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Unassociated Document

    

    

    

    

    WEB
      SITE COMPANY FORMATION 

    

    DEVELOPMENT
      AND SERVICES AGREEMENT

    

    THIS
      AGREEMENT (the “Agreement”)
      is entered into as of December 2005 by and between Ocean-7 Development, Inc.,
      a
      New York corporation “OCEAN”)
      and DAG Media, Inc., a New York corporation (“DAGM”).
      Capitalized terms used in this Agreement and not defined herein shall have
      the
      meanings ascribed to such terms in this Agreement..

    

    RECITALS

    

    WHEREAS,
      DAGM is a publicly traded corporation engaged in the business of publishing
      and
      distributing yellow pages classified business telephone directories;
      and

    

    WHEREAS,
      OCEAN
      is a
      privately held publishing/technology corporation engaged in the business of
      providing full-service programming and specializes in web and database
      solutions; and

    

    WHEREAS,
      MARK ALHADEFF
      (“MARK”)
      is
an
      OCEAN
      shareholder and an executive and key professional at OCEAN;
      and

    

    WHEREAS,
      SHERRY DAVIS (“SHERRY”) is a majority shareholder at OCEAN; and

    

    WHEREAS,
      DAGM desires to launch a new subsidiary (“NEWCO”) to focus on an online referral
      service; and 

    

    WHEREAS,
      DAGM desires to cooperate and partner with OCEAN for purpose of forming NEWCO,
      developing its business and launching it business; 

    

    NOW,
      THEREFORE, in consideration of the mutual promises and covenants set forth
      below, and for other good and valuable consideration, the receipt and
      sufficiency of which is hereby acknowledged, DAGM
      and
      OCEAN
      intending to be legally bound, hereby agree as follows.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    1.    
      FORMATION
      OF NEWCO

    

    On
      or
      before December 5, 2005 DAGM will establish NEWCO under the Delaware Corporation
      Law by filing a certificate of incorporation with the Secretary of State of
      Delaware. Immediately after incorporation, DAGM shall hold an organization
      meeting to adopt bylaws, elect directors, elect officers and to transact any
      other business necessary or appropriate under this Agreement. After
      incorporation, NEWCO’s Board of Directors shall issue shares of capital stock to
      DAGM and OCEAN in the percentages described in Paragraph 3.3, in exchange for
      the consideration described in this Agreement; provided that these shares shall
      be deemed fully paid and non assessable upon issuance. The parties hereto agree
      that the form on NEWCO’s certificate of incorporation and bylaws shall be
      determined by DAGM, but in any event, for as long as this Agreement is in effect
      and NEWCO is in existence, NEWCO shall be governed by the following provisions:
      (a) NEWCO’s Board of Directors will be comprised of at least 2 individuals; and
      (b) DAGM, as incorporator or shareholder, agrees to elect MARK as one of the
      directors of NEWCO for as long as NEWCO is in existence and OCEAN is providing
      Services (as defined below) to NEWCO. 

    

    2.    
      SCOPE
      OF SERVICES 

    

    OCEAN
      will provide NEWCO with professional
      services
      as outlined below:

    

    2.1    
      Until
      production release of the web site,, OCEAN shall provide professional services
      including: (i) development; (ii) programming; (iii) specifications; (iv) design
      implementations; (v) testing; and (vi) hosting (as described in Statement of
      Work) resulting in the production availability of NEWCO's referral web service
      (description of which is set forth in Statement of Work) and allowing the
      commercial functionality for end-users to interact with the service and support
      potential high capacity nationwide use, including large numbers of transactions
      and large scale revenues. Support for this high capacity usage will require
      a
      hardware environment to be specified by Ocean. The referral service experience
      by end users will conform to a reasonable industry standard of other offerings
      on the Internet. The services shall be deemed to have satisfied the above
      requirements and be complete, delivered and accepted by NEWCO upon the full
      functionality of the web site according to the specifications set forth in
      Statement of Work and the web site being commercially used and there have been
      200 successfully processed consumer requests. Acceptance as provided under
      this
      Paragraph may not be revoked in whole or in part without the written consent
      of
      OCEAN. 

     

    2.2    
      OCEAN
      will provide
      comprehensive
      support
      and
      maintenance
      services
      and hosting for
      the
      web site (as described in Statement of Work) for
      2
      consecutive months after completion of Services and acceptance by
      NEWCO
      of the
      web site developed under Statement of Work. Except as provided in Paragraph
      8.4,
      OCEAN will provide such support services as part of the Services and at no
      additional charge to NEWCO.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    2.3    
      At
      the
      expiration of the initial 2 month support period, NEWCO will pay for its own
      support and maintenance expenses while MARK will supervise, advise and consult
      NEWCO at no cost for as long as OCEAN has outstanding options that have not
      been
      vested pursuant to section 3.2 below. If services of independent contractors
      are
      needed at the expiration of the 2 month period, MARK will use best efforts
      to
      help NEWCO acquire technical services and support at lowest cost possible.
      In
      the event NEWCO wishes that OCEAN will provide the technical support and
      maintenance at the expiration of the 2 month period, NEWCO will pay OCEAN $1350
      per month. The services provided under this fee will not include implementation
      of new features, enhancements of features, or hosting. If NEWCO wishes that
      OCEAN 7 provide hosting after the expiration of the 2 month period, the
      compensation will be $700 per month (with the non-refundable fee of $8400 for
      the full 12-months payable in 12 equal installments of $700 a month due upon
      invoice at the beginning of each month). This hosting fee is based upon less
      than 10,000 consumer requests per day. In the event that the number of consumer
      requests exceeds 10,000 per day, more robust hosting may be needed and the
      pricing for this hosting will be negotiated separately. All monthly fees quoted
      in this paragraph are valid for a 12-month period beginning at the expiration
      of
      the 2 month period. 

    

    2.4    
      Unless
      otherwise agreed in writing by DAGM, OCEAN shall not utilize any contractors
      to
      perform Services. In the event OCEAN utilizes independent contractors approved
      by DAGM to perform certain portions of the Services, OCEAN shall be responsible
      for the quality of the Services performed by the independent contractors and
      for
      the payment to the independent contractors.

     

    2.5    
      The
      parties agree that, except as provided below, the Services shall be supervised
      and directed by MARK. MARK will be the contact person, unless Mark is prevented,
      by illness, accident, disability, death, or act of god, from doing so, in which
      case OCEAN will appoint another contact person with comparable
      skills.

    

    

    3.    
      COMPENSATION
      AND PAYMENT

    

    DAGM
      shall pay OCEAN the following complete and inclusive compensation for
Services
      performed by OCEAN under this Agreement
      as
      follows:

    

    3.1    
      DAGM
      shall issue OCEAN 60,000 restricted shares of its common stock (“DAGM COMMON
      STOCK”) pursuant to RULE 144 promulgated under the Securities Act of 1933, as
      amended (the “ACT”) and according to the following schedule: (i) 20,000 shares
      upon signing of this Agreement and kick off of the project; (ii) 20,000 shares
      10 days following delivery of an internal 80% functional beta site of the
      referral service; and (iii) 20,000 shares 30 days following production release
      of the web site.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.2    
       On
      or
      about the signing of this Agreement, DAGM shall grant to OCEAN an option to
      purchase 75,000 shares of DAGM COMMON STOCK under
      DAGM’s stock option
      plan at an exercise price equal to the
      fair
      market value at date of grant according to the following vesting schedule:
      (i)
      25,000 options will be vested on the first anniversary of this
      Agreement,
      if
      NEWCO is still a solvent entity; (ii) 25,000 options will be vested on the
      second anniversary of this Agreement,
      if
      NEWCO is still a solvent entity; and (iii) 25,000 options will be vested at
      the
      third anniversary of this Agreement,
      if
      NEWCO is still a solvent entity. Notwithstanding to the contrary, the vesting
      will not continue according to the schedule above if DAGM lost its majority
      ownership in NEWCO, unless such change in DAGM majority share position was
      due
      to a sale of DAGM shares in NEWCO in which OCEAN did not have equal right to
      participate in.

    

    3.3    
      OCEAN will
      receive 20% stock ownership in NEWCO and DAGM shall receive 80% stock ownership
      in NEWCO. The final legal structure of NEWCO, its Certificate of Incorporation
      and bylaws will be determined
      by DAGM subject to Section 1 hereof. 

    

    3.4     
      The
      compensation provided under Paragraphs 3.1-3.3 above is for services provided
      under this Agreement excluding: (i) services provided pursuant to Paragraph
      2.3
      above for any services performed at the expiration of the initial 2 months
      support period; and (ii) services performed pursuant to the exceptions under
      Paragraph 8.4 below. 

    

    3.5     
      OCEAN
      and
      DAGM agree that when NEWCO reaches $10M
      in
annual
      gross revenue,
      the
      parties will use their best efforts to take NEWCO to IPO or otherwise spin
      it
      off of DAGM.

    

    3.6     
      If
      OCEAN
      desires
      to sell or transfer its ownership in the NEWCO, in whole or in part,
      OCEAN
      shall
      first notify DAGM in writing of the proposed sale or transfer (including the
      price and proposed transferee). DAGM shall have a right of first refusal for
      90
      days to purchase OCEAN’s
      shares
      at the proposed sale price. If DAGM doesn’t exercise its right of first refusal
      within the period provided, OCEAN
      will
      have additional 90 days to conclude the transfer of shares to the proposed
      transferee at the proposed terms, provided DAGM approves the proposed transferee
      in writing. DAGM will not unreasonably hold such approval.

