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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">UNITED
        STATES</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECURITIES
        AND EXCHANGE COMMISSION</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
        DC 20549</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FORM
        8-K</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CURRENT
        REPORT</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
        to Section 13 or 15(d) of the Securities Exchange Act of 1934</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
        of
        Report (Date of earliest event reported): December 9, 2005</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">GENEREX
        BIOTECHNOLOGY CORPORATION</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
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          <hr style="COLOR: #000000" align="left" noshade size="1" width="100%">
          &#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
          Name of Registrant as Specified in Its Charter)</font></div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br>&#160;</div>
      <div align="center">&#160;</div>
      <div align="center">
        <table bgcolor="#ffffff" cellpadding="0" cellspacing="0" width="100%">

            <tr bgcolor="#ffffff">
              <td width="33.33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<u><font size="2">Delaware</font></u></div>
              </td>
              <td width="33.33%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>000-25169</u></font></div>
              </td>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<u><font size="2">98-0178636</font></u></div>
              </td>
            </tr>
            <tr bgcolor="#ffffff">
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font size="2">(State
                  or Other</font></div>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">Jurisdiction
                  of</font></div>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">Incorporation)</font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission</font></div>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
                  File Number)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(IRS
                  Employer</font></div>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">Identification</font></div>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">Number)</font></div>
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                <div>&#160;</div>
              </td>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br>&#160;</div>
      <div align="center">
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font size="2"><u>33
                  Harbour Square, Suite 202, Toronto, Ontario
                  Canada&#160;&#160;</u>&#160;&#160;&#160;&#160;</font></div>
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              <td width="50%">&#160;<u><font size="2">M5J 2G2</font></u></td>
            </tr>
            <tr bgcolor="#ffffff">
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;(Address
                  of
                  Principal Executive Offices)&#160;&#160;</font></div>
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              <td width="50%">&#160;<font size="2">(Zip
                Code)</font></td>
            </tr>

        </table>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font size="2"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Registrant&#8217;s
            telephone number, including area code: <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>(416)
            364-2551</u></font></font></div>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><br></div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt"></font>
        <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">
          <hr style="COLOR: #000000" align="left" noshade size="1" width="100%">
        </div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
        name or former address, if changed since last report.)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>see</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        General
        Instruction A.2. below):</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol"><strong>&#129;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Written
        communications pursuant to Rule 425 under the Securities Act (17 CFR
        230.425)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol"><strong>&#129;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
        240.14a-12)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol"><strong>&#129;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
        Act
        (17 CFR 240.14d-2(b))</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol"><strong>&#129;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
        Act
        (17 CFR 240.13e-4(c))</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
        1.01.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Entry
        Into a Material Definitive Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
        3.02.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unregistered
        Sales of Equity Securities.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 9, 2005, upon the recommendation of a majority of the members of
        the
        Compensation Committee of Generex Biotechnology Corporation (the &#8220;Company&#8221;), the
        Company&#8217;s Board of Directors approved the terms and conditions of employment for
        Anna Gluskin as the Company&#8217;s President and Chief Executive Officer and Rose
        Perri as the Company&#8217;s Chief Financial Officer and Chief Operating Officer.
        Prior to such date, Ms. Gluskin and Ms. Perri served in such capacities without
        formal employment agreements with the Company. The material terms of the
        Company&#8217;s employment agreement with each of Ms. Gluskin and Ms. Perri (each of
        whom is referred to as &#8220;Executive&#8221; below) are identical except as otherwise
        noted and are as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#376;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
                  agreement will be effective as of January 1, 2006. The initial
                  term of
                  each agreement is five years, subject to the termination provisions
                  described below. The Company or Executive may give notice of non-renewal
                  not less than six months prior to the expiration of the term. If
                  no such
                  notice is given, the term of the agreement will extend indefinitely
                  and
                  will be terminable upon not less than six months&#8217; prior written
                  notice.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#376;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
                  agreement may be terminated:</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">&#160;</td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">by
                  the Company for cause (without any additional payment to
                  Executive);</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">&#160;</td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">automatically
                  upon expiration of the term;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">&#160;</td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">automatically
                  upon Executive&#8217;s death or disability;
                  or</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">&#160;</td>
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">by
                  Executive upon thirty days&#8217; prior written notice if there is a (i) a
                  material change in duties (other than removal of the title of Chief
                  Financial Officer and the duties associated therewith in the case
                  of Ms.
