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EXHIBIT 10.42
SUPPLY AGREEMENT
ANHYDROUS CRYSTALLINE MALTOSE
THIS AGREEMENT is made and effective this 13 day of October , 2000, by and
between AMARILLO BIOSCIENCES, INC., a Texas corporation with its principal place
of business at 000 Xxxx 0xx, Xxxxxxxx, Xxxxx 00000 (hereinafter "ABI") and
HAYASHIBARA BIOCHEMICAL LABORATORIES, INC. and XXXXXXXXXXX XXXXX, INC., each of
them with its principal place of business at 0-0, Xxxxxxxxxx 0-xxxxx, Xxxxxxx
000-0000, Xxxxx (hereinafter collectively "Hayashibara"). ABI and Hayashibara
collectively referred to hereinafter as the "Parties".
WHEREAS, Hayashibara desires to grant to ABI, and ABI desires to have, the
exclusive right to purchase and distribute Hayashibara's pharmaceutical grade
anhydrous crystalline maltose, subject to the specifications as attached
herewith (hereinafter "ACM"), for sale as an active ingredient in nutraceutical
products which are developed, produced and commercialized by ABI's proprietary
technology worldwide, except Japan.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, Hayashibara and ABI agree as follows:
Section 1. Right to Purchase and Distribute.
Hayashibara hereby grants to ABI the exclusive right to purchase,
distribute and sell, worldwide except Japan, nutraceutical and health-care
products for human consumption containing ACM as an active ingredient to relieve
dry mouth (hereinafter the "Products").
Section 2. Consideration.
Hayashibara shall receive a transfer fee from ABI in the amount of (US)
**** Dollars ($****) per kilogram. f.o.b. Kobe, Japan.
Section 3. Term.
Unless sooner terminated as hereinafter provided, this Agreement shall
remain in effect for a period of Five (5) years from the date of this Agreement.
After that initial term, the Agreement shall be automatically renewed for
successive One (1) year term unless one of the Parties gives written notice of
termination or modification of this Agreement to the other within Thirty (30)
days prior to commencement of the renewal term. Any termination pursuant to this
paragraph shall not relieve Hayashibara of any obligation to fill purchase
orders placed with Hayashibara prior to termination. Similarly such termination
shall not
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relieve ABI of any obligation to Hayashibara to pay for ACM delivered by
Hayashibara and any payment due hereunder prior to termination.
If ABI shall at any time during the initial term of any subsequent renewal
term of this Agreement default in any obligation hereunder or fail to pay any
payment due, and such default shall not be cured within sixty (60) days after
written notice from Hayashibara to ABI specifying the nature of the default,
Hayashibara may terminate this Agreement, or may demand specific performance and
remedies for violation of the terms of this Agreement or under applicable law.
If ABI shall be involved in financial difficulties as evidenced (a) by its
commencement of a voluntary bankruptcy under any applicable bankruptcy code or
statute, or by its authorizing, by appropriate proceedings, the commencement of
such a voluntary bankruptcy; or (b) by its failing to receive dismissal of any
involuntary case under any applicable bankruptcy code or statute within Sixty
(60) days after initiation of such action or petition; or (c) by its seeking
relief as a debtor under any applicable law of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or alteration of
the rights of creditors, or by consenting to or acquiescing in such relief; or
(d) by the entry of an order by a court of competent jurisdiction finding it to
be bankrupt or insolvent, or ordering or approving its liquidation,
reorganization or any modification or alteration of the rights of its creditors
or assuming custody of, or appointing a receiver or other custodian for, all or
a substantial part of its property or assets; or (e) by its making an assignment
for the benefit of, or entering into a composition with, its creditors, or
appointing or consenting to the appointment of a receiver or other custodian for
all or a substantial part of its property, this Agreement shall be terminated
immediately.
Section 4. Orders, Shipment and Payment.
Actual quantities and delivery dates relating to ACM shall be specified in
purchase orders submitted by ABI to Hayashibara, which purchase orders shall
constitute firm and legally binding orders. Unless otherwise agreed in writing,
Hayashibara hereunder shall accept each individual purchase order by notifying
ABI in writing its acceptance of an order within Ten (10) business days of
receipt of the purchase order. Hayashibara shall ship ACM as specified in such
accepted purchase orders within Thirty (30) days after Hayashibara's acceptance
of a purchase order from ABI. The shipment of ACM under this Agreement shall be
made on f.o.b. Kobe, Japan, unless otherwise agreed in writing. For shipment of
ACM Hayashibara may arrange for a vessel or vessel space in ABI's name at ABI's
cost.
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Section 5. Minimum Purchase.
ABI agrees that, commencing 12 months following the date when the sale of
the Products is commenced, it shall guarantee the annual minimum purchase
quantity of ACM in the amount of 10 MT (metric tons). ABI agrees that the
complete performance of the above minimum purchase guarantee is of essence for
assuring the maintenance and continuation of this Agreement as an exclusive
Supply Agreement. In the event such minimum purchases are not effected, this
Agreement shall become nonexclusive.
Section 6. Indemnification.
ABI shall indemnify, hold harmless and defend Hayashibara from all claims,
demands, payments, suits, actions and judgments brought, recovered or executed
against the Parties on account of death, injury or damage sustained by any party
in connection with ABI's distribution, marketing or sales of the Products under
this Agreement, to the extent that such claims are the result of actions or
inactions by ABI or its affiliates acting hereunder pursuant to this Section.
