REDACTED – AS FILED
Exhibit 10.2

THE MARKED PORTIONS OF THIS AMENDMENT HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT

--------------------------------------------------------------------------------

RECOMBINANT HUMAN INSULIN ACTIVE INGREDIENT

MANUFACTURING AND SUPPLY AGREEMENT

BETWEEN

GENEREX BIOTECHNOLOGY CORPORATION

AND

SANOFI-AVENTIS DEUTSCHLAND GMBH

DATED: NOVEMBER 24, 2009

 

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TABLE OF CONTENTS

Article
 
Title
 
Page
         
1
 
Definitions
 
1
2
 
Manufacture, Sale and Purchase of Active Ingredient
 
5
3
 
Coordinators
 
6
4
 
Packaging
 
6
5
 
Specification Changes
 
7
6
 
Forecasts and Orders
 
8
7
 
Registration of the Product
 
9
8
 
Deliveries; Inspections
 
9
9
 
Price; Price Adjustments; Payment Terms
 
11
10
 
SAD’s Representations, Warranties and Covenants
 
11
11
 
General Representations and Warranties
 
12
12
 
Term; Termination
 
13
13
 
Claims; Recalls
 
15
14
 
Indemnification
 
17
15
 
Insurance
 
18
16
 
Limitation of Liability
 
18
17
 
Confidentiality
 
19
18
 
Ownership of Property
 
20
19
 
Intentionally omitted.
 
20
20
 
Cooperation with Governmental Requirements
 
20
21
 
Force Majeure
 
20
22
 
Independent Contractors
 
21
23
 
Further Actions
 
21
24
  
Miscellaneous
  
21

TABLE OF SCHEDULES

Exhibit
 
Title
     
1
 
Territories:  Exclusive
1A
 
Territories:  Non-Exclusive
2
 
Active Ingredient Prices
3
 
Packaging Specifications
4
 
Active Ingredient Specifications
5
 
Minimum Purchase Commitments
6
  
In-Vitro Physio-Chemical Characterizations

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REDACTED – AS FILED
Exhibit 10.2

THE MARKED PORTIONS OF THIS AMENDMENT HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT

--------------------------------------------------------------------------------

RECOMBINANT HUMAN INSULIN ACTIVE INGREDIENT

MANUFACTURING AND SUPPLY  AGREEMENT

(RECOMBINANT HUMAN INSULIN COMMERCIAL QUANTITIES)

           THIS MANUFACTURING AND SUPPLY AGREEMENT (the “Agreement”) is made
effective as of November 24, 2009 (the “Effective Date”) between:

generex biotechnology corporation, a Delaware corporation having a place of
business at 33 Harbour Square, Suite 202, Toronto, Ontario, Canada M5J 2G2
(“Generex”); and

Sanofi-Aventis Deutschland GmbH, a company existing under the laws of Germany,
located at Industriepark Hoechst, 65926 Frankfurt am Main, Germany ( “SAD”).

Generex and SAD are individually referred to herein as a “Party” and are
collectively referred to herein as the “Parties”.

Background

           A.           Generex wishes to engage SAD to perform services for
Generex, as more specifically set forth herein, in connection with the
manufacturing and supply of Active Ingredient for use in the Product.

           B.           SAD wishes to perform such services subject to the terms
and conditions set forth in this Agreement.

Covenants

           In consideration of the mutual covenants and promises set forth
herein, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE 1
DEFINITIONS

           The following terms, whether used in the singular or plural, shall
have the meanings assigned to them below for purposes of this Agreement:

           “Acquisition Cost” shall mean the actual invoiced price actually paid
by SAD to any Third Party for materials, components and packaging materials
required to manufacture and package the Active Ingredient hereunder, including,
but not limited to, shipping and handling costs, taxes and customs duties
incurred and paid by SAD to any Third Party in connection with the acquisition
of such materials and components, as the case may be.

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           “Active Ingredient” shall mean Recombinant Human Insulin as
manufactured by SAD in accordance with the Active Ingredient Specifications, for
use in the Product.

           “Active Ingredient Price(s)” shall have the meaning set forth in
Article 9 hereof.

           “Active Ingredient Specifications” shall mean the specifications for
the Active Ingredient attached hereto as Exhibit 4 and made a part hereof, as
determined in accordance with the analytical methodology set forth therein, as
such specifications may be amended from time to time by mutual agreement of the
Parties in accordance with the terms and conditions of the Quality Agreement.

           “Affiliate” shall mean any corporation or non-corporate entity which
controls, is controlled by, or is under common control with a Party.  A
corporation or non-corporate entity shall be regarded as in control of another
corporation if it owns or directly or indirectly controls at least fifty percent
(50%) of the voting stock of the other corporation or (a) in the absence of the
ownership of at least fifty percent (50%) of the voting stock of a corporation
or (b) in the case of a non-corporate entity, the power to direct or cause the
direction of the management and policies of such corporation or non-corporate
entity, as applicable.

           “Agreement” shall mean this Manufacturing and Supply Agreement, as it
may hereafter be amended or supplemented from time to time in accordance with
the terms hereof.

            “[REDACTED]” shall have the meaning set forth in Section 2.4 hereof.

“cGMPs” shall mean applicable standards for current good manufacturing practices
of active ingredients specified in (i) the ICH Guidelines, and (ii) the FDA’s
“Guidance for Industry Q7A Good Manufacturing Practice Guidance for Active
Pharmaceutical Ingredients”.  For clarity, such definition of cGMPs shall not
include other country-specific regulatory requirements.

“Certificate of Analysis” shall mean a document, signed by an authorized
representative of SAD, certifying the Specifications for, and testing methods
applied to, the Active Ingredient, and the results thereof, and which includes
the Active Ingredient date of manufacture, date for re-testing or expiration
date as appropriate.

“Certificate of GMP Compliance” shall mean a document, signed by an authorized
representative of SAD, certifying that the Active Ingredient being delivered to
Generex has been manufactured in conformity with cGMPs.

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           “Confidential Information” shall mean, as the case may be, any and
all information, relating to the Active Ingredient, of a confidential nature not
known to the public or to the recipient of the information before its disclosure
belonging to either Party in written, electronic or any other form. This
includes, but is not limited to, Know-How, operational methods, formulae,
samples, Specifications, analytical methods as well as any details of
commercial, technical, pharmaceutical, scientific and industrial nature. The
terms of this Agreement shall also be deemed Confidential
Information.  Confidential Information shall not include information, materials,
technical data or know-how which: (i) is in a receiving Party’s possession at
the time of disclosure as evidenced by the receiving Party’s written records
immediately prior to the time of disclosure; (ii) is in the public domain at the
time of disclosure; (iii) becomes part of the public domain by publication or
otherwise after disclosure hereunder other than by breach of this Agreement by a
receiving Party; (iv) is disclosed to a receiving Party by a third party having
the right to disclose such information without any violation of any rights of or
obligations to the disclosing Party; or (v) is independently developed by an
employee or agent of a receiving Party without knowledge of the disclosing
Party’s Confidential Information as evidenced by the receiving Party’s written
records.

           “Contract Year” shall mean a twelve (12) month period during the
Term, beginning with January 1 and ending on December 31, except that the first
“Contract Year” shall be understood to be from November 1, 2009 through December
31, 2009 and the last “Contract Year” for the initial Term shall be understood
to run from January 1, 2016 through October 31, 2016..

           “Coordinators” shall have the meaning set forth in Article 3 hereof.

“FDA” shall mean the United States Food and Drug Administration or any successor
entity thereto.

“FDCA” shall mean the Federal Food, Drug and Cosmetic Act (21 U.S.C. § et seq.),
as the same may be amended from time to time, together with any rules and
regulations promulgated thereunder, and any foreign counterpart.

“Forecast” shall have the meaning set forth in Section 6.1 hereof.

           “Force Majeure Event” shall have the meaning set forth in Section
21.1 hereof.

           “ICH Guidelines” shall mean the document titled “Q7A - Good
Manufacturing Practice Guide for Active Pharmaceutical Ingredients” endorsed by
the International Conference on Harmonization of Technical Requirements for
Registrations of Pharmaceuticals for human use.

           “Initial Term” shall have the meaning set forth in Section 12.1
hereof.

           “Invention” shall mean information relating to any innovation,
improvement, development, discovery, computer program, device, trade secret,
method, know-how, process, technique or the like, whether or not written or
otherwise fixed in any form or medium, regardless of the media on which
contained and whether or not patentable or copyrightable.