                  Perri), (ii) a material reduction in Executive&#8217;s remuneration, (iii) a
                  material breach of the agreement by the Company, (iv) a change
                  of control
                  of the Company, or (v) a sale of all or substantially all of the
                  property
                  and assets of the Company.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        the
        event of termination pursuant to clause (b) above as a result of the Company&#8217;s
        notice of non-renewal or pursuant to clause (d) above, the Company will pay
        Executive an amount equal to the greater of (x) an amount equal to five times
        Executive&#8217;s base annual salary as of the date of termination, which amount will
        be payable in a lump sum on the date of termination, or (y) $5,000,000,
        $3,000,000 of which will be payable in a lump sum on the date of termination
        and
        $2,000,000 of which will be payable in stock issuable within three business
        days
        of the date of termination and valued at the 20-day VWAP as of the close
        of
        business on the date of termination. In addition, in such a termination event,
        Executive will be entitled to participate in and receive benefits for a period
        of twelve months following termination and will have no duty to
        mitigate.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#376;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                  will be entitled to an annual bonus as determined by the Company&#8217;s
                  Compensation Committee in respect of each fiscal year of the Company
                  during the term of the agreement and reimbursement of all reasonable
                  expenses incurred by her in connection with the Company&#8217;s
                  business.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#376;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                  will be included on any management slate of nominees submitted
                  to the
                  Company&#8217;s stockholders for election to the Board of
                  Directors.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#376;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
                  agreement will include standard employee confidentiality, non-competition
                  and non-solicitation covenants.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="LINE-HEIGHT: 1.25">
              <td style="WIDTH: 36pt">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#376;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
                  of Ms. Gluskin and Ms. Perri will receive her current annual base
                  salary
                  under her respective employment agreement with the Company, which
                  salary
                  may not be reduced during the term of such agreement. Ms. Gluskin&#8217;s
                  current annual base salary is $425,000, and Ms. Perri&#8217;s is $325,000.
                  </font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        employment agreements with Ms. Gluskin and Ms. Perri have not yet been finalized
        and executed.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 9, 2005, the Company&#8217;s Board of Directors also approved a one-time
        recompense payment in the aggregate amount of $1,000,000 for each of Ms.
        Gluskin
        and Ms. Perri in recognition of the Company&#8217;s failure to remunerate each of Ms.
        Gluskin and Ms. Perri in each of the fiscal years ended July 31, 1998, 1999,
        2000 and 2001 in a fair and reasonable manner commensurate with comparable
        industry standards and Ms. Gluskin&#8217;s and Ms. Perri&#8217;s duties, responsibilities
        and performance during such years. The payment of such amount to each of
        Ms.
        Gluskin and Ms. Perri will be made (a) in cash at such time or times and
        in such
        amounts as determined solely by Ms. Gluskin or Ms. Perri, as applicable,
        and/or
        (b) in shares of the Company&#8217;s common stock at such time or times as determined
        by Ms. Gluskin or Ms. Perri, as applicable, provided that the conversion
        price
        for any such shares shall be equal to the average closing price of the Company&#8217;s
        common stock on the Nasdaq Capital Market for the 20 successive trading days
        immediately preceding, but not including, December 9, 2005. In the event
        that
        Ms. Gluskin or Ms. Perri elects payment of any or all of such recompense
        payment
        in the form of shares of the Company&#8217;s common stock and such election is deemed
        to be a &#8220;sale&#8221; as that term is defined under Section 2(a)(3) of the Securities
        Act of 1933, as amended (the &#8220;Securities Act&#8221;), each such &#8220;sale&#8221; is exempt from
        registration under the Securities Act in reliance upon Section 4(2) thereof.
