Document:

Exhibit
      10.2

    

    COMPENSATION
      ARRANGEMENT FOR WILLIAM W. DUNCAN, JR.

    

    The
      Talbot Bank of Easton, Maryland (the “Bank”) and William W. Duncan, Jr., the
      Bank’s President and Chief Executive Officer, are not party to a written
      employment agreement. Mr. Duncan’s employment arrangement provides for an annual
      salary of $245,000, subject to annual adjustment. Mr. Duncan is also entitled
      to
      participate in the bonus program, profit sharing and 401(k) plan, and group
      term
      life insurance program of Shore Bancshares, Inc. (the “Company”), to the extent
      the provisions and rules of those plans and programs permit such participation.
      In addition, provided that Mr. Duncan remains employed by the Bank, the Company
      agreed to make five annual awards of restricted stock to Mr. Duncan under the
      Company’s 2006 Stock and Incentive Compensation Plan. The number of shares that
      will be subject to each restricted stock award has not yet been determined
      but
      will be based on a fixed dollar amount intended to correspond, in part, to
      the
      value of certain retirement and other benefits that were forfeited when Mr.
      Duncan terminated his service with his previous employer. Each award of
      restricted stock will vest ratably over the lesser of five years or the number
      of years remaining until Mr. Duncan reaches age 65.REDACTED
      - AS FILED

    

    THE
      MARKED PORTIONS OF THIS AMENDMENT HAVE BEEN OMITTED

    AND
      FILED SEPARATELY WITH THE COMMISSION PURSUANT TO

    A
      REQUEST FOR CONFIDENTIAL TREATMENT

     

    
      Quotation

      

      
        	
                Contract
                  Manufacturing of Ora-lynTM 

              

      

      

      
        	
                QTE-GFV-0001.01

                 

                June
                  5, 2006

              

      

      

      

      
        	
                Confidential
                  for Generex
                  Biotechnology Corporation

              
	
                 

                Customer
                  Contact: Rose
                  C. Perri

                Suite
                  202

                33
                  Harbour Square

                Toronto,
                  ON M5J 2G2

                Phone:
                  416-364-2551,
                  ext 234

              
	 	 
	
                Account
                  Manager: Tom Clark

                Phone:
                  919-465-8319

              	
                Contract
                  Manager: Wally Heritage

                Phone:
                  919-465-8284 

              

      

       

      
        	 	
                BioPharmaceutical
                  Product Development

              
	 	 
	 	
                 Pharmaceutical
                  Product
                  Development

              
	 	 
		
                Clinical
                  Packaging Services

                 

                
                  Analytical
                    Chemistry and Microbiology
                    Services

                

              
	 	
                
                

              
	 	
                Scientific
                  and Regulatory
                  Consulting

              
	 	 
	 	
                Pulmonary
                  and Nasal Product Development

              
	 	 
	 	
                 Clinical
                  and Small Scale Commercial
                  Manufacturing

              

      

      
         

      

      CONFIDENTIAL

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      	
              QTE-GFV-0001.01 

            	
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    Executive
      Summary

    

    Cardinal
      Health, Pharmaceutical Development (Cardinal Health) will perform a technical
      transfer for the production of Oral-lynTM for Generex Biotechnology Corporation
      (Generex).
      Following the technical transfer, Cardinal Health will produce Phase III
      clinical supplies of the Oral-lyn drug product. The estimated cost for the
      technical transfer and Phase III clinical batch production is $[REDACTED]
      over a period of approximately
      seven months. If the three process qualification batches are used as the Phase
      III clinical supplies, the total estimated cost will be
      $[REDACTED].