“Know-How” shall mean all confidential and identified technical and scientific
information and data, irrespective of its subject-matter and form, including,
but not limited to, processes, formulae, designs and data as well as Inventions
and improvements whether patentable or not.

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“Minimum Purchase Commitments” shall have the meaning set forth in Section 2.2
hereof.

           “Packaging Specifications” shall mean the packaging and labeling
specifications for the Active Ingredient attached hereto as Exhibit 3 and made a
part hereof, as such specifications may be amended from time to time by mutual
agreement of the Parties in accordance with the terms and conditions of the
Quality Agreement.

“Product” shall mean Generex’s proprietary “Generex Oral-lyn™” product,
formulated as a buccal insulin spray device containing a proprietary formulation
that includes the Active Ingredient, marketed by Generex (or its licensee(s))
under the registered trademark “GENEREX ORAL-LYN” (or otherwise).

“Production Site” or “Production Sites” shall mean (i) the active pharmaceutical
ingredient facility owned by SAD or an Affiliate of SAD (both directly or
indirectly under the control of Sanofi-Aventis, SA, the French parent company)
located at Industriepark Hoechst, 65926, Frankfurt am Main, Germany, and (ii)
such other facilities owned by SAD or an Affiliate of SAD, if any, as the
Parties may mutually agree to in writing from time to time.

           “Quality Agreement” shall mean the Quality Agreement which the
parties shall in good faith negotiate and execute within thirty (30) days after
the execution of this Agreement, and which shall be made part hereof.

           “Recall” shall have the meaning set forth in Section 13.2(a) hereof.

           “Regulatory Change” shall have the meaning set forth in Section 21.2
hereof.

           “Renewal Term” shall have the meaning set forth in Section 12.1
hereof.

           “Specifications” shall mean the Active Ingredient Specifications and
the Packaging Specifications.

           “Term” shall have the meaning set forth in Section 12.1 hereof.

“Territory” shall mean, collectively, those territories set forth on Exhibit 1
and Exhibit 1A  attached hereto.

“Third Party” shall mean any person or entity other than Generex, SAD and their
respective Affiliates.

           “Third Party Claims” shall have the meaning set forth in Section 14.1
hereof.

“Third Party Offer” shall be a third party’s documented offer for the sale of
recombinant human insulin to Generex for commercial production of the Product.

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           “USA” shall mean the United States of America, including its
territories and possessions.

ARTICLE 2
MANUFACTURE, SALE AND PURCHASE OF ACTIVE INGREDIENT

2.1           Generally.  Subject to the terms and conditions of this Agreement,
SAD shall manufacture and supply to Generex and Generex shall purchase from SAD,
the Active Ingredient during the Term of this Agreement for the Territory and as
specified in Section 2.2 below.

 
           2.2           Purchase Commitments.  Generex shall observe and
perform the minimum purchase commitments specified and defined in Exhibit 5
hereto (the “Minimum Purchase Commitments”) from the Effective Date through
December 31, 2011.  SAD shall be the exclusive supplier of Active Ingredient to
Generex during such period and thereafter through the Term of this Agreement for
those territories listed in Exhibit 1, and as a non-exclusive supplier of Active
Ingredient to Generex for those territories listed in Exhibit 1A, unless
otherwise agreed to be mutual agreement of the parties or in accordance with the
terms of this Agreement.    

2.3           Quality Agreement. The Parties shall comply in all respects with
their obligations under the Quality Agreement.

           2.4           Capacity.  Under no circumstances shall SAD be obliged
to accept orders or deliver the Active Ingredient in quantities which, in the
aggregate, are in [REDACTED]. Starting January 1, 2012 and thereafter, should
Generex’s rolling forecast(s) (as outlined in Article 6 below), be in
[REDACTED], the parties shall discuss such forecast(s) and SAD shall have the
right, at its sole discretion, to deny or accept such [REDACTED] forecast(s) or
other terms discussed by the parties as set forth above.  Should SAD elect not
to supply the [REDACTED], Generex shall have the right to purchase Active
Ingredient from another supplier but only to the extent to obtain the quantities
in the forecast not provided by SAD. 

2.5           Suppliers.  SAD shall have the discretion to determine sources and
suppliers for all materials and components used in the manufacture of the Active
Ingredient, subject to Article 5 hereof.

2.6           First Right of Refusal.

(a) During the Term, Generex will not accept any Third Party Offer or enter into
any arrangement pursuant to which Generex agrees to purchase the Active
Ingredient from a Third Party on an exclusive basis for Product to be sold in
[REDACTED] without first giving SAD a first right to refuse to exclusively
supply Active Ingredient to Generex for Product to be sold in [REDACTED] on
substantially the same terms as the Third Party Offer without material variance.

(b)           Upon receipt by Generex of a bona fide Third Party Offer that
Generex is prepared to accept, Generex shall apprise SAD in writing of the terms
of the Third Party Offer.

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(c)           SAD will have a period of thirty (30) days to from the date of
delivery of the Third Party Offer to deliver to Generex an offer in writing (the
“SAD Offer”) to sell Active Ingredient to Generex on an exclusive basis for
Product to be sold in [REDACTED] upon the same terms as are contained in the
Third Party Offer, which SAD Offer shall be deemed accepted by Generex once
received by Generex.  Failure to deliver the SAD Offer shall be deemed to be a
waiver by SAD indicating declination to exercise the first right of refusal
set forth herein.  The parties shall execute an amendment to this Agreement
which shall reflect the SAD Offer and relevant terms related thereto.

(d)           If SAD fails to submit the SAD Offer, Generex will be entitled,
for a period of six (6) months after the expiry of the time provided for
delivery of the SAD Offer, to execute and deliver contractual documentation
formalizing the Third Party Offer with such Third Party on and subject to the
terms contained in the Third Party Offer without material variance.

ARTICLE 3
COORDINATORS

           Within ten (10) days after the Effective Date, Generex and SAD shall
each appoint one or more authorized representatives (“Coordinators”) for the
exchange of all communications, other than formal notices hereunder, related to
the manufacture and supply the Active Ingredient. Each Party shall provide
notice to the other Party as to the name and title of the individuals so
appointed. Each Party may replace its Coordinators at any time for any reason by
providing written notice to the other Party in accordance with Section 24.1
hereof.

ARTICLE 4
PACKAGING

           SAD shall procure all packaging materials and components for, and
shall package, the Active Ingredient in accordance with the Packaging
Specifications as set forth in Exhibit 3 attached hereto.  Typical packaging
materials and components are described in the Drug Master File in respect of the
Active Ingredient and the use thereof is supported by extant stability data.

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ARTICLE 5
SPECIFICATION CHANGES