        Ms.
        Gluskin and Ms. Perri, as executive officers and directors of the Company,
        are
&#8220;accredited investors&#8221; as that term is defined in Rule 501(a) of Regulation D.
        The certificates issued for the shares of common stock will be legended to
        indicate that they are restricted. The sale, if any, of such shares did not
        involve the use of underwriters, and no commissions were paid in connection
        with
        the issuance or sale, if any, thereof.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 9, 2005, the Company&#8217;s Board of Directors also approved the grant to
        Ms. Perri of a right of first refusal in respect of any sale, transfer,
        assignment or other disposition of either or both real properties municipally
        known as 1740 Sismet Road, Mississauga, Ontario and 98 Stafford Drive, Brampton,
        Ontario (collectively, the &#8220;Properties&#8221;). The Company granted Ms. Perri this
        right in recognition of the fair market value transfer to the Company during
        the
        fiscal year ended July 31, 1998 by Ms. Perri (or parties related to her)
        of the
        Properties.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 9, 2005, the Company&#8217;s Board of Directors also directed that the
        payment of all accrued and unpaid salary in the amount of $8,698.43 owed
        to Rita
        Consentino, an employee of the Company, be satisfied by the issuance of shares
        of the Company&#8217;s common stock. The number of shares to be issued to Ms.
        Consentino was calculated using the closing price of the common stock on
        the
        Nasdaq Capital Market on December 9, 2005 ($0.90 per share). In the event
        that
        the issuance of such stock to Ms. Consentino in satisfaction of accrued and
        unpaid salary is deemed to be a &#8220;sale&#8221; as that term is defined under Section
        2(a)(3) of the Securities Act, such &#8220;sale&#8221; is exempt from registration under the
        Securities Act in reliance upon Section 4(2) thereof. The certificate(s)
        issued
        for the shares of common stock will be legended to indicate that they are
        restricted. The sale, if any, of such shares did not involve the use of
        underwriters, and no commissions were paid in connection with the issuance
        or
        sale, if any, thereof. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        previously reported in the Company&#8217;s Current Report on Form 8-K filed with the
        Securities and Exchange Commission (the &#8220;SEC&#8221;) on April 1, 2005 (the &#8220;April
        Current Report&#8221;), on March 28, 2005, the Company entered into a Promissory Note
        and Agreement with Cranshire Capital, L.P. (&#8220;Cranshire&#8221;) pursuant to which
        Cranshire loaned the Company the principal amount of $500,000 (the &#8220;Note&#8221;). As
        reported in the Company&#8217;s April Current Report, as additional consideration for
        the loan, the Company issued Cranshire a warrant to purchase an aggregate
        of
        1,219,512 shares of the Company&#8217;s common stock on April 28, 2005 (the &#8220;April
        Warrant&#8221;). As reported in the Company&#8217;s Quarterly Report on Form 10-Q filed with
        the SEC on June 14, 2005, Cranshire agreed to extend the interest payment
        date
        and the maturity date of the Note to July 22, 2005, and in consideration
        of such
        extension, the Company issued Cranshire a warrant to purchase an aggregate
        of
        1,219,512 shares of common stock on June 7, 2005 (the &#8220;June Warrant&#8221;). As
        previously reported in&#160;the Company's&#160;Annual Report on Form
        10-K filed
        with the SEC on October 31, 2005, Cranshire agreed to further extend the
        interest payment date and the maturity date under the Note to September 20,
        2005, and, as consideration for such extension, the Company issued a warrant
        to
        Cranshire to purchase an aggregate of 1,219,512 shares of common stock on
        July
        22, 2005 (the &#8220;July Warrant&#8221;).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        October and November 2005, Cranshire exercised its April, June and July
        Warrants, and the Company received aggregate proceeds of approximately
        $3,000,000 in connection therewith. On December 9, 2005, consistent with
        the
        intention of the Company and Cranshire and in consideration of Cranshire&#8217;s
        exercise of its April, June and July Warrants, the Company issued Cranshire
        a
        five-year warrant to purchase an aggregate of 1,829,268 shares of common
        stock.
