Generex Biotechnology Corporation
Attn: Xxxx X. Xxxxxxx, President
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
XXXXXX X0X 0X0
RE: Subscription for Shares of Common Stock
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Gentlemen/Ladies:
The undersigned (hereinafter referred to as "Investor") hereby subscribes
for and agrees to purchase __________________________________________________
(US$________ ) SHARES of Common Stock of Generex Biotechnology Corporation
(hereinafter referred to as the "Company"), an Idaho corporation, at a price of
FOUR and 10/100 (US$4.10) DOLLARS per share, for a total purchase
price ________________________________ (US$____________ ) DOLLARS, on
and subject to the following terms and conditions:
1. Investor is making this subscription in the expectation that the
Company will accept this subscription and deliver its acceptance promptly
following receipt of the subscription from Investor. If this subscription is not
accepted by the Company before the close of business on the third business day
following the date of delivery to the Company of the within subscription, the
subscription shall expire and have no further force or effect, and Investor
shall have no further obligation hereunder. The Investor acknowledges and agrees
that this subscription is irrevocable, Investor is not entitled to cancel,
terminate or revoke the subscription or any agreements of Investor hereunder,
and that the subscription shall survive the death or disability of the Investor.
2. Payment for the aforementioned shares (the "Shares") will be delivered
to the Company at the above address by bank cashier's or certified check payable
to the Company, or by wire transfer of funds to the Company's account no.
000-000-0 in the name of the Company at Royal Bank of Canada located at 000 Xxx
Xxxxxx, Xxxxxxx, Xxxxxxx, xxxxxxx xxxxxx 00002, on the following dates in the
amounts indicated:
Date Due Payment Amount
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3. Unless Investor otherwise advises the Company, the Shares, when
issued, should be registered on the Company's books as follows:
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4. Investor understands and agrees that:
(a) This subscription may be accepted or rejected, in whole or in
part, by the Company within the three business day period referred to in
Section 1 in its sole and absolute discretion.
(b) No federal, state or provincial authority in Canada or the United
States of America (the "US") has made any finding or determination as to
the merits of an investment in the Company.
(c) Investor is an "accredited investor" as that term is defined in
Rule 501(a), Regulation D, promulgated under the US Securities Act of 1933,
as amended (the "1933 Act"), and has conducted Investor's own investigation
of the Company, its business and financial position. Investor has requested
and received from the Company all information deemed necessary by Investor
in order to evaluate an investment in the Company. The Shares are being
acquired for Investor's own account and/or for the account of a limited
number of friends, family and/or close business associates of Investor, all
of whom also are accredited investors. Investor shall promptly advise the
Company if anyone other than the Investor is the beneficial owner of any
Shares registered in Investor's name, and shall furnish to the Company the
name and residence address of such beneficial owner(s).
(d) Because the Shares have not been registered under the 1933 Act or
the securities laws of any other country, state or province, and are being
sold to Investor in reliance upon an exemption from such registration
requirements for non-public offerings pursuant to Rule 506 of Regulation D
under the 1933 Act and from the prospectus requirements of Section 72(1)(d)
of the Ontario Securities Act, the Shares shall be subject to restrictions
on resale and/or other transfers to comply with and to assure future
compliance with such laws. Investor will not resell or otherwise transfer
any Shares except in compliance with such laws, and certificates for the
Shares will bear a legend to the effect that transfer of the Shares is
subject to restrictions to insure that any such transfer is in compliance
with such laws. In addition, stop transfer instructions will be placed with
the transfer agent for the Company's Common Stock to enforce such
restrictions.
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5. Investor understands that Investor must bear the economic risk of an
investment in the Shares for an indefinite period of time, and represents and
warrants to the Company that, except as indicated in paragraph 4(c) above,
Investor: is purchasing the Shares for Investor's own account and not for the
purpose of resale or otherwise effecting a distribution of the Shares; has no
contract, undertaking, agreement or arrangement with any person to sell,
transfer or pledge any Shares to such person or anyone else; has no present
plans to enter into any such contract, undertaking, agreement or arrangement;
and has full power and authority to execute and deliver this subscription and to
perform the obligations of Investor hereunder.
6. In addition to the investment representations and agreements set forth
in paragraphs 4 and 5 above, to induce the Company to accept this subscription
and as additional consideration for the Shares, the Investor agrees as follows:
(a) For a period of five (5) years from the date the Shares are issued
by the Company (the "Restricted Period"), Investor agrees to vote, or to
authorize a person designated by the Company's Board of Directors to vote,
as Investor's proxy, all Shares over which Investor has voting power as of
the record date of any meeting of shareholders of the Company in proportion
to the votes of all other shareholders of the Company cast at such meeting.
