company (such agreement, as amended
at any time, the "Company License Agreement"; together with the Elan License
Agreement, the "License Agreements"). Further, Elan and Company shall enter into
a development agreement (the "Development Agreement").

                  C. The Company and EIS are executing and delivering on the
date hereof a Registration Rights Agreement in the form attached hereto as
Exhibit C (as amended at any time, the "Company Registration Rights Agreement")
in respect of (i) the Company Common Stock issued and purchased hereunder, the
Company Common Stock issued or issuable upon conversion of the Series A
Preferred Stock or exercise of all or any portion of the Warrant and (ii) any
other Company Common Stock owned by EIS or any of its affiliates or their
respective permitted transferees. The Company, EIS and Newco are also executing
and delivering on the date hereof a Registration Rights Agreement in the form
attached hereto as Exhibit D(as amended at any time, the "Newco Registration
Rights Agreement"). This Agreement, the Certificate of Designations, the
Warrant, the JDOA, the Company Registration Rights Agreement, the Newco
Registration Rights Agreement, the License Agreements and each other document or
instrument executed and delivered in connection with the transactions
contemplated hereby and by the JDOA collectively are referred to herein as the
"Transaction Documents".

                               A G R E E M E N T:

                  In consideration of the foregoing premises and the mutual
covenants contained herein, the sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:

                  SECTION 1. Closing.

                  (a) Time and Place. The closing of the Initial Purchase (as
defined below) (the "Initial Closing") shall occur on the date hereof (the
"Initial Closing Date"). The funding of any purchase due under the Put Event (as
defined below) (each, a "Subsequent Closing") shall occur on such dates as set
forth in Section 1(d) (each, a "Subsequent Closing Date"). The Initial Closing
and each Subsequent Closing individually are referred to herein as a "Closing",
<PAGE>

                                      -3-

and the Initial Closing Date and each Subsequent Closing Date individually are
referred to herein as a "Closing Date". The Closing shall be held at the offices
of Cahill, Gordon & Reindel, 80 Pine Street, New York, New York 10005 (by means
of facsimile or overnight mail).

                  (b) Sale and Purchase. At the Initial Closing, subject to the
terms and conditions hereof, the Company shall issue and sell to EIS, and EIS
shall purchase from the Company, (i) 1,000 shares of Series A Preferred Stock,
(ii) 344,116 shares of Company Common Stock and (iii) the Warrant (the "Initial
Purchase").

                  (c) Purchase Price. The aggregate purchase price for the
Initial Purchase shall be U.S.$17.015 million (the "Initial Purchase Price").

                  (d) Initial Closing Delivery. (i) On the Closing Date, subject
to the terms and conditions hereof: (a) EIS shall pay the Initial Purchase Price
by wire transfer of U.S.$17.015 million to an account designated in writing by
the Company ; (b) the parties hereto shall execute and deliver to each other, as
applicable, (A) certificates representing 1,000 shares of Series A Preferred
Stock and 344,116 shares of Common Stock, (B) the Warrant, (C) the Company
Registration Rights Agreement, (D) the Newco Registration Rights Agreement, (E)
the JDOA, (F) the Certificate of Designations as filed with the Secretary of
State of the State of Delaware, (G) the License Agreements, (H) a customary
secretary's certificate from the secretary of the Company, including a
certificates as to the incumbency of the officers of the Company executing any
of the Transaction Documents, (I) certificates as to the incumbency of the
officers of EIS and EPIL executing any of the Transaction Documents and (J) any
other documents or instruments reasonably requested by a party hereto; and (c)
the Company shall cause to be delivered to EIS an opinion of counsel in the form
attached hereto as Exhibit E.

                  (ii) It is estimated that Newco will require additional funds
to commence development of Newco's products. Upon approval by the United States
Food and Drug Administration of an investigational new drug application (an
"IND") filed by Newco, and the dosing of the first human patient of such product
(the "Put Event"), the Company shall have the right, exercisable for 30 days, to
require EIS to purchase shares of Company Common Stock for an aggregate amount
of $1.0 million payable in cash at a price per share equal to a 30% premium over
the average closing price for the sixty day period immediately preceding the Put
Event, provided, that the closing of such purchase shall be subject to the
satisfaction of any applicable regulatory approvals. The Subsequent Closing
shall occur the third business day after the Company notifies Elan of its intent
to exercise this right, subject to the satisfaction of all regulatory approvals.
EIS shall receive the same anti-dilution protection that is provided with
respect to the shares of Generex Common Stock purchased on the Initial Closing
Date. Notwithstanding the foregoing, the preceding anti-dilution provisions
relating to any shares purchased pursuant to the Put Event shall terminate upon
the earlier of (i) 60 days following the registration of the shares of Company
<PAGE>

                                      -4-

Common Stock purchased by EIS pursuant to the Put Event and (ii) the fourteen
month anniversary of the Put Event.

                  (e) Development Funding. It is estimated that Newco will
require additional funds to commence research development of Newco's products.
Within the period commencing on the Initial Closing Date and ending on the three
(3) year anniversary of the Initial Closing Date, (the "Development Period"),
EIS and the Company may provide to Newco up to an aggregate maximum amount of
U.S.$6.0 million, such funding to be provided by EIS and the Company in
accordance with the parties then-current respective ownership on a fully-diluted
basis, in Newco (the "Development Funding"). The provisions with respect to the
Development Funding are subject to the more specific provisions contained in
Sections 6.3 and 6.4 of the JDOA.

                  (f) Exemption from Registration. The Securities and any
underlying shares of Company Common Stock will be issued under an exemption or
exemptions from registration under the U.S. Securities Act of 1933, as amended
(the "Securities Act"). Accordingly, the certificates evidencing the Series A
Preferred Stock, the Company Common Stock, the Warrant, and any shares of the
Company Common Stock or other securities issuable upon the exercise, conversion
or exchange of any of the Securities shall, upon issuance, contain a legend,
substantially in the form as follows:

                  THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                  UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
                  OR APPLICABLE STATE SECURITIES LAWS AND NO INTEREST THEREIN
                  MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THERE
                  IS AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
                  UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE
                  ISSUER OF THESE SECURITIES RECEIVES AN OPINION OF COUNSEL FOR
                  THE HOLDER OF THESE SECURITIES SATISFACTORY TO THE ISSUER THAT
                  REGISTRATION IS NOT REQUIRED UNDER THE ACT OR ANY APPLICABLE
                  STATE SECURITIES LAWS.

                  THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
                  IS ALSO SUBJECT TO THE RESTRICTIONS CONTAINED IN THAT CERTAIN
                  SECURITIES PURCHASE AGREEMENT, DATED AS OF JANUARY 16, 2001,
                  BY AND AMONG GENEREX BIOTECHNOLOGY CORPORATION AND ELAN
                  INTERNATIONAL SERVICES, LTD.
<PAGE>

                                      -5-

                  SECTION 2. Representations and Warranties of the Company. The
Company hereby represents and warrants to EIS, as of the Closing Date, as
follows:

                  (a) Organization and Qualification. The Company is duly
         organized, validly existing and in good standing under the laws of the
         State of Delaware and has all requisite corporate power and authority
         to own and lease its properties, to carry on its business as presently
         conducted and as proposed to be conducted and to consummate the
         transactions contemplated hereby. The Company is duly qualified as a
         foreign corporation and in good standing to do business in each
         jurisdiction in which the nature of the business conducted or the
         property owned by it requires such qualification, except where the
         failure to be so qualified would not, individually or in the aggregate,
         have a material adverse effect on the business, assets, liabilities
         (contingent or otherwise), operations, condition (financial or
         otherwise), or prospects of the Company (a "Company Material Adverse
         Effect").

                  (b) Capitalization. (i) Immediately following the Initial
         Closing, the capitalization of the Company will be as follows: (a)
         50,000,000 shares of Common Stock, of which 19,178,186 shares have been
         issued and are outstanding, (b) 1,000,000 shares of preferred stock, of
         which (x) 1,512 have been designated shares of Series A Preferred
         Stock, of which 1,000 shares have been issued and are outstanding, and
         (y) 1,000 shares have been designated Special Voting Rights Preferred
         Stock of which 1,000 are issued and outstanding.. All authorized and
         issued shares of Common Stock are fully paid and non-assessable.

                           (ii) As of the Initial Closing Date, the Company has
                  reserved a sufficient number of shares of Company Common Stock
                  for issuance upon conversion of the Series A Preferred Stock,
                  exercise of the Warrant and a sufficient number of shares of
                  Series A Preferred Stock for issuance as dividends on the
                  Series A Preferred Stock.

                          (iii) There are no preemptive rights, voting
                  agreements, rights of first offer or refusal, options,
                  warrants or other conversion privileges or rights presently
                  outstanding to purchase, subscribe for or otherwise acquire,
                  or any securities convertible into or exercisable for or into,
                  any of the Company's capital stock (collectively, "Preemptive
                  Rights"), except as described on Schedule 2(b). There are no
                  agreements to register any of the Company's outstanding
                  securities under U.S. federal securities laws, other than the
                  Company Registration Rights Agreement and except as described
                  on Schedule 2(b).