        At Cranshire&#8217;s option, this warrant is exercisable into shares of common stock
        at the exercise price </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
        $1.25
        per share. The exercise price is subject to an anti-dilution adjustment upon
        the
        Company&#8217;s issuance of securities at a price per share less than the then
        exercise price. If, at any time after the first anniversary of the date of
        issuance of this warrant, there is no effective registration statement
        registering for resale the shares of common stock into which the warrant
        is
        exercisable, Cranshire may exercise its warrant through a cashless exercise.
        The
        number of shares to be issued upon a cashless exercise will be equal to the
        quotient resulting from the following calculation: [(the VWAP on the trading
        day
        immediately preceding the date of such election less the exercise price,
        as
        adjusted) multiplied by the number of shares issuable upon exercise of the
        warrant by means of a cash exercise] divided by the VWAP on the trading day
        immediately preceding the date of such election. Cranshire has agreed that
        it
        will not exercise its warrant if such exercise would cause it, together with
        its
        respective affiliates, to beneficially own more than 4.99% of the Company's
        shares of common stock then outstanding. The form of the warrant issued to
        Cranshire on December 9, 2005 is included as Exhibit 4.1 to this Current
        Report
        on Form 8-K. The offer and sale of the warrant to Cranshire, including the
        shares of common stock into which such warrant is exercisable, are exempt
        from
        registration under the Securities Act in reliance upon Section 4(2) thereof.
        Cranshire has previously represented and warranted to the Company that it
        is an
&#8220;accredited investor&#8221; as that term is defined in Rule 501(a) of Regulation D
        promulgated under the Securities Act. The certificates representing such
        warrant
        and shares of common stock issued upon exercise of such warrant will be legended
        to indicate that they are restricted. The sale of such securities did not
        involve the use of underwriters, and no commissions were paid in connection
        therewith.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
        9.01.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Financial
        Statements and Exhibits.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibits.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="11%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;4.1</font></div>
              </td>
              <td align="left" valign="top" width="54%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                  of Warrant issued by Generex Biotechnology Corporation to Cranshire
                  Capital, L.P. on December 9, 2005 (incorporated by reference to
                  Exhibit
                  4.45 to Generex Biotechnology Corporation&#8217;s Report on Form 10-Q filed on
                  December 15, 2005)</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>SIGNATURE</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

              <tr valign="top" bgcolor="#ffffff">
                <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">GENEREX
                  BIOTECHNOLOGY CORPORATION</font></td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
                <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
                <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<br>&#160;</font></td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:&#160;December
                  15, 2005</font></td>
                <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:&#160;&#160;</font></td>
                <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/&#160;Rose
                  C. Perri</font></td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td colspan="2"><font style="FONT-FAMILY: Times New Roman" size="1">&#160;</font></td>
                <td align="left">
                  <div>
                    <hr style="COLOR: #000000" align="left" noshade size="2" width="80%">
                  </div>
                  <div><font size="2">Chief Operating Officer and</font></div>
                  <div><font size="2">Chief Financial Officer</font></div>
                </td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(principal
                  financial officer) </font></td>
              </tr>

          </table>
        </div><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
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        INDEX</font></div>
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              <td align="left" valign="top" width="54%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                  of Warrant issued by Generex Biotechnology Corporation to Cranshire
                  Capital, L.P. on December 9, 2005 (incorporated by reference to
                  Exhibit
                  4.45 to Generex Biotechnology Corporation&#8217;s Report on Form 10-Q filed on
                  December 15, 2005)</font></div>
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{"company-data": {"conformed-name": "GENEREX BIOTECHNOLOGY CORP", "cik": "0001059784", "assigned-sic": "2834", "irs-number": "820490211", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-25169", "film-number": "051266864"}, "business-address": {"street1": "33 HARBOUR SQ", "street2": "STE 202", "city": "TORONTO ONTARIO CANADA", "state": "A1", "zip": "M5J 2G2", "phone": "4163642551"}, "mail-address": {"street1": "33 HARBOUR SQ", "street2": "STE 202", "city": "TORONTO ONTARIO CA", "state": "A1", "zip": "M5J 2G2"}}
UNITED
        STATES
SECURITIES
        AND EXCHANGE COMMISSION
Washington,
        DC 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): December 9, 2005
GENEREX
        BIOTECHNOLOGY CORPORATION
(Exact
          Name of Registrant as Specified in Its Charter)
Delaware
000-25169
98-0178636
(State
                  or Other
Jurisdiction
                  of
Incorporation)
(Commission
File Number)
(IRS
                  Employer
Identification
Number)
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 (
see
General
        Instruction A.2. below):

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.
