8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

February 13, 2009

GENEREX BIOTECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	000-29169	98-0178636
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S Employer Identification No.)

33 Harbour Square, Suite 202, Toronto, Ontario Canada	M5J 2G2
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (416) 364-2551

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On February 13, 2009, Generex Biotechnology Corporation (the “Company”) entered into separate letter agreements (the “Agreements”) with each of the investors that purchased the Company’s 8% Senior Secured Convertible Notes (the “Notes”) pursuant to that certain Securities Purchase Agreement dated as of March 31, 2008, by and among the Company and the investors listed on the Schedule of Buyers attached thereto (“Investors” or “Holders”).  Unless indicated otherwise, capitalized terms used in this Current Report on Form 8-K are defined in the Notes. The form of the Notes was filed as Exhibit 4.2 to the Company’s report on Form 8-K, filed with the Securities and Exchange Commission on April 2, 2008.

The Notes require the Company to pay the Investors on each applicable installment date set forth in the Notes the installment amount due on such date by electing (i) a Company Conversion if various conditions are satisfied, and/or (ii) a Company Redemption.

Background

As of the date hereof, one of the conditions to a Company Conversion has not been satisfied because the Company is not in compliance with the minimum bid price requirement of The NASDAQ Stock Market Marketplace Rule 4310(c)(4) (the “Listing Maintenance Equity Condition”).  As set forth in the Company’s Current Report on Form 8-K dated July 29, 2008, pursuant to separate agreements certain Investors waived the Company’s compliance with the Listing Maintenance Equity Condition as to the September 1, 2008 and August 1, 2008 installment dates under the Notes.  In addition, as set forth in the Company’s Current Report on Form 8-K dated December 23, 2008 (the “December Form 8-K”), pursuant to separate agreements each of the Investors waived satisfaction of the Listing Maintenance Equity Condition solely with respect to (a) the additional principal repayment of the Notes by the Company pursuant to a conversion on January 12, 2009, and (b) the February 1, 2009 installment date.

As set forth on the December Form 8-K, each such Investor agreed to waive (a) the “Event of Default” under Section 4(a)(xv) of the Notes with respect to the Company’s failure to meet the Net Cash Balance Test in respect of any and all periods prior to December 22, 2008, and (b) compliance by the Company with the Net Cash Balance Test  for the period from December 22, 2008  through January 30, 2009.

As of January 31, 2009, the Company’s failure to meet the Net Cash Balance Test under Section 4(a)(xv) of the Notes is an Event of Default.  In addition, the Company’s failure to procure Control Agreements as required under the separate agreements entered into with each of the Investors on December 22, 2008 constitutes a breach under each Investor’s Note which is not curable.  As a result of these covenant related (not payment related) Events of Default, each Holder may require the Company upon written notice to redeem all or any portion of its Note at a default redemption price as calculated pursuant to certain formulas set forth in the Note. Until the default redemption price (together with any interest thereon) is paid in full, the amount of any Note submitted for redemption (together with any interest thereon) may be converted, in whole or in part, by the Holder into shares of the Company’s common stock.

Material Terms of Separate February 13, 2009 Letter Agreements with Investors

On February 13, 2009, the Company entered into the Agreements with each of the Investors to address the non-compliance with the Listing Maintenance Equity Condition.  Pursuant to each of the Agreements, the Company and each Investor agreed to the following:

· Such Investor agreed to waive satisfaction of only the Listing Maintenance Equity Condition solely with respect to (a) the installment amount payable on March 1, 2009, and (b) the March 1, 2009 installment date (the “March 1st Installment Date”).  Therefore, the Company will be entitled to pay the whole installment amount due on the March 1st Installment Date pursuant to a Company Conversion, if all other Equity Conditions are satisfied and the Company is otherwise permitted to effect a Company Conversion in accordance with the terms of such Investor’s Note.

· Computation of the installment amount solely in respect of the March 1st Installment Date will be the product of (i) $1,927,333.42 multiplied by (ii) such Investor’s Holder Pro Rata Amount (as set forth in the Note), together with the sum of all accrued and unpaid interest as of the March 1, 2009 under such Investor’s Note (collectively, the “Applicable Installment Amount”).

· The Pre-Installment Conversion Price in respect of the Applicable Installment Amount will be equal to the price which shall be computed as 90% of the arithmetic average of the volume weighted average price of the Company’s common stock on each of the twenty (20) consecutive trading days immediately preceding and including February 13, 2009 (to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction during such measuring period).