                           (iv) All of the outstanding shares of capital stock
                  of the Company have been issued in accordance with applicable
                  state and federal laws and regulations (or exemptions
                  therefrom) governing the sale and purchase of securities, all
<PAGE>

                                      -6-

                  of such shares have been duly and validly issued and are fully
                  paid and non-assessable. The Shares, when issued against
                  payment therefor in accordance with this Agreement or, in the
                  case of the Series A Preferred Stock, as dividends in respect
                  of previously issued shares of Series A Preferred Stock, will
                  be duly and validly issued, fully paid and non-assessable, and
                  the Warrant (including additional amounts issued as accrued
                  interest), when issued against payment therefor in accordance
                  with this Agreement, will be duly and validly issued, and in
                  each case will not be issued in violation of any Preemptive
                  Rights. The shares of Company Common Stock issuable upon
                  conversion or exercise of the Series A Preferred Stock and the
                  Warrant (the "Underlying Shares"), when issued upon conversion
                  or exercise in accordance with the terms thereof, will be duly
                  and validly issued, fully paid and non-assessable, and will
                  not be issued in violation of any Preemptive Rights.

                  (c) Authorization of Transaction Documents. The Company has
         full corporate power and authority to execute and deliver this
         Agreement and each of the other Transaction Documents to which it is a
         party, and to perform its obligations hereunder and thereunder. The
         execution, delivery and performance by the Company of this Agreement
         and each of the other Transaction Documents to which it is a party
         (including the issuance and sale of the Securities and the Underlying
         Shares) have been duly authorized by all requisite corporate action by
         the Company and, when executed and delivered by the Company, this
         Agreement and each of the other Transaction Documents to which it is a
         party will be the valid and binding obligations of the Company,
         enforceable against the Company in accordance with their respective
         terms, subject to applicable bankruptcy, insolvency, fraudulent
         conveyance, reorganization or similar laws affecting the rights of
         creditors generally and subject to general principles of equity.

                  (d) No Violations. The execution, delivery and performance by
         the Company of this Agreement and each of the other Transaction
         Documents to which it is a party (including the issuance and sale of
         the Securities) and the compliance with the provisions hereof and
         thereof by the Company do not violate, conflict with or constitute or
         result in a breach of or default under (or an event which with notice
         or passage of time or both would constitute a default) or give rise to
         any right of termination, cancellation or acceleration under, or result
         in the creation of any Encumbrance (as defined below) upon any
         properties or assets of the Company under (i) the Certificate of
         Incorporation or bylaws of the Company, (ii) applicable law, statute,
         rule or regulation, or any ruling, writ, injunction, order, judgment or
         decree of any court, arbitrator, administrative agency or other
         governmental body applicable to the Company or any of its properties or
         assets or (iii) to the Company's knowledge, any contract or agreement
         affecting the Company, except, in each case, where such violation,
         conflict, breach, default, termination, cancellation, acceleration or
         Encumbrance would not, individually or in the aggregate, have a Company
<PAGE>

                                      -7-

         Material Adverse Effect. As used herein, the term "Encumbrance" shall
         mean any lien, charge, encumbrance, claim, option, proxy, pledge,
         security interest, or other similar right of any nature other than
         statutory liens securing payments not yet due and payable or due but
         not yet delinquent.

                  (e) Approvals. Except as set forth on Schedule 2(e) and for
         consent which may be required under the Mergers and Takeovers (Control)
         Acts 1978-1996 (Ireland), the Hart-Scott-Rodino Antitrust Improvements
         Act of 1976, as amended, or any other similar law and regulation, no
         permit, authorization, consent, approval, or order of or by, or any
         notification of or filing with, any person or entity (governmental or
         otherwise) is required in connection with the execution, delivery or
         performance of this Agreement or the other Transaction Documents
         (including the issuance and sale of the Securities) by the Company,
         except for filings on Form D with the Securities and Exchange
         Commission ("SEC") and except for such permits, authorizations,
         consents, approvals, orders, notifications or filings which, if not
         obtained or made, would not have a Company Material Adverse Effect.

                  (f) Financial Statements. The Company has provided access to
         (i) the balance sheet of the Company in the Form 10-K for the fiscal
         year ending July 31, 2000 and the related statements of operations,
         stockholders' equity (deficit) and cash flows for the year then ended,
         together with the reports thereon of Withom Smith Brown (the "Audited
         Financial Statements") and (ii) the unaudited balance sheet of the
         Company in the Form 10-Q for the period ended October 31, 2000 and the
         related statements of operations and cash flows for the period then
         ended (the "Unaudited Financial Statements"; collectively with the
         Audited Financial Statements, the "Financial Statements"). The
         Financial Statements fairly present, in all material respects, the
         financial position of the Company and the results of its operations and
         its cash flows at such dates and for the periods indicated and were
         prepared in conformity in all material respects with United States
         generally accepted accounting principles applied on a consistent basis
         throughout the periods indicated (except as may be otherwise indicated
         therein), subject, in the case of the Unaudited Financial Statements,
         to normal year-end audit adjustments (which shall not be material in
         the aggregate) and the absence of footnote disclosures. As of the
         Closing Date, the Company has not incurred and is not liable for any
         material liabilities or obligations except as set forth on the face of
         the balance sheet contained in the Unaudited Financial Statements or
         the footnotes to the Audited Financial Statements or otherwise
         disclosed in the Company's SEC filings.

                  (g) Taxes. The Company has filed in a timely manner any
         federal, state, local and foreign tax returns, reports and filings
         (collectively, "Returns"), including income, franchise, property and
         other taxes, and has paid or accrued the appropriate amounts reflected
         on such Returns heretofore required to be filed. Except as set forth on
<PAGE>

                                      -8-

         Schedule 2(g), none of the Returns have been audited or challenged, nor
         has the Company received any notice of challenge nor to the Company's
         knowledge have any of the amounts or other data included in the Returns
         been challenged or reviewed by any governmental authority.

                  (h) Absence of Certain Events. Since the most recent filing by
         the Company with the SEC, there has been no material adverse change and
         no material adverse development in the business, properties,
         operations, financial condition, results of operations or prospects of
         the Company. The Company has not taken any steps, and does not
         currently expect to take any steps, to seek protection pursuant to any
         bankruptcy law nor does the Company have any knowledge or reason to
         believe that its creditors intend to initiate involuntary bankruptcy
         proceedings.

                      The Company owns or possesses adequate rights or
         licenses to use all trademarks, trade names, service marks, service
         mark registrations, service names, patents, patent rights, copyrights,
         inventions, licenses, approvals, governmental authorizations, trade
         secrets and rights necessary to conduct their respective businesses as
         now conducted. None of the Company's trademarks, trade names, service
         marks, service mark registrations, service names, patents, patent
         rights, copyrights, inventions, licenses, approvals, government
         authorizations, trade secrets or other intellectual property rights
         have expired or terminated, or are expected to expire or terminate
         within two years from the date of this Agreement. The Company does not
         have any knowledge of any infringement by the Company of trademark,
         trade name rights, patents, patent rights, copyrights, inventions,
         licenses, service names, service marks, service mark registrations,
         trade secret or other similar rights of others, or of any such
         development of similar or identical trade secrets or technical
         information by others and the Company is unaware of any facts or
         circumstances which might give rise to any of the foregoing. The
         Company has taken reasonable security measures to protect the secrecy,
         confidentiality and value of all of their intellectual properties.

                  (i) No Liabilities. The Company does not have any material
         obligation or liability, contingent or otherwise, except as disclosed
         in its most recent 10-K and other filings with the SEC since the filing
         of its most recent 10-K, or as incurred in the ordinary course of
         business, consistent with past practices.

                  (j) Properties and Assets; Etc. (i) Except as disclosed in the
         Company's filings with the SEC, the Company has good and marketable
         title to its properties and assets shown in the Financial Statements to
         be owned by the Company, and has valid leasehold interests to the
         properties and assets shown in the Financial Statements to be leased by
         the Company, in each case subject to no Encumbrances.
<PAGE>

                                      -9-

                           (ii) There are no material contracts ("Material
                  Contracts") of the Company other than as disclosed in the
                  Company's filings with the SEC. Each Material Contract is a
                  legal and valid agreement binding upon the Company and, to the
                  Company's knowledge, is in full force and effect. To the
                  Company's knowledge, there is no material breach or default by
                  any party thereunder.

                          (iii) The Company has and maintains adequate and
                  sufficient insurance, including liability, casualty and
                  products liability insurance, covering risks associated with
                  its business, properties and assets, including insurance that
                  is customary for companies similarly situated.

                           (iv) The Company, its business and properties and
                  assets are in compliance in all material respects with all
                  applicable laws and regulations, including without limitation,
                  those relating to (i) health, safety and employee relations,
                  (ii) environmental matters, including the discharge of any
                  hazardous or potentially hazardous materials into the
                  environment and (iii) the development, commercialization and
                  sale of pharmaceutical and biotechnology products, including
                  all applicable regulations of the U.S. Food and Drug
                  Administration and comparable applicable foreign regulatory
                  authorities.

                  (k) Legal Proceedings, etc. There is no legal, administrative,
         arbitration or other action or proceeding or governmental or
         investigation pending, or to the Company's knowledge, threatened
         against the Company, or any director, officer or employee of the
         Company in their capacities as such that (i) challenges the validity or
         performance of this Agreement or the other Transaction Documents or
         (ii) except as disclosed in the Company's filings with the SEC could
         reasonably be expected to have a Company Material Adverse Effect. The
         Company is not in violation of or default under, any material laws,
         judgments, injunctions, orders or decrees known to it of any court,
         governmental department, commission, agency, instrumentality or
         arbitrator applicable to its business, which violation or default would
         be required to be disclosed in the Company's filings with the SEC,
         other than any violation or default which, individually or in the
         aggregate, would not have a Company Material Adverse Effect.

                  (l) Disclosure. The representations and warranties set forth
         herein and in the other Transaction Documents, when viewed
         collectively, do not contain any untrue statement of a material fact or
         omit to state any material fact necessary to make the statements
         contained herein not misleading in light of the circumstances in which
         they were made.