    

    3.7     
      Upon
      execution of this Agreement and approval by DAGM Board of Director, MARK will
      be
      nominated to the
      DAGM
      Board of Directors. MARK
      and
      Assaf Ran, the CEO of DAGM will be nominated to NEWCO Board of Directors for
      as
      long as OCEAN
      desires
      and
      maintains an ownership interest in NEWCO. DAGM agrees to vote its shares in
      NEWCO such that MARK will be elected to the NEWCO Board of Directors.
      MARK’s
      nomination to the DAGM Board of Directors
      is
      subject to DAGM Bylaws.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3.8    
      To
      the
      extent that DAGM has paid OCEAN for a third party provider's invoices, OCEAN
      shall bear the responsibility to make payment to the third party provider and
      OCEAN shall indemnify and hold harmless DAGM from OCEAN’s failure to do
      so.

    

    3.9    
      OCEAN
      shall be responsible for all costs and expenses incurred by OCEAN and its
      approved contractors in performing the Services.

    

    4.    
      NON-COMPETITION

     

    4.1    
      OCEAN,
      MARK and SHERRY agree that for so long as OCEAN is providing Services to
NEWCO
      hereunder or owns any shares in NEWCO,
      and for
      a period of three
      (3)
      years thereafter it shall not independently, through an affiliate or with a
      third party, directly or indirectly, perform services on its own or for another
      company that are substantially similar to the Services performed for
NEWCO
      hereunder to enable
      itself
      or such other company to
      provide
      an on-line
      referral
      service or
      that
      is competing with any current (as of the date of this Agreement) DAGM
      product.

    

    4.2    
      OCEAN
      acknowledges and agrees that the restrictions set forth in Paragraph 4.1 are
      reasonable in scope and duration and are necessary to protect NEWCO,
      and to enable NEWCO
      to
      receive the anticipated benefits of this Agreement and the arrangements
      contemplated herein. The parties hereto agree that, if any of the length of
      time, restriction,
      the scope or another parameter of the restrictions set forth in Paragraph
      4.1 is deemed to be unlawfully restrictive by a court of competent jurisdiction,
      such provision shall be deemed to be amended and shall be construed by such
      court to have the broadest type, scope and duration permissible under applicable
      law, and if no validating construction is possible, shall be severable from
      the
      rest of this Agreement, and the validity, legality or enforceability of the
      remaining provisions of this Agreement shall not in any way be affected or
      impaired thereby.

    

    5.    
      INDEMNIFICATION/LIMITATION
      OF LIABILITY

    

    5.1    
      Subject
      to the exception in Paragraph 8.5, Each
      party shall indemnify, defend and hold the other, its agents, officers, and
      employees harmless from and against any and all claims, damages, liabilities
      and
      losses, including reasonable attorney and litigation fees arising out of any
      alleged or actual breach of this Agreement or the inaccuracy of any warranty
      or
      representation made by it or any act or omission by it in the performance of
      this Agreement.

    

    5.2    
      As
      a
      condition to the obligations under Paragraphs 5.1, the party seeking
      indemnification under this Agreement shall give the indemnifying party prompt
      written notice of any claim for which it is seeking indemnification and shall
      cooperate with the indemnifying party in the defense of any such claim or
      action.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    5.3    
      Except
      with respect to the indemnity obligation , neither party shall be liable for
      any
      indirect, incidental, punitive or other consequential damages (including,
      without limitation, lost profits) arising out of or in relation to this
      Agreement.

    

    

    6.    
      CONFIDENTIALITY

    

    6.1    
      OCEAN
      acknowledges that DAGM is a publicly traded corporation and therefore has to
      comply with certain disclosures as required by law. OCEAN further acknowledges
      and agrees that DAGM only will make any public announcement or disclosure
      pertaining to the nature or scope of this venture. In no event shall OCEAN
      make
      any public disclosure or announcement concerning this venture without prior
      written approval by DAGM. 

    

    6.2    
      In
      the
      course of performing this Agreement, OCEAN and DAGM may disclose to each other
      and each other’s respective employees, directors, officers, agents and other
      representatives, including financial advisors, accountants and attorneys, and
      any affiliates of the foregoing (each a “Recipient”),
      confidential or proprietary information, including, but not limited to, the
      business affairs, property, methods of operation, databases, information
      contained in such databases and other records related thereto of a DAGM customer
      or potential customer, information concerning the terms of this Agreement,
      software code (both source and object code), documentation, software
      specifications, other technical, marketing, promotional, financial or other
      business information and information of a competitively sensitive or proprietary
      nature as may be necessary to further the purposes of this Agreement
      (“Confidential
      Information”). All Confidential Information shall remain the sole property of
      the disclosing party, and the Recipient shall have no interest in or rights
      with
      respect thereto, except as expressly set forth in this Agreement. OCEAN and
      DAGM
      each agree, for itself and for its respective Recipients, to maintain all such
      Confidential Information, which in no event will be less than safeguards a
      reasonably prudent business would exercise in similar circumstances, and further
      agree to take all reasonable precautions to prevent any unauthorized disclosure
      of such information. The foregoing restriction on disclosure shall not apply
      with respect to any information which (a)
      the
      Recipient may be required to disclose by any subpoena, court order, decree,
      law
      or regulation applicable to such Recipient; provided, that such Recipient shall
      notify the disclosing party in a timely fashion and shall seek the maximum
      available confidentiality for the disclosed Confidential Information,
(b)
      is or
      becomes generally known or publicly available through no act or failure to
      act
      on the part of the Recipient, (c)
      the
      Recipient reasonably deems such disclosure necessary in connection with
      litigation involving a deliverable or this Agreement; provided, that such party
      shall notify the disclosing party in a timely fashion and shall seek the maximum
      available confidentiality for the disclosed Confidential Information,
(d)
      is
      furnished to others by the disclosing party without restriction on disclosure,
      (e)
      is
      known by the Recipient at the time of receiving such information from the
      disclosing party as evidenced by such Recipient’s records, or (f)
      is
      hereafter furnished to the Recipient by a third party, as a matter of right
      and
      without restriction on disclosure. The Recipient of Confidential Information
      agrees to notify the disclosing party concerning any disclosure permitted under
      this Section prior to making such disclosure so that the disclosing party may
      take appropriate action to protect the confidentiality of such
      information.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    6.3    
      OCEAN
      acknowledges that any information exchanged under this Agreement or information
      that is known to the parties to this Agreement may be privileged and thus may
      not be used trading DAGM’s or NEWCO’s stock or options, or otherwise used to the
      benefit of any party.

    

    7.    
      OWNERSHIP

    

    7.1    
      As
      between NEWCO and OCEAN, NEWCO shall own all right, title, and interest in
      and
      to all deliverables developed by OCEAN as part of the Services or supplied
      by
      DAGM to OCEAN hereunder, including, but not limited to, all trademarks, domain
      names, patents, artwork, ideas, concepts, and other property incorporated
      therein, all preliminary or other copies thereof, all versions of all computer
      generated graphics, HTML and other web text documents, software programs,
      database content, prints, paintings, sketches, etchings, drawings, mechanicals
      or any other work, material or property produced, developed, or fabricated
      for
      delivery under this Agreement (collectively referred to as the “Materials”)
      and to
      all end user information collected by and stored in the applicable Web Site,
      including, without limitation, all reports generated by OCEAN hereunder
      containing such end user information (the "User
      Content").
      Without derogating from the above, if DAGM defaults in its obligation to deliver
      the payment (DAGM stock) in accordance to Section 3.1 above, OCEAN can suspend
      Services without liability.

    

    7.2    
      OCEAN
      hereby irrevocably assigns to NEWCO all its right, title, and interest in and
      to
      the Materials created by OCEAN, its employees and agents as part of the
      Services. OCEAN agrees to execute any documents necessary to perfect the
      transfer of such title. NEWCO’s rights in the Materials shall include the
      worldwide rights and copyrights thereto and all the related rights regardless
      of
      whether they may be “works made for hire” under the United States Copyright
      Revision Act of 1976, as amended. The Materials shall be considered specially
      ordered for NEWCO as a “work for hire”, or, if for any reason held not to be a
      work made for hire, OCEAN’s execution of this Agreement shall act as an
      assignment of copyright.

    

    7.3    
      OCEAN
      shall be responsible for obtaining an assignment from its third party providers
      engaged by OCEAN to perform Services under this Agreement to ensure NEWCO’s
      ownership of third party Materials in accordance with the definition in
      paragraph 8.1 herein. OCEAN shall secure the appropriate releases or assignments
      for all third party Materials OCEAN contained in the Materials, at no additional
      charge to DAGM. 

     

    7.4    
      DAGM
      and
      NEWCO understand and agree that, in the course of developing the Materials,
      OCEAN may use software that is distributed as free software, open source
      software (e.g. Linux, GPL, etc.), or software that requires as a condition
      of
      use that OCEAN make the source code of any derivative works available for
      redistribution at no charge (“Publicly Available Software”). DAGM and NEWCO
      agree that use of such Publicly Available Software shall not violate any terms
      of this Agreement.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    8.    
      WARRANTIES
      AND REPRESENTATIONS

    

    8.1    
      DAGM
      and
      OCEAN each warrant and represent to each other that each has the authority
      to
      enter into this Agreement and to perform all obligations hereunder and that
      the
      person whose signature appears below is duly authorized to enter into this
      Agreement on behalf of the party for whom such person is signing.