    

    Section
      1. Version
      History

    

    Table
      1: Revisions

     

    
      	
              Version

            	 	
              Date
                Issued

            	 	
              Reason(s)

            
	
              00

            	 	
              May
                11, 2006

            	 	
              New
                Issue

            
	 	 	 	 	 
	
              01

            	 	
              June
                5, 2006

            	 	
              1. Reduced
                the total number of clinical supplies needed to [REDACTED] (Table
                4)

              2. Reduced
                the amount of in-process testing required per batch. (Tables 2 and
                4)

              3. Removed
                full raw materials release and included release by Identification
                and
                Certificates of Analysis. (Table 4)

              4. Removed
                finished product full release testing from the scope of work. (Tables
                2
                and 4)

              5. Included
                invoicing schedule. (Table 11)

            

    

    

    Section
      2. Scope
      of Work

    

    Cardinal
      Health will perform a technical transfer for the production of Oral-lyn drug
      product for Generex. The technical transfer will include the transfer of
      analytical methods, the production of an engineering batch, and then production
      of three process qualification batches. If appropriate, all three process
      qualification batches will serve as Phase III clinical trial materials.
      Otherwise, Cardinal Health will produce additional batches for Phase III
      clinical supplies to support Generex’s clinical studies. All activities will be
      conducted according to cGMPs.

    

    2.1. Safety

    

    2.1.1. Cardinal
      Health’s Responsibilities

    

    Cardinal
      Health will assess all vendor and Generex MSDSs and all handling data for the
      samples/materials associated with this project. When samples/materials are
      categorized as a Controlled Drug Substance (CDS) and/or Class 4 and above,
      the
      samples/materials will require special handling precautions and
      procedures.

     

      
        

      

    

    
      
        
          	
                   160
                    Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
                    27709

                  Direct:
                    (919) 481-4855 • Facsimile: (919)
                    481-4908 • www.cardinal.com/pts

                

        

      

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
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    If
      categorized as a CDS, Cardinal Health will invoice Generex a CDS Handling
      Surcharge for all project activities. If categorized as a Class 4 or above,
      Cardinal Health will invoice Generex for compound specific monitoring, supplies,
      or equipment purchased specifically for this project to ensure safe handling
      of
      Generex‘s samples and materials. It is not anticipated that Generex’s product
      will be categorized as a CDS or Class 4 compound.

    

    2.1.2. Generex’s
      Responsibilities

    

    Generex
      will provide an MSDS and all sample/material handling data for the
      samples/materials associated with this project. If samples/materials have any
      special handling considerations, Generex will notify Cardinal Health prior
      to
      the initiation of the project.

    

    2.2. Methods/Documentation

    

    Table
      2: Methods
      for Reference 

     

    
      	 	 	 	 	
              Replicates
                per Analysis

            
	
              Reference

            	 	
              Method

            	 	
              In-process
                Testing 

            	 	
              Batch
                Release

            
	
              GNX-001

            	 	
              Physical
                Appearance of Oral-lyn Bulk Drug Product

            	 	
              1

            	 	
              -

            
	 	 	 	 	 	 	 
	
              GNX-003

            	 	
              pH
                Test For Bulk

            	 	
              1

            	 	
              -

            
	 	 	 	 	 	 	 
	
              GNX-005

            	 	
              HPLC
                Potency and Identity Determination for Insulin in Bulk
                Product

            	 	
              1

            	 	
              1

            
	 	 	 	 	 	 	 
	
              GNX-017

            	 	
              Leak
                Rate/Net Content (Aerosol Finished Product)

            	 	
              -

            	 	
              10

            
	 	 	 	 	 	 	 
	
              GNX-020

            	 	
              High
                Molecular Weight Protein (HMWP) Content of Oral-lyn Drug Substance
                and
                Drug Product by Size Exclusion HPLC (Oral-lyn Bulk Drug
                Product)

            	 	
              1

            	 	
              -

            
	 	 	 	 	 	 	 
	
              GNX-024

            	 	
              Fill
                Weight Finish Product

            	 	
              -

            	 	
              3

            
	 	 	 	 	 	 	 
	
              USP
                <61> & <1227>

            	 	
              Microbial
                Limits

            	 	
              1

            	 	
              1

            
	 	 	 	 	 	 	 
	
              SOP-MC-019-002

            	 	
              Cleaning
                Verification

            	 	
              -

            	 	
              -

            

    

    

    2.2.1. Cardinal
      Health’s Responsibilities

    

    Cardinal
      Health will review all project-related documentation and methods received from
      Generex associated with this project. 