                  (m) Brokers or Finders. There have been no investment bankers,
         brokers or finders used by the Company in connection with the
<PAGE>

                                      -10-

         transactions contemplated by the Transaction Documents to whom EIS will
         have any liability in respect thereof and there are no persons or
         entities that are entitled to a fee or compensation in respect thereof
         for which EIS will have any liability.

                  (n) SEC Filings. Since February 12, 1999, the Company has
         timely filed with the Securities and Exchange Commission (the "SEC")
         all forms, reports, schedules, statements, exhibits and other documents
         (collectively, the "SEC Filings") required to be filed by the Company
         on or before the date hereof. At the time filed, the SEC Filings,
         including without limitation, any financial statements, exhibits and
         schedules included therein or documents incorporated therein by
         reference (i) did not contain any untrue statement of a material fact
         or 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 under which they were made, not misleading and (ii)
         complied in all material respects with the applicable requirements of
         the Securities Act or the Securities Exchange Act of 1934, as amended
         (the "Exchange Act"), as the case may be.

                  SECTION 3. Representation and Warranties of EIS. EIS hereby
represents and warrants to the Company, as of the date hereof, as follows:

                  (a) Organization. EIS is an exempted company duly organized,
         validly existing and in good standing under the laws of Bermuda and has
         all requisite corporate power and authority to own and lease its
         properties, to carry on its business as presently conducted and as
         proposed to be conducted and to consummate the transactions
         contemplated hereby. EIS is duly qualified as a foreign corporation and
         in good standing to do business in each jurisdiction in which the
         nature of the business conducted or the property owned by it requires
         such qualification, except where the failure to be so qualified would
         not, individually or in the aggregate, have a material adverse effect
         on the business, assets, liabilities (contingent or otherwise),
         operations, condition (financial or otherwise), or prospects of EIS (an
         "EIS Material Adverse Effect").

                  (b) Authorization of Transaction Documents. EIS has full
         corporate power and authority to execute and deliver this Agreement and
         each of the other Transaction Documents to which it is a party, and to
         perform its obligations hereunder and thereunder. The execution,
         delivery, and performance by EIS of this Agreement and each other
         Transaction Document to which it is a party (including the purchase and
         acceptance of the Securities) have been duly authorized by all
         requisite corporate action by EIS and, when executed and delivered by
         EIS, this Agreement and each of the other Transaction Documents to
         which it is a party will be the valid and binding obligations of EIS
         enforceable against it in accordance with their respective terms,
         subject to applicable bankruptcy, insolvency, fraudulent conveyance,
         reorganization or similar laws affecting the rights of creditors
         generally and subject to general principles of equity.
<PAGE>

                                      -11-

                  (c) No Violation. The execution, delivery and performance by
         EIS of this Agreement and each other Transaction Document to which it
         is a party (including the purchase and acceptance of the Securities)
         and compliance with provisions hereof and thereof by EIS will not
         violate conflict with or constitute or result in a breach of or default
         under (or an event which with notice or passage of time or both would
         constitute a default) or give rise to any right of termination,
         cancellation or acceleration under (i) the charter or bylaws of EIS,
         (ii) applicable law, statute, rule or regulation, or any ruling, writ,
         injunction, order, judgment or decree of any court, arbitrator,
         administrative agency or other governmental body applicable to EIS or
         any of its properties or assets or (iii) any material contract to which
         EIS is a party, except, in each case, where such violation, breach,
         default, termination, cancellation or acceleration would not,
         individually or in the aggregate, have an EIS Material Adverse Effect.

                  (d) Approvals. Except for consents which may be required under
         the Mergers and Takeovers (Control) Acts 1978-1996 (Ireland), the
         Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
         any other similar law and regulation, no material permit,
         authorization, consent, approval or order of or by, or any notification
         of or filing with, any person or entity (governmental or otherwise) is
         required in connection with the execution, delivery or performance of
         this Agreement by EIS or the other Transaction Documents to which it is
         a party.

                  (e)      Investment Representations.

                            (i) EIS is sophisticated in transactions of this
                  type and capable of evaluating the merits and risks of the
                  transactions described herein and in the other Transaction
                  Documents to which it is a party, and has the capacity to
                  protect its own interests. EIS has not been formed solely for
                  the purpose of entering into the transactions described herein
                  and therein and is acquiring the Securities (and the
                  Underlying Shares) for investment for its own account, not as
                  a nominee or agent, and not with the view to, or for resale,
                  distribution or fractionalization thereof, in whole or in
                  part, and no other person has a direct or indirect interest,
                  beneficial or otherwise in the Securities (or the Underlying
                  Shares); provided, however, that EIS shall be permitted to
                  convert or exchange such Securities in accordance with their
                  terms.

                           (ii) EIS has not and does not intend to enter into
                  any contract, undertaking, agreement or arrangement with any
                  person or entity to sell, transfer or pledge the Securities
                  (or the Underlying Shares).

                          (iii) EIS acknowledges its understanding that the
                  private placement and sale of the Securities (and the
                  Underlying Shares) is exempt from registration under the
<PAGE>

                                      -12-

                  Securities Act. In furtherance thereof, EIS represents and
                  warrants that it is an "accredited investor" as that term is
                  defined in the regulations under the Securities Act, has the
                  financial ability to bear the economic risk of its investment,
                  has adequate means for providing for its current needs and
                  personal contingencies and has no need for liquidity with
                  respect to its investment in the Company.

                           (iv) EIS agrees that it shall not sell or otherwise
                  transfer any of the Securities (or the Underlying Shares)
                  without registration under the Securities Act or pursuant to
                  an opinion of counsel reasonably satisfactory to the Company
                  that an exemption from registration is available, and fully
                  understands and agrees that it must bear the total economic
                  risk of its purchase for an indefinite period of time because,
                  among other reasons, none of the Securities (or the Underlying
                  Shares) have been registered under the Securities Act or under
                  the securities laws of any applicable state or other
                  jurisdiction and, therefore, cannot be resold, pledged,
                  assigned or otherwise disposed of unless subsequently
                  registered under the Securities Act and under the applicable
                  securities laws of such states or jurisdictions or an
                  exemption from such registration is available. EIS understands
                  that the Company is under no obligation to register the
                  Securities (or the Underlying Shares) on its behalf with the
                  exception of certain registration rights with respect to
                  certain of the Securities (and the Underlying Shares), as
                  provided in the Company Registration Rights Agreement. EIS
                  understands the lack of liquidity and restrictions on transfer
                  of the Securities (and the Underlying Shares) and that this
                  investment is suitable only for a person or entity of adequate
                  financial means that has no need for liquidity of this
                  investment and that can afford a total loss of its investment.

                  (f) Legal Proceedings, etc. There is no legal, administrative,
         arbitration or other action or proceeding or governmental investigation
         pending, or to the knowledge of EIS threatened, against EIS that
         challenges the validity or performance of this Agreement or the other
         Transaction Documents to which EIS is a party.

                  (g) Brokers or Finders. There have been no investment bankers,
         brokers or finders used by EIS or its affiliates in connection with the
         transactions contemplated by the Transaction Documents and no persons
         or entities are entitled to a fee or compensation in respect thereof.

                  SECTION 4. Covenants of the Parties.

                  (a) Certain Covenants. From and after the Initial Closing Date
and until the earlier to occur of the exercise or expiration of the EIS Exchange
Right (as such term is defined in Section 5(c) hereof), the Company shall not
without the prior written consent of EIS, which consent shall not be
<PAGE>

                                      -13-

unreasonably withheld: (i) sell, transfer, encumber, pledge or otherwise affect,
in any respect, the shares of Newco Preferred Shares transferable to EIS upon
exercise by EIS of the EIS Exchange Right and (ii) affect, in any respect, the
Company's ability to permit EIS to exercise the EIS Exchange Right in full, as
provided herein.

                  (b) Fully-diluted Stock Ownership. Notwithstanding any other
provision of this Agreement, in the event that EIS shall have determined that at
any time they (together with their affiliates, if applicable) hold or have the
right to receive Company Common Stock (or securities or rights, options or
warrants exercisable, exchangeable or convertible for or into Company Common
Stock) representing in the aggregate in excess of [**] of the Company's
outstanding "Company" Common Stock on a fully diluted basis, EIS shall have the
right to elect to convert all or any part of the Securities into other
preferred, non-voting securities of the Company (to be specified by EIS, but
having terms no more favorable than the Securities being so converted by EIS)
such that EIS and its affiliates will not directly or indirectly own more than
[**] of the Company Common Stock for a period of at least two years from the
date such election is made. In the event that EIS shall elect such conversion,
EIS and its affiliates shall retain the right to transfer all or a portion of
such securities (including the Company Common Stock issuable upon conversion
thereof) to their respective affiliates. Each of the Company and EIS shall use
commercially reasonable efforts to effect such transactions and any required
subsequent conversions or adjustments to the securities position of EIS, on a
quarterly basis, within 15 business days of the end of EIS's fiscal quarters.
Notwithstanding anything to the contrary herein, no transaction contemplated by
this Agreement or other Transaction Document shall require the Company to issue
any shares of Company Common Stock if such issuance would violate any rule or
regulation promulgated by the National Association of Securities Dealers, Inc.,
including, without limitation, issuing shares without any stockholder approval
as required under Rule 4460(i). In the incidence of such an event, the parties
will discuss in good faith a mutually satisfactory alternative.

                  (c) Use of Proceeds. The Company shall use the proceeds of the
issuance and sale of the Series A Preferred Stock solely to meet its initial
capitalization obligations to Newco as described in the JDOA and for no other
purpose.