Item
        3.02.
Unregistered
        Sales of Equity Securities.
On
        December 9, 2005, upon the recommendation of a majority of the members of
        the
        Compensation Committee of Generex Biotechnology Corporation (the "Company"), the
        Company's Board of Directors approved the terms and conditions of employment for
        Anna Gluskin as the Company's President and Chief Executive Officer and Rose
        Perri as the Company's Chief Financial Officer and Chief Operating Officer.
        Prior to such date, Ms. Gluskin and Ms. Perri served in such capacities without
        formal employment agreements with the Company. The material terms of the
        Company's employment agreement with each of Ms. Gluskin and Ms. Perri (each of
        whom is referred to as "Executive" below) are identical except as otherwise
        noted and are as follows:
Ÿ
Each
                  agreement will be effective as of January 1, 2006. The initial
                  term of
                  each agreement is five years, subject to the termination provisions
                  described below. The Company or Executive may give notice of non-renewal
                  not less than six months prior to the expiration of the term. If
                  no such
                  notice is given, the term of the agreement will extend indefinitely
                  and
                  will be terminable upon not less than six months' prior written
                  notice.
Ÿ
Each
                  agreement may be terminated:
(a)
by
                  the Company for cause (without any additional payment to
                  Executive);
(b)
automatically
                  upon expiration of the term;
(c)
automatically
                  upon Executive's death or disability;
                  or
(d)
by
                  Executive upon thirty days' prior written notice if there is a (i) a
                  material change in duties (other than removal of the title of Chief
                  Financial Officer and the duties associated therewith in the case
                  of Ms.
                  Perri), (ii) a material reduction in Executive's remuneration, (iii) a
                  material breach of the agreement by the Company, (iv) a change
                  of control
                  of the Company, or (v) a sale of all or substantially all of the
                  property
                  and assets of the Company.
In
        the
        event of termination pursuant to clause (b) above as a result of the Company's
        notice of non-renewal or pursuant to clause (d) above, the Company will pay
        Executive an amount equal to the greater of (x) an amount equal to five times
        Executive's base annual salary as of the date of termination, which amount will
        be payable in a lump sum on the date of termination, or (y) $5,000,000,
        $3,000,000 of which will be payable in a lump sum on the date of termination
        and
        $2,000,000 of which will be payable in stock issuable within three business
        days
        of the date of termination and valued at the 20-day VWAP as of the close
        of
        business on the date of termination. In addition, in such a termination event,
        Executive will be entitled to participate in and receive benefits for a period
        of twelve months following termination and will have no duty to
        mitigate.
Ÿ
Executive
                  will be entitled to an annual bonus as determined by the Company's
                  Compensation Committee in respect of each fiscal year of the Company
                  during the term of the agreement and reimbursement of all reasonable
                  expenses incurred by her in connection with the Company's
                  business.
Ÿ
Executive
                  will be included on any management slate of nominees submitted
                  to the
                  Company's stockholders for election to the Board of
                  Directors.
Ÿ
Each
                  agreement will include standard employee confidentiality, non-competition
                  and non-solicitation covenants.
Ÿ
Each
                  of Ms. Gluskin and Ms. Perri will receive her current annual base
                  salary
                  under her respective employment agreement with the Company, which
                  salary
                  may not be reduced during the term of such agreement. Ms. Gluskin's
                  current annual base salary is $425,000, and Ms. Perri's is $325,000.