    

    2.2.2. Generex’s
      Responsibilities

    

    Generex
      will provide all available project-related documentation and methods to be
      used
      for this project.

     

    
      

    

    
      160
        Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
        27709

      Direct:
        (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
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2.3. Sample/Materials
      

    

    Table
      3: Raw
      Materials

     

    
      	
              Raw
                Material

            	 	
              Supplier

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            
	
              [REDACTED]

            	 	
              [REDACTED]

            

    

    

    2.3.1. Cardinal
      Health’s Responsibilities

    

    Cardinal
      Health will, as necessary, log in all samples/materials according to current
      Standard Operating Procedures. Upon
      issuance of the final report or Certificate of Analysis, samples/materials
      will
      be stored in quarantine at Cardinal Health for a period of 30 days. After the
      30-day quarantine, samples/materials will be disposed of at Cardinal Health
      unless notified otherwise by Generex. 

    

    2.3.2. Generex’s
      Responsibilities

    

    If
      available, Generex will provide all samples/materials necessary to perform
      this
      project. The samples/materials should arrive at Cardinal Health with all proper
      documentation. If samples/materials are not available, Generex will request
      Cardinal Health to purchase all necessary samples/materials needed to perform
      this project. If return shipment is requested, Generex will notify Cardinal
      Health prior to the disposition of samples/materials.

     

    
      
        

      

      
        160
          Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
          27709

        Direct:
          (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    
      	
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    Section
      3. Project
      Activities

    

    3.1. Cardinal
      Health’s Responsibilities

    

    Cardinal
      Health will transfer analytical methods in-house from Generex, produce
      engineering and process qualification batches, and produce clinical supplies
      as
      indicated in Table 4.

    

    Table
      4: Project
      Activities and Costs 

     

    
      	
              Study
                Phase

            	 	
              Activities

            
	
              Project
                Related Activities

            	 	
              Cardinal
                Health will carry out project related activities that include initial
                project discussions with Generex, project team selection, agreement
                to and
                approval of project activities, and program management
                activities.

            
	 	 	 
	
              Analytical
                Methods Transfer

            	 	
              Transfer
                of Generex’s analytical methods listed in Table 21 .

            
	 	 	 
	
              Raw
                Materials Release

            	 	
              Cardinal
                Health will release the raw materials listed in Table 3 for use with
                the
                engineering, process qualification, and clinical batches. It is assumed
                that Generex will perform full release of all raw materials and Cardinal
                Health will release raw materials based on Identification and Certificates
                of Analysis. 2 

            
	 	 	 
	
              Engineering
                Batch

            	 	
              · Preparation
                of product inventory specifications

              · Preparation
                of batch records

              · Production
                of one [REDACTED]-canister placebo batch

              · Production
                of one [REDACTED]-canister active batch

              · Process
                evaluation analysis consisting of:

              · In-process
                and finished product analysis by the methods listed in Table
                2

              · Check
                weighing

              · Automatic
                valve function (spray testing)

              · Cleaning
                verification

            

    

     

    
      
        

      

      1
        It is
        assumed that analytical methods are validated to a level sufficient for Phase
        III activities. Cardinal Health requests that a report detailing the validation
        of the all methodology be provided prior to transfer activities.

       

      2 It
        is assumed that Cardinal Health will perform Identification and CoA release
        testing once for the engineering batches, once for the three process
        qualification batches, and once for the Phase III clinical supply
        batches.