                  (d) Confidentiality; Non-Disclosure.

                   (i) Subject to clause (ii) below, from and after the date
hereof, neither the Company nor EIS (nor its affiliates) shall disclose to any
person or entity this Agreement or the other Transaction Documents or the
contents thereof or the parties thereto, except that such parties may make such
disclosure (x) to their directors, officers, employees and advisors, and
potential bank creditors and investors, so long as they shall have advised such
persons of the obligation of confidentiality herein and for whose breach or
default the disclosing party shall be responsible or (y) as required by
applicable law, rule, regulation or judicial or administrative process, provided
<PAGE>

                                      -14-

that the disclosing party uses commercially reasonable efforts to obtain an
order or ruling protecting the confidentiality of confidential information of
the other party contained herein or therein and notifies the other party prior
to such disclosure so that such other party may, if it chooses, seek such
relief. The parties shall be entitled to seek injunctive or other equitable
relief in respect of any breach or threatened breach of the foregoing covenant
without the requirement of posting a bond or other collateral.

                  (ii) Without limiting the foregoing, the parties shall agree
upon the text of the Company's press release in respect of the transactions,
which may be released by the Company subject to the prior consent of Elan, which
consent shall not be unreasonably withheld; the Company shall not make any
public disclosure of such transactions or the parties hereto other than
disclosure that is consistent with, and the substance of which is contained in,
such release without the prior consent of Elan, which consent shall not be
unreasonably withheld, and in any event, any press release that contains EIS's
name or any of its affiliates' names shall require EIS's specific written
consent, which consent shall not be unreasonably withheld and which consent may
be granted in Elan's discretion for repetitive boilerplate disclosures
periodically containing EIS's or one of its affiliates' names.

                 (iii) Notwithstanding any of the foregoing, after reasonable
consultation with EIS, the Company may disclose of any facts or any documents
that it considers reasonably necessary to comply with securities laws and
regulations or any other applicable laws and regulations.

                  (e) Further Assurances. From and after the date hereof, each
of the parties hereto agree to do or cause to be done such further acts and
things and deliver or cause to be delivered to each other such additional
assignments, agreements, powers and instruments, as each may reasonably require
or deem advisable to carry into effect the purposes of this Agreement and the
other Transaction Documents.

                  SECTION 5. Certain Rights of EIS.

                  (a) Preemptive Right. In order for EIS to maintain its pro
rata interest in the Company, during the period of [**] , EIS shall have the
right to participate in any equity financing, or any financing involving
securities convertible or exchangeable for equity, consummated by the Company,
on the same terms and conditions (other than amount of shares to be purchased)
offered to the other proposed investors in such financing, in order for EIS and
its affiliates to maintain the pro rata interest in the Company which they had
immediately prior to such new financing, based on the number of shares of
Company Common Stock owned by EIS and its affiliates, assuming the conversion or
exercise of all Securities (other than the Series A Preferred Stock) and the
actual number of shares of Company Common Stock outstanding on the date such
financing is consummated; provided, however, that such right shall not apply to
<PAGE>

                                      -15-

(i) offerings under any employee benefit plan, as defined in Rule 405 of
Regulation C of the Securities Act of 1933; (ii) asset or company acquisitions
paid for in stock; (iii) any joint venture or partnering arrangements with a
Strategic Investor (as defined in the JDOA); (iv) a Prior Financing Commitment
(as defined in paragraph (d)); or (v) an underwritten or agented public
offering. Such right shall be exercised by EIS within 10 days of receipt of
notice of such financing from the Company, which notice shall be provided by the
Company at least 15 days prior to such financing.

                  Newco shall grant to each of EIS and Generex a pre-emptive
right that will terminate upon an initial public offering by Newco, to
participate in an equity, debt, warrant or convertible financing contemplated by
Newco so to maintain its pro rata interest in Newco.

                  (b) Company Board of Directors. For so long as EIS or its
affiliates, directly or indirectly, collectively own at least 1.0% of the issued
and outstanding shares of Company Common Stock (or securities convertible,
exchangeable or exercisable for or into the Company Common Stock which, with
such owned Company Common Stock represents at least 5.0% ownership, assuming the
exercise, conversion or exchange thereof by EIS and its affiliates but not of
any other Company Common Stock equivalents), EIS shall be entitled to nominate
one director (the "EIS Director") for election to the Company's board of
directors. The EIS Director shall not have more than 15.0% of the votes on the
Company's board of directors, irrespective of the actual number of directors
thereon. In connection with the foregoing, the Company will take all necessary
and/or appropriate steps to effect such appointment, such as including the
designated EIS Director as part of the management recommended slate of directors
presented at any regular or special meeting of the stockholders of the Company
at which directors of the Company are to be elected. Prior to such election, the
designated EIS Director shall be entitled to be an observer at the meetings of
the Company's board of directors. EIS shall inform the Company of its nominee
for director within ten (10) days after being notified of the record date for
any meeting of the Company's shareholders, or of the date for any meeting of the
board of directors of the Company at which the Company proposes to effect the
appointment of the EIS director.

                  (c) Conversion and Exchange Rights. The Company acknowledges
that the Certificate of Designations sets forth certain rights of the holders of
shares of Series A Preferred Stock to convert such shares of Series A Preferred
Stock into newly issued shares of Company Common Stock, or to exchange such
shares of Series A Preferred Stock (or shares of Company Common Stock into which
such shares of Series A Preferred Stock were converted under certain specified
circumstances) for certain shares of Newco Shares (the "EIS Exchange Right"),
and agrees that it will not take any action which would impair such rights other
than as otherwise permitted by the provisions thereof.

                  In the event that EIS shall exercise the EIS Exchange Right,
EIS shall cause to be paid to the Company, within 30 days of such exercise, an
amount equal to 30.1% of the aggregate amount of the Development Funding through
<PAGE>

                                      -16-

the date of such exercise provided to Newco (by or on behalf of the Company and
EIS and their respective affiliates and subsidiaries) from and after the Initial
Closing Date and prior to such exercise (plus interest on the amount so funded,
from the date of the pertinent funding, at the interest rate of 10% per annum
compounded semi-annually).

                  In the event of a Required Conversion (as defined in the
Certificate of Designations), the Common Stock delivered upon such conversion
shall have the benefit of the EIS Exchange Right identical to that with respect
to the Series A Preferred Stock so converted and shall be evidenced by a
security substantially in the form of Exhibit F.

                  (d) Antidilution. If the Company shall issue and sell any
shares of Company Common Stock (or securities exchangeable, exercisable or
convertible for or into Company Common Stock), at an effective price per share
of Company Common Stock less than the purchase price per share for Company
Common Stock paid at the Initial Closing (other than shares issued pursuant to
outstanding options, warrants, convertible securities or contractual commitments
or arrangements outstanding on the Closing Date and listed on Schedule 5(d)
("Prior Financing Commitments") and other than shares issued pursuant to an
employee benefit plan as defined in Rule 405 of Regulation C of the Securities
Act of 1933, as amended), then, in such event, within five business days after
such subsequent issuance and sale, the Company shall issue to EIS additional
shares of Company Common Stock so that EIS's weighted-average effective price
per share is adjusted in accordance with the methodology set forth on Annex I.
The preceding anti-dilution provisions shall terminate upon the earlier of (i)
60 days following the registration with the SEC of the shares of Company Common
Stock purchased by EIS hereunder and (ii) fourteen months after the Initial
Closing Date.

                  SECTION 6. Pledge of Newco Shares. In order to secure the
Company's obligations pursuant to the EIS Exchange Right, the Company hereby
pledges, assigns and sets over to EIS, all of the Company's right, title and
interest in and to all shares of Newco Shares deliverable by the Company upon
exercise of the EIS Exchange Right (including stock distributions and dividends
thereon) for such period of time as the EIS Exchange Right shall be exercisable.
The the Company shall cause to be delivered to EIS all of the certificates
together with duly executed stock power in favor of EIS evidencing such shares,
and take all other necessary, appropriate and customary actions in connection
therewith reasonably requested by EIS. Upon exercise of the EIS Exchange Right,
EIS shall be entitled to keep and retain such share certificates, which shall
then be owned by EIS in accordance with the terms thereof. Until EIS exercises
the EIS Exchange Right, the Company shall retain all rights in and to the
pledged Newco Shares (including without limitation all voting, dividend,
liquidation and other rights), subject only to this pledge and the JDOA.
<PAGE>

                                      -17-

                  SECTION 7. Survival and Indemnification. (a) Survival. For the
purposes of this Section, the representations and warranties of the Company, EIS
and Elan contained herein shall survive for a period of 24 months from and after
the date hereof.

                  (b) Indemnification. In addition to all rights and remedies
available to the parties hereto at law or in equity, the Company (in such
capacity, "Indemnifying Party") shall indemnify EIS, its stockholders, officers,
directors and assigns, its affiliates, and its affiliates' stockholders,
officers, directors, employees, agents, representatives, successors and assigns
(collectively, the "Indemnified Person"), and save and hold each Indemnified
Person harmless from and against and pay on behalf of or reimburse each such
Indemnified Person, as and when incurred, for any and all loss, liability,
demand, claim, action, cause of action, cost, damage, deficiency, tax, penalty,
fine or expense, including interest, penalties, reasonable attorneys' fees and
expenses and all amounts paid in investigation, defense or settlement of any of
the foregoing (collectively, "Losses"), whether or not such Losses arise from
the claims of any third party or are directly incurred by the Indemnified
Person, that any such Indemnified Person may suffer, sustain incur or become
subject to, as a result of, in connection with, relating or incidental to or by
virtue of:

                    (i) any misrepresentation or breach of warranty on the part
         of the Indemnifying Party in the case of the Company under Section 2 of
         this Agreement or in the case of EIS under Section 3 of this Agreement
         or any of the other Transaction Documents (as limited thereby) (it
         being understood that the Company shall not be responsible for any such
         misrepresentation or breach of warranty by Newco); or

                   (ii) any nonfulfillment, default or breach of any covenant or
         agreement on the part of the Indemnifying Party under Section 4 of this
         Agreement.