· In accordance with Section 8(a) of such Investor’s Note, the Company will deliver the Pre-Installment Conversion Shares (which shall instead equal the number of shares of the Company’s common stock equal to the quotient of (i) the Applicable Installment Amount divided by (ii) the Pre-Installment Conversion Price (as computed as described above)) to such Holder no later than two trading days after February 13, 2009.

· The Company Conversion Price in respect of the Applicable Installment Amount will be equal to the price which shall be computed as 90% of the arithmetic average of the volume weighted average price of the common stock on each of the fourteen (14) consecutive trading days immediately preceding and including March 6, 2009 (to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction during such measuring period).

· The Company will deliver the number of shares of its common stock to be delivered pursuant to a Company Conversion (which Company Conversion shall occur on March 6, 2009 instead of March 1, 2009) in respect of the Applicable Installment Amount and the March 1st Installment Date, reduced by the number of the Pre-Installment Conversion Shares delivered in connection with the Applicable Installment Amount and the March 1st Installment Date, no later than March 9, 2009, and such delivery of such shares will be deemed timely and effective payment of the Applicable Installment Amount on the March 1st Installment Date if so delivered no later than March 9, 2009.

As of the date hereof, the covenant related defaults described above and various other covenant defaults under the Notes remain uncured.  However, the Company is actively engaged in separate negotiations with each Investor to achieve certain amendments and waivers with respect to such defaults to permit such Investor’s Note to be amortized, and interest thereunder to the paid, in full with Conversion Shares over the next five (5) months.

There can be no assurance that the Company’s efforts will be successful or that each of the Investors will agree to forbear from pursuing their individual rights and remedies under their respective Notes.

The foregoing summaries of the terms of the Agreements are subject to, and qualified in their entirety by, such document attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)   Exhibits. 

Exhibit Number	Description
10.1	Form of separate Letter Agreements dated as of February 13, 2009 and entered into by and between Generex Biotechnology Corporation and each of Cranshire Capital, L.P., Portside Growth and Opportunity Fund, Rockmore Investment Master Fund Ltd., Smithfield Fiduciary LLC, Iroquois Master Fund Ltd. and Iroquois Capital Opportunity Fund, LP.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GENEREX BIOTECHNOLOGY CORPORATION.
Date: February 17, 2009	/s/ Rose C. Perri
	Chief Operating Officer and Chief Financial Officer (principal financial officer)

EXHIBIT INDEX

Exhibit Number	Description
10.1	Form of separate Letter Agreements dated as of February 13, 2009 entered into by and between Generex Biotechnology Corporation and each of Cranshire Capital, L.P., Portside Growth and Opportunity Fund, Rockmore Investment Master Fund Ltd., Smithfield Fiduciary LLC, Iroquois Master Fund Ltd. and Iroquois Capital Opportunity Fund, LP.

EX-10.1

EXHIBIT 10.1

Generex Biotechnology Corporation

33 Harbour Square, Suite 202

Toronto, Ontario

Canada M5J 2G2

February 13, 2009

Cranshire Capital, L.P.

3100 Dundee Road, Suite 703

Northbrook, Illinois 60062

Re: Generex Biotechnology Corporation -8% Senior Secured Convertible Note -March 1, 2009 Installment Amount

Dear Sirs:

Reference is made to that certain 8% Senior Secured Convertible Note in the original principal amount of $5,000,000 (the “Note”) issued by Generex Biotechnology Corporation (the “Company”) to Cranshire Capital, L.P. (the “Holder”) on March 31, 2008. Capitalized terms used in this letter agreement that are not otherwise defined herein have the meanings set forth in the Note.

This letter confirms the agreement between the Company and the Holder as of February 13, 2009 (the “Effective Date”) as follows:

1.   Notwithstanding the terms of the Note, (i) the Effective Date will constitute the Installment Notice Due Date and the Company Installment Notice Date in respect of the Applicable Installment Date and (ii) this letter will constitute (a) the Company Installment Notice in respect of the Installment Amount due on March 1, 2009 (the “Applicable Installment Date”), (b) the Company’s election of a Company Conversion in respect of the Applicable Installment Amount (as that term is hereinafter defined) and the Applicable Installment Date, and (c) subject to the matters disclosed in Section 10 hereof, the Company’s confirmation of the matters required to be confirmed in Section 8 of the Note in connection with the Company’s election of a Company Conversion with respect to the Applicable Installment Amount and the Applicable Installment Date.