    

     

    
      
        

      

      
        160
          Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
          27709

        Direct:
          (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    
      	
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Table:
      4  Project
      Activities and Costs (continued)

    

      
        	
                Study
                  Phase

              	 	
                Activities

              
	
                Process
                  Qualification

              	 	
                Production
                  of process qualification batches will consist of the following
                  activities
                  for each of the three batches:

                · Pre-production
                  activities

                · Preparation
                  of product specifications 

                · Preparation
                  of batch records

                · Production
                  activities

                · Filling
                  up to [REDACTED] canisters with the Oral-lyn drug product

                · In-process
                  control analysis (post-production analysis) of bulk and finished
                  drug
                  product

                · Release
                  of finished drug product per methods listed in Table 2

                · Cleaning
                  verification after the manufacture of each batch 

                It
                  is proposed that if the production and release analysis of the
                  process
                  qualification batches is acceptable, the process qualification
                  batches may
                  serve as clinical supplies. If process qualification batches are
                  to be
                  used as clinical supplies, the following additional activities
                  will be
                  performed:

                · Bulk
                  packaging and labeling1 

                · Shipment
                  of samples to a clinical packaging and services facility3 

              
	 	 	 
	
                Clinical
                  Supplies Production

              	 	
                If
                  necessary (based on the use of Process Qualification batches as
                  clinical
                  supplies) Cardinal Health will produce up to three batches of the
                  Oral-lyn
                  drug product for use in clinical studies. Activities will
                  include:

                · Pre-production
                  activities

                · Receipt
                  and release of API, valves, canisters, and actuators1

                · Preparation
                  of batch records

                · Production
                  activities

                · Filling
                  up to [REDACTED] canisters per batch with the Oral-lyn drug
                  product

                · In-process
                  control analysis (post-production analysis) of bulk drug product
                  and
                  finished product

                · Release
                  of finished drug product per methods listed in Table 2

                · Bulk
                  packaging and labeling1,2

                · Shipment
                  of samples to a clinical packaging and services facility (e.g.
                  Cardinal
                  Health’s Clinical Packaging Services facility in Philadelphia4 

                 

                The
                  costs associated with stability studies (storage and analysis)
                  to support
                  Phase III clinical studies are not included in this quotation.
                  Cardinal
                  Health has the experience, capabilities, and facilities to provide
                  stability study services if requested by
                  Generex.

              

      

       

      
        
          

        

        1
          The
          costs associated with long-term storage of bulk product is not included
          in this
          quotation.

         

        2 The
          costs associated with assembly of the canisters into actuators and dust
          caps is
          not included in this quotation. It is assumed that assembly will occur
          at the
          clinical packaging and labeling facility.

         

        3
          The
          costs associated with shipment to the clinical packaging and labeling facility
          is not included in this quotation but will be invoiced to Generex at cost.
          Packaging and labeling of clinical supplies is not included in this
          quotation.

         

        4
          The
          costs associated with shipment to the clinical packaging and labeling facility
          is not included in this quotation but will be invoiced to Generex at cost.
          Packaging and labeling of clinical supplies is not included in this
          quotation.

      

       

      
        
          
            

          

          
            160
              Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
              27709

            Direct:
              (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

             

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

          

        

      

       

    

    
      	
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    3.2. Generex’s
      Responsibilities

    

    Generex
      will sign the protocol and provide a technical contact that will be available
      for technical discussions and to make decisions that are needed in reference
      to
      this project. Generex will not use any samples/materials shipped from Cardinal
      Health for this project in a manner that is inconsistent with the scope of
      this
      project. 

    

    Section
      4. Specifications

    

    4.1. Cardinal
      Health’s Responsibilities

    

    Cardinal
      Health will document the specifications, if applicable, in the
      protocol.

     

    4.2. Generex’s
      Responsibilities

    

    Generex
      will provide all specifications necessary to perform this project. 

    

    Section
      5. Scheduling/Deliverables

    

    5.1. Scheduling

    

    Cardinal
      Health must receive a signed Quotation with a Purchase Order number, a signed
      protocol, all samples/materials, and must have on file a signed and effective
      terms and conditions and Quality Agreement (if applicable) in order for this
      project to be scheduled. Once scheduled, Cardinal Health will notify Generex
      of
      the anticipated start and completion date of the project activities.

    

    Rush
      services are available at Generex’s request. If rush services are requested,
      additional costs will be incurred, ranging from [REDACTED] to [REDACTED]% of
      the
      project cost and depending upon the lead-time provided and Generex-requested
      turnaround time.