                  (c) Maximum Recovery. Notwithstanding anything in this
Agreement to the contrary, in no event shall the Indemnifying Parties be liable
for indemnification under this Section 7 in an amount in excess of [**] . No
Indemnified Person shall assert any such claim unless Losses in respect thereof
incurred by any Indemnified Person, when aggregated with all previous Losses
hereunder, equal or exceed [**] , but at such time that an Indemnified Person is
entitled to assert a claim, such claim shall include all Losses covered by this
Section 7.

                  (d) Exception. Notwithstanding the foregoing, upon judicial
determination that is final and no longer appealable, that the act or omission
giving rise to the indemnification set forth above resulted primarily out of or
was based primarily upon the Indemnified Person's negligence (unless such
Indemnified Person's negligence was based upon the Indemnified Person's reliance
in good faith upon any of the representations, warranties, covenants or promises
made by the Indemnifying Party herein) the Indemnifying Party shall not be
responsible for any Losses sought to be indemnified in connection therewith, and
<PAGE>

                                      -18-

the Indemnifying Party shall be entitled to recover from the Indemnified Person
all amounts previously paid in full or partial satisfaction of such indemnity,
together with all costs and expenses (including reasonable attorneys fees) of
the Indemnifying Party reasonably incurred in connection with the Indemnified
Persons claim for indemnity, together with interest at the rate per annum
publicly announced by Morgan Guaranty Trust Company as its prime rate from the
time of payment of such amounts to the Indemnified Person until repayment to the
Indemnifying Party.

                  (e) Investigation. All indemnification rights hereunder shall
survive the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, irrespective of any investigation, inquiry or
examination made for or on behalf of, or any knowledge of the Indemnified Person
or the acceptance of any certificate or opinion, except where the Indemnified
Person has acknowledged in writing knowledge of any fact prior to Closing.

                  (f) Contribution. If the indemnity provided for in this
Section 7 shall be, in whole or in part, unavailable to any Indemnified Person,
due to Section 7(b) being declared unenforceable by a court of competent
jurisdiction based upon reasons of public policy, so that Section 7(b) shall be
insufficient to hold each such Indemnified Person harmless from Losses which
would otherwise be indemnified hereunder, then the Indemnifying Party and the
Indemnified Person shall each contribute to the amount paid or payable for such
Loss in such proportion as is appropriate to reflect not only the relative
benefits received by the Indemnifying Party on the one hand and the Indemnified
Person on the other, but also the relative fault of the Indemnifying Party and
be in addition to any liability that the Indemnifying Party may otherwise have.
The indemnity, contribution and expense reimbursement obligations that the
Indemnifying Party has under this Section 7 shall survive the expiration of the
Transaction Documents. The parties hereto further agree that the indemnification
and reimbursement commitments set forth in this Agreement shall apply whether or
not the Indemnified Person is a party to any lawsuit, claims or other
proceedings brought by a third party or any Loss is incurred directly by the
Indemnified Person.

                  (g) Limitation. This Section 7 is not intended to limit the
rights or remedies otherwise available to any party hereto with respect to this
Agreement or the Transaction Documents.

                  SECTION 8. Notices. All notices, demands and requests of any
kind to be delivered to any party in connection with this Agreement shall be in
writing and shall be deemed to have been duly given if personally or hand
delivered or if sent by an internationally-recognized overnight delivery courier
or by registered or certified mail, return receipt requested and postage
prepaid, or by facsimile transmission addressed as follows:
<PAGE>

                                      -19-

                  (i)      if to the Company, to:

                           Generex Biotechnology Corporation
                           33 Harbour Sq.
                           Suite 202
                           Toronto, Ontario, Canada  M5J 2G2
                           Attention:  Chief Executive Officer
                           Facsimile:

                           with a copy to:

                           Eckert Seamans Cherin & Mellott LLC
                           1515 Market Street
                           9th Floor
                           Philadelphia, PA  19102
                           Attention:  John G. Chou
                           Facsimile:  (215) 851-8383

                  (ii)     If to EIS, to:

                           Elan International Services, Ltd.
                           102 St. James Court
                           Flatts, Smiths Parish
                           Bermuda FL 04
                           Attention:  Chief Executive Officer
                           Facsimile:  (441) 292-2224

                  with a copy to:

                           Cahill Gordon & Reindel
                           80 Pine Street
                           New York, NY  10005
                           Attention:  William M. Hartnett
                           Facsimile:  (212) 269-5420

or to such other address as the party to whom notice is to be given may have
furnished to the other party hereto in writing in accordance with provisions of
this Section 8. Any such notice or communication shall be deemed to have been
effectively given (i) in the case of personal or hand delivery, on the date of
such delivery, (ii) in the case of an internationally-recognized overnight
delivery courier, on the second business day after the date when sent, (iii) in
the case of mailing, on the fifth business day following that day on which the
<PAGE>

                                      -20-

piece of mail containing such communication is posted and (iv) in the case of
facsimile transmission, the date of telephone confirmation of receipt.

                  SECTION 9. Entire Agreement. This Agreement and the other
Transaction Documents contain the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings among the parties with respect thereto.

                  SECTION 10. Amendments and Waiver. This Agreement may not be
modified or amended, or any of the provisions hereof waived, except by written
agreement of the Company and EIS dated after the date hereof.

                  SECTION 11. Counterparts and Facsimile. The Transaction
Documents may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement. Each of the Transaction
Documents may be signed and delivered to the other party by facsimile
transmission; such transmission shall be deemed a valid signature.

                  SECTION 12. Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of the Agreement.

                  SECTION 13. Governing Law; Disputes. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York, without giving effect to principles of conflicts of laws. Any dispute
under the Transaction Documents that is not settled by mutual consent shall be
finally adjudicated by any federal or state court sitting in the City, County
and State of New York, and each party consents to the exclusive jurisdiction of
such courts (or any appellate court therefrom) over any such dispute.

                  SECTION 14. Expenses. Each of the parties shall be responsible
for its own costs and expenses incurred in connection with the transactions
contemplated hereby and by the other Transaction Documents.

                  SECTION 15. Exhibits and Schedules. The exhibits to and
schedules delivered by or on behalf of any party in connection with this
Agreement are an integral part of this Agreement, and any statements contained
in such schedules shall be deemed to be representations and warranties under
this Agreement.

                  SECTION 16. Assignments and Transfers. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. All or any
part of this Agreement, the Securities and the Underlying Shares may be assigned
or transferred by EIS and its permitted assigns and transferees to their
<PAGE>

                                      -21-

respective affiliates and subsidiaries, as well as any special purpose financing
or similar vehicle established by EIS. Other than as set forth above, no party
shall assign or transfer all or any part of this Agreement, the Securities and
the Underlying Shares, or any interest therein, without the prior written
consent of the other party.

                  SECTION 17. Severability. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not be in any way affected or
impaired thereby.

                            [Signature page follows]
<PAGE>

                  IN WITNESS WHEREOF, each of the undersigned has duly executed
this Agreement as of the date first written above.

                              GENEREX BIOTECHNOLOGY
                                   CORPORATION

                              By: /s/ E. Mark Perri
                                  --------------------------------------------
                                  Name:  E. Mark Perri
                                  Title: Chairman

                              ELAN INTERNATIONAL SERVICES, LTD.

                              By: /s/ Kevin Insley
                                  --------------------------------------------
                                  Name:  Kevin Insley
                                  Title: President and Chief Financial Officer
<PAGE>

                                                                       Annex I

        Method of Calculating "Weighted Average" Anti-Dilution Provisions

Upon issuance of shares of Generex Common Stock at a price below EIS' purchase
price, after giving effect to any prior adjustment hereunder, the "weighted
average" price per share of Generex Common Stock shall be determined as follows:

         C' = CO + PN
              -------
              O+N

Where:

C' = The new effective price per share C = The old effective price per share
O  = The number of shares of Generex Common Stock outstanding prior to the new
issuance (including all shares issuable in connection with options, warrants,
and other convertible securities that are exercisable within 60 days of this
calculation)
P  = The price per share of Generex Common Stock sold in new issuance
N  = The number of shares of Generex Common Stock sold in the new issuance

The number of additional shares to be issued to EIS following the determination
of the new effective price per share is as follows:

         S'=  A -  S
              -
              C'

Where:

S' = The number of additional shares to be issued to EIS
S  = The number of shares initially issued to EIS (as adjusted mechanically for
any stock splits or similar transactions subsequent to the issuance of the
shares to EIS)
A  = The dollar amount of the initial investment by EIS<PAGE>

                        GENEREX BIOTECHNOLOGY CORPORATION
                          REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
as of January 16, 2001 by and among Generex Biotechnology Corporation, a
Delaware corporation (the "Company"), and Elan International Services, Ltd., a
Bermuda exempted limited liability company ("EIS").

                                R E C I T A L S:

                  A. Pursuant to a Securities Purchase Agreement dated as of the
date hereof by and among the Company, EIS (the "Purchase Agreement"), EIS has
acquired, or will acquire in the future, (a) certain shares of Series A
Preferred Stock of the Company (the "Series A Preferred Stock") convertible into
shares of common stock of the Company (the "Common Stock"), (b) certain shares
of Common Stock and (c) warrants (the "Warrants") to purchase certain shares of
Common Stock. The Series A Preferred Stock, the Common Stock and the Warrants
collectively are referred to herein as the "Securities".