Hayashibara shall indemnify, hold harmless and defend ABI from all claims,
demands, payments, suits, actions and judgments brought, recovered or executed
against the Parties on account of death, injury or damage sustained by any party
in connection with Hayashibara's manufacture or shipment of ACM under this
Agreement, to the extent that such claims are the result of actions or inactions
by Hayashibara.
Section 7. Confidentiality.
Each of the Parties agrees to maintain confidential and secret all
information which may be disclosed or provided to it by the other and that the
Parties may together subsequently acquire in relation to the Products and which
is designated in writing by clearly identifiable legend as being confidential or
secret in character.
Each Party's obligation to the other (to maintain confidentiality)
hereunder shall terminate with respect to any particular item and only said item
of the disclosing Party's confidential information, when the recipient Party can
demonstrate that such item of information:
(1) Is publicly known and available through some means other than by the
recipient Party's act or omission; or
(2) Was in the recipient Party's possession prior to its disclosure by the
other Party, provided that written evidence of such possession is established;
or
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(3) Has come into the recipient Party's possession through a third party
free of any obligation of confidentiality to the disclosing Party, where said
third party has acquired information lawfully and not under circumstances
forbidding its disclosure.
Neither Party will permit confidential or secret information or any part
thereof to be disclosed to third parties or to employees except on a
"need-to-know" basis and each will maintain confidential or secret information
and/or documents with the same precautions it uses to safeguard its own
confidential or secret information.
Each Party will notify the other promptly if it has knowledge that a third
party possesses confidential or secret information of the other Party related to
the Products.
Section 8. Miscellaneous.
(1) Force Majeure.
The failure of Hayashibara, ABI, or any of their affiliates or
sublicenses to take any act required by this Agreement if occasioned by an act
of God or the public enemy, fire, explosion, perils of the sea, floods, drought,
war, riot, sabotage, accident, embargo or any circumstances of like or different
character beyond the reasonable control of the Party so failing or by the
interruption or delay in transportation, inadequacy, or shortage or failure of
the supply of materials and/or request of any governmental officer, department
or agency and whether in any case such circumstance now exists or hereafter
arises, shall not subject said Party to any liability to the other.
(2) Arbitration.
The Parties hereto desire to avoid and settle without litigation future
disputes that may arise between them relative to this Agreement. Accordingly,
the parties agree to engage in good faith negotiations to resolve any such
dispute. In the event they are unable to resolve any such dispute by
negotiation, such dispute shall be submitted to arbitration as follows: If
arbitration is initiated by Hayashibara, it shall be held in the State of Texas,
USA, in compliance with the Commercial Arbitration Rules of the American
Arbitration Association. If arbitration is initiated by ABI, it shall be held in
Tokyo, Japan in compliance with the Rules of the Japan Commercial Arbitration
Association. The arbitration award shall be final and binding upon the parties
hereto and may be filed with and enforced by any competent court having
competent jurisdiction to enforce said award.
(3) Communication.
Any payment, notice or other communication required or permitted to be
made or given to either Party hereto pursuant to this Agreement shall be
sufficiently made or given on the date of sending if sent to such Party by
certified or registered mail or by Federal Express or a similar overnight
courier service, postage or delivery charge prepaid, by telex, or telephone
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facsimile addressed to it at its address set forth, or to such other address(es)
as it may designate by written notice given to the other Party as follows:
In case of HBL
Overseas Business Development
Hayashibara Company Ltd.
0-0 Xxxxxxxxxx 0-xxxxx
Xxxxxxx Xxxxx
In case of ABI
Xx. Xxxxxx X. Xxxxxxx, President
Amarillo Biosciences Inc
000 X 0xx Xxxxxxxx, Xxxxx 00000
(4) Assignment.
This Agreement shall not be assignable by ABI to any person or entity
without prior written consent of HBL, which consent shall not be unreasonably
withheld, in any case including merger, amalgamation, reorganization, or sale or
transfer of major business or assets on ABI. The designation by ABI of one or
more affiliates shall not relieve ABI from any responsibility from performing
all of ABI's obligations under this Agreement. The foregoing notwithstanding,
HBL's prior written consent ABI may transfer or spinoff its nutraceutical
business, including its rights under this Supply Agreement, at anytime to its
shareholders, or to an entity all of whose equity interests are held by ABI
shareholders.
(5) Amendment.
This Agreement shall not be amended, in whole or in part, without the
prior written consent of the Parties.
(6) Nature of Relationship.
Nothing herein shall be construed to place the Parties in a relationship
of partners or joint ventures, nor does this Agreement make either Party the
agent or legal representative of the other for any purposes whatsoever. The
Parties further agree that no representation shall be made by either Party that
would create an apparent agency, employment, partnership or joint venture.
Neither Party shall have the power express or implied, to obligate the other in
any manner whatsoever.
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IN WITNESS WHEREOF, the Parties hereunto have caused this Distribution
Agreement to be executed in duplicate by their duly authorized representatives
as of the date first above written.
ABI On behalf of Hayashibara
AMARILLO BIOSCIENCES, INC. HAYASHIBARA BIOCHEMICAL
LABORATORIES, INC.
By By
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Xxxxxx X. Xxxxxxx, DVM, PhD Xx. Xxx Xxxxxxxxxxx
President President
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separately with the Commission.
