<PAGE>   1
                                                                   EXHIBIT 10.27

                             DISTRIBUTION AGREEMENT



                 THIS DISTRIBUTION AGREEMENT ("Agreement") is made and
effective this 12th day of January, 1998, by and between AMARILLO BIOSCIENCES,
INC., a Texas corporation with its principal place of business at 800 W. 9th,
Amarillo, Texas 79101 (hereinafter "SUPPLIER") and GLOBAL DAMON PHARMACEUTICAL,
a company organized under the laws of the Republic of Korea with its principal
place of business at Rm #1803, Garden Tower Building, 98-78 Wooni-Dong,
Chongro-Ku, Seoul, Korea (hereinafter "DISTRIBUTOR") (SUPPLIER and DISTRIBUTOR
are hereinafter collectively referred to as the "Parties").  MITSUBISHI
CORPORATION is SUPPLIER'S shipping agent with respect to product shipped to
DISTRIBUTOR under this Agreement.

                 WHEREAS, SUPPLIER and its contract suppliers have substantial
expertise in the production and use of interferon alpha (hereinafter, "IFN-a")
and have proprietary rights and know-how in the field of production,
purification and formulation of IFN-a;

                 WHEREAS, SUPPLIER is willing to disclose to DISTRIBUTOR
SUPPLIER Technical Information including preliminary human data; and

                 WHEREAS, SUPPLIER has an exclusive worldwide license to market
and distribute HBL IFN (as defined in ARTICLE I, below), and desires to provide
HBL IFN to DISTRIBUTOR on the terms and conditions herein set forth, and
DISTRIBUTOR desires to obtain the right to test, distribute and market HBL IFN
on the terms and conditions herein set forth;





                                      -1-
<PAGE>   2
                 NOW, THEREFORE, for and in consideration of the mutual
covenants contained herein, and for other good and adequate consideration the
receipt and sufficiency of which are evidenced by the execution hereof,
DISTRIBUTOR and SUPPLIER agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

                 1.1.     "SUPPLIER" and "DISTRIBUTOR" shall mean and include
not only the indicated company, but also such company's Assignees.

                 1.2.     "Affiliate" means a corporation, company,
partnership, or other business entity which controls or is controlled by, or is
under common control with, the designated party. In the case of a corporation
or company, "control" means ownership either directly or indirectly of at least
Fifty Percent (50%) of the shares of stock entitled to vote for the election of
directors.

                 1.3.     "Agreement" means this Distribution Agreement.

                 1.4.     "Assignee" means any permitted assignee or
sublicensee of rights under this Agreement.

                 1.5.     "HBL IFN" means the culture derived human
lympho-blastoid interferon alpha used for the formulation by HAYASHIBARA
BIOCHEMICAL LABORATORIES, INC. ("HBL") of natural IFN alpha-containing
formulations for use in the treatment of human renal cell carcinoma and
hepatitis B and C in Japan, which may be produced, purified and formulated by
HBL in Japan, or under license from HBL in Japan, or elsewhere.

                 1.6.     "Licensed Indications" means the human diseases of
hepatitis B, hepatitis C, and primary liver cancer.





                                      -2-
<PAGE>   3
                 1.7.     "Licensed Product" means a dose formulation or
composition containing HBL IFN and designated, detailed, or labeled for oral
use in the treatment of any Licensed Indication.

                 1.8.     "Technical Information" means all information,
reports, results, inventions, know-how, materials, and any other technical and
scientific data, specifications and formulae directly related to the
development, regulatory approval, manufacture, testing, use, marketing and/or
sale of Licensed Product or other IFN-containing compositions, and any
non-public information relevant to the business of the Parties which is
necessarily disclosed by one to the other during the Parties' conduct under
this Agreement. "SUPPLIER Technical Information" refers to Technical
Information originating with SUPPLIER or which SUPPLIER has obtained through
its contractual relationships with third parties. "DISTRIBUTOR Technical
Information" refers to Technical Information originating with DISTRIBUTOR or
which DISTRIBUTOR has obtained through its contractual relationships with third
parties. "Technical Information" when not otherwise specified herein means both
SUPPLIER Technical Information and DISTRIBUTOR Technical Information.

                                   ARTICLE II

                          GRANT OF DISTRIBUTION RIGHTS

                 2.1.     SUPPLIER grants to DISTRIBUTOR and DISTRIBUTOR
accepts, subject to the terms of this Agreement, the exclusive right to use
Licensed Product for testing or trials, and upon proper regulatory approval,
for marketing and distribution to treat the Licensed Indications in Korea.





                                      -3-
<PAGE>   4
                 2.2.     The distribution rights granted to DISTRIBUTOR under
this Agreement shall commence on the effective date of this Agreement and shall
terminate immediately upon the termination or expiration of this Agreement.