Upon any change in the Active Ingredient Specifications or Packaging
Specifications requested by Generex (“Generex Specification Changes”), including
the addition of new packaging configurations, Generex shall promptly advise SAD
in writing of any requested Generex Specification Changes, and SAD shall
promptly advise Generex as to the feasibility of the Generex Specification
Changes, and if in SAD’s reasonably exercised discretion, the Generex
Specification Changes are found to be commercially reasonable and feasible, SAD
will inform Generex of any scheduling and/or price adjustments which may result
from the Generex Specification Changes.    Prior to implementation of Generex
Specification Changes, the Parties shall negotiate in good faith in an attempt
to reach agreement on (a) the new Active Ingredient Price for any Active
Ingredient which embodies the Generex Specification Changes, (b) any amounts to
be reimbursed by Generex to SAD as described in the next sentence of this
paragraph, and (c) any other amendments to this Agreement which may be
necessitated by the Generex Specification Changes (i.e., an adjustment to the
lead time for purchase orders). Generex shall reimburse SAD for the mutually
agreed upon reasonable expenses incurred by S AD as a result of the Generex
Specification Changes, including, but not limited to, reimbursing SAD for its
mutually agreed validation and development costs, capital expenditure costs and
costs for any reasonable inventory of packaging components or other materials
maintained by SAD for purposes of this Agreement and consistent with any
then-current Forecast, and rendered unusable as a result of the Generex
Specification Changes.  If during the Term, Generex, in accordance with this
Article 5, causes the amendment of the Active Ingredient Specifications or
Packaging Specifications so as to render obsolete reasonable quantities of the
Active Ingredient and/or materials and components used to manufacture and
package the Active Ingredient pursuant to this Agreement on hand at SAD, Generex
shall purchase from SAD (i) all such obsolete Active Ingredient at the Active
Ingredient Prices then in effect, (ii) all work-in-progress of the Active
Ingredient at SAD’s actual cost thereof, and (iii) at SAD’s Acquisition Cost,
all such obsolete materials and components obtained by SAD pursuant to its
normal procurement policies to manufacture quantities of the Active Ingredient
pursuant to Generex’ forecasts under Section 6.1.  SAD’s normal procurement
policies for purposes of the preceding sentence of this Article 5 shall be
considered to be quantities of materials and components corresponding to the
following six (6) months of Generex’s forecasted Active Ingredient demand.  For
greater certainty, the foregoing provisions of this Article 5 shall not apply in
respect of any change in the Active Ingredient Specifications or Packaging
Specifications made by SAD other than pursuant to a Generex request.  SAD shall
provide Generex with not less than six (6) months’ prior written notice of SAD’s
implementation of any intended significant change(s) to its manufacturing
processes for the Active Ingredient, which might affect the quality of the
Active Ingredient (“Change Notice”) (e.g. Any change in the Active Ingredient
Specifications or Packaging Specifications made by SAD other than pursuant to a
Generex request).  If a significant change implemented by SAD and Generex
provides SAD with demonstrable evidence that the utility (i.e. the conditions of
being useful as a pharmaceutical product in connection with the manufacture and
performance of the Product) of the Active Ingredient is significantly altered in
that there is no similar bioequivalence (to Active Ingredient before the
significant change) or similar Product specifications when formulated in the
final Product formulation (together, “Utility Loss”), the parties shall exert
their best commercial efforts to resolve issues related to the Utility Loss in
order to continue operating under this Agreement.  If the parties cannot reach
agreement and resolution regarding Utility Loss Generex shall have the option to
provide sixty (60) days written notice of termination of this Agreement to SAD.

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ARTICLE 6
FORECASTS AND ORDERS

           6.1           Communication of Forecasts and Purchase Orders by
Generex.

Generex shall by the end of each calendar quarter (commencing with the calendar
quarter ending December 31, 2009) provide SAD with its non-binding forecast of
its Active Ingredient requirements for the succeeding twelve (12) calendar
months (each a “Forecast”).  Generex shall provide firm and binding Active
Ingredient purchase orders for 100% of the Q1 and Q2 amounts in each Forecast,
75% of the Q3 amounts in each Forecast, and 50% of the Q4 amounts in each
Forecast. In addition, Generex shall furnish SAD with a non-binding rolling
forecast of its Active Ingredient requirements for a subsequent twelve (12)
month period (for a total of twenty-four (24) months). Generex shall make its
commercially reasonable efforts to provide forecasts at least eighteen (18)
months in advance for annual orders that will [REDACTED]. Generex shall use its
commercially reasonable efforts to provide accurate Forecasts.  Forecasts and
SAD obligations to supply are subject to [REDACTED] set forth in Section 2.4
above.

Generex shall place with SAD firm purchase orders not later than three (3)
months prior to the desired delivery date.

For purchase orders less than or equal to nine (9) kilograms, the minimum
quantity in such purchase order shall not be less than three (3) kilograms.  For
quantities from ten (10) kilograms up to and including one hundred (100)
kilograms, the minimum quantity in such purchase order shall not be less than
ten (10) kilograms and multiples of ten (10) thereafter.  For quantities greater
than one hundred (100) kilograms, Generex shall order full batches.  Under no
circumstances shall SAD be obliged to accept purchase orders or deliver the
Active Ingredient pursuant thereto in quantities smaller than the minimum order
quantities set out above.

6.2           Confirmation by SAD; Order Confirmation.  No later than fifteen
(15) business days after receipt of Generex’s purchase orders, SAD shall confirm
that it can fulfill the monthly quantities specified in such orders, and shall
confirm for each relevant portion of such monthly quantities the expected
delivery date within the month specified.

6.3           Additional Quantities.   If the purchase order quantities are in
excess of the Forecast quantities by more than twenty five percent (25%), then
SAD shall use commercially reasonable efforts to manufacture and supply the
excess quantities up to [REDACTED], with the express understanding that any
failure or delay in the delivery of such excess amounts shall not subject SAD to
any penalties or other liabilities.  Unless otherwise agreed to by SAD before
such orders [REDACTED] were placed, SAD, at its sole discretion, may elect
whether or not to manufacture and supply the excess quantities [REDACTED] for
such orders, subject to the terms set out in Section 2.4 above and otherwise set
forth in this Agreement.

6.4           Long-Term Planning Forecasts.  Within one month after the first
day of each Contract Year (Y), Generex will supply SAD with a written four (4)
year non-binding rolling forecast reflecting Generex’s projected annual Active
Ingredient demand for the four (4) Contract Years (Y+1) to (Y+4) following the
Contract Year in which such planning forecast is provided to SAD. Such planning
forecasts shall represent Generex’s most current estimates for planning purposes
only, and shall not be considered to be purchase commitments.

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ARTICLE 7
REGISTRATION OF THE PRODUCT

7.1           General. Generex shall diligently use good faith commercially
reasonable efforts to receive necessary governmental approvals which allow the
sale of Product in all territories which comprise the Territory for the Product.

7.2           Cooperation of the Parties.  The Parties shall diligently
cooperate in good faith to conduct the registration activities required for
Product Approval (such Product containing SAD provided Active Ingredient)
approval by the regulatory agencies in the countries in the Territory or any
countries the Parties contemplate adding to the Territory for the Product
containing the Active Ingredient, which costs (i.e.; registration fees) shall be
paid solely by Generex. For this purpose, SAD will provide Generex with a letter
of reference to its Drug Master File in respect of the Active Ingredient as
submitted to the FDA and other relevant governmental regulatory authorities for
the Term.   In addition, SAD shall provide the specific regulatory agency within
a particular territory with a copy of open parts of the Drug Master Files with
respect to the Active Ingredient, as submitted to the regulatory agencies of the
respective territories comprising the Territory.  For clarification, under no
circumstance is SAD required to provide any information, data, or other material
which SAD, in good faith and at SAD’s sole discretion, determines is proprietary
or deemed to be the closed parts of the Drug Master File, and by not providing
such information, data or other materials, SAD is not in violation of the terms
outlined herein and in this Agreement; provided, however, that in the event that
Generex is unable to procure Product approval in any territory in the Territory
as a consequence of SAD’s failure to provide such information, data or other
materials related to the Active Ingredient, then this Agreement shall be deemed
to be amended by deleting such territory (and, by extension, any Minimum
Purchase Commitments in respect of such territory) from Exhibit 1 or Exhibit 1A
annexed hereto (such that such territory will no longer be included in the
Territory).

ARTICLE 8
DELIVERIES; INSPECTIONS

           8.1           Purchase Quantities. SAD will use commercially
reasonably efforts to ship the quantities specified in a particular monthly
purchase order.  Should it be anticipated that there will be a quantity
variation (between what is available for shipment and what is outlined in a
purchase order) above or below five percent (5%), the parties shall negotiate in
good faith on the actual quantity to be shipped.  Variations in shipments as
outlined herein shall be deemed to be in compliance with such purchase order;
provided, however, that Generex shall only be invoiced and required to pay for
the quantities of Active Ingredient which SAD actually ships to Generex.  It is
understood and accepted by Generex that quantities shipped are subject to the
Packaging Specifications set out in Exhibit 3 hereto.

           8.2           Active Ingredient Release.  No Active Ingredient shall
be released to Generex without a Certificate of Analysis and Certificate of GMP
Compliance, both of which shall be supplied to Generex by SAD.  SAD shall
conduct such quality assurance testing for the Active Ingredient as is required
by the Specifications, cGMPs and the Quality Agreement.  SAD shall conduct in
parallel on-going stability studies of the Active Ingredients.

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           8.3           Delivery Terms. Shipment of the Active Ingredient will
be to one location as designated by Generex.  Generex will select and pay the
carrier to be used.  The Active Ingredient will be shipped with the requisite
Certificates of Analysis and Certificate of cGMP Compliance FCA Production Site
(Incoterms 2000), freight class, Class 70 (Class of Commodity for Food and
Pharmaceutical Compound).  Loading of the Active Ingredient shall be performed
at no cost by SAD, but under the responsibility and liability of Generex.  All
shipments of the Active Ingredient to Generex shall be made via such carrier(s)
as Generex may direct.  Title and risk of loss shall pass to Generex upon
delivery to the carrier.  Freight charges shall be billed ship collect.