Investor further agrees that Investor will not authorize any other person
to vote such Shares in a manner inconsistent with Investor's agreements
herein, provided that nothing herein shall prevent Investor from selling or
otherwise disposing of any Shares, subject to the terms of paragraph (b)
and (c) below.
(b) During the first year of the Restricted Period, Investor will not
sell or otherwise transfer any Shares without the Company's prior written
approval. Thereafter, for the remainder of the Restricted Period, and
provided that a public market exists for the Company's Common Stock,
Investor will not sell any Shares without first offering to sell such
Shares to the Company at the then current Market Price of the Company's
publicly-traded shares of Common Stock. For this purpose, the Market Price
of shares of the Company's publicly-traded Common Stock shall be (i) the
average closing sale price during a period of twenty days immediately
preceding the date of such offer on which the New York Stock Exchange was
open for trading (the "Valuation Period")(or, if no sales are reported on
any given day, the closing "bid" price reported) for the Common Stock on
NASDAQ/NMS or, (ii) if the Common Stock is not listed on NASDAQ/NMS, such
closing sale or "bid" price as reported on any comparable automated
quotation system or exchange on which the Common Stock is then listed, or
(iii) any combination thereof.
(c) Any offer by Investor to sell Shares to the Company pursuant to
paragraph (b) above shall be in writing, shall set forth the proposed
manner in which Investor intends to sell the Shares if the offer to the
Company is not accepted (including the identity of the proposed buyer if
the proposed manner of sale is other than in routine "brokers'
transactions", within the meaning of that term as used in Rule 144 under
the 1933 Act), and shall be delivered to the Company at its address as set
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forth above, or at such other address that the Company may hereafter
designate for notice purposes. The Company shall have fifteen (15) calendar
days after receipt of such offer to accept the offer by delivering written
notice of its acceptance to Investor personally by hand or by Federal
Express courier to Investor at the address specified for this purpose by
Investor in Investor's offer to the Company or, if no address is so
specified, at the address for notice purposes as set forth below Investor's
signature hereon. The Company's acceptance shall be effective upon
delivery.
(d) If the Company timely accepts the offer, Investor shall tender the
Shares to the Company at office of the Company to which Investor's offer
was delivered, against payment for such Shares by certified check, bank
check or wire transfer funds to an account designated by Investor. If the
Company fails to timely accept the offer, Investor shall be free to sell
the Shares but only in the manner (and to the buyer identified in the offer
if the proposed manner of sale is not in routine brokers' transactions) set
forth in Investor's offer to the Company. If the Company accepts the offer
but fails to pay for the Shares specified in the offer in the manner
provided herein, all restrictions on resale of the Shares pursuant to
paragraph (b) above shall terminate.
(e) Notwithstanding anything to the contrary in paragraphs (b) and (c)
above, Investor may transfer record ownership of the Shares to any other
person who was the beneficial owner thereof at the time the Shares were
issued, subject to compliance with applicable securities laws and provided
that such person first enters into a separate agreement with the Company to
be bound by the provisions of this subscription relating to the voting and
transfer of Shares. In addition, after the first year of the Restricted
Period, Investor may sell in routine brokers' transactions during any
continuous ninety day period a number of Shares equal (in the aggregate) to
one (1%) percent of the total number of shares of the Common Stock of the
Company outstanding at the time of such sale.
(f) Certificates representing the Shares shall be legended to reflect
the above restrictions, as well as the securities laws restrictions
referred to in Section 4 above.
7. Investor recognizes that the sale of the Shares to Investor is being
made in reliance upon Investor's agreements, representations and warranties set
forth in paragraphs 4, 5 and 6 hereof. Investor agrees to indemnify the Company,
its agents and controlling persons for, and to hold each of them harmless
against, any liability, loss, damage cost or expense (including reasonable
attorneys' fees) arising from any breach thereof by Investor.
8. Acceptance of this subscription by the Company shall be effected by
the Company's signing (by its duly authorized officer) a copy of this
subscription in the space provided below, and by delivering that signed copy to
Investor personally by hand, or by delivering such signed copy via Federal
Express courier to Investor at the address for notice purposes set forth below
Investor's signature(s) hereon. The Company's acceptance shall be effective upon
delivery to Investor in accordance with this Section 8.
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9. Whenever a time for performance is specified herein, time shall be of
the essence of the parties' agreements herein and this subscription shall be
interpreted accordingly.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Investor has
executed this Subscription Agreement this ________ day of,_________________1998.
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(Print name(s) of Investor)
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(Signature of Investor(s) or Authorized Person. If signing in a representative,
please print name and title below signature.)
Investor's address for notice purposes is:
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This Subscription is hereby accepted by Generex Biotechnology Corporation this
___ day of __________, 1998.
GENEREX BIOTECHNOLOGY CORPORATION
By:
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