    

    8.2    
      EXCEPT
      AND TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 8, THERE ARE
      NO
      OTHER WARRANTIES OF ANY KIND, WHETHER EXPRESSED OR IMPLIED, INCLUDING, BUT
      NOT
      LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
      FITNESS
      FOR A PARTICULAR PURPOSE
      TITLE,
      ACCURACY, INTEGRATION OR COMPATIBILITY.

     

    8.3    
      OCEAN
      warrants to NEWCO that the Services and Materials described in Statement of
      Work
      shall conform to the descriptions set forth therein. OCEAN further represents
      that it will perform the Services in a prompt, professional, and diligent
      manner, and will use commercially reasonable efforts to complete the Services
      in
      accordance with the schedule mutually agreed between the parties..
      

    

    8.4    
      OCEAN
      represents and warrants to NEWCO that for a period of one (1) year after
      delivery of any software created by OCEAN for NEWCO
      as
      Materials under this Agreement such software shall conform in all material
      respects to the specifications agreed upon by the parties for such software.
      In
      the event the
      software fails to perform as warranted, NEWCO shall notify OCEAN of
      the
      error in writing, provide a description of the error, and provide OCEAN with
      access (physical and remote) to the software and the servers on which it
      resides. Subject to the exceptions in Paragraph 8.5 OCEAN shall,
      at its
      own cost and expense, correct all errors
      to
      NEWCO’S
      reasonable satisfaction. An error shall be deemed corrected upon the earlier
      to
      occur of (a) mutual agreement of the parties or (b) change to the software
      which
      brings it into conformance with the specifications. If, during the course of
      evaluating the error, OCEAN determines that the error is due to any act or
      failure to act of NEWCO, beyond the intended use of the Website, or any cause
      listed in Paragraph 8.5, OCEAN will use reasonable efforts to correct the error;
      provided that DAGM shall pay OCEAN for such services at the rate specified
      in
      Paragraph 2.3. 

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    8.5    
      OCEAN
      shall have no obligation under Paragraphs 5.1 or 8.4 to the extent any claim
      for
      repair, breach of warranty, or infringement is due to (a) any use of the
      Materials in an environment or in conjunction with any product, hardware,
      software or service which does not meet the minimum requirements established
      by
      OCEAN in its written specification documentation; (b) any combination of the
      Materials with hardware or software provided by any person other than OCEAN
      where such infringement or breach would not have occurred but for such
      combination; (c) any software modification to the Materials (but not content
      changes) by NEWCO or by a third party; or (d) any claim that the Materials
      as
      used by NEWCO infringe a business method or process patent of any third party
      

    

    8.6  OCEAN
      warrants to NEWCO that,
      to the
      best of its knowledge, neither the deliverables nor the
      component applications, processes, and designs employed herein
      infringe upon or misappropriate or otherwise violate any patent, copyright,
      trade secret, or any other third-party proprietary right. Notwithstanding the
      preceding, OCEAN makes no warranty of any kind with respect to the business
      process or method to be employed by NEWCO or DAGM in connection with the NEWCO’s
      referral web service or its use of the web site developed by OCEAN under this
      Agreement.

    

    8.7    
      In
      the
      event
      OCEAN
      breaches the warranty in Paragraph 8.6 and NEWCO is enjoined from using any
      Materials
      created by OCEAN for NEWCO
      hereunder, or any portion thereof, by a court of competent jurisdiction due
      to
      OCEAN’s alleged infringement, OCEAN
      must at its own expense, use reasonable efforts to: (a) procure for NEWCO the
      right to continue using the Materials subject to the claim; or (b) replace
      or
      modify the Materials subject to the claim with a functional, non-infringing
      equivalent. If OCEAN is unable to either procure for NEWCO the right to continue
      to use the subject Materials or replace or modify them in 30 days thereof,
      NEWCO
      may
      take any and all reasonable steps necessary to obtain a license or other right
      to use the software or any portion thereof and NEWCO may recover from OCEAN
      the
      reasonable actual out-of-pocket license fee paid by NEWCO to obtain such a
      license. 

    

    8.8    
      OCEAN
      represents and warrants to NEWCO that it will not, by virtue of entering into
      and performing this Agreement and the transactions contemplated hereunder,
      be in
      violation (with or without the passage of time or giving of notice or both)
      of
      any term of its charter or bylaws or any term or provision of any material
      mortgage, indenture, contract, agreement, instrument, law, regulation, rule,
      judgment, order or decree to which it is a party or by which it or its assets
      are bound and that there is no outstanding contract, commitment or agreement
      to
      which OCEAN is a party or legal impediment of any kind known to OCEAN which
      conflicts with this Agreement or might limit, restrict or impair the rights
      granted to NEWCO hereunder.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    8.9    
      OCEAN
      represents and warrants to NEWCO and DAGM that OCEAN is responsible for the
      payment of compensation to its personnel, including all personnel assigned
      to
      the performance of OCEAN’s undertakings herein, federal and state income tax
      withholding, social security taxes and unemployment insurance applicable to
      such
      personnel as employees of OCEAN. OCEAN further represents and warrants to NEWCO
      and DAGM that OCEAN is responsible for all employee benefits, if any, to which
      such personnel may be entitled. OCEAN agrees to defend, indemnify and hold
      harmless DAGM, its officers, directors, employees, agents, representatives
      and
      the administrators of DAGM’ benefit plans, from and against any claims,
      liabilities or expenses relating to such compensation, tax or benefit
      matters.

    

    8.10    
      OCEAN
      represents and warrants to NEWCO that notwithstanding any other workers’
      compensation or insurance policies maintained by DAGM, OCEAN is responsible
      for
      the procurement and maintenance of workers’ compensation coverage sufficient to
      meet the statutory requirements for OCEAN’s personnel who are engaged in the
      performance of OCEAN’s undertakings herein.

     

    9.    
      DELIVERY
      SCHEDULE

    

    9.1    
      OCEAN
      acknowledges that time is of the essence with regard to delivery of the
      Materials. OCEAN agrees to undertake reasonable commercial efforts to deliver
      the Materials according the following timeline:

    

    9.2    
      A
      beta
      delivery of
      the
      software described in the Statement
      of Work with 80% of the functionality described in the specifications complete
      -
      delivery no later than 4 months following the date of this
      Agreement. 

    

    9.3    
      A
      production delivery of the software described in the Statement of Work including
      full
      commercial functionality for end-users to interact with the service as described
      in the specifications - delivery no later than 6 months following the date
      of
      this Agreement.

    

    9.4    
      In
      the
      event OCEAN is delayed in the delivery of any Materials or Services under this
      Agreement as the result of any act or failure to act by DAGM or NEWCO, the
      time
      for Ocean’s performance shall be extended accordingly. 

    

    

    10.    
      MARKETING
      AND CUSTOMER SERVICE

    

    10.1    
      Upon
      production release of the web site,
      DAGM
      will loan NEWCO $500,000
      to be used for marketing, to be spent in NEWCO’s
      sole discretion (“Marketing Expenses”). DAGM
      will
      have the right to draw back its out of pocket Marketing Expenses prior to any
      shareholders dividend distribution. 

    

    10.2    
      Following
      launch
      of
      the fully commercial and functional
      NEWCO’s
      web
      site, DAGM will
      at its
      sole cost and expense provide sales solicitation support and customer service
      support to NEWCO including assisting in the referral service itself until the
      system is fully automated,
      or
      NEWCO is profitable according to GAAP standards, whichever is
      earlier.
      

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    11.    
      INSURANCE

    

    In
      addition to maintaining the statutory Employers Liability and Workers’
      Compensation Insurance, OCEAN shall carry commercial general liability insurance
      in the minimum amount of One Million Dollars ($1,000,000) during the term of
      this Agreement and shall forward an insurance certificate to NEWCO
      evidencing said insurance coverage prior to performing the Services for
NEWCO.
      OCEAN shall cause its insurance carrier to provide NEWCO
      with at
      least thirty (30) days prior notice of cancellation of such insurance. The
      amount of insurance coverage shall not limit in any way OCEAN’s obligations to
      indemnify DAGM pursuant to Section 5.

    

    12.    
      MISCELLANEOUS

    

    12.1    
      Material
      Change.    
      OCEAN
      will notify DAGM promptly of any material change in its corporate structure,
      financial capabilities or any other change that might compromise its ability
      to
      perform its obligations hereunder.

    

    12.2    
      Assignment.    
      This Agreement and the rights and duties hereunder shall not be assignable
      by
      OCEAN or DAGM except upon written consent of the other; provided,
      however,
      that either
      party may assign this Agreement and its rights and duties hereunder without
      the
      consent of the
      other
      to any affiliate
      or to
      any purchaser of all or substantially all of its assets.
      For purposes of this Paragraph,
      an
“affiliate” of is
      any
      company that controls, is controlled by, or is under common control with
      DAGM
      or
      OCEAN, as applicable.
      “Control” is the ability to direct the affairs of a company through the
      ownership of stock, contract or other means.

    

    12.3    
      Notice.    
      Whenever a party hereto desires or is required to give any notice, demand or
      request with respect to this Agreement, such communication shall be effective
      only if it is in writing and delivered by personal service, facsimile
      transmission (with satisfactory evidence of receipt), courier service (with
      satisfactory evidence of delivery) or mailed, certified mail, postage prepaid,
      addressed as follows:

    

    If
      to
      DAGM, to:  
DAG
      Media
      Inc.