           8.4           Shipping; Dating and Customs Costs.  SAD shall make
commercially reasonable efforts to cause Active Ingredient delivered hereunder
to have eighteen (18) months until expiration, but in any event, SAD shall
deliver Active Ingredient hereunder with at least twelve (12) months until
expiration.  For clarity, costs for the shipment of Active Ingredient from the
Production Site and all customs tariffs and duties shall be for the account of
Generex.

           8.5           Inconsistencies. In the event of any inconsistencies
between the terms of this Agreement and any purchase order issued by Generex
hereunder or any acceptance thereof by SAD, the terms of this Agreement shall
govern.

           8.6           Inspections by Generex.  Upon reasonable prior written
notice, the single Generex designated agent which is reasonably agreed to by
SAD, together with up to two (2) Generex employees, shall have the right to
inspect those portions of the manufacturing, storage and warehouse facilities of
a Production Site where Active Ingredient is being manufactured or stored,
during regular business hours, to verify compliance with the terms and
provisions of this Agreement or for insurance inspection purposes.  Unless for
reasonable cause, Generex agrees to not inspect a Production Site more often
than one (1) time in three (3) calendar years.

           8.7           Governmental Inspections.  If SAD is notified that the
Active Ingredient or the Production Site will be subject to an inspection,
related to the Active Ingredient, by any governmental authority for a particular
territory listed in Exhibit 1 or 1A, SAD shall promptly inform Generex of such
inspection and shall cooperate with and allow such inspection to the extent
required by applicable laws.  Generex shall not have the right to be present at
any meetings or events related to such inspection.  Subject to being excluded
due to restrictions under confidentiality obligations of SAD to Third Parties,
and to SAD’s determination that particular information and/or documentation is
confidential in nature, SAD shall provide information related to inspection
outcomes to Generex resulting from such inspection to the extent relevant to the
Active Ingredient.  SAD will promptly inform Generex whether any Form FDA 483 or
warning letters or citations are issued to SAD (by the FDA or any other
governmental authority for a particular territory listed in Exhibit 1 or Exhibit
1A) which are related to or impact the supply of the Active Ingredient.

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ARTICLE 9
PRICE; PRICE ADJUSTMENTS; PAYMENT TERMS

           9.1           Price.  The per-kilogram price(s) payable by Generex
for all quantities of the Active Ingredient ordered hereunder (the “Active
Ingredient Price(s)”) shall be as specified in the pricing schedule in Exhibit 2
hereto; as such prices may be revised from time to time pursuant to Article 5
and Article 9.

9.2           Price Adjustments. The Active Ingredient Price through December
31, 2012 shall be as  specified in the pricing schedule in Exhibit 2 attached
hereto.  Subject to Article 5 hereof, the Active Ingredient Price(s) listed in
Exhibit 2 for each Contract Year thereafter shall be equal to the Active
Ingredient Price(s) in effect at the end of the immediately preceding Contract
Year, increased (or decreased, as the case may be) by a percentage equal to
fifty percent (50%) of the percentage increase (or the decrease, as the case may
be) in the Producer Price Index of the Federal Republic of Germany (the “PPI”)
over the course of the immediately preceding Contract Year, calculated as the
average of the twelve (12) monthly PPI data reports of the Federal Statistical
Office Germany during the immediately preceding Contract Year.

9.3           Payment Terms. SAD shall invoice Generex for all quantities of the
Active Ingredient purchased hereunder concurrently with SAD’s shipment thereof
to Generex. Subject to Section 13.1, and Section 8.3, all amounts properly
invoiced by SAD hereunder shall be due and payable [REDACTED] days from the date
of such invoice, except that for the first two Contract Years (for the Minimum
Purchase Commitments only and payment thereof in 2009 and 2010), Generex shall
submit payment within [REDACTED] days from the date of invoice.  SAD shall
deliver invoices to Generex on the date the invoice is issued. Payment may be
made by Generex’s corporate check or by wire transfer of funds to such account
as SAD may designate.  Orders, invoices and payments under this Agreement shall
be made in Euros.  Invoices shall reflect the actual quantities shipped and
Generex shall be responsible for payment for such actual quantities shipped in
accordance with this Agreement and the Packaging Specifications set out in
Exhibit 3 hereto.

ARTICLE 10
SAD’S REPRESENTATIONS, WARRANTIES AND COVENANTS

SAD represents, warrants and covenants to Generex as follows:

           10.1           Active Ingredient. The Active Ingredient, at the time
of sale and shipment to Generex by SAD, (a) will conform to the Specifications,
as then in effect, (b) will have dating until re-evaluation of not less than
that which is set forth in Section 8.4 above, (c) will have been manufactured in
all material respects in accordance with cGMP in effect at the time of
manufacture, (d) will not be adulterated or mis-branded within the meaning of
the FDCA, (e) will not have been manufactured, sold or shipped in violation of
any applicable laws in any material respect, (f) will be conveyed with good
title, free and clear of all security interests, liens or encumbrances, and (g)
as may be appropriate or applicable, will have been approved by any and all
requisite governmental and regulatory authorities.

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10.2           Manufacturing Standards. SAD shall manufacture the Active
Ingredient in accordance with (i) the Specifications, (ii) then-current cGMPs,
and (iii) applicable ICH Guidelines.

10.3           Compliance with Applicable Laws. SAD shall fully comply with all
applicable federal, state and local laws in the Territory, as they relate to the
manufacture or sale of pharmaceutical products, in performing the services
contemplated hereunder.

10.4           Qualified Personnel. SAD shall engage and employ only
professionally qualified personnel to perform the services contemplated
hereunder, and will not knowingly utilize any individual, in any material
capacity, who has been debarred under FDCA 21 USC 335a or who is subject to a
conviction described in FDCA 21 USC 331.

10.5           SAD represents and warrant to Generex that the Facility is
wholly-owned by an affiliate of SAD and that such affiliate and SAD are wholly
owned, directly or indirectly, by sanofi-aventis SA.

ARTICLE 11
GENERAL REPRESENTATIONS AND WARRANTIES

Each Party represents and warrants to the other as follows:

           11.1           Power and Authorization. It has all requisite power
and authority (corporate and otherwise) to enter into this Agreement and has
duly authorized by all necessary action the execution and delivery hereof by the
officer or individual whose name is signed on its behalf below.

           11.2           No Conflict. Its execution and delivery of this
Agreement and the performance of its obligations hereunder do not and will not
conflict with or result in a breach of or a default under its organizational
instruments or any other agreement, instrument, order, law or regulation
applicable to it or by which it may be bound.

           11.3           Enforceability. This Agreement has been duly and
validly executed and delivered by it and constitutes its valid and legally
binding obligation, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors’ rights and
except as enforcement is subject to general equitable principles.

           11.4           Debarment.  As of the Effective Date, neither party
has been debarred under FDCA 21 USC 335a, and to the best of its knowledge, is
not subject to pending debarment under FDCA 21 USC 335a.

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ARTICLE 12
TERM; TERMINATION

           12.1           Term. Unless sooner terminated pursuant to the terms
hereof, the term of this Agreement shall commence on the Effective Date and
shall expire on October 31, 2016 (the “Initial Term”). Upon the expiration of
the Initial Term, this Agreement shall automatically and continually renew for
successive three (3) year terms (each, a “Renewal Term”, and the Initial Term
and all Renewal Terms being collectively referred to as the “Term”) unless
either Party notifies the other in writing at least twenty-four (24) months
prior to the end of the Initial Term or any Renewal Term, as the case may be, of
its intent that this Agreement shall expire without further renewal.

12.2           Third Party Distribution.  In the event that Generex (a) executes
and delivers an agreement with a Third Party pursuant to which the Third Party
agrees to distribute the Product in one or more territories listed in Exhibit 1
(each a “Third Party Distribution Jurisdiction”), and (b) the business of such
Third Party includes the manufacture of recombinant human insulin, then, upon
not less than thirty (30) days’ prior written notice by Generex to SAD, this
Agreement shall be deemed to be amended by deleting the Third Party Distribution
Jurisdiction (and, by extension, any Minimum Purchase Commitments in respect of
such Third Party Distribution Jurisdiction) from Exhibit 1 annexed hereto (such
that the Third Party Distribution Jurisdiction will no longer be included in the
Territory for Exhibit 1), and at the sole option of SAD, to move such Third
Party Distribution Jurisdiction to Exhibit 1A or remove from the Agreement in
its entirety.