The
        employment agreements with Ms. Gluskin and Ms. Perri have not yet been finalized
        and executed.
On
        December 9, 2005, the Company's Board of Directors also approved a one-time
        recompense payment in the aggregate amount of $1,000,000 for each of Ms.
        Gluskin
        and Ms. Perri in recognition of the Company's failure to remunerate each of Ms.
        Gluskin and Ms. Perri in each of the fiscal years ended July 31, 1998, 1999,
        2000 and 2001 in a fair and reasonable manner commensurate with comparable
        industry standards and Ms. Gluskin's and Ms. Perri's duties, responsibilities
        and performance during such years. The payment of such amount to each of
        Ms.
        Gluskin and Ms. Perri will be made (a) in cash at such time or times and
        in such
        amounts as determined solely by Ms. Gluskin or Ms. Perri, as applicable,
        and/or
        (b) in shares of the Company's common stock at such time or times as determined
        by Ms. Gluskin or Ms. Perri, as applicable, provided that the conversion
        price
        for any such shares shall be equal to the average closing price of the Company's
        common stock on the Nasdaq Capital Market for the 20 successive trading days
        immediately preceding, but not including, December 9, 2005. In the event
        that
        Ms. Gluskin or Ms. Perri elects payment of any or all of such recompense
        payment
        in the form of shares of the Company's common stock and such election is deemed
        to be a "sale" as that term is defined under Section 2(a)(3) of the Securities
        Act of 1933, as amended (the "Securities Act"), each such "sale" is exempt from
        registration under the Securities Act in reliance upon Section 4(2) thereof.
        Ms.
        Gluskin and Ms. Perri, as executive officers and directors of the Company,
        are
"accredited investors" as that term is defined in Rule 501(a) of Regulation D.
        The certificates issued for the shares of common stock will be legended to
        indicate that they are restricted. The sale, if any, of such shares did not
        involve the use of underwriters, and no commissions were paid in connection
        with
        the issuance or sale, if any, thereof.
On
        December 9, 2005, the Company's Board of Directors also approved the grant to
        Ms. Perri of a right of first refusal in respect of any sale, transfer,
        assignment or other disposition of either or both real properties municipally
        known as 1740 Sismet Road, Mississauga, Ontario and 98 Stafford Drive, Brampton,
        Ontario (collectively, the "Properties"). The Company granted Ms. Perri this
        right in recognition of the fair market value transfer to the Company during
        the
        fiscal year ended July 31, 1998 by Ms. Perri (or parties related to her)
        of the
        Properties.
On
        December 9, 2005, the Company's Board of Directors also directed that the
        payment of all accrued and unpaid salary in the amount of $8,698.43 owed
        to Rita
        Consentino, an employee of the Company, be satisfied by the issuance of shares
        of the Company's common stock. The number of shares to be issued to Ms.
        Consentino was calculated using the closing price of the common stock on
        the
        Nasdaq Capital Market on December 9, 2005 ($0.90 per share). In the event
        that
        the issuance of such stock to Ms. Consentino in satisfaction of accrued and
        unpaid salary is deemed to be a "sale" as that term is defined under Section
        2(a)(3) of the Securities Act, such "sale" is exempt from registration under the
        Securities Act in reliance upon Section 4(2) thereof. The certificate(s)
        issued
        for the shares of common stock will be legended to indicate that they are
        restricted. The sale, if any, of such shares did not involve the use of
        underwriters, and no commissions were paid in connection with the issuance
        or
        sale, if any, thereof.