    125-10
      Queens Blvd., Suite 14

    Kew
      Gardens, New York11415

    Telephone:
      (718) 520-1000

    Fax:
      (718) 793-2522

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    If
      to
      OCEAN, to:

    OCEAN-7
      Development Inc.

    520
      East
      11th Street

    New
      York,
      NY 10009

    

    Telephone:
      (212) 533-8460

    Fax:
      (212) 5337883

    

    

    Such
      communications shall be effective when they are received by the addressee
      thereof, but if sent by certified mail in the manner set forth above, they
      shall
      be effective two (2) business days after being deposited in the mail or if
      sent
      by courier or facsimile transmission they shall be effective on the day after
      delivery. A party may change its address for such communications by giving
      notice thereof to the other party in conformity with this Paragraph
      14.3.

    

    12.4    
      Entire
      Agreement.
      This
      Agreement and all of its Exhibits
      constitute the entire agreement among DAGM and OCEAN with respect to the subject
      matter of this Agreement, and supersede all prior agreements and understandings
      with respect to the matters covered by this Agreement.

    

    12.5    
      Governing
      Law; Submission to Jurisdiction.
      This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of New York, without giving effect to the provisions thereof
      relating to conflicts of laws, and OCEAN hereby submits to the exclusive
      jurisdiction of any state or federal court in New York, New York for the
      adjudication of matters related to this Agreement.

    

    12.6    
      Remedies.
      The
      rights and remedies of OCEAN and DAGM set forth herein with respect to failure
      of the other to comply with the terms of this Agreement (including, without
      limitation, rights of full termination of this Agreement) are not exclusive,
      the
      exercise thereof shall not constitute an election of remedies and the aggrieved
      party shall in all events be entitled to seek whatever additional remedies
      may
      be available in law or in equity.

    

    12.7    
      Headings.
      The
      headings of this Agreement are for purposes of reference only and shall not
      limit or otherwise affect the meaning hereof.

    

    12.8    
      No
      Waiver; Modifications.
      No
      provision of this Agreement may be waived, amended or otherwise modified, except
      by a written agreement signed by each party hereto. The waiver by a party of
      the
      breach of any provision hereof shall not be construed as a waiver of subsequent
      breaches or as a continuing waiver of such breach.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    12.9    
      Severability.
      The
      provisions of this Agreement shall be deemed severable and the invalidity or
      unenforceability of any provision shall not affect the validity and
      enforceability of the other provisions hereof. If any provision of this
      Agreement, or the application thereof to any person or entity or any
      circumstance, is invalid or unenforceable, (a) a suitable and equitable
      provision shall be substituted therefor in order to carry out, so far as may
      be
      valid and enforceable, the intent and purpose of such invalid and unenforceable
      provision and (b) the remainder of this Agreement and the application
      of
      such provision to other persons, entities or circumstances shall not be affected
      by such invalidity or enforceability, nor shall such invalidity or
      unenforceability affect the validity or enforceability of such provision, or
      the
      application thereof, in any other jurisdiction, unless invalidity of a certain
      provision affects the entire basis of the bargain for a party.

    

    12.10    
      Binding
      Agreement.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto,
      their successors and permitted assigns.

    

    12.11    
      Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but all of which taken together shall constitute one and the same
      instrument.

    

    12.12    
      Incorporation
      of Exhibits.
      All
      Exhibits attached hereto are incorporated into and made a part of this
      Agreement.

    

    12.13    
      Notice
      of Actions.
      Each
      party hereto shall promptly notify the other parties in writing of any claims,
      demands or actions having any bearing on this Agreement.

    

    12.14    
      Compliance
      with Laws.
      Each
      party agrees to perform its obligations hereunder in accordance with all
      applicable laws, rules and regulations now or hereafter in effect.

    

    12.15    
      Publicity.
      OCEAN
      shall not use the name of DAGM or the applicable Web Site in any publicity
      releases, advertising or other promotional activities without the prior written
      consent of DAGM.

    

    12.16    
      Authority.
      Each
      party represents that it has full power and authority to enter into and perform
      this Agreement, and the person signing this Agreement on behalf of it has been
      properly authorized and empowered to enter into this Agreement. Each party
      further acknowledges that it has read this Agreement, understands it and agrees
      to be bound by it.

    

    12.17    
      Force
      Majeure.
      For the
      period and to the extent that a party hereto is disabled from fulfilling in
      whole or in part its obligations hereunder where such disability arises by
      reason of an act of God, war conditions, revolt, revolution, sabotage,
      government, state or municipal regulations or actions, embargo, fire, strike,
      or
      other labor trouble, or any cause beyond a party’s control, such party shall
      provide prompt notice thereof to the other party and be released from its
      obligations hereunder until the cessation of such disability.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Agreement to be duly executed as of the date
      first set forth above by their duly authorized representatives.

     

     

    
      	
               DAG MEDIA, INC.

               

            	 	 OCEAN-7 DEVELOPMENT,
              INC.
	 By: /s/ Assaf Ran	 	 By:
              /s/ Mark Alhadeff
	 Name: Assaf Ran	 	 Name:
              Mark Alhadeff
	 Title: CEO	 	 Title: President
	 	 	 
	
               MARK ALHADEFF

               

            	 	 SHERRY
              DAVIS
	 /s/ Mark Alhadeff	 	/s/ Sherry Davis
	
               

               

            	 	 
	
               In Witness Thereof:

               

               

            	 	 
	 By: /s/ Mark Hauser	 	 
	 Name: Mark Hauser	 	 
	 Date: 12-05-2005	 	 

    

    
      
 

      
        
          
          

        

        
          14AMENDMENT
        NO. 3 TO SECURITIES PURCHASE AGREEMENT
        AND
        REGISTRATION RIGHTS AGREEMENT

       

      This
        AMENDMENT NO. 3 TO SECURITIES PURCHASE AGREEMENT AND REGISTRATION RIGHTS
        AGREEMENT (this “Amendment”) is made and entered into as of December 4, 2005, by
        and among Generex Biotechnology Corporation, a Delaware corporation (“Generex”),
        and the stockholders identified on the signature pages hereto (each, a
“Purchaser” and, collectively, the “Purchasers”).

      RECITALS

       

      	1.  	
              Generex
                and the Purchasers are parties to a Securities Purchase Agreement,
                dated
                as of November 10, 2004 (as amended by Amendment No. 1 (as hereinafter
                defined) and Amendment No. 2 (as hereinafter defined), the “Purchase
                Agreement”), pursuant to which Generex issued and sold to the Purchasers
                an aggregate of $4,000,000 of Debentures and certain Warrants (each
                as
                defined in the Purchase Agreement). Capitalized terms used and not
                defined
                in this Amendment but defined in the Purchase Agreement shall have
                the
                respective meanings set forth in the Purchase Agreement.
                

            

       

      	2.  	
              In
                addition to the Debentures and Warrants, under the Purchase Agreement
                Generex issued and sold to the Purchasers Additional Investment Rights,
                pursuant to which the holders thereof had the right to purchase up
                to an
                additional aggregate principal amount of Debentures equal to the
                principal
                amount of $4,000,000 of Debentures (collectively, the “AIR Debentures”),
                together with additional Warrants to purchase up to a number of shares
                of
                Generex’s Common Stock equal to 100% of the shares issuable upon
                conversion of such AIR Debentures so purchased (collectively, the
“AIR
                Warrants”).

            

       

      	3.  	
              In
                connection with the Purchase Agreement, Generex and the Purchasers
                entered
                into a Registration Rights Agreement, dated as of November 10, 2004
                (as
                amended by Amendment No. 1 (as hereinafter defined) and Amendment
                No. 2
                (as hereinafter defined), the “Registration Rights Agreement”), pursuant
                to which Generex undertook certain registration obligations to the
                Purchasers.

            

       

      	4.  	
              In
                connection with that certain Amendment No. 1 to Securities Purchase
                Agreement and Registration Rights Agreement, dated as of June 15,
                2005, by
                and among Generex and the Purchasers (“Amendment No. 1”), the Purchasers
                exercised an aggregate of $2,000,000 of Additional Investment Rights
                and
                Generex agreed to issue to the Purchasers further Additional Investment
                Rights (the “Amendment No. 1 AIR”) for an aggregate principal amount of
                $2,000,000 AIR Debentures, together with additional Warrants to purchase
                up to a number of shares of Generex’s Common Stock equal to 100% of the
                shares issuable upon conversion of such AIR Debentures so purchased.
                

            

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      	5.  	
              In
                connection with that certain Amendment No. 2 to Securities Purchase
                Agreement and Registration Rights Agreement, dated as of September
                8,
                2005, by and among Generex and the Purchasers (“Amendment No. 2”), the
                Purchasers exercised an aggregate of $2,000,000 of Additional Investment
                Rights and Generex agreed to issue to the Purchasers further Additional
                Investment Rights (the “Amendment No. 2 AIR” and together with the
                Amendment No. 1 AIR and and Amendment No. 2 AIR, the “Additional
                Investment Rights”) for an aggregate principal amount of $2,000,000 AIR
                Debentures, together with additional Warrants to purchase up to a
                number
                of shares of Generex’s Common Stock equal to 100% of the shares issuable
                upon conversion of such AIR Debentures so purchased.
                

            

       

      	6.  	
              Generex
                and the Purchasers now wish to further modify certain of the terms
                of the
                Purchase Agreement, Registration Rights Agreement, Additional Investment
                Rights and AIR Debentures.