12.3           Termination by Generex for Utility Loss.  Generex shall be
entitled to terminate this Agreement pursuant to and in accordance with Article
5 in the event of a Utility Loss.  In the event of a termination by Generex in
accordance with this Section 12.3 and Article 5, Generex’s then-current
obligations under this Agreement shall remain until fully satisfied, including
the payment of amounts due to SAD for Active Ingredient or otherwise, which are
not related to Utility Loss.

12.4           Termination For Low Volume.  This Agreement may be terminated by
SAD in its sole discretion after December 31, 2011, upon not less than twelve
(12) months’ prior written notice in the event that the forecasted purchase
volumes of Generex for Active Ingredient pursuant to Section 6.1 hereof for the
next two (2) calendar quarters (Q+1 though Q+2) is less than ten (10) kilograms
(“Low Volume”).  The parties acknowledge and agree that they shall have good
faith discussions regarding Low Volume issues prior to any SAD termination in
accordance with this Section 12.4, but that SAD retains the right to terminate
as set forth above. Within six (6) months of Generex receiving SAD’s written
termination notice in accordance with this Section 12.4, Generex shall have the
option to request, and the parties shall then have, a second good faith
discussion regarding Low Volume, subject to SAD having the ultimate right to
have the termination become effective as set out herein.

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12.5           Termination Upon Delay of Commercialization.  Should the project
of commercializing the Product be delayed beyond December 31, 2011 in any
particular territory in the Territory, then, at SAD’s discretion and upon not
less than thirty (30) days’ prior written notice by SAD to Generex, this
Agreement shall be deemed to be amended by deleting such territory (and, by
extension, any Minimum Purchase Commitments in respect of such territory) from
Exhibit 1 or Exhibit 1A annexed hereto (such that such territory will no longer
be included in the Territory).

12.6           Termination For Failure of Bridging Study or In-Vitro
Physio-Chemical Characterizations (each a “Study”).   Generex acknowledges and
agrees that Generex is obligated to perform a Study if required by a regulatory
authority in any territory as listed in Exhibit 1 or 1A at Generex’s sole cost
and expense.  Either party shall have the right to terminate this Agreement
without further obligation if (a) a Study is conducted involving not less than
fifty (50) patients and that Study does not demonstrate non-inferiority of
Product utilizing the Active Ingredient supplied by SAD, or (b) any in-vitro
physio-chemical characterizations (as outlined in Exhibit 6) carried out on the
Active Ingredient supplied by SAD cannot be used to establish suitable
equivalence to the recombinant human insulin product supplied by N.V. Organon
and utilized in the Product prior to the date hereof.  Generex shall promptly
communicate the results of any completed Study and/or characterizations to
SAD.  SAD shall have the right, at its sole expense, to audit and receive for
review any documentation or information related to a Study and/or
characterizations in order to verify that the same were conducted in accordance
with industry practice.  The termination right under this Section 12.6 must be
exercised within sixty (60) days of the date the results of a Study and/or
characterizations are available to Generex.

12.7           Termination by Mutual Agreement. The Parties may terminate this
Agreement at any time by mutual written agreement.

12.8           Termination Upon Breach. Either Party may terminate this
Agreement upon not less than ninety (90) days’ prior written notice to the other
Party upon the material breach or default by the other Party of any of its
representations, warranties, covenants or agreements (provided, however, that
such notice period shall be extended by such additional period as the breaching
Party may request, not exceeding six (6) months, upon the breaching Party’s
written certification that (i) such breach is not reasonably capable of being
cured within such ninety (90) day period, and (ii) it has commenced and is
diligently pursuing efforts to cure such breach).  Upon the expiration of such
notice period, this Agreement shall terminate without the need for further
action by either Party; provided, however, that if the breach upon which such
notice of termination is based shall have been fully cured to the reasonable
satisfaction of the non-breaching Party within such notice period, then such
notice of termination shall be deemed rescinded, and this Agreement shall be
deemed reinstated and in full force and effect. Such right of termination shall
be in addition to such other rights and remedies specified in this Agreement and
as provided by law.  For greater certainty, any breach or default (material or
otherwise) by a Party under any other agreement between the Parties (other than
the Quality Agreement) shall not entitle the other Party to terminate this
Agreement.

 

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12.9           Rights and Duties Upon Termination.
 
(a)           Unless otherwise mutually agreed by the Parties, SAD shall
manufacture and ship, and Generex shall purchase in accordance with the
provisions hereof, all quantities of Active Ingredient ordered by Generex
hereunder prior to the date of expiration or termination

(b)           Upon the expiration or termination of this Agreement (other than
termination by Generex pursuant to Section 12.3 or Section 12.8 hereof), Generex
shall, if so requested by SAD, purchase (i) all materials and components
acquired by SAD hereunder to manufacture the Active Ingredient in accordance
with the then-current Forecast or Minimum Purchase Commitments, at SAD’s
Acquisition Cost thereof, (ii) all work-in-progress of the Active Ingredient in
respect of the then-current Forecast or Minimum Purchase Commitments at SAD’s
actual cost thereof, and (iii) all finished Active Ingredient inventory in
respect of the then-current Forecast or Minimum Purchase Commitments, then in
SAD’s possession at the then-current Active Ingredient Price hereunder. In
addition, in such case Generex shall pay SAD for any uncancellable commitments
made by SAD for materials and components made by SAD hereunder in respect of the
then-current Forecast or Minimum Purchase Commitments.  Notwithstanding anything
to the contrary in the preceding two sentences, the foregoing purchase and
payment obligations of Generex shall be limited solely to materials and
components obtained as to the time periods for the types of materials and
components provided in Section 5, and Active Ingredient quantities manufactured
as to which Generex’ forecasts under Section 6.1 hereof constitute a firm
commitment.

ARTICLE 13
CLAIMS; RECALLS

13.1           Claims. Generex may reject any quantity of the Active Ingredient
which fails to conform to any applicable purchase order, warranty, or
Specifications upon written notice to SAD describing such nonconformity given
within thirty (30) days after Generex’s receipt thereof (or, in the case of any
defects not reasonably susceptible of discovery upon receipt of such goods,
within thirty (30) days after discovery thereof by Generex).  SAD shall have no
liability to Generex with respect to any such nonconformity which the Parties
agree (or, absent such agreement, which a mutually acceptable independent
laboratory or consultant determines) (i) was caused by information supplied by
Generex or due to a fault in materials supplied by Generex, (ii) was otherwise
caused by Generex or its agents, or (iii) was caused after delivery thereof to
the carrier at the point of origin.  In all other cases, SAD shall promptly
credit Generex’s account for SAD’s invoice price to Generex of such
nonconforming Active Ingredient.  Additionally, if Generex shall have previously
paid for such nonconforming Active Ingredient, SAD shall promptly, at Generex’s
election, either (a) refund the invoice price thereof (b) offset the amount
thereof against other amounts then due SAD hereunder or (c) replace such
nonconforming Active Ingredient with conforming Active Ingredient at no
additional cost to Generex.  The foregoing remedy constitutes the exclusive
remedy against SAD and the entire liability of SAD in connection with the
rejected shipment. .  The fees and expenses of any independent laboratory or
consultant engaged by the Parties for purposes of this section shall be paid by
the Party which is determined to bear responsibility for the nonconformity in
question.

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13.2         Recalls.

(a)           Notices.  Each Party shall notify the other of any information,
whether received directly or indirectly, which might affect the marketability,
safety or effectiveness of Product which was manufactured using Active
Ingredient supplied by SAD hereunder and/or which might result in the Recall or
seizure of the Product which was manufactured using Active Ingredient supplied
by SAD hereunder. For purposes of this Agreement, a “Recall” shall mean any
action: (i) by either Party to recover title to or possession of quantities of
the Product which was manufactured using Active Ingredient supplied by SAD
hereunder sold or shipped to Third Parties (including, without limitation, the
voluntary withdrawal of such Product which was manufactured using Active
Ingredient supplied by SAD hereunder from the market) or (ii) by any regulatory
authorities to detain or destroy any of such Product which was manufactured
using Active Ingredient supplied by SAD hereunder. “Recall” shall also include
the election by either Party to refrain from selling or shipping quantities of
such Product which was manufactured using Active Ingredient supplied by SAD
hereunder to Third Parties that would have been subject to a Recall if sold or
shipped.