                 2.3.     DISTRIBUTOR shall have the right to use and sell
Licensed Product only in Korea. DISTRIBUTOR shall not seek customers, establish
any branch or maintain any distribution depot for Licensed Product in any
country other than Korea. DISTRIBUTOR shall not sell Licensed Product to any
customer in any country other than Korea or to any customer in Korea if to the
knowledge of DISTRIBUTOR such customer intends to resell the Licensed Product
in any country other than Korea.

                 2.4.     All Licensed Product sold by DISTRIBUTOR shall bear
SUPPLIER'S trademark or logo, acknowledging SUPPLIER as developer and
manufacturer. Alternatively, DISTRIBUTOR may recommend to SUPPLIER for its
approval one or more other registerable trademarks for the Licensed Products in
Korea. If needed, SUPPLIER shall apply for any new trademark registration, and
SUPPLIER shall own all rights to such trademarks. SUPPLIER hereby grants to
DISTRIBUTOR during the term of this Agreement the exclusive license to use such
trademarks in Korea in connection with the use or sale of Licensed Products.
DISTRIBUTOR shall not directly or indirectly use any of SUPPLIER'S trademarks
or part thereof, or any mark or name confusingly similar thereto, as part of
its corporate or





                                      -4-
<PAGE>   5
business name or in any other manner, except that (1) DISTRIBUTOR may identify
itself as an authorized distributor of SUPPLIER and (2) on SUPPLIER'S written
consent DISTRIBUTOR may use SUPPLIER'S trademarks relating to the Licensed
Product for display purposes in connection with solicitation of orders for
Licensed Product from customers in Korea, and in any other manner previously
approved by SUPPLIER in writing. In addition, DISTRIBUTOR shall not register
any of SUPPLIER'S trademarks or any mark or name closely resembling them.

                 2.5.     DISTRIBUTOR agrees to cooperate with and assist
SUPPLIER, at SUPPLIER'S expense, in the protection of trademarks, patents, or
copyrights owned by or licensed to SUPPLIER and shall inform SUPPLIER
immediately of any infringements or other improper action with respect to such
trademarks, patents, or copyrights that shall come to the attention of
DISTRIBUTOR.

                 2.6.     In the event SUPPLIER or an Affiliate of SUPPLIER
obtains at any time during the term of this Agreement US FDA approval of an HBL
interferon-containing product for oral use in humans in any indication other
than a Licensed Indication, then SUPPLIER will thereupon extend to DISTRIBUTOR
a right of first refusal to the distribution rights for any such indication(s)
in the Republic of Korea. SUPPLIER and DISTRIBUTOR shall negotiate in good
faith, with the goal of entering into a distribution agreement with respect to
any such products. In the event the Parties should fail to reach agreement with
respect to one or more indications, SUPPLIER may (at its election) provide to
DISTRIBUTOR in writing an





                                      -5-
<PAGE>   6
itemization of the material terms and provisions which SUPPLIER wishes to have
contained in such an agreement.  Thereupon, DISTRIBUTOR shall have a period of
sixty (60) days during which DISTRIBUTOR may accept such terms, and offer to
enter into a distribution agreement with SUPPLIER, on that basis. In the event
DISTRIBUTOR fails to acknowledge its acceptance of such terms in writing within
said sixty (60) day period, SUPPLIER shall thereupon be permitted to enter into
a distribution agreement with an entity other than DISTRIBUTOR, upon the same
terms and conditions which had been noticed to DISTRIBUTOR, or upon terms and
conditions no less favorable to SUPPLIER, nor more favorable to the
distributor, than those terms previously noticed to DISTRIBUTOR. However, in
the event SUPPLIER does not enter into such an agreement with another entity
within six (6) months of the expiration of said sixty (60) day notice period,
all of the terms and provisions of this Paragraph 2.6 shall once again be of
full force and effect, and SUPPLIER shall not thereafter enter into any such
distribution agreement with respect to sale or use of such products in Korea,
without once again granting to DISTRIBUTOR the aforesaid right of first
refusal.

                                  ARTICLE III

                               SUPPLY OF PRODUCT

                 3.1.     Subject to the terms and conditions of this
Agreement, SUPPLIER shall supply Licensed Product for testing and (upon
approval) sale in the country of Korea exclusively to DISTRIBUTOR, and to no
other persons or entities. Licensed Product





                                      -6-
<PAGE>   7
shall be supplied in response to issuance by DISTRIBUTOR of written purchase
orders delivered to SUPPLIER specifying the quantity to be supplied, along with
any special instructions/requests regarding supply and/or delivery. Foil
stripping will be included at no additional cost, if requested by DISTRIBUTOR.

                 3.2.     SUPPLIER agrees to allow DISTRIBUTOR right of
reference to SUPPLIER'S US FDA Drug Master File for HBL IFN and to do such
other acts that are reasonably necessary, and within SUPPLIER'S control, to
facilitate approval of HBL IFN-containing lozenges in Korea for use in Licensed
Indications, and SUPPLