GENEREX BIOTECHNOLOGY CORPORATION
(a corporation organized under the General Corporation Law
of the State of Delaware)
Special Voting Rights Preferred Stock authorized - 1,000 shares,
par value $.001 per share
THIS CERTIFIES THAT ____________________________________________________ is the
owner of _________________________________________________________ shares of the
SPECIAL VOTING RIGHTS PREFERRED STOCK of GENEREX BIOTECHNOLOGY
CORPORATION, full paid and non assessable and transferable on the books of
said Corporation in person or by attorney upon surrender of this Certificate,
properly endorsed, subject to the restrictions on transfer set forth below.
Holders of Special Voting Rights Preferred Stock are entitled only to such
rights, privileges and benefits of a shareholder of the Corporation as are
set forth below.
1. Dividends. Holders of Special Voting Rights Preferred Stock
(hereinafter referred to as the "Preferred Shares" or "Shares") shall be
entitled to receive a dividend per Share which equals the dividend declared
and paid on shares of the Corporation's Common Stock as and when dividends
are declared and paid on the Corporation's Common Stock.
2. Rights and Liquidation, Dissolution or Winding Up. In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation available for distribution to its
shareholders, whether from capital, surplus or earnings, shall be distributed
in the following order of priority:
a. First, to the holders of any class or series of Preferred Stock or
other capital stock of the Corporation which is entitled to a preference in
liquidation and dissolution over the Shares, but only to the extent of that
preference.
b. Next, to the holders of Shares and any class or series of Preferred
Stock or other capital stock of the Corporation which is of equal rank with
the Shares with respect to sharing in the proceeds of liquidation and
dissolution of the Corporation, pari passu, but only to the extent that such
class or series of capital stock is of equal rank. In any such distribution,
holders of Shares shall be entitled to receive, prior to and in preference to
any distribution to the holders of the Corporation's Common Stock or any
other class or series of capital stock of the Corporation which is inferior
to the rights of holders of Shares in liquidation and dissolution and winding
up an amount equal to $.10 per Preferred Share then outstanding (the "Shares
Liquidation Preference").
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c. After distribution of the Shares Liquidation Preference to holders of
Shares, the remaining assets, if any, of the Corporation available for
distribution to the shareholders of the Corporation shall be distributed,
pari passu, to the holders of all shares of capital stock of the Corporation,
without distinction as to class, as their rights may appear.
3. Voting.
a. The holders of Preferred Shares are not entitled to vote, except as
specifically required by Delaware law or as expressly provided below:
(i) If a Change of Control (as hereinafter defined) occurs, thereafter,
holders of Preferred Shares shall be entitled to elect a number of directors
of the Corporation equal to a majority of the entire Board of Directors of
the Corporation. Any holder of Preferred Shares may call a meeting of holders
of Preferred Shares for the purpose of exercising these special voting rights
(the "Special Voting Rights") upon not less than ten (10) days notice.
Holders of the Preferred Shares may exercise the Special Voting Rights by
written consent in lieu of a meeting pursuant to Section 228 of the Delaware
General Corporation Law. Upon exercise of the Special Voting Rights by
holders of the Preferred Shares, the Bylaws of the Corporation shall be
deemed amended to increase the size of the Board of Directors to accommodate
directors elected by the holders of the Preferred Shares. After the Special
Voting Rights have been exercised, the Corporation shall give holders of
Preferred Shares the same notice that is required to be sent to holders of
the Corporation's Common Stock of any meeting at which directors of the
Corporation are to be elected. Once Special Voting Rights have been
exercised, they shall remain in force at all times thereafter until the
Preferred Shares have been redeemed by the Corporation.
(ii) The affirmative vote of the holders of a majority of the Preferred
Shares then outstanding, voting separately as a class, shall be required to
approve any transaction that would result in a Change of Control (a "Change
of Control Transaction"). The Corporation shall give each holder of Preferred
Shares at least twenty (20) days prior written notice of any meeting of
shareholders called for the purpose of voting on a Change of Control
Transaction. Holders of Preferred Shares may approve any Change of Control
Transaction by written consent in lieu of a meeting pursuant to Section 228
of the Delaware General Corporation Law.
b. A "Change of Control" of the Corporation, as that term is used
herein, shall occur at any time that (a) the Current Management Group shall
cease to constitute at least sixty (60%) of all directors of the Corporation,
or (b) that any person becomes either the Chairman of the Board of Directors
or Chief Executive Officer of the Corporation without the prior approval of a
majority of the Current Management Group, acting in their capacities as
directors of the Corporation. The term "Current Management Group" as used
herein shall mean Anna H. Gluskin, Rose C. Perri, E. Mark Perri, Pankaj Modi
and/or any other person (a) who is appointed a director of the Corporation by
action of the Board of Directors of the
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Corporation with the approval of a majority of the Current Management
Group then serving as directors of the Corporation, in their capacities as
directors, or (b) who is nominated for election as a director of the
Corporation by action of the Board of Directors of the Corporation with the
approval of a majority of the Current Management Group then serving as
directors of the Corporation, in their capacities as directors.
c. On any matter as to which the holders of Preferred Shares shall be
entitled to vote as provided above, they shall be entitled to one vote per
share.
4. Redemption.
a. The Corporation shall have the right, at any time after
December 31, 2000, upon written notice (a "Preferred Shares Redemption
Notice") to all holders of Preferred Shares at their respective registered
addresses stating that the Corporation is exercising its right of redemption
set forth herein and fixing a date for such redemption (the "Preferred Shares
Redemption Date") which shall be no more than sixty (60) and no less than
thirty (30) days following the date of the Preferred Shares Redemption
Notice, redeem Preferred Shares at a price per Preferred Share (the
"Preferred Share Redemption Price") equal to ten ($.10) cents.
b. From and after the Preferred Shares Redemption Date, holders of
Preferred Shares shall cease to be shareholders of the Corporation and the
sole right of holders of Preferred Shares shall be to receive the Preferred
Shares Redemption Price as provided herein.
c. The Corporation shall pay the Preferred Shares Redemption Price to
each holder of record of Preferred Shares as of the Preferred Shares
Redemption Date, provided, however, that as a condition precedent to the
Corporation's payment of the Preferred Shares Redemption Price to any holder,
such holder shall deliver to the Corporation the certificate representing the
Preferred Shares to be redeemed or, in lieu thereof, satisfactory evidence
that such certificate has been lost or destroyed, together with a bond or
surety satisfactory to the Corporation to protect it against loss should such
certificate subsequently be tendered for redemption.
d. If the Corporation at any time redeems fewer than all Preferred
Shares, it shall redeem the Preferred Shares pro-rata from all holders
thereof.
e. The Corporation shall have the right to redeem Preferred Shares owned
by any Holder thereof upon the same terms and conditions set forth above upon
the death of the holder.
5. Transferability. The Preferred Shares shall not be transferrable by a
holder thereof without the prior written consent of the Corporation except
pursuant to the laws of descent and distribution.
6. Other. Except as expressly provided herein, Preferred Shares shall
have
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the same rights and privileges as shares of the Corporation's Common Stock.
IN WITNESS WHEREOF, this Certificate has been signed by the President of the
Corporation and the Corporation has caused its corporate seal to be hereunto
affixed as of this _____ day of ______________, ____.
GENEREX BIOTECHNOLOGY CORPORATION
By:
------------------------------
Anna E. Gluskin, President
[CORPORATE SEAL]
Attest:
--------------------------
Rose C. Perri, Secretary
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