    

    A
      proposed timeline based on the clinical supplies requirements and raw materials
      constraints as anticipated at the time of quotation issuance is included in
      Table 5.

    
       

      
        
          

        

        
          160
            Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
            27709

          Direct:
            (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

    
      	
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Table
      5: Anticipated
      Project Timelines

     

    [REDACTED]

    
       

      
        
          

        

        
          160
            Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
            27709

          Direct:
            (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

    
      	
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    5.2. Communication

    

    In
      order
      to establish a collaborative relationship between Generex and Cardinal Health,
      Cardinal Health will appoint a project management representative to serve as
      a
      point of contact for Generex and to oversee progress on this project. Upon
      initiation of the project, Cardinal Health and Generex will establish a
      communication plan to include primary points of contact for both Cardinal Health
      and Generex. In addition, Cardinal Health and Generex will establish project
      meeting schedule(s), with scope, frequencies and durations to be mutually agreed
      upon by both parties.

    

    5.3. Deliverables

    

    Table
      6: Tasks/Deliverables

     

    
      	
              Task

            	 	
              Deliverable

            
	 	 	 
	
              Technical
                Transfer

            	 	
              Analytical
                method transfer activities

              · Analytical
                methods transfer report

              Pre-production
                activities

              · Product
                inventory specifications

              · Master
                batch records

              Engineering
                Batch

              · Production
                batch records

              · [REDACTED]
                placebo canisters 

              · [REDACTED]
                active canisters

              Process
                Qualification

              · Production
                batch records 

              · [REDACTED]
                canisters per process qualification batch (three batches
                total)

              · Process
                qualification report

              Technical
                transfer report

            
	 	 	 
	
              Phase
                III Clinical Supply Production

            	 	
              · Production
                batch records

              · [REDACTED]
                canisters per Phase III clinical batch (3 total batches for a total
                of
                [REDACTED] canisters)

              · Certificates
                of Analysis for each batch

              · Bulk
                packaged and labeled supplies shipped to Cardinal Health’s clinical
                packaging and labeling facility in Philadelphia,
                PA

            

    

    
       

      
        
          

        

        
          160
            Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
            27709

          Direct:
            (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

    
      	
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      Section
        6. Cost
        Proposal

    

    

    6.1 Project
      Cost

    

    Table
      7: Project
      Related Activities Costs1 

     

    
      	
              Activity

            	 	
              Estimated
                Cost ($)

            
	
              Project
                Related Activities

            	 	
              [REDACTED]

            

    

     

    Table
      8: Technical
      Transfer Costs

     

    
      	
              Technical
                Transfer Activity

            	 	
              Cost
                ($)

            
	
              Analytical
                Methods Transfer

            	 	
              REDACTED

            
	 	 	 
	
              Engineering
                Batch Production and Evaluation of 

              One
                Active and One Placebo Batch

            	 	
              [REDACTED]

            
	 	 	 
	
              Process
                Qualification (Three Batches of [REDACTED])

            	 	
              [REDACTED]

            
	 	 	 
	
              Total
                Technical Transfer Cost

            	 	
              [REDACTED]

            

    

    

    Table
      9: Phase
      III Clinical Supply Production Costs

     

    
      	
              Activity

            	 	
              Cost
                ($)

            
	
              Production
                of Clinical Supplies

            	 	
              [REDACTED]/batch
                of [REDACTED] units

              ($[REDACTED]
                per canister)

            
	 	 	 
	
              Total
                Clinical Supplies Production Costs for Three
                Batches

            	 	
              [REDACTED]

            

    

     

    Table
      10: Total
      Project Costs

     

    
      	
              Activity

            	 	
              Cost
                ($)

            
	
              Project
                Related Activities

            	 	
              [REDACTED]

            
	 	 	 
	
              Technical
                Transfer

            	 	
              [REDACTED]

            
	 	 	 
	
              Phase
                III Clinical Supply Production

            	 	
              [REDACTED]

            
	 	 	 
	
              Total
                Project Costs

            	 	
              [REDACTED]2 

            

    

     

    
      
        

      

      1
        Project
        Related Activities, as detailed in Section 3.1, will be performed over the
        course of the program and will include frequent communications with Generex
        during
        technical transfer activities and project management of the technical transfer
        and subsequent Phase III batch productions. 