                  B. The execution of the Purchase Agreement has occurred on the
date hereof and it is a condition to the closing of the transactions
contemplated thereby that the parties execute and deliver this Agreement.

                  C. The parties desire to set forth herein their agreement on
the terms and subject to the conditions set forth herein related to the granting
of certain registration rights to the Holders (as defined below) relating to the
Common Stock held and the Common Stock issuable upon conversion or exercise of
the Securities by such Holders.

                               A G R E E M E N T:

                  The parties hereto agree as follows:

         1.       Certain Definitions.  As used in this Agreement, the following
terms shall have the following respective meanings:

                  "Commission" shall mean the U.S. Securities and Exchange
Commission.

                  "Exchange Act" shall mean the U.S. Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect from time to time.

<PAGE>
                  "Holders" or "Holders of Registrable Securities" shall mean
EIS, EPIL and any Person who shall have acquired Registrable Securities from EIS
as permitted herein and in the Purchase Agreement, either individually or
jointly, as the case may be, in a transaction pursuant to which registration
rights are transferred pursuant to Section 10 hereof.

                  "Person" shall mean an individual, a partnership, a company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental or quasi-governmental entity, or
any department, agency or political subdivision thereof.

                  "Registrable Securities" means (i) any shares of Common Stock
subscribed for pursuant to the Purchase Agreement; (ii) any shares of Common
Stock issued or issuable upon conversion or exercise of the Securities; and
(iii) any shares of Common Stock issued or issuable in respect of the securities
referred to in clause (i) and (ii) above, until, in the case of any such
security, it is effectively registered under the Securities Act and disposed of
in accordance with the registration statement covering it; excluding in all
cases, however, any Registrable Securities that may be sold under Rule 144(k)
promulgated under the Securities Act, as such rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission, and
Registrable Securities sold by a Person in a transaction (including a
transaction pursuant to a registration statement under this Agreement and a
transaction pursuant to Rule 144 promulgated under the Securities Act) in which
registration rights are not transferred pursuant to Section 10 hereof. Whenever
a number or percentage of Registrable Securities is to be determined pursuant to
this Agreement, each then outstanding Security that is convertible into or
exercisable for shares of Common Stock will be deemed to be equal to the number
of shares of Common Stock for which such Security is then so convertible or
exercisable.

                  The terms "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act.

                  "Registration Expenses" shall mean all expenses, other than
Selling Expenses, incurred by the Company in complying with Sections 2 or 3
hereof, including without limitation, all registration, qualification and filing
fees, exchange listing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration.

                  "Securities Act" shall mean the Securities Act of 1933, as
amended.

                  "Selling Expenses" shall mean all underwriting discounts,
selling commissions and non-accountable expense allowances of underwriters and
stock transfer taxes and the costs, fees and expenses of any accountants,
attorneys or other experts retained by the Holders.

                                      -2-

<PAGE>

         2.       Demand Registrations.

                  (a) Requests for Registration. Any Holder or Holders who
collectively hold Registrable Securities representing at least 5% of the
Registrable Securities then outstanding shall have the right (subject to the
limitations below) to request registration under the Securities Act of all or
part of their Registrable Securities on Form S-3 (or any successor form to Form
S-3, or any similar short-form registration statement) (each, a "Demand
Registration"). The request for the Demand Registration shall specify the
approximate number of Registrable Securities requested to be registered, which
must have a minimum expected aggregate offering price to the public of at least
U.S.$1,000,000. Within 10 days after receipt of any such request, the Company
will give written notice of such requested registration to all other Holders of
Registrable Securities. The Company shall include such other Holders'
Registrable Securities in such offering if they have responded affirmatively
within 10 days after the receipt of the Company's notice. The Holders shall be
permitted one Demand Registration hereunder; provided, however, that such right
shall not apply to (i) the registration of shares relating to the Company's
previously announced equity drawdown financing facility expected to be filed in
the first calendar quarter of 2001, (ii) any registration statements on forms
S-4 or S-8 or any successor forms and (iii) any registration statements that
have been filed as of the date hereof and have not yet been declared effective.
A registration will not count as a permitted Demand Registration until it has
become effective (unless such Demand Registration has not become effective due
solely to the fault of the Holders requesting such registration, including a
request by such Holders that such registration be withdrawn).

                  (b) Priority on Demand Registrations. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering,
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in such offering without adversely affecting the marketability of
the offering, the Company will include in such registration:

                  (i) first, the Registrable Securities requested to be included
         in such registration by the Holders (or, if necessary, such Registrable
         Securities pro rata among the Holders thereof based upon the number of
         Registrable Securities owned by each such Holder); and

                  (ii) thereafter, other securities requested to be included in
         such registration, as determined by the Company.

                  (c) Restrictions on Demand Registration. The Company may
postpone or suspend for up to three months in any 12-month period the filing or
the effectiveness of a registration statement for a Demand Registration if the

                                      -3-

<PAGE>

Company determines in good faith that such Demand Registration (i) would
reasonably be expected to have a material adverse effect on (x) any proposal or
plan by the Company to engage in any financing, acquisition or disposition of
assets (other than in the ordinary course of business) or (y) any merger,
consolidation, tender offer or similar transaction or (ii) would require
disclosure of any information that the board of directors of the Company
determines in good faith the disclosure of which would be detrimental to the
Company; in addition, the Company may postpone or suspend the filing or
effectiveness of a registration statement for an additional three months
following the consummation of any merger between the Company and another
publicly traded entity; provided, however, that in such event, the Holders
initially requesting such Demand Registration will be entitled to withdraw such
request and, if such request is withdrawn, such Demand Registration will not
count as a permitted Demand Registration hereunder and the Company will pay any
Registration Expenses in connection with such registration.

                  (d) Selection of Underwriters. The Holders will have the right
to select the investment banker(s) and manager(s) to administer an offering
pursuant to the Demand Registration, subject to the Company's prior written
approval, which will not be unreasonably withheld, delayed or conditioned.

                  (e) Other Registration Rights. (i) Except as provided in this
Agreement, so long as any Holder or Holders own at least 10% of the Registrable
Securities originally issued or available for issuance, the Company will not
grant to any Persons the right to require the Company to register any equity
securities of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, which conflicts with the rights granted to the
Holders hereunder, without the prior written consent of the Holders of at least
50% of the Registrable Securities. The granting of demand registration rights,
with or without provisions similar to those contained in Section 5 of this
Agreement, shall not be deemed, in and of itself, to conflict with the rights
granted to the Holders hereunder. The granting of piggyback rights which may
have the right to participate pari passu with the Holders, shall not be deemed,
in and of itself, to be inconsistent with the rights of the Holders.

                  (ii) Notwithstanding anything to the contrary herein, EIS
         agrees that the Company will not have any obligation to register shares
         owned by Elan or maintain any prior registration of such shares
         (pursuant to demand or piggyback rights) at any time that, in the
         written opinion of counsel to the Company, such shares may be sold by
         EIS under Securities Act Rule 144(k).

         3.       Piggyback Registrations.

                  (a) Right to Piggyback. If at any time the Company shall
propose to register shares of Common Stock under the Securities Act (other than
in a registration statement on Form S-3 relating to sales of securities to

                                      -4-
<PAGE>

participants in a Company dividend reinvestment plan, or Form S-4 or S-8 or any
successor form or in connection with an acquisition or exchange offer or an
offering of securities solely to the existing shareholders or employees of the
Company), the Company (i) will give prompt written notice to all Holders of
Registrable Securities of its intention to effect such a registration and (ii)
subject to Section 3(b) and the other terms of this Agreement, will include in
such registration all Registrable Securities which are permitted under
applicable securities laws to be included in the form of registration statement
selected by the Company and with respect to which the Company has received
written requests for inclusion therein within 20 days after the receipt of the
Company's notice (each, a "Piggyback Registration"). The Holders will be
permitted to withdraw all or any part of the Registrable Securities from a
Piggyback Registration at any time prior to the effective date of such Piggyback
Registration. The rights granted to the Holders in this Section 3 do not apply
to (i) the registration of shares relating to the Company's previously announced
equity drawdown financing facility expected to be filed in the first calendar
quarter of 2001, and (ii) any registration statements that have been filed as of
the date hereof and have not yet been declared effective.

                  (b) Priority on Piggyback Registrations. If a Piggyback
Registration is to be an underwritten offering, and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without adversely affecting the marketability of the
offering, the Company will include in such registration:

                  (i)  first, the securities the Company proposes to sell;

                  (ii) second, securities held by holders other than the
         Holders of Registrable Securities;

                  (iii) third, the Registrable Securities requested to be
         included in such registration by the Holders and any securities
         requested to be included in such registration by any other Person other
         than Persons having a lower priority of registration than the Holders,
         pro rata among the Holders of such Registrable Securities and such
         other Persons, on the basis of the number of securities requested to be
         included in such registration by each of such Holders and such other
         Persons; and

                  (iv) thereafter, other securities requested to be included in
         such registration, as determined by the Company.

                  The Holders of any Registrable Securities included in such an
underwritten offering will execute an underwriting agreement in customary form
and in form and substance satisfactory to the managing underwriters.

                                      -5-
<PAGE>
                  (c) Right to Terminate Registration. If at any time after
giving written notice of its intention to register any of its securities as set
forth in Section 3(a) and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register such securities, the Company may, at
its election, give written notice of such determination to each Holder of
Registrable Securities and thereupon be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
its obligation to pay the Registration Expenses in connection therewith as
provided herein).