            

       

      NOW,
        THEREFORE, in consideration of the foregoing Recitals and other good and
        valuable consideration, the receipt and sufficiency of which are hereby
        acknowledged, Generex and each Purchaser, severally and not jointly, agree
        as
        follows:

       

      1. Additional
        Investment Rights.
        Subject
        to the terms hereof, each Purchaser agrees to exercise 100% of its Additional
        Investment Rights (pertaining to an aggregate of $3,500,000 of AIR Debentures
        and accompanying AIR Warrants) on the Business Day following the date of
        this
        Amendment. 

       

      	1.1.  	
              In
                consideration for such exercise, Generex agrees that the “Initial Exercise
                Date” under each of the Additional Investment Rights shall be amended
                to
                be December 4, 2005.

            

       

      	1.2.  	
              The
                AIR Debentures issuable upon the Additional Investment Right exercise
                contemplated in this Section 1 (the “Amendment No. 3 AIR Debentures”)
                shall be in a principal amount equal to the amount set forth on such
                Purchaser’s signature page to this Amendment and shall have a Conversion
                Price equal to $0.82 (subject to adjustment as set forth therein).
                

            

       

      	1.3.  	
              The
                AIR Warrants issuable upon the Additional Investment Right exercise
                contemplated in this Section 1 (the “Amendment No. 3 AIR Warrants”) shall
                entitle the holder thereof to purchase a number of shares of Common
                Stock
                equal to 100% of the shares of Common Stock issuable upon the conversion
                in full (without regard to any restrictions on conversion therein
                contained) of the Amendment No. 3 AIR Debentures issuable upon the
                exercise contemplated by this Section 1 at a $0.82 Conversion Price
                (subject to adjustment as set forth therein).

            

       

      	1.4.  	
              In
                further consideration for the exercise of the Additional Investment
                Right
                herein contemplated, Generex will issue and deliver to each Purchaser
                a
                further Additional Investment Right in the form of Exhibit A (which
                is
                substantially the same in form as the existing Additional Investment
                Rights) (each an “Amendment No. 3 Additional AIR” and collectively, the
                “Amendment No. 3 Additional AIRs”), pursuant to which each Purchaser will
                have the right to acquire detachable units consisting of (a) additional
                AIR Debentures in principal amount equal to the principal amount
                of AIR
                Debentures issuable upon the portion of the Additional Investment
                Right to
                be exercised by each such Purchaser under Section 1 (such additional
                AIR
                Debentures, the “Amendment No. 3 Additional AIR Debentures”) and (b)
                additional AIR Warrants entitling the holder thereof to purchase
                a number
                of shares of Common Stock equal to 100% of the shares of Common Stock
                issuable upon an assumed conversion in full (without regard to any
                restrictions on conversion therein contained) at a $1.25 Conversion
                Price
                (subject to adjustment as set forth therein) of the Amendment No.
                3 AIR
                Debentures contemplated in clause (a) above, at an exercise price
                equal to
                the “AIR Warrant Exercise Price” (as such term is defined in the
                Additional Investment Rights) (collectively, the “Amendment No. 3
                Additional AIR Warrants”). The “conversion price” of the Amendment No. 3
                Additional AIR Debentures will equal $1.25, subject to adjustment
                in
                accordance with the terms thereof.

            

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      	2.  	
              [Reserved]

            

       

      	3.  	
              Registration
                Rights.
                To ensure that the registration rights of the Purchasers are not
                adversely
                affected as a result of the transactions contemplated by this Amendment
                and to provide registration rights consistent with the existing
                registration rights in respect of the securities issuable upon exercise
                of
                the Amendment No. 3 Additional AIR, Amendment No. 3 AIR Debentures
                and
                Amendment No. 3 AIR Warrants, the parties agree as follows with respect
                to
                registration rights:

            

       

      	3.1.  	
              The
                definition of “Additional Investment Right” under the Purchase Agreement
                is hereby amended to include the Amendment No. 3 Additional
                AIRs.

            

       

      	3.2.  	
              The
                definition of “Additional Investment Right Securities” under the Purchase
                Agreement is hereby amended to include the Amendment No. 3 Additional
                AIR
                Debentures and Amendment No. 3 Additional AIR Warrants and the Amendment
                No. 3 Underlying Shares (as hereinafter defined) issuable in connection
                therewith.

            

       

      	3.3.  	
              The
                parties hereby confirm that the definition of “Registrable Securities”
                under the Registration Rights Agreement includes (a) the additional
                shares
                of Common Stock as may be issuable upon a conversion of the Amendment
                No.
                3 AIR Debentures, (b) the additional shares of Common Stock as may
                be
                issuable upon an exercise of the Amendment No. 3 AIR Warrants, and
                (c) the
                Additional Investment Right Securities contemplated in Section
                3.2.

            

       

      	3.4.  	
              Generex
                will prepare and file a registration statement to cover all shares
                of
                Common Stock issuable under the Additional Investment Rights, including
                shares of Common Stock issuable upon conversion of the Amendment
                No. 3
                Additional AIR Debentures and the Common Stock issuable upon the
                exercise
                of the Amendment No. 3 Additional AIR Warrants.

            

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      	3.5.  	
              The
                registration statement contemplated in Section 3.4 will constitute
                a
                “Registration Statement” under the Registration Rights Agreement, afforded
                all of the rights and obligations of and upon each of Generex and
                the
                “Purchasers” thereunder, including Sections 2(b) and 3(c) thereof. With
                respect to the Registration Statement contemplated by Section 3.4
                the
                Filing Date shall be the 45th
                calendar day following the date hereof. The calculation of the
                Effectiveness Date with respect to the Registration Statement contemplated
                by Section 3.4 shall be the same as for the initial Registration
                Statement
                under the Registration Rights Agreement. In addition, such Registration
                Statement may include some or all of the shares set forth in Schedule
                3.5
                hereto, in addition to the shares referenced in Section 3.4 above.
                

            

       

       

      	4.  	
              Representation
                and Warranties of Generex.
                Generex hereby represents and warrants to each Purchaser as follows,
                except as may be set forth on the Additional Disclosure Schedules
                hereto:

            

       

      (a)  Authorization;
        Enforcement.
        Generex
        has the requisite corporate power and authority to enter into and to consummate
        the transactions contemplated by this Amendment and each other Transaction
        Document (as hereinafter defined) and to carry out its obligations under
        each.
        The execution and delivery of each Transaction Document by Generex and the
        consummation by it of the transactions contemplated thereby have been duly
        authorized by all necessary action on the part of Generex and no further
        action
        is required by Generex in connection therewith other than the Required Approvals
        (as hereinafter defined). Each of this Amendment, the Amendment No. 3 Additional
        AIRs, the Amendment No. 3 AIR Debentures, the Amendment No. 3 AIR Warrants,
        the
        Amendment No. 3 Additional AIR Debentures and Amendment No. 3 Additional
        AIR
        Warrants (collectively, the “Transaction Documents”) has been (or upon delivery
        will have been) duly executed by Generex and, when delivered in accordance
        with
        the terms hereof, will constitute the valid and binding obligation of Generex,
        enforceable against Generex in accordance with their respective terms except
        (i)
        as limited by applicable bankruptcy, insolvency, reorganization, moratorium
        and
        other laws of general application affecting enforcement of creditors’ rights
        generally and (ii) as limited by laws relating to the availability of specific
        performance, injunctive relief or other equitable remedies.

       

      (b)  No
        Conflicts.
        The
        execution, delivery and performance of the Transaction Documents by Generex
        and
        the consummation by Generex of the other transactions contemplated thereby
        do
        not and will not: (i) conflict with or violate any provision of Generex’s or any
        Subsidiary’s certificate or articles of incorporation, bylaws or other
        organizational or charter documents, or (ii) conflict with, or constitute
        a
        default (or an event that with notice or lapse of time or both would become
        a
        default) under, result in the creation of any Lien upon any of the properties
        or
        assets of Generex or any Subsidiary, or give to others any rights of
        termination, amendment, acceleration or cancellation (with or without notice,
        lapse of time or both) of, any agreement, credit facility, debt or other
        instrument (evidencing a Company or Subsidiary debt or otherwise) or other
        understanding to which Generex or any Subsidiary is a party or by which any
        property or asset of Generex or any Subsidiary is bound or affected, or (iii)
        subject to the Required Approvals, conflict with or result in a violation
        of any
        law, rule, regulation, order, judgment, injunction, decree or other restriction
        of any court or governmental authority to which Generex or a Subsidiary is
        subject (including federal and state securities laws and regulations), or
        by
        which any property or asset of Generex or a Subsidiary is bound or affected,
        or
        (iv) conflict with or result in a violation of the rules or regulations of
        the
        Nasdaq Stock Market.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      (c)  Filings,
        Consents and Approvals.
        Generex
        is not required to obtain any consent, waiver, authorization or order of,
        give
        any notice to, or make any filing or registration with, any court or other
        federal, state, local or other governmental authority or other Person in
        connection with its execution, delivery and performance of the Transaction
        Documents, other than (i) filings required pursuant to Section 7.4, (ii)
        the
        filing with the Commission of the Registration Statement contemplated in
        Section
        3.4, (iii) the notice and/or application(s) to the Nasdaq Stock Market of
        the
        issuance and sale of the Amendment No. 3 Additional AIR and the listing of
        the
        shares of Common Stock ultimately issuable in respect thereof for trading
        thereon in the time and manner required thereby, and (iv) the filing of Form
        D
        with the Commission and such filings as are required to be made under applicable
        state securities laws (collectively, the “Required Approvals”). 