      2
        The
        total project cost, excluding project related activities, will be $[REDACTED]
        if
        all three Process Qualification batches are used for Phase III clinical supplies
        and no additional batches are produced. Project related activities will be
        invoiced as accrued.

       

    

    
      
        

      

      
        160
          Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
          27709

        Direct:
          (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    
      	
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    6.2. Additional
      Fees

    

    If
      copies
      of raw data are requested in the course of an active project, Generex will
      be
      invoiced at $[REDACTED]/hour for time required to generate and compile the
      data.

    

    All
      requested samples/materials purchased by Cardinal Health for this project will
      be invoiced to Generex, at cost. 

    

    Non-standard
      or special instrumentation or equipment required solely for Generex’s project
      will be invoiced to Generex following Generex approval.

    

    6.3. Revisions
      to Pricing

    

    Cardinal
      Health reserves the right to revise quoted costs for any project as a result
      of
      initial scope change, revisions in protocols, modifications of test methods,
      final review of test methods, undocumented requirements, retesting or
      resynthesis, or any unforeseen difficulty in executing the project. The
      additional work will be performed based on written agreement from Generex and
      will be documented on a Cardinal Health Quotation Amendment Request (QAR).
      

    

    All
      required investigational work (such as OOS investigations, troubleshooting
      chromatographic methods, etc.) may be conducted without prior approval from
      Generex, for up to [REDACTED] scientist hours per occurrence. If the additional
      work requires going beyond [REDACTED] hours, Generex will be contacted prior
      to
      continuation. All investigational retesting performed that is not directly
      due
      to a Cardinal Health error will be invoiced to Generex.

    
       

      
        
          

        

        
          160
            Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
            27709

          Direct:
            (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

        

      

    

    
      	
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    Section
      7. Invoicing
      and Payment Terms

    

    7.1. Invoicing

     

    Cardinal
      Health will [REDACTED]. Cardinal Health will issue invoices as detailed below.
      Costs for activities, not including any pass-through costs, will not exceed
      those listed in Section 6 without Generex’s approval.

     

    Table
      11: Invoicing
      Schedule

     

    
      	
              Activity

            	 	
              Invoice
                Schedule/Amount

            
	
              Quotation
                Acceptance 

              by
                Generex

            	 	
               $[REDACTED]
                (deposit to be made by Generex)1 

            
	 	 	 
	
              Project
                Related Activities

            	 	
              Invoiced
                monthly as accrued

            
	 	 	 
	
              Analytical
                Method Transfer

            	 	
              Invoiced
                monthly until completion

            
	 	 	 
	
              Engineering
                Batch Production 

              and
                Evaluation

            	 	
              Invoiced
                monthly until completion

            
	 	 	 
	
              Process
                Qualification

            	 	
              Invoiced
                upon batch completion [REDACTED]2 

            
	 	 	 
	
              Production
                of Clinical Supplies

            	 	
              Invoiced
                upon batch completion [REDACTED]2

            
	 	 	 
	
              Generex’s
                Regulatory Submission to the Canadian Agency

            	 	
              Invoiced
                upon submission [REDACTED]

            

    

    

    7.2. Payment
      Terms 

    

    Payments
      toward all invoices are due within [REDACTED] days of receipt of invoice and
      are
      non-refundable. Any applicable wire transfer fee must be included in the payment
      issued to Cardinal Health. Remit all payments to:

    

    Cardinal
      Health, Pharmaceutical Development, RTP

    4673
      Collections Center Drive

    Chicago,
      IL 60693

    

    Section
      8. Additional
      Project Terms

    

    8.1. Termination
      / Cancellation

    