(b)           Discretion.  Generex shall institute a Recall of the Product as a
consequence of any defect that Generex deems sufficiently serious. Generex shall
consult with SAD regarding any Recall of Product which was manufactured using
Active Ingredient supplied by SAD hereunder; provided, however, that Generex
shall retain sole discretion whether to institute a Recall. SAD shall provide a
rapid initial response and a full report with respect thereto within thirty (30)
calendar days of such notification.

(c)           Responsibilities.  SAD shall have no liability to Generex with
respect to any Recall which the Parties agree (or, absent such agreement, which
a mutually acceptable independent laboratory or consultant determines) (i) was
caused by information or materials supplied by Generex, (ii) was otherwise
caused by Generex or its agents, (iii) was caused by factors occurring after
delivery of the Active Ingredient to the carrier at the Production Site, or (iv)
did not result from a breach of SAD’s warranties provided under Article 10
hereof.  In addition, Generex shall reimburse SAD for all reasonable
out-of-pocket Third Party costs and expenses incurred and not recovered by SAD
directly resulting from such Recall (subject to the limitations set forth in
Section 16.2 hereof).   For all Recalls which result from a breach of SAD’s
warranties provided under Article 10 hereof, unless SAD does not have liability
pursuant to this Section 13.2(c), SAD shall: (x) promptly credit Generex’s
account for SAD’s invoice price to Generex of the Active Ingredient used in such
Recalled Product; if Generex shall have previously paid for such Active
Ingredient, SAD shall promptly, at Generex’ election, either (A) refund the
invoice price thereof, or (B) offset the amount thereof against other amounts
then due SAD hereunder, or (C) replace such Active Ingredient at no additional
cost to Generex (y) reimburse Generex, subject to the limitation set out in
subsection 13.2(e) below, for all reasonable out-of-pocket Third Party costs and
expenses incurred and not recovered by Generex directly resulting from such
Recall (subject to the limitations set forth in Section 16 hereof).

(d)           Independent Laboratory Costs.  The fees and expenses of any
independent laboratory or consultant engaged by the Parties for purposes of this
Section 13.2 shall be paid by the Party which is determined to bear
responsibility for the Recall in question.
 

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(e)           Limitation.  Notwithstanding any other provision of this
Agreement, the liability of SAD to reimburse Generex for Third Party costs and
expenses pursuant to Section 13.2(c)(y) hereof related to any Recall shall not
exceed [REDACTED] ($[REDACTED]) dollars plus fifty percent (50%) remaining
liability up to [REDACTED] dollars ($[REDACTED]) in respect of each such
Recall.   For clarification, SAD shall have a maximum per recall liability of
[REDACTED] ($[REDACTED]) dollars.  The Parties shall, to the extent possible,
meet to review, in advance, actions and budgets for any Recall for which SAD
shall have financial responsibility to Generex pursuant to this Section 13.2.

13.3         Disposition of Nonconforming or Recalled Product. Generex shall not
dispose of any damaged, nonconforming or Recalled Product as to which it intends
to assert a claim against SAD without SAD’s written authorization to do so.
Alternatively, SAD may instruct Generex to return such Product to SAD. SAD shall
bear the cost of disposition (as well as all applicable shipping costs) with
respect to any damaged, nonconforming or Recalled Product as to which it bears
responsibility under Section 13.1 or 13.2 hereof.

ARTICLE 14
INDEMNIFICATION

14.1         By Generex. Generex shall defend, indemnify and hold harmless SAD,
its Affiliates and their respective officers, directors, shareholders,
employees, licensees, agents, successors and assigns from and against any and
all claims, demands, damages, judgments, settlements and awards made or asserted
by Third Parties (collectively, “Third Party Claims”) (including, without
limitation, those associated with a Recall) which any of them may incur or
become subject to arising out of or resulting from (a) Generex’s use, handling,
distribution, marketing or sale of the Active Ingredient (subject to Section
14.2 hereof) or the Product, (b) the breach by Generex of any of its
representations, warranties, covenants, obligations, agreements or duties under
this Agreement (c) any claim that the manufacture, use or sale of the Product
(which for purposes of this section, includes Active Ingredient) infringes a
patent or any other proprietary rights, or (d) any other claim that arises from
and is related to the Product; provided, however, that such obligation to
indemnify shall not extend to any Third Party Claim to the extent they arise out
of or resulting from any negligence, recklessness or wrongful conduct by SAD or
the breach by SAD of any of its representations, warranties, covenants,
obligations, agreements or duties under this Agreement.  It is understood that
for purposes of this Section 14.1, and as related to Third Party Claims as
defined above, “Generex” shall include Generex Affiliates.

14.2         By SAD. SAD shall defend, indemnify and hold harmless Generex, its
Affiliates and their respective officers, directors, shareholders, employees,
licensees, agents, successors and assigns from and against any and all Third
Party Claims which any of them may incur or become subject to arising out of or
resulting from (a) SAD’s negligent acts or omissions or willful misconduct in
connection with the performance of the services contemplated by this Agreement,
(b) the breach by SAD of any of its representations, warranties, covenants,
obligations, agreements or duties under this Agreement, or (c) any claim that
SAD’s manufacture, use or sale of the Active Ingredient alone infringes a patent
or any other proprietary rights; provided, however, that such obligation to
indemnify shall not extend to any Third Party Claim to the extent they arise out
of or resulting from any negligence, recklessness or wrongful conduct by Generex
or the breach by Generex of any of its representations, warranties, covenants,
obligations, agreements or duties under this Agreement.
 

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14.3         Procedure. Promptly after learning of the occurrence of any event
which may give rise to its rights under the provisions of this Article 14, each
indemnitee hereunder shall give written notice of such matter to the indemnitor.
The indemnitee shall cooperate with the indemnitor in the negotiation,
compromise and defense of any such matter. The indemnitor shall be in charge of
and control such negotiations, compromise and defense and shall select and
manage counsel with respect thereto, provided that the indemnitor shall promptly
notify the indemnitee of all developments in the matter, In no event shall the
indemnitee compromise or settle any such matter without the prior written
consent of the indemnitor, who shall not be bound by any such compromise or
settlement absent its prior written consent, which consent shall not be
unreasonably withheld or delayed.

ARTICLE 15
INSURANCE

Each Party represents that it has and shall maintain during the Term hereof, as
well as after the expiration or termination of this Agreement, sufficient
insurance or an appropriate program of self insurance, and in particular
products liability insurance, with appropriate policy limits to cover all risks
associated with the performance of its obligations under this Agreement.  Each
Party agrees to provide upon request copies of the relevant certificate(s) of
insurance.

ARTICLE 16
LIMITATION OF LIABILITY

16.1         DISCLAIMER OF WARRANTIES. THE WARRANTIES GIVEN BY SAD HEREUNDER ARE
IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
AND ALL OTHER WARRANTIES ARE HEREBY DISCLAIMED AND EXCLUDED BY SAD PARTY.

16.2         DAMAGES. SAD SHALL NOT BE LIABLE FOR ANY INCIDENTAL, INDIRECT,
PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, WITHOUT
LIMITATION, LOST PROFITS AND LOSS OF GOODWILL) ARISING FROM ANY BREACH OR
ALLEGED BREACH OF THIS AGREEMENT (EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES).

16.3         Remedies.  SAD’s sole obligations, and Generex’s sole and exclusive
remedies, for any breach by SAD of this Agreement related to nonconforming
Active Ingredient or Recalled Product shall be as set forth in Sections 13.1 and
13.2 hereof, respectively.
 

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16.4         LIMITATION.  EXCEPT FOR SAD’S INDEMNIFICATION OBLIGATIONS FOR THIRD
PARTY CLAIMS, IN NO EVENT SHALL SAD’S TOTAL AGGREGATE LIABILITY FOR ALL CLAIMS
OR LOSSES ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE HIGHEST
AGGREGATE AMOUNTS PAID TO SAD HEREUNDER DURING ANY TWELVE (12) MONTH PERIOD
PRECEDING THE EVENT GIVING RISE TO LIABILITY, BUT IN NO EVENT SHALL SAD’S
LIABILITY EXCEED FIVE MILLION ($5,000,000.00) DOLLARS, IN THE AGGREGATE OVER THE
ENTIRE TERM.