       

      (d)  Stockholder
        Approval.
        No
        approval of the stockholders of Generex is required in order for Generex
        to
        enter into this Amendment and to issue and deliver to the Purchasers the
        Securities (as hereinafter defined). At a meeting of the stockholders of
        Generex
        duly convened and held April 5, 2005, the stockholders of Generex approved
        the
        Purchase Agreement and the transactions entered into in connection therewith,
        and approved the issuance and potential issuance by Generex of 20% or more
        of
        its then outstanding Common Stock in connection therewith at a price lower
        than
        the market price of the Common Stock at such time (the “Stockholder Approval”).
        The Stockholder Approval satisfied the requirements of Nasdaq Rule
        4350(i)(1)(D)(ii). The Stockholder Approval extends to this Amendment and
        the
        transactions contemplated by the Transaction Documents so that additional
        stockholder approval is not required in order for Generex to enter into and
        consummate the transactions contemplated by the Transaction Documents, including
        without limitation, modifying the conversion price of the AIR Debentures,
        issuing the additional Amendment No. 3 Underlying Shares as a result thereof
        and
        granting and issuing the Amendment No. 3 Additional AIRs and the other
        Securities (as hereinafter defined) thereunder.

       

      (e)  Issuance
        of the Securities.
        The
        Amendment No. 3 AIR Debentures, Amendment No. 3 AIR Warrants, Amendment No.
        3
        Additional AIRs, Amendment No. 3 Additional AIR Debentures, Amendment No.
        3
        Additional AIR Warrants, and the shares of Common Stock issuable upon the
        exercise and conversion of each the foregoing (collectively, the “Securities”)
        are duly authorized and, when issued and paid for in accordance with their
        respective terms, will be duly and validly issued, fully paid and nonassessable,
        free and clear of all Liens other than restrictions on transfer under applicable
        securities laws. Generex has reserved from its duly authorized capital stock
        a
        number of shares of Common Stock for issuance upon exercise and conversion
        of
        the Amendment No. 3 AIR Debentures, Amendment No. 3 AIR Warrants, Amendment
        No.
        3 Additional AIR Debentures and Amendment No. 3 Additional AIR Warrants,
        and as
        payment of interest in shares of Common Stock under the Amendment No. 3 AIR
        Debentures and Amendment No. 3 Additional AIR Debentures (collectively, such
        shares of Common Stock are the “Amendment No. 3 Underlying Shares”) at least
        equal to the Required Minimum on the date hereof. “Required Minimum” means, as
        of any date, the maximum aggregate number of shares of Common Stock then
        issued
        or potentially issuable in the future pursuant to the Transaction Documents,
        including any Amendment No. 3 Underlying Shares issuable upon exercise or
        conversion in full of all Amendment No. 3 AIR Warrants, Amendment No. 3
        Additional AIR Warrants, Amendment No. 3 AIR Debentures and Amendment No.
        3
        Additional AIR Debentures (including Amendment No. 3 Underlying Shares issuable
        as payment of interest), ignoring any conversion or exercise limits set forth
        therein, and assuming that the applicable conversion and exercise prices
        are at
        all times on and after the date of determination 75% of the then conversion
        or
        exercise price on the Trading Day immediately prior to the date of
        determination.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      (f)  Valid
        Private Placement.
        Assuming the accuracy of the Purchasers’ representations and warranties set
        forth in Section 4.2, no registration under the Securities Act is required
        for
        the offer and sale of the Securities by Generex to the Purchasers as
        contemplated by the Transaction Documents. 

       

      (g)  Acknowledgment
        Regarding Purchaser’ Purchase of Securities.
        Generex
        acknowledges and agrees that each Purchaser is acting solely in the capacity
        of
        an arm’s length purchaser with respect to the Transaction Documents. Generex
        further acknowledges that no Purchaser is acting as a financial advisor or
        fiduciary of Generex (or in any similar capacity) with respect to any
        Transaction Document or the transactions contemplated thereby, and any advice
        given by any Purchaser or any of their respective representatives or agents
        in
        connection with the Transaction Documents and the transactions contemplated
        thereby is merely incidental to the Purchasers’ respective purchase of the
        Securities. Generex further represents that Generex’s decision to enter into the
        Transaction Documents has been based solely on the independent evaluation
        of the
        transactions contemplated thereby by Generex and its
        representatives.

       

      (h)  Compliance
        with Existing Agreements.
        Generex
        is in compliance with the respective terms and conditions of the Purchase
        Agreement and “Transaction Documents” (as therein defined) entered into in
        connection therewith (including those pertaining to Amendment No. 1). No
“Event
        of Default” (as defined under the Debentures and the AIR Debentures) has
        occurred, and no event has occurred that with notice or lapse of time or
        both
        would become an Event of Default under the Debentures or AIR
        Debentures.

       

      (i)  Certain
        Fees.
        Except
        for fees payable to the Shemano Group, described in the Disclosure Schedules
        to
        the Purchase Agreement, no brokerage or finder’s fees or commissions are or will
        be payable by Generex to any broker, financial advisor or consultant, finder,
        placement agent, investment banker, bank or other Person with respect to
        the
        transactions contemplated by this Amendment. The Purchasers shall have no
        obligation with respect to any fees or with respect to any claims made by
        or on
        behalf of other Persons for fees of a type contemplated in this Section that
        may
        be due in connection with the transactions contemplated by this
        Amendment.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      (j)  
        Listing and Maintenance Requirements.
        The
        Common Stock is registered pursuant to Section 12(g) of the Exchange Act,
        and
        Generex has taken no action designed to, or which to its knowledge is likely
        to
        have the effect of, terminating the registration of the Common Stock under
        the
        Exchange Act, nor has Generex received any notification that the Commission
        is
        contemplating terminating such registration. Except as disclosed in Generex’s
        publicly available periodic reports and Form 8-K’s under the Exchange Act,
        Generex has not, in the 12 months preceding the date hereof, received notice
        from any Trading Market on which the Common Stock is or has been listed or
        quoted to the effect that Generex is not in compliance with the listing or
        maintenance requirements of such Trading Market. Other than as to minimum
        stock
        price requirements, Generex is, and has no reason to believe that it will
        not in
        the foreseeable future continue to be, in compliance with all such listing
        and
        maintenance requirements.

       

      (k)  Bring
        Down of Certain Representations and Warranties.
        Generex
        hereby restates, as if first made as of and on the date of this Amendment,
        the
        representations and warranties set forth in the Purchase Agreement (as modified
        by the Disclosure Schedules to the extent they apply thereto) in Sections
        3.1(a), (b), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r),
        (u),
        (v), (x), (aa), (cc), (ee), and (hh); provided that (1) the term “Transaction
        Documents” therein shall refer not only to such term as defined in the Purchase
        Agreement but also to the Transaction Documents defined in this Amendment,
        and
        (2) the term the “Company” defined in such Purchase Agreement shall also refer
        to “Generex” as used herein.

       

      (l)  Disclosure.
        Generex
        confirms that neither it nor any other Person acting on its behalf has provided
        any of the Purchasers or their agents or counsel with any information that
        constitutes or might constitute material, nonpublic information (except to
        the
        extent that the existence of this Amendment may be material). Generex
        understands and confirms that the Purchasers will rely on the foregoing
        representations in effecting transactions in securities of Generex. All
        disclosure provided to the Purchasers regarding Generex, its business and
        the
        transactions contemplated hereby, including any disclosure schedules to this
        Amendment, furnished by or on behalf of Generex with respect to the
        representations and warranties made herein are true and correct in all material
        respects with respect to such representations and warranties and do not contain
        any untrue statement of a material fact or omit to state any material fact
        necessary in order to make the statements made therein, in light of the
        circumstances under which they were made, not misleading. Generex acknowledges
        and agrees that each Purchaser does not make or has not made any representations
        or warranties with respect to the transactions contemplated hereby other
        than
        those specifically set forth in this Section 4.2. 

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      4.2.  Representations
        and Warranties of the Purchasers.
        Each
        Purchaser hereby, for itself and for no other Purchaser, represents and warrants
        as of the date hereof to Generex as follows:

       

      (a)  Organization;
        Authority.
        Such
        Purchaser is an entity duly organized, validly existing and in good standing
        under the laws of the jurisdiction of its organization with the requisite
        right,
        corporate or partnership power and authority to enter into and to consummate
        the
        transactions contemplated by this Amendment and to carry out its obligations
        hereunder. The execution, delivery and performance by such Purchaser of the
        transactions contemplated by this Amendment have been duly authorized by
        all
        necessary corporate or similar action on the part of such Purchaser. This
        Amendment has been duly executed by such Purchaser, and when delivered by
        such
        Purchaser in accordance with the terms hereof, will constitute the valid
        and
        legally binding obligation of such Purchaser, enforceable against it in
        accordance with its terms, except (i) as limited by general equitable principles
        and applicable bankruptcy, insolvency, reorganization, moratorium and other
        laws
        of general application affecting enforcement of creditors’ rights generally,
        (ii) as limited by laws relating to the availability of specific performance,
        injunctive relief or other equitable remedies and (iii) insofar as
        indemnification and contribution provisions may be limited by applicable
        law.