                  (d) Selection of Underwriters. The Company will have the right
to select the investment banker(s) and manager(s) to administer an offering
pursuant to a Piggyback Registration.

         4.       Expenses of Registration.

                  Except as otherwise provided herein or as may otherwise be
prohibited by applicable law, all Registration Expenses incurred in connection
with all registrations pursuant to Sections 2 and 3 hereof shall be borne by the
Company. All Selling Expenses relating to securities registered on behalf of the
Holders of Registrable Securities shall be borne by such Holders.

         5.       Holdback Agreements.

                  (a) The Company agrees not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10-day period prior
to, and during the 90-day period following, the effective date of any
underwritten Demand Registration (except as part of such underwritten
registration or pursuant to registration statements on Form S-4 or Form S-8 or
any successor form), unless the underwriters managing the registered public
offering otherwise agree. This paragraph shall not apply to the distribution
under any registration statement the Company has filed before receiving the
request for the Demand Registration.

                  (b) Each Holder agrees, if requested by the managing
underwriters in an underwritten offering of Common Stock or securities
convertible for Common Stock of the Company, not to effect any offer, sale,
distribution or transfer, except pursuant to Rule 144 (or any similar provision
then effect) under the Securities Act (except as part of such underwritten
registration), during the 10-day period prior to, and during the 180-day period
in the case of the Company's initial public offering or a 90-day period in the
case of any other offering of Common Stock (or, in each case, such shorter
period as may be agreed to in writing by the Company and the Holders of at least
50% of the Registrable Securities) following, the effective date of such
Registration Statement; provided, however, that no Holder shall be required to
enter into more than one such agreement in any 12-month period.

                                       6
<PAGE>

         6.       Registration Procedures.

                  Whenever the Holders of Registrable Securities have requested
that any Registrable Securities be registered pursuant to this Agreement, the
Company will use all reasonable efforts to effect the registration and the sale
of such Registrable Securities in accordance with the intended method or methods
of distribution thereof, and pursuant thereto the Company will as expeditiously
as possible:

                  (a) subject to Section 2(c) hereof, prepare and file with the
         Commission a registration statement on any appropriate form for which
         the Company qualifies with respect to such Registrable Securities and
         use all reasonable efforts to cause such registration statement to
         become effective (provided that before filing a registration statement
         or prospectus or any amendments or supplements thereto, the Company
         will (i) furnish to the counsel selected by the Holders copies of all
         such documents proposed to be filed, which documents will be subject to
         the review of such counsel, and (ii) notify each Holder of Registrable
         Securities covered by such registration of any stop order issued or
         threatened by the Commission);

                  (b) subject to Section 2(c) hereof, prepare and file with the
         Commission such amendments and supplements to such registration
         statement and the prospectus used in connection therewith as may be
         reasonably necessary to keep such registration statement effective for
         a period equal to the shorter of (i) six months and (ii) the time by
         which all securities covered by such registration statement have been
         sold, and comply with the provisions of the Securities Act with respect
         to the disposition of all securities covered by such registration
         statement during such period in accordance with the intended methods of
         disposition by the sellers thereof set forth in such registration
         statement;

                  (c) furnish to each seller of Registrable Securities such
         number of copies of such registration statement, each amendment and
         supplement thereto, the prospectus included in such registration
         statement (including each preliminary prospectus) and such other
         documents as such seller may reasonably request in order to facilitate
         the disposition of the Registrable Securities owned by such seller;

                  (d) use all reasonable efforts to register or qualify such
         Registrable Securities under the securities or blue sky laws of such
         jurisdictions as any seller reasonably requests and do any and all
         other acts and things which may be reasonably necessary or advisable to
         enable such seller to consummate the disposition in such jurisdictions
         of the Registrable Securities owned by such seller (provided that the
         Company will not be required to (i) qualify generally to do business in
         any jurisdiction where it would not otherwise be required to qualify
         but for this Section 6(d), (ii) subject itself to taxation in any

                                      -7-
<PAGE>

         jurisdiction or (iii) take any action that would subject it to general
         service of process in any such jurisdiction);

                  (e) notify each seller of such Registrable Securities, at any
         time when a prospectus relating thereto is required to be delivered
         under the Securities Act, of the happening of any event as a result of
         which the prospectus included in such registration statement contains
         an untrue statement of a material fact or omits any fact necessary to
         make the statements therein not misleading, and, at the request of any
         such seller, the Company will prepare a supplement or amendment to such
         prospectus so that, as thereafter delivered to the purchasers of such
         Registrable Securities, such prospectus will not contain an untrue
         statement of a material fact or omit to state any fact necessary to
         make the statements therein not misleading; provided, however, that the
         Company shall not be required to amend the registration statement or
         supplement the Prospectus for a period of up to six months if the board
         of directors determines in good faith that to do so would reasonably be
         expected to have a material adverse effect on any proposal or plan by
         the Company to engage in any financing, acquisition or disposition of
         assets (other than in the ordinary course of business) or any merger,
         consolidation, tender offer or similar transaction or would require the
         disclosure of any information that the board of directors determines in
         good faith the disclosure of which would be detrimental to the Company,
         it being understood that the period for which the Company is obligated
         to keep the Registration Statement effective shall be extended for a
         number of days equal to the number of days the Company delays
         amendments or supplements pursuant to this provision. Upon receipt of
         any notice pursuant to this Section 6(e), the Holders shall suspend all
         offers and sales of securities of the Company and all use of any
         prospectus until advised by the Company that offers and sales may
         resume, and shall keep confidential the fact and content of any notice
         given by the Company pursuant to this Section 6(e);

                  (f) cause all such Registrable Securities to be listed on each
         securities exchange, if any, on which similar securities issued by the
         Company are then listed;

                  (g) provide a transfer agent and registrar for all such
         Registrable Securities not later than the effective date of such
         registration statement;

                  (h) enter into such customary agreements (including
         underwriting agreements in customary form) and take all such other
         actions as the Holders of a majority of the Registrable Securities
         being sold or the underwriters, if any, reasonably request in order to
         expedite or facilitate the disposition of such Registrable Securities;

                  (i) make available for inspection by a representative of the
         Holders of Registrable Securities included in the registration
         statement, any underwriter participating in any disposition pursuant to

                                      -8-
<PAGE>

         such registration statement and any attorney, accountant or other agent
         retained by any such seller or underwriter, all pertinent financial and
         other records, pertinent corporate documents and properties of the
         Company, and cause the Company's officers, directors, employees and
         independent accountants to supply all information reasonably requested
         by any such seller, underwriter, attorney, accountant or agent in
         connection with such registration statement;

                  (j) otherwise use its reasonable efforts to comply with all
         applicable rules and regulations of the Commission, and make available
         to its security holders, as soon as reasonably practicable, an earnings
         statement covering the period of at least 12 months beginning with the
         first day of the Company's first full calendar quarter after the
         effective date of the registration statement, which earnings statement
         shall satisfy the provisions of Section 11(a) of the Securities Act and
         Rule 158 thereunder;

                  (k) in the event of the issuance of any stop order suspending
         the effectiveness of a registration statement, or of any order
         suspending or preventing the use of any related prospectus or
         suspending the qualification of any shares of Common Stock included in
         such registration statement for sale in any jurisdiction, use all
         reasonable efforts promptly to obtain the withdrawal of such order; and

                  (l) if the registration is an underwritten offering, use all
         reasonable efforts to obtain a so-called "cold comfort" letter from the
         Company's independent public accountants in customary form and covering
         such matters of the type customarily covered by cold comfort letters.

         7.       Obligations of Holders.

                  Whenever the Holders of Registrable Securities sell any
Registrable Securities pursuant to a Demand Registration or a Piggyback
Registration, such Holders shall be obligated to comply with the applicable
provisions of the Securities Act, including the prospectus delivery requirements
thereunder, and any applicable state securities or blue sky laws. In addition,
each Holder of Registrable Securities will be deemed to have agreed by virtue of
its acquisition of such Registrable Securities that, upon receipt of any notice
described in Section 6(e), such holder will forthwith discontinue disposition of
such Registrable Securities covered by such registration statement or prospectus
until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6(e), or until it is advised in writing by
the Company that the use of the applicable prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such prospectus.

                                       -9-
<PAGE>

         8.       Indemnification.

                  (a) The Company agrees to indemnify, to the fullest extent
permitted by applicable law, each Holder of Registrable Securities, its officers
and directors and each Person who controls such Holder (within the meaning of
the Securities Act) against all losses, claims, damages, liabilities, expenses
or any amounts paid in settlement of any litigation, investigation or proceeding
commenced or threatened (collectively, "Claims") to which each such indemnified
party may become subject under the Securities Act insofar as such Claim arose
out of (i) any untrue or alleged untrue statement of material fact contained, on
the effective date thereof, in any registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or (ii)
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such Holder expressly for use therein, by
such Holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such Holder with a sufficient number of copies of the same or by such
Holder's failure to comply with applicable securities laws or this Agreement. In
connection with an underwritten offering, the Company will indemnify the
underwriters, their officers and directors and each Person who controls the
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Holders of Registrable
Securities.