ARTICLE 17
CONFIDENTIALITY

17.1         Treatment of Confidential Information. Except as otherwise provided
in this Article 17, during the Term and for a period of ten (10) years
thereafter:

 
(i)
SAD will retain in confidence and use only for the purposes contemplated hereby
any Confidential Information disclosed to it by or on behalf of Generex in
connection with the performance of this Agreement; and

 

 
(ii)
Generex will retain in confidence and use only for the purposes contemplated
hereby any Confidential Information disclosed to it by or on behalf of SAD in
connection with the performance of this Agreement.

17.2         Right to Disclose.  To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under this
Agreement or any rights which survive termination or expiration hereof, each
Party may disclose Confidential Information to its Affiliates, sublicensees,
consultants, outside contractors, clinical investigators or other Third Parties
on condition that such entities or persons agree (a) to keep the Confidential
Information confidential for the same time periods and to the same extent as
each Party is required to keep the Confidential Information confidential and (b)
to use the Confidential Information only for such purposes as such Party is
entitled to use the Confidential Information. Each Party or its Affiliates or
sublicensees may disclose such Confidential Information to government or other
regulatory authorities to the extent that such disclosure (i) is
reasonably necessary to obtain patents or authorizations to conduct clinical
trials with and to market commercially the Product, provided such Party is
otherwise entitled to engage in such activities under this Agreement or (ii) is
otherwise legally required.
 

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ARTICLE 18
OWNERSHIP OF PROPERTY

18.1         Ownership of Rights. Each Party shall exclusively own and retain
all right, title and interest in and to (i) all intellectual property rights,
information, documents and tangible and intangible materials owned by it as of
the Effective Date, and (ii) all Inventions which are conceived, reduced to
practice, or created by such Party and/or its Affiliates or agents (including
without limitation Inventions based upon any background or preexisting
technology of such Party) and which do not include any intellectual property
rights of the other Party from and after the Effective Date.   Each Party shall
be solely responsible for the conduct and costs of filing, prosecution and
maintenance of patents and patent applications on its own intellectual property
rights, including without limitation its Inventions.

18.2         Trademarks. Generex shall retain all right, title and interest
arising under the U.S. Trademark Act and all other applicable laws in the
trademarks of Generex that may be adopted with respect to the Product.

ARTICLE 19

Intentionally omitted.

ARTICLE 20
COOPERATION WITH GOVERNMENTAL REQUIREMENTS

The Parties shall cooperate with one another as may be reasonably necessary or
appropriate to satisfy all governmental requirements and obtain all needed
permits, approvals and licenses with respect to the manufacture and supply of
the Active Ingredient. Such cooperation shall include, without limitation,
communicating with regulatory authorities and making available as promptly as
practicable all information, documents and other materials which result from the
performance by SAD of its services hereunder which Generex is required to submit
or which Generex may otherwise reasonably request in connection with
governmental filings relating to the Active Ingredient. The costs and expenses
of such cooperation, if applicable, shall be subject to the Parties’ mutual
agreement.  Notwithstanding the foregoing, it shall be the responsibility of (i)
Generex to obtain and maintain all such permits, approvals and licenses which
are specific to the Active Ingredient or the Product, and (ii) SAD to obtain and
maintain all such permits, approvals and licenses which are generally required
for the Production Site and to maintain the Drug Master File in respect of the
Active Ingredient.

ARTICLE 21
FORCE MAJEURE

21.1         Effects of Force Majeure. Neither Party shall be held liable or
responsible for failure or delay in fulfilling or performing any of its
obligations under this Agreement (other than the payment of money owed
hereunder) to the extent that such failure or delay results from any cause
beyond its reasonable control, including, without limitation, fire, flood,
natural disaster, explosion, war, strike, labor unrest, riot, embargo, acts or
omissions of carriers, or act of God (each, a “Force Majeure Event”). Such
excuse shall continue as long as the Force Majeure Event continues, following
which such Party shall promptly resume performance hereunder.
 

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21.2         Effects of Regulatory Changes. Neither Party shall be held
responsible or liable for failure or delay in fulfilling or performing any of
its obligations under this Agreement to the extent that such failure or delay
results from good faith efforts to comply with the enactment or revision of any
law, rule, regulation or regulatory advisory opinion or order applicable to the
manufacturing, marketing, sale, reimbursement and/or pricing of the Product (a
“Regulatory Change”). Such excuse shall continue as long as performance is
prevented by the affected Party’s good faith efforts to comply with such
Regulatory Change, following which such Party shall promptly resume performance
hereunder.

21.3         Notice. The Party affected by a Force Majeure Event or a Regulatory
Change shall notify the other Party thereof as promptly as practicable after its
occurrence. Such notice shall describe the nature of such Force Majeure Event or
Regulatory Change and the extent and expected duration of the affected Party’s
inability to fully perform its obligations hereunder. The affected Party shall
use due diligence, where practicable, to minimize the effects of or end any such
event so as to facilitate the resumption of full performance hereunder and shall
notify the other Party when it is again fully able to perform such obligations.

ARTICLE 22
INDEPENDENT CONTRACTORS

The relationship between Generex and SAD is that of independent contractors and
nothing herein shall be deemed to constitute the relationship of partners, joint
venturers, nor of principal and agent between Generex and SAD. Neither Party
shall have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other Party or to bind the other
Party to any contract, agreement or undertaking with any Third Party.

ARTICLE 23
FURTHER ACTIONS

General. The Parties agree to execute such additional documents and to perform
all such other and further acts as may be necessary or desirable to carry out
the purposes and intents of this Agreement.

ARTICLE 24
MISCELLANEOUS

24.1         General Notices. Except as otherwise provided in Section 24.2
hereof, all notices, requests, instructions, consents and other communications
to be given pursuant to this Agreement shall be in writing and shall be deemed
received (i) on the same day if delivered in person, by same-day courier or by
facsimile transmission, (ii) on the next day if delivered by overnight mail or
courier, or (iii) on the date indicated on the return receipt, or if there is no
such receipt, on the third calendar day (excluding Sundays) if delivered by
certified or registered mail, postage prepaid, to the Party for whom intended to
the following addresses:
 

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If to Generex:

Generex Biotechnology Corporation
33 Harbour Square, Suite 202,
Toronto, Ontario, Canada M5J 2G2

 
Attention: 
Rose C. Perri,

Chief Operating Officer

 
FAX: 
1-416-364-9363

If to SAD:
Sanofi-Aventis Deutschland GmbH
Industriepark Hoechst, 65926
Frankfurt am Main, Germany

Each Party may by written notice given to the other in accordance with this
Agreement change the address to which notices to such Party are to be delivered.

24.2         Special Notices. Each Party shall notify the other by telephone as
soon as practicable (with written confirmation within three business days) upon
its receipt of any technical complaint or notice of adverse reaction; provided,
however, that notification of serious, new or unexpected experiences reported
with increased frequency shall be made immediately (but in any event not more
than thirty-six (36) hours after the notifying Party learns of such
experiences). All such notices shall be directed to the Parties at the addresses
set forth in Section 24.1 to the attention of the following personnel:

If to Generex:

Technical complaints: George Markus, Vice-President, Regulatory Affairs
Adverse reactions:      George Markus, Vice-President, Regulatory Affairs

If to SAD:

Technical complaints: Site Quality Manager
Adverse reactions:      Site Quality Manager

24.3         Entire Agreement. This Agreement contains the entire understanding
of the Parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, whether written or oral, between them with
respect to the subject matter hereof. Each Party has executed this Agreement
without reliance upon any promise, representation or warranty other than those
expressly set forth herein.

24.4         Amendment. No amendment of this Agreement shall be effective unless
embodied in a written instrument executed by both of the Parties.
 

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24.5         Waiver of Breach. The failure of either Party at any time to
enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor in any way to affect the validity of
this Agreement or any provisions hereof or the right of any Party to thereafter
enforce each and every provision of this Agreement. No waiver of any breach of
any of the provisions of this Agreement shall be effective unless set forth in a
written instrument executed by the Party against whom or which enforcement of
such waiver is sought; and no waiver of any such breach shall be construed or
deemed to be a waiver of any other or subsequent breach.