2.   Notwithstanding the computation of the Installment Amount set forth in the Note, the computation of the Installment Amount solely in respect of the Applicable Installment Date will instead be the product of (i) $1,927,333.42 multiplied by (ii) the Holder Pro Rata Amount, together with the sum of all accrued and unpaid Interest as of the Applicable Installment Date under the Note because the Applicable Installment Date is also an Interest Date (collectively, the “Applicable Installment Amount”).

3.   Notwithstanding the Pre-Installment Conversion Price set forth in the Note, the Pre-Installment Conversion Price in respect of the Applicable Installment Amount will be equal to the price which shall be computed as 90% of the arithmetic average of the VWAP of the Common Stock on each of the twenty (20) consecutive Trading Days immediately preceding and including the Effective Date (to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction during such measuring period).

4.   In accordance with Section 8(a) of the Note, the Company will deliver the Pre-Installment Conversion Shares (which shall instead equal the number of shares of Common Stock equal to the quotient of (i) the Applicable Installment Amount divided by (ii) the Pre-Installment Conversion Price determined pursuant to Section 3 above) to the Holder no later than two (2) Trading Days after the Effective Date, provided that the Company will deliver irrevocable instructions with respect to the issuance of such Pre-Installment Conversion Shares to its Transfer Agent on February 13, 2009.

5.   Notwithstanding the Company Conversion Price set forth in the Note, the Company Conversion Price in respect of the Applicable Installment Amount will be equal to the price which shall be computed as 90% of the arithmetic average of the VWAP of the Common Stock on each of the fourteen (14) consecutive Trading Days immediately preceding and including March 6, 2009 (to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction during such measuring period).

6.   The Company will deliver the number of shares of Common Stock to be delivered pursuant to a Company Conversion (which Company Conversion shall occur on March 6, 2009 instead of March 1, 2009) in respect of the Applicable Installment Amount and the Applicable Installment Date, reduced by the number of the Pre-Installment Conversion Shares delivered in connection with the Applicable Installment Amount and the Applicable Installment Date, no later than March 9, 2009, and such delivery of such shares will be deemed timely and effective payment of the Applicable Installment Amount on the Applicable Installment Date if so delivered no later than March 9, 2009.

7.   As at the date hereof, one of the Equity Conditions has not been satisfied in that the Company received notice from The NASDAQ Stock Market of the Company’s failure to comply with the minimum bid price requirement of Marketplace Rule 4310(c)(4) (the “Listing Maintenance Equity Condition”).  The Holder hereby waives satisfaction of only the Listing Maintenance Equity Condition solely with respect to the Applicable Installment Date and the Applicable Installment Amount thereby entitling the Company to pay the whole of the Applicable Installment Amount due on the Applicable Installment Date pursuant to a Company Conversion pursuant to Section 1 hereof if, subject to the matters disclosed in Section 10 hereof  (i) all other Equity Conditions and (ii) all other conditions relating to a Company Conversion, in each case, are satisfied in accordance with the terms of the Note.

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

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

10.   The Company acknowledges that there have occurred Events of Default under the Notes and that Holder and the Company are engaged in the process of negotiating certain amendments and waivers with respect thereto. Nothing in this letter shall constitute a waiver of any Events of Default and Holder fully and specifically reserves any and all rights, powers, privileges and remedies under the Transaction Documents or otherwise.

11.   Prior to the opening of the Principal Market on February 17, 2009, the Company shall file with the SEC a Form 8-K Current Report describing all of the material terms of the transactions contemplated by this letter agreement in the form required by the 1934 Act and attaching a form of this letter agreement.

This letter agreement may be executed in any number of counterparts and signature pages hereto may be delivered by facsimile or other electronic means, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this letter agreement by signing any such counterpart.

[signature pages follow]

IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature pages to this letter agreement to be duly executed as of the Effective Date.

COMPANY: GENEREX BIOTECHNOLOGY CORPORATION
By:
	Name:  Rose C. Perri
	Title:    Chief Financial Officer
By:
	Name: Mark A. Fletcher
	Title:    Executive Vice President
	and General Counsel

IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature pages to this letter agreement to be duly executed as of the Effective Date.

INVESTOR: CRANSHIRE CAPITAL, L.P.
By:	Downsview Capital, Inc.
Its:	General Partner
By:	Mitchell P. Kopin
Its:	President