                  (b) In connection with any registration statements in which a
Holder of Registrable Securities is participating, each such Holder will, to the
fullest extent permitted by applicable law, indemnify the Company, its directors
and officers and each Person who controls the Company (within the meaning of the
Securities Act) against any and all Claims to which each such indemnified party
may become subject under the Securities Act insofar as such Claim arose out of
(i) any untrue or alleged untrue statement of material fact contained, on the
effective date thereof, in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto, (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading or (iii) any failure
to comply with applicable securities laws or this Agreement; provided that with
respect to a Claim arising pursuant to clause (i) or (ii) above, the material
misstatement or omission is contained in the information such Holder provided to
the Company pursuant to Section 11 hereof; provided, further, that the
obligation to indemnify will be individual to each Holder and will be limited to
the amount of proceeds received by such Holder from the sale of Registrable
Securities pursuant to such registration statement.

                  (c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (but the failure to provide such notice shall
not release the indemnifying party of its obligation under paragraphs (a) and

                                      -10-
<PAGE>

(b), unless and then only to the extent that, the indemnifying party has been
prejudiced by such failure to provide such notice) and (ii) unless in such
indemnified party's reasonable judgment, based on written advice of counsel to
the Company, a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party, based on written advice of counsel, a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim; provided, however, that in no
event shall the Company be obligated to pay the fees and expenses of more than
two (2) counsel for all indemnified parties.

                  (d) The indemnifying party shall not be liable to indemnify an
indemnified party for any settlement, or consent to judgment of any such action
effected without the indemnifying party's written consent (but such consent will
not be unreasonably withheld, delayed or conditioned). Furthermore, the
indemnifying party shall not, except with the prior written approval of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to each indemnified party of a release from all liability
in respect of such claim or litigation without any payment or consideration
provided by each such indemnified party.

                  (e) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under clauses (a) and (b) above in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the Company,
the underwriters, the sellers of Registrable Securities and any other sellers
participating in the registration statement from the sale of shares pursuant to
the registered offering of securities for which indemnity is sought but also the
relative fault of the Company, the underwriters, the sellers of Registrable
Securities and any other sellers participating in the registration statement in
connection with the misstatement or omission which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company, the underwriters,
the sellers of Registrable Securities and any other sellers participating in the
registration statement shall be deemed to be based on the relative relationship
of the total net proceeds from the offering (before deducting expenses) to the
Company, the total underwriting commissions and fees from the offering (before
deducting expenses) to the underwriters and the total net proceeds from the
offering (before deducting expenses) to the sellers of Registrable Securities
and any other sellers participating in the registration statement. The relative
fault of the Company, the underwriters, the sellers of Registrable Securities
and any other sellers participating in the registration statement shall be
determined by reference to, among other things, whether the untrue or alleged

                                      -11-
<PAGE>

untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the sellers
of Registrable Securities and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided that in no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the proceeds received by such Holder
upon the sale of the Registrable Securities giving rise to such indemnification
obligation.

                  (f) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling person
of such indemnified party and will survive the transfer of the Registrable
Securities.

         9.       Participation in Underwritten Registrations.

                  No Holder may participate in any registration hereunder which
is underwritten unless such Holder (a) agrees to sell such Holder's securities
on the basis provided in any underwriting arrangements, which arrangements, in
the case of a Demand Registration, approved by the Holder or Holders of more
than 50% of the Registrable Securities electing to participate in such Demand
Registration, (b) as expeditiously as possible notifies the Company of the
occurrence of any event as a result of which any prospectus contains an untrue
statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(c) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

         10.      Transfer of Registration Rights.

                  The rights granted to any Holder under this Agreement may be
assigned to any permitted transferee of Registrable Securities, in connection
with any transfer or assignment of Registrable Securities by a Holder; provided,
however, that: (a) such transfer is otherwise effected in accordance with
applicable securities laws, (b) such transfer is permitted by the Purchase
Agreement, (c) if not already a party hereto, the assignee or transferee agrees
in writing prior to such transfer to be bound by the provisions of this
Agreement applicable to the transferor and (d) EIS shall act as agent and
representative for such Holder for the giving and receiving of notices
hereunder.

         11.      Information by Holder.

                  Each Holder shall furnish to the Company such written
information regarding such Holder and any distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance

                                      -12-
<PAGE>

referred to in this Agreement and shall promptly notify the Company of any
changes in such information.

         12.      Exchange Act Compliance.

                  The Company shall comply with all of the reporting
requirements of the Exchange Act then applicable to it, if any, and shall comply
with all other public information reporting requirements of the Commission which
are conditions to the availability of Rule 144 for the sale of the Registrable
Securities. The Company shall cooperate with each Holder in supplying such
information as may be necessary for such Holder to complete and file any
information reporting forms presently or hereafter required by the Commission as
a condition to the availability of Rule 144.

         13.      Termination of Registration Rights.

                  All registration rights and obligations (including, without
limitation, under Section 5) under this Agreement shall terminate and be of no
further force and effect, as to any particular Holder, at such time as all
Registrable Securities held by such Holder are eligible to be sold without
compliance with the registration requirements of the Securities Act pursuant to
Rule 144(k) promulgated thereunder or have been resold pursuant to a
registration statement hereunder.

         14.      Miscellaneous.

                  (a) No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the Holders of Registrable Securities in
this Agreement without the prior written consent of a majority in interest of
such Registrable Securities. The granting of demand registration rights, with or
without provisions similar to those contained in Section 5 of this Agreement,
shall not be deemed, in and of itself, to conflict with the rights granted to
the Holders hereunder. The granting of piggyback rights which may have the right
to participate pari passu with the Holders, shall not be deemed, in and of
itself, to be inconsistent with the rights of the Holders.

                  (b) Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement; provided, however, that in no event shall any Holder have the right

                                      -13-
<PAGE>

to enjoin, delay or interfere with any offering of securities by the Company.

                  (c) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only with the
prior written consent of the Company and Holders of at least 50% of the
Registrable Securities; provided, however, that without the prior written
consent of all the Holders, no such amendment or waiver shall reduce the
foregoing percentage required to amend or waive any provision of this Agreement.

                  (d) Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns. This Agreement may be
transferred by EIS and their permitted assigns and transferees to their
respective affiliates and subsidiaries, as well as any special purpose financing
or similar vehicle established by EIS, in connection with a transfer of
Registrable Securities permitted by the Purchase Agreement. Other than as set
forth above, no party shall transfer or assign this Agreement without the prior
written consent of the other party, which will not be unreasonably withheld,
delayed or conditioned. In addition, whether or not any express assignment has
been made, the provisions of this Agreement which are for the benefit of Holders
of Registrable Securities are also for the benefit of, and enforceable by, any
permitted transferee of Registrable Securities, in accordance with Section 10
hereof.

                  (e) Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not be in any way affected or
impaired thereby.

                  (f) Counterparts and Facsimile. This Agreement may be executed
in any number of counterparts, and each such counterpart hereof shall be deemed
to be an original instrument, but all such counterparts together shall
constitute one agreement. This Agreement may be signed and delivered to the
other party by facsimile transmission; such transmission shall be deemed a valid
signature.

                  (g) Descriptive Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.

                  (h) Governing Law; Disputes. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York,
without giving effect to principles of conflicts of laws. Any dispute under this
Agreement that is not settled by mutual consent shall be finally adjudicated by
any federal or state court sitting in the City, County and State of New York,
and each party consents to the exclusive jurisdiction of such courts (or any
appellate court therefrom) over any such dispute.

                                      -14-
<PAGE>

                  (i) Notices. All notices, demands and requests of any kind to
be delivered to any party in connection with this Agreement shall be in writing
and shall be deemed to have been duly given if personally or hand delivered or
if sent by internationally-recognized overnight courier or by registered or
certified mail, return receipt requested and postage prepaid, or by facsimile
transmission, addressed as follows:

                  (i)      if to the Company, to:

                           Generex Biotechnology Corporation
                           32 Harbour Square
                           Suite 202
                           Toronto Ontario Canada
                           Attention:  Chief Executive Officer
                           Facsimile:  (416) 364-9363

                           with a copy to:

                           Eckert Seamans Cherin Mellott, LLC
                           1515 Market Street
                           9th Floor
                           Philadelphia, PA  19102
                           Attention:  John G. Chou
                           Facsimile:  (215) 851-8383

                  (ii)     if to EIS, to:

                           Elan International Services, Ltd.
                           102 St. James Court
                           Flatts, Smiths Parish
                           Bermuda FL 04
                           Attention:  Chief Executive Officer
                           Facsimile:  (441) 292-2224

                  with a copy to:

                           Cahill Gordon & Reindel
                           80 Pine Street
                           New York, NY  10005
                           Attention:  William M. Hartnett
                           Facsimile:  (212) 269-5420

or to such other address as the party to whom notice is to be given may have
furnished to the other party hereto in writing in accordance with provisions of
this Section 14(i). Any such notice or communication shall be deemed to have
been effectively given (i) in the case of personal or hand delivery, on the date
of such delivery, (ii) in the case of an internationally-recognized overnight
delivery courier, on the second business day after the date when sent, (iii) in
the case of mailing, on the fifth business day following that day on which the
piece of mail containing such communication is posted and (iv) in the case of
facsimile transmission, on the date of telephone confirmation of receipt.

                  (j) Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement of the parties with regard to the subject
matter hereof and supersedes all prior agreements and understandings among the
parties with respect thereto.

                            [Signature page follows]

                                      -15-
<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.

                                 GENEREX BIOTECHNOLOGY CORPORATION

                                 By:  /s/ E. Mark Perri
                                      -----------------------------------------
                                      Name:  E. Mark Perri
                                      Title: Chairman

                                  ELAN INTERNATIONAL SERVICES, LTD.

                                  By: /s/ Kevin Insley
                                      -----------------------------------------
                                      Name:  Kevin Insley
                                      Title: President and Chief Financial
                                             Officer

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