    Either
      party may terminate the Project or any portion thereof at any time by providing
      forty-five (45) days written notice. In the event of a termination by Generex,
      Cardinal Health will promptly scale down the affected portion of the Project
      to
      avoid (or minimize, where non-cancellable) any further related expenses. On
      the
      effective date of termination, Generex will make payment to Cardinal Health
      in
      an amount equal to the costs incurred by Cardinal Health for all work performed
      prior to the effective date, any costs necessary to scale-down the Project,
      any
      non-cancellable commitments made by Cardinal Health prior to notice of
      termination, and any cancellation fees pursuant to the details below.
      Additionally, Cardinal Health will invoice Generex the cost of any
      sample/materials, reference materials, equipment, and supplies purchased by
      Cardinal Health specifically for this project. 

     

    
      1
        The
        $[REDACTED] deposit will be applied to the final invoice for Process
        Qualification activities (or Clinical Supplies production if performed).
        

      2
        Batch
        completion will be marked by release of materials to Generex for
        analysis.

    

     

    
      
        
          

        

        
          160
            Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
            27709

          Direct:
            (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
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    In
      addition to costs already incurred, Cardinal Health reserves the right to
      invoice Project Cancellation fees according to the following calendar day
      schedule: Batch Cancellation notice of 20 to 29 days - [REDACTED]% of cost
      for
      Batch Manufacture, 10 to 19 days - [REDACTED]% of cost for Batch Manufacture,
      4
      to 9 days - [REDACTED]% of cost for Batch Manufacture and 0 to 3 days -
      [REDACTED]% of cost of Batch Manufacture.

     

    8.2. Project
      Notes and Assumptions

    

    Generex
      acknowledges that the results of experimental/development work and the outcome
      of prevalidated manufacturing are not predictable and agrees that Generex shall
      pay for all work conducted and for all product batches produced in accordance
      within this quotation regardless of outcome.

    

    Costs
      assume that raw material vendors will not be qualified by Cardinal Health.
      Qualification of vendors may represent a potential opportunity for cost savings
      and may be discussed with Generex in greater detail, if requested.

    

    It
      is
      assumed that a single cleaning verification will be performed after the
      production of each two-batch campaign.

     

    Costs
      assumes high yields (>[REDACTED]%).

     

    
      
        
          

        

        
          160
            Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
            27709

          Direct:
            (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

    
      	
              QTE-GFV-0001.01 

            	
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                14

            

    

     

    8.3. Standard
      Terms and Conditions

    

    All
      work
      performed under this quotation is subject to the Master Development and Clinical
      Services Agreement, pending negotiation, between Cardinal Health and Generex.
      

    

    Section
      9. Project
      Approval and Authorization

    

    By
      signing below, Generex Biotechnology Corporation agrees to the project details
      as set forth in this Quotation.

     

    
      	Generex
              Biotechnology Corporation	 	 	Cardinal
              Health PTS, LLC
	 	 	 	 
	 	 	 	 
	/s/
              Rose C.
              Perri	 	 	/s/
              Troy M. Young
	
              

              Signature

            	 	 	
              

              Signature

            
	
            	 	 	
            
	Rose C. Perri	 	 	
              Troy
                M. Young

            
	
              
                

              

              Printed
                Name

            	 	 	
              
                

              

              Printed
                Name

            
	 	 	 	 
	
              Chief
                Operating Officer

            	 	 	
              Director,
                Business Services

            
	
              
                

              

              Title

            	 	 	
              
                

              

              Title

            
	 	 	 	 
	
              June
                20, 2006

            	 	 	
              6/5/2006

            
	
              
                

              

              Date

            	 	 	
              
                

              

              Date

            
	 	 	 	 
	
              
                

              

              PO
                Number

            	 	 	 

    

     

    Please
      sign and return a copy of the Quotation Approval Page via fax to Wally Heritage
      at 

    (919)
      481-4908 or email at wally.heritage@cardinal.com.

    
       

      
        
          
            

          

          
            160
              Cardinal Health Way • Morrisville, NC 27560 • PO Box 13341 • RTP, NC
              27709

            Direct:
              (919) 481-4855 • Facsimile: (919) 481-4908 • www.cardinal.com/pts

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