24.6         Subcontracting.  Neither Party shall subcontract any of its
obligations under this Agreement; provided, however, that (i) either party may
subcontract to a Third Party any of its obligations under this Agreement with
the prior written approval of the other Party, such approval not to be
unreasonably withheld, and (ii) SAD may subcontract any services to an
Affiliate, or otherwise if permitted in the Specifications or Packaging
Specifications, including without limitation the supply of materials and
components, or pursuant to Section 24.7 hereof.

24.7         Assignment; Requirement to Assign to Successor to Business. Neither
Party may assign its rights under this Agreement in whole or in part without the
prior written approval of the other Party (such approval not to be unreasonably
withheld or delayed). Any such attempted assignment without such prior written
consent shall be void and ineffective. Should SAD consent to an assignment by
Generex to another party, Generex shall assign its rights and delegate its
duties under this Agreement in whole or in part to such party, and shall ensure
that such party (A) undertakes in writing with SAD to observe and perform the
obligations of Generex hereunder and under the Quality Agreement, (B) has
adequate financial resources (equal or superior to Generex’s financial resources
as of the date of the assignment) to perform Generex’s financial obligations
hereunder, and (C) meets with SAD to review the future of manufacturing for the
Active Ingredient.  Notwithstanding the foregoing, SAD may assign this Agreement
to an Affiliate.

24.8         Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York without regard to its conflicts of laws
principles.

24.9         Severability. All of the provisions of this Agreement are intended
to be distinct and severable.  If any provision of this Agreement is or is
declared to be invalid or unenforceable in any jurisdiction, it shall be
ineffective in such jurisdiction only to the extent of such invalidity or
unenforceability.  Such invalidity or unenforceability shall not affect either
the balance of such provision, to the extent it is not invalid or unenforceable,
or the remaining provisions hereof, nor render invalid or unenforceable such
provision in any other jurisdiction.
 

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24.10       Publicity.  Nothing in this Agreement shall be deemed to give either
Party any rights to use the other Party’s trademarks or trade names without the
other Party's prior specific, written consent.  Neither party will issue any
press release or otherwise make any public statement, advertisement or
disclosure with respect to this Agreement or Products which contain SAD Active
Ingredient or the transactions contemplated hereby without the prior written
consent of the other Party, which shall not be unreasonably withheld; provided,
however, if, in the opinion of the disclosing Party’s legal counsel, such
announcement is necessary to comply with applicable law, either Party shall be
entitled to make a public announcement of this Agreement and/or file a Form 8-K
Current Report with the Securities and Exchange Commission, subject to the prior
review and approval of such press release and/or Form 8-K by the other Party,
which approval will not be unreasonably withheld or delayed and provided to the
extent practicable the other Party has received at least three (3) business days
notice.  Mutually agreed upon redacted versions of this Agreement may be
exhibits to the Form 8-K Current Report.  In addition, Generex will be entitled
to make reference to this Agreement in reports filed with the Securities and
Exchange Commission, after providing SAD advance and a reasonable opportunity to
review and comment thereon.

24.11       Survival. The provisions of 12.9 (Rights and Duties Upon
Termination), Article 13 (Claims; Recalls), Article 14 (Indemnification),
Article 15 (Insurance), Article 16 (Limitation of Liability), Article 17
(Confidentiality), Article 18 (Ownership of Property), Article 20 (Cooperation
with Governmental Requirements), Section 24.8 (Governing Law), Section 24.10
(Publicity) and Section 24.11 (Survival) shall survive the expiration or
termination of this Agreement.

24.12       Headings. The headings of articles and sections have been included
for convenience only and shall not be considered in interpreting this Agreement.

24.13       Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same Agreement. This Agreement may be
executed and delivered via electronic facsimile transmission with the same force
and effect as if it were executed and delivered by the Parties simultaneously in
the presence of one another.

24.14       Execution.  At the time of execution of this Agreement, the Parties
shall cause their authorized officers to execute two original copies of this
Agreement, one copy of which shall be maintained by each Party at that Party’s
offices. Each Party represents that the person who executes this Agreement is
authorized and empowered to obligate and bind his or her Party under this
Agreement.
 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized representatives as of the day and year first
above written.

Generex Biotechnology Corporation
       
By:
/s/ Anna E. Gluskin
       
Name:
Anna E. Gluskin
       
Title:
President, Chief Executive Officer
       
By:
/s/ Rose C. Perri
       
Name:
Rose C. Perri
       
Title:
Chief Operating Officer, Chief Financial Officer
           
SANOFI-AVENTIS DEUTSCHLAND GMBH
       
By:
/s/ M. Braun
       
Name:
M. Braun
       
Title:
Vice President
           
SANOFI-AVENTIS DEUTSCHLAND GMBH
       
By:
/s/ Klaus Menken
       
Name:
Dr. Klaus Menken
       
Title:
CFO Germany
 

 

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Exhibit 1

TERRITORIES:  EXCLUSIVE

Territories where Generex will register Generex Oral-lyn
with the Active Ingredient to be supplied by SAD on an exclusive basis

[REDACTED]

 

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Exhibit 1A

TERRITORIES:  NON-EXCLUSIVE

Territories where Generex will register Generex Oral-lyn
with the Active Ingredient to be supplied by SAD on a non-exclusive basis

[REDACTED]

 

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Exhibit 2

ACTIVE INGREDIENT PRICES

The Active Ingredient Prices payable by Generex to SAD through December 31, 2012
will be as follows:
 
a. For the first [REDACTED] kg:
[REDACTED] € per gram;
b. for the succeeding [REDACTED] kg:
[REDACTED] € per gram; and
c. thereafter:
[REDACTED] € per gram.

 
Such pricing (in Euros) is subject to adjustment pursuant to Articles 5 and 9 of
the Agreement.  In addition, the above pricing includes packaging in compliant
bulk containers and on-going routine stability testing costs, and is exclusive
of all taxes, tariffs and customs duties.

* * * * *

 

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Exhibit 3
 
PACKAGING SPECIFICATIONS
 
SAD will supply the Active Ingredient in packaging units of two (2) to three (3)
kilograms for a purchased quantity below ten (10) kg and in packaging units of
eight (8) to eleven (11) kilograms (standard preferred packaging unit) for a
purchased quantity higher than ten (10) kilograms.

The following sizes of [REDACTED] drums are utilized for packaging and delivery:

                                1.  [REDACTED] drum - height*:[REDACTED]mm +/-
[REDACTED]mm; Inside diameter: [REDACTED]mm +/- [REDACTED] mm, for [REDACTED] kg
consignments.

                                2.  [REDACTED] drum - height*: [REDACTED]mm +/-
[REDACTED]mm, Inside diameter: [REDACTED]mm +/- [REDACTED]mm, for [REDACTED]kg
of content (this drum is the standard pack).

 * not factoring in the lid

SAD shall have the right, at its option, to deliver ordered quantities in one
drum where feasible.
 

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Exhibit 4
 
ACTIVE INGREDIENT SPECIFICATIONS
 
[REDACTED]

 

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Exhibit 5
 
MINIMUM PURCHASE COMMITMENTS
  
Generex shall purchase from SAD a minimum of [REDACTED] kilograms of Active
Ingredient prior to December 31, 2011 as set forth below:.
 
Minimum quantity for the first three years of the agreement:
 
1. Contract Year 1 (Effective Date through December 31, 2009):
[REDACTED] kg
 
2. Contract Year 2 (January 1, 2010 through December 31, 2010):
[REDACTED] kg
 
3. Contract Year 3 (January 1, 2011 through December 31, 2011):
[REDACTED] kg
 
* * * * *

 

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Exhibit 6

IN-VITRO PHYSIO-CHEMICAL CHARACTERIZATIONS

 
In-Vitro Physio-Chemical Characterizations are determined using the following
analytical methods:

- X-ray crystallography
- SDS-PAGE
- Mass-spectrometry
- FT-IR
- Loss on drying
- Impurity Profile (HPLC testing only)

Scientific comparisons from the results of these analytical techniques will be
made to determine characterization equivalence between the SAD Active Ingredient
and the third party supplying the active ingredient to Generex..  The
characterization limits associated with loss on drying and impurity profile
listed above are defined by USP and EU Pharmacopoeia set forth in Exhibit 4.

 

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