       

      (b)  Investment
        Intent.
        Such
        Purchaser understands that the Securities are “restricted securities” and have
        not been registered under the Securities Act or any applicable state securities
        law and is acquiring the Securities as principal for its own account and
        not
        with a view to or for distributing or reselling such Securities or any part
        thereof (this representation and warranty not limiting such Purchaser’s right to
        sell the Securities pursuant to the Registration Statement or otherwise in
        compliance with applicable federal and state securities laws). Nothing contained
        herein shall be deemed a representation or warranty by such Purchaser to
        hold
        Securities for any period of time. Such Purchaser is acquiring the Securities
        hereunder in the ordinary course of its business. Such Purchaser does not
        have
        any agreement or understanding, directly or indirectly, with any Person to
        distribute any of the Securities.

       

      (c)  Purchaser
        Status.
        Such
        Purchaser is either (i) an “accredited investor” as defined in Rule 501(a) under
        the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
        144A(a) under the Securities Act. Such Purchaser is not registered as a
        broker-dealer under Section 15 of the Exchange Act.

       

      (d)  Experience
        of Such Purchaser.
        Such
        Purchaser, either alone or together with its representatives, has such
        knowledge, sophistication and experience in business and financial matters
        so as
        to be capable of evaluating the merits and risks of the prospective investment
        in the Securities, and has so evaluated the merits and risks of such investment.
        Such Purchaser is able to bear the economic risk of an investment in the
        Securities and, at the present time, is able to afford a complete loss of
        such
        investment.

       

      (e)  General
        Solicitation.
        Such
        Purchaser is not purchasing the Securities as a result of any advertisement,
        article, notice or other communication regarding the Securities published
        in any
        newspaper, magazine or similar media or broadcast over television or radio
        or
        presented at any seminar or any other general solicitation or general
        advertisement.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      (f)  Access
        to Information.
        Such
        Purchaser acknowledges that it has reviewed such materials it deems necessary
        to
        make an informed investment decision and has been afforded (i) the opportunity
        to ask such questions as it has deemed necessary of, and to receive answers
        from, representatives of Generex concerning the terms and conditions of the
        offering of the Securities and the merits and risks of investing therein;
        (ii)
        access to information about Generex and the Subsidiaries and their respective
        financial condition, results of operations, business, properties, management
        and
        prospects sufficient to enable it to evaluate its investment; and (iii) the
        opportunity to obtain such additional information that Generex possesses
        or can
        acquire without unreasonable effort or expense that is necessary to make
        an
        informed investment decision with respect to the investment. Neither such
        inquiries nor any other investigation conducted by or on behalf of such
        Purchaser or its representatives or counsel shall modify, amend or affect
        such
        Purchaser’s right to rely on the truth, accuracy and completeness of such
        materials it has reviewed and Generex’s representations and warranties contained
        in this Amendment.

       

      (g)  Limited
        Ownership.
        The
        purchase by such Purchaser of the Securities issuable to it upon the closing
        under this Amendment (including the Amendment No. 3 Underlying Shares then
        immediately issuable in respect of such Securities) will not result in such
        Purchaser (individually or together with any other Person with whom such
        Purchaser has identified, or will have identified, itself as part of a “group”
        in a public filing made with the Commission involving Generex’s securities)
        acquiring, or obtaining the right to acquire, in excess of 19.999% of the
        Common
        Stock or the voting power of Generex on a post transaction basis that assumes
        that the closing shall have occurred. Such Purchaser does not presently intend
        to, alone or together with others, make a public filing with the Commission
        to
        disclose that it has (or that it together with such other Persons have)
        acquired, or obtained the right to acquire, as a result of the closing (when
        added to any other securities of Generex that it or they then own or have
        the
        right to acquire), in excess of 19.999% of the Common Stock or the voting
        power
        of Generex on a post transaction basis that assumes that the closing shall
        have
        occurred.

       

      (h)  Principal
        Amount of AIR Debentures.
        The
        principal amount of AIR Debentures which such Purchaser’s Additional Investment
        Right permits it to acquire immediately prior to its execution of this Amendment
        is set forth on such Purchaser’s signature page to this Amendment.

       

      (i)  Independent
        Investment Decision.
        Such
        Purchaser has independently evaluated the merits of its decision to purchase
        Securities pursuant to this Agreement, such decision has been independently
        made
        by such Purchaser and such Purchaser confirms that it has only relied on
        the
        advice of its own business and/or legal counsel and not on the advice of
        any
        other Purchaser’s business and/or legal counsel in making such decision. Such
        Purchaser understands that its investment in the Securities involves a high
        degree of risk. Such Purchaser has sought such accounting, legal and tax
        advice
        as it has considered necessary to make an informed investment decision with
        respect to its acquisition of the securities.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      (j)  Reliance
        on Exemptions.
        Such
        Purchaser understands that the Securities are being offered and sold to it
        in
        reliance on Regulation D and that Generex is relying upon the truth and accuracy
        of, and such Purchaser’s compliance with, the representations, warranties,
        agreements, acknowledgments and understandings of such Purchaser set forth
        herein in order to determine the availability of Regulation D and the
        eligibility of such Purchaser to acquire such Securities.

       

      (k)  No
        Governmental Review.
        Such
        Purchaser understands that no United States federal or state agency or any
        other
        government or governmental agency has passed on or made any recommendation
        or
        endorsement of the Securities or the fairness or suitability of the investment
        in the Securities nor have such authorities passed upon or endorsed the merits
        of the offering of the Securities. 

       

      (l)  Residency.
        Such
        Purchaser certifies that it resides or has a bona fide place of business
        at the
        address set forth below such Purchaser’s name on its signature page to this
        Amendment. 

       

       

      	5.  	
              Continued
                Validity of Transaction Documents under Purchase Agreement.
                The parties hereto agree that the Purchase Agreement and the Transaction
                Documents entered into in connection therewith (as amended by Amendment
                No. 1), remain in full force and effect, modified to the extent and
                only
                to the extent necessary to give effect to this Amendment and the
                transactions herein contemplated. Article IV of the Purchase Agreement
                is
                hereby incorporated by reference in its entirety, except for Sections
                4.6
                and 4.15 therein, into this Amendment with the understanding that
                if any
                term is identified in each of Article IV of the Purchase Agreement
                and in
                this Amendment, the term shall have the meaning set forth in this
                Amendment and references in such Article IV to “the Company” shall mean
                Generex.

            

       

       

      	6.  	
              Closing.

            

       

      	6.1.  	
              Closing.
                On the Trading Day following the date on which the conditions set
                forth in
                Section 6.3 are satisfied, or on such other date as the parties may
                agree
                (the “Closing Date”), the closing of the transactions contemplated by this
                Amendment shall occur (the “Closing”).

            

       

      	6.2.  	
              Deliveries

            

       

      	a)  	
              On
                the Closing Date, Generex shall deliver or cause to be delivered
                to each
                Purchaser the following:

            

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      	(1)  	
              this
                Amendment, duly executed by Generex;

            

       

      	(2)  	
              an
                Amendment No. 3 AIR Debenture, registered in the name of such Purchaser
                in
                the correct principal amount;

            

       

      	(3)  	
              an
                Amendment No. 3 AIR Warrant, registered in the name of such
                Purchaser;

            

       

      	(4)  	
              an
                Amendment No. 3 Additional AIR, registered in the name of such Purchaser;
                and

            

      	 	 

      	(5)  	a legal opinion issued by Company
              counsel.

       

      	b)  	
              On
                the Closing Date, each Purchaser shall deliver or cause to be delivered
                to
                Generex the following: 

            

       

      	(1)  	
              this
                Amendment, duly executed by such Purchaser;
                and

            

       

      	(2)  	
              100%
                of the principal amount of AIR Debentures issuable upon exercise
                in full
                of such Purchaser’s Additional Investment Right by wire transfer to the
                account as specified in writing by the Company.

            

       

      	6.3.  	
              Closing
                Conditions. 

            

       

      	a)  	
              The
                obligations of Generex hereunder in connection with the Closing are
                subject to the following conditions being
                met:

            

       

      	(1)  	
              the
                accuracy in all material respects when made and on the Closing Date
                of the
                representations and warranties of the Purchasers contained
                herein;

            

       

      	(2)  	
              all
                obligations, covenants and agreements of the Purchasers required
                to be
                performed at or prior to the Closing Date shall have been performed;
                and

            

       

      	(3)  	
              the
                delivery by the Purchasers of the items set forth in Section 6.2(b)
                of
                this Amendment.

            

       

      	b)  	
              The
                respective obligations of the Purchasers hereunder in connection
                with the
                Closing are subject to the following conditions being
                met:

            

       

      	(4)  	
              the
                accuracy in all material respects on the Closing Date of the
                representations and warranties of Generex
                contained herein;

            

       

      	(5)  	
              all
                obligations, covenants and agreements of Generex required to be performed
                at or prior to the Closing Date shall have been performed;
                

            

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      	(6)  	
              the
                delivery by Generex
                of
                the items set forth in Section 6.2(a) of this Amendment;
                

            

       

      	(7)  	
              there
                shall have been no Material Adverse Effect with respect to Generex
                since the date hereof; and

            

       

      	(8)  	
              From
                the date hereof to the Closing Date, trading in the Common Stock
                shall not
                have been suspended by the Commission (except for any suspension
                of
                trading of limited duration agreed to by Generex, which suspension
                shall
                be terminated prior to the Closing), and, at any time prior to the
                Closing
                Date, trading in securities generally as reported by Bloomberg Financial
                Markets shall not have been suspended or limited, or minimum prices
                shall
                not have been established on securities whose trades are reported
                by such
                service, or on any Trading Market, nor shall a banking moratorium
                have
                been declared either by the United States or New York State authorities
                nor shall there have occurred any material outbreak or escalation
                of
                hostilities or other national or international calamity of such magnitude
                in its effect on, or any material adverse change in, any financial
                market
                which, in each case, in the reasonable judgment of each Purchaser,
                makes
                it impracticable or inadvisable to exercise its Additional Investment
                Right at the Closing.