As
        previously reported in the Company's Current Report on Form 8-K filed with the
        Securities and Exchange Commission (the "SEC") on April 1, 2005 (the "April
        Current Report"), on March 28, 2005, the Company entered into a Promissory Note
        and Agreement with Cranshire Capital, L.P. ("Cranshire") pursuant to which
        Cranshire loaned the Company the principal amount of $500,000 (the "Note"). As
        reported in the Company's April Current Report, as additional consideration for
        the loan, the Company issued Cranshire a warrant to purchase an aggregate
        of
        1,219,512 shares of the Company's common stock on April 28, 2005 (the "April
        Warrant"). As reported in the Company's Quarterly Report on Form 10-Q filed with
        the SEC on June 14, 2005, Cranshire agreed to extend the interest payment
        date
        and the maturity date of the Note to July 22, 2005, and in consideration
        of such
        extension, the Company issued Cranshire a warrant to purchase an aggregate
        of
        1,219,512 shares of common stock on June 7, 2005 (the "June Warrant"). As
        previously reported in the Company's Annual Report on Form
        10-K filed
        with the SEC on October 31, 2005, Cranshire agreed to further extend the
        interest payment date and the maturity date under the Note to September 20,
        2005, and, as consideration for such extension, the Company issued a warrant
        to
        Cranshire to purchase an aggregate of 1,219,512 shares of common stock on
        July
        22, 2005 (the "July Warrant").
In
        October and November 2005, Cranshire exercised its April, June and July
        Warrants, and the Company received aggregate proceeds of approximately
        $3,000,000 in connection therewith. On December 9, 2005, consistent with
        the
        intention of the Company and Cranshire and in consideration of Cranshire's
        exercise of its April, June and July Warrants, the Company issued Cranshire
        a
        five-year warrant to purchase an aggregate of 1,829,268 shares of common
        stock.
        At Cranshire's option, this warrant is exercisable into shares of common stock
        at the exercise price
of
        $1.25
        per share. The exercise price is subject to an anti-dilution adjustment upon
        the
        Company's issuance of securities at a price per share less than the then
        exercise price. If, at any time after the first anniversary of the date of
        issuance of this warrant, there is no effective registration statement
        registering for resale the shares of common stock into which the warrant
        is
        exercisable, Cranshire may exercise its warrant through a cashless exercise.
        The
        number of shares to be issued upon a cashless exercise will be equal to the
        quotient resulting from the following calculation: [(the VWAP on the trading
        day
        immediately preceding the date of such election less the exercise price,
        as
        adjusted) multiplied by the number of shares issuable upon exercise of the
        warrant by means of a cash exercise] divided by the VWAP on the trading day
        immediately preceding the date of such election. Cranshire has agreed that
        it
        will not exercise its warrant if such exercise would cause it, together with
        its
        respective affiliates, to beneficially own more than 4.99% of the Company's
        shares of common stock then outstanding. The form of the warrant issued to
        Cranshire on December 9, 2005 is included as Exhibit 4.1 to this Current
        Report
        on Form 8-K. The offer and sale of the warrant to Cranshire, including the
        shares of common stock into which such warrant is exercisable, are exempt
        from
        registration under the Securities Act in reliance upon Section 4(2) thereof.
        Cranshire has previously represented and warranted to the Company that it
        is an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D
        promulgated under the Securities Act. The certificates representing such
        warrant
        and shares of common stock issued upon exercise of such warrant will be legended
        to indicate that they are restricted. The sale of such securities did not
        involve the use of underwriters, and no commissions were paid in connection
        therewith.
Item
        9.01.
Financial
        Statements and Exhibits.
(d)
Exhibits.
4.1
Form
                  of Warrant issued by Generex Biotechnology Corporation to Cranshire
                  Capital, L.P. on December 9, 2005 (incorporated by reference to
                  Exhibit
                  4.45 to Generex Biotechnology Corporation's Report on Form 10-Q filed on
                  December 15, 2005)
SIGNATURE
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: December
                  15, 2005
By:
/s/ Rose
                  C. Perri
Chief Operating Officer and
Chief Financial Officer
(principal
                  financial officer)
EXHIBIT
        INDEX
4.1
Form
                  of Warrant issued by Generex Biotechnology Corporation to Cranshire
                  Capital, L.P. on December 9, 2005 (incorporated by reference to
                  Exhibit
                  4.45 to Generex Biotechnology Corporation's Report on Form 10-Q filed on
                  December 15, 2005)