            

       

      	7.  	
              Miscellaneous.

            

       

      	7.1.  	
              Fees
                and Expenses.
                Generex has agreed to reimburse Cranshire Capital, L.P. (“Cranshire”)
                $15,000 for its legal fees and expenses in connection with this Amendment.
                Accordingly, the amount Cranshire must pay to Generex to exercise
                its
                Additional Investment Right under Section 1 shall be reduced by $15,000.
                Except for the foregoing, each party hereto will bear the fees and
                expenses of its own counsel and advisors in connection with the
                negotiation and entering into of this Amendment. Generex shall pay
                all
                transfer agent fees, stamp taxes and other taxes and duties levied
                in
                connection with the issuance of any
                Securities.

            

       

      	7.2.  	
              Entire
                Agreement.
                This Amendment and the Transaction Documents, together with the exhibits
                and schedules thereto, contain the entire understanding of the parties
                with respect to the subject matter hereof and supersede all prior
                agreements and understandings, oral or written, with respect to such
                matters, which the parties acknowledge have been merged into such
                documents, exhibits and schedules.

            

       

      	7.3.  	
              Equal
                Treatment of Purchasers.
                No consideration shall be offered or paid to any person to amend
                or
                consent to a waiver or modification of any provision of any of the
                Transaction Documents unless the same consideration is also offered
                to all
                of the parties to the Transaction Documents. Further, Generex shall
                not
                make any payment of principal or interest on the Debentures, AIR
                Debentures or Amendment
                No. 3 AIR Debentures
                in
                amounts which are disproportionate to the respective principal amounts
                outstanding on the Debentures, AIR Debentures or Amendment No. 3
                AIR
                Debentures at any applicable time. For clarification purposes, this
                provision constitutes a separate right granted to each Purchaser
                by
                Generex and negotiated separately by each Purchaser, and is intended
                to
                treat for Generex the Debenture, AIR Debenture and Amendment No.
                3 AIR
                Debenture holders as a class and shall not in any way be construed
                as the
                Purchasers acting in concert or as a group with respect to the purchase,
                disposition or voting of Securities or
                otherwise.

            

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      	7.4.  	
              Public
                Announcement.
                Generex shall, by 8:30 a.m. Eastern time on the Trading Day following
                the
                date hereof, issue a press release disclosing the material terms
                of the
                transactions contemplated hereby and by 4:30 p.m. Eastern time on
                such
                date, file a Current Report on Form 8-K, attaching such press release
                and
                the Transaction Documents thereto, each reasonably acceptable to
                each
                Purchaser. Generex and each Purchaser shall consult with each other
                in
                issuing any other press releases with respect to the transactions
                contemplated hereby, and neither Generex nor any Purchaser shall
                issue any
                such press release or otherwise make any such public statement without
                the
                prior consent of Generex, with respect to any press release of any
                Purchaser, or without the prior consent of each Purchaser, with respect
                to
                any press release of Generex, which consent shall not unreasonably
                be
                withheld, except if such disclosure is required by law, in which
                case the
                disclosing party shall promptly provide the other party with prior
                notice
                of such public statement or communication. Notwithstanding the foregoing,
                Generex shall not publicly disclose the name of any Purchaser, or
                include
                the name of any Purchaser in any filing with the Commission or any
                regulatory agency or Trading Market, without the prior written consent
                of
                such Purchaser, except (i) as required by federal securities law
                in
                connection with the registration statement contemplated by the
                Registration Rights Agreement and (ii) to the extent such disclosure
                is
                required by law or Trading Market regulations, in which case Generex
                shall
                provide the Purchasers with prior notice of such disclosure permitted
                under subclause (i) or (ii).

            

       

      	7.5.  	
              Notices.
                Any and all notices or other communications or deliveries required
                or
                permitted to be provided hereunder shall be in writing and shall
                be deemed
                given and effective as specified in the Purchase Agreement. The address
                for such notices and communications shall be as set forth on the
                signature
                pages attached to the Purchase Agreement.

            

       

      	7.6.  	
              Amendments;
                Waivers.
                No provision of this Amendment may be waived or amended except in
                a
                written instrument signed, in the case of an amendment, by Generex
                and
                each Purchaser or, in the case of a waiver, by the party against
                whom
                enforcement of any such waiver is sought. No waiver of any default
                with
                respect to any provision, condition or requirement of this Amendment
                shall
                be deemed to be a continuing waiver in the future or a waiver of
                any
                subsequent default or a waiver of any other provision, condition
                or
                requirement hereof, nor shall any delay or omission of either party
                to
                exercise any right hereunder in any manner impair the exercise of
                any such
                right.

            

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

      	7.7.  	
              Amendment
                Controls.
                If any topic is addressed both in the Purchase Agreement (or any
                document
                related thereto) and in this Amendment, this Amendment shall
                control.

            

       

      	7.8.  	
              Construction.
                The headings herein are for convenience only, do not constitute a
                part of
                this Amendment and shall not be deemed to limit or affect any of
                the
                provisions hereof. The language used in this Amendment will be deemed
                to
                be the language chosen by the parties to express their mutual intent,
                and
                no rules of strict construction will be applied against any
                party.

            

       

      	7.9.  	
              Governing
                Law.
                All questions concerning the construction, validity, enforcement
                and
                interpretation of this Amendment shall be governed by and construed
                and
                enforced in accordance with the internal laws of the State of New
                York,
                without regard to the principles of conflicts of law thereof. The
                parties
                agree that Section 5.9 of the Purchase Agreement shall apply to this
                Amendment as if set forth in its entirety
                herein.

            

       

      	7.10.  	
              Survival.
                The representations and warranties contained herein shall survive
                the
                delivery, exercise and/or conversion of the Securities, as applicable
                for
                the applicable statue of limitations.

            

       

      	7.11.  	
              Execution.
                This Amendment may be executed in two or more counterparts, all of
                which
                when taken together shall be considered one and the same document
                and
                shall become effective when counterparts have been signed by each
                party
                and delivered to the other party, it being understood that both parties
                need not sign the same counterpart. 

            

       

      	7.12.  	
              Severability.
                If any provision of this Amendment is held to be invalid or unenforceable
                in any respect, the validity and enforceability of the remaining
                terms and
                provisions of this Amendment shall not in any way be affected or
                impaired
                thereby and the parties will attempt to agree upon a valid and enforceable
                provision that is a reasonable substitute therefor, and upon so agreeing,
                shall incorporate such substitute provision in this
                Amendment.

            

       

      	7.13.  	
              Independent
                Nature of Purchasers’ Obligations and Rights.
                The obligations of each Purchaser hereunder are several and not joint
                with
                the obligations of any other Purchaser, and no Purchaser shall be
                responsible in any way for the performance of the obligations of
                any other
                Purchaser. Nothing contained herein, and no action taken by any Purchaser
                pursuant hereto, shall be deemed to constitute the Purchasers as
                a
                partnership, an association, a joint venture or any other kind of
                entity,
                or create a presumption that the Purchasers are in any way acting
                in
                concert or as a group with respect to such obligations or the transactions
                contemplated hereby. Each Purchaser shall be entitled to independently
                protect and enforce its rights, including, without limitation, the
                rights
                arising out of this Amendment and it shall not be necessary for any
                other
                Purchaser to be joined as an additional party in any proceeding for
                such
                purpose. The Purchasers have not relied upon the same legal counsel
                in
                their review and negotiation of this Amendment. Generex has elected
                to
                provide all Purchasers with the same terms and form of Amendment
                for the
                convenience of Generex and not because it was required or requested
                to do
                so by the Purchasers. Each Purchaser represents that it has been
                represented by its own separate legal counsel in its review and
                negotiations of this Amendment and each party represents and confirms
                that
                Proskauer Rose LLP represents only Cranshire Capital, L.P. in connection
                with this Amendment.

            

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

      	7.14.  	
              Exempt
                Issuances.
                The term “Exempt Issuance” as defined in the Purchase Agreement is hereby
                amended to include Common Stock and Common Stock Equivalents to employees,
                officers, directors and consultants, if issued pursuant to a resolution
                adopted by the majority of the non-employee members of the Board
                of
                Directors.

            

       

      (Signature
        Pages Follow)

       

      
 

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
        executed by their respective authorized signatories as of the date first
        indicated above.

       

      
        	
                GENEREX
                  BIOTECHNOLOGY CORPORATION

                 

              
	
                By:__________________________________________

                Name:

                Title:

              

      

      

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
        PAGE FOR PURCHASERS FOLLOWS]

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      

      IN
        WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed
        by their respective authorized signatories as of the date first indicated
        above.

       

      Name
        of
        Investing Entity:
        ________________________________________________________

      Signature
        of Authorized Signatory of Investing Entity:
        __________________________________

      Name
        of
        Authorized Signatory:
        ____________________________________________________

      Title
        of
        Authorized Signatory:
        _____________________________________________________

      Email
        Address of Authorized
        Entity:________________________________________________

      

      

      The
        principal amount of AIR Debentures which such 

      Purchaser’s
        Additional Investment Right permits it to acquire: $______________________

      

      

      Residency
        of Investing Entity: ______________________________

      

       

      

      
        
           

        

        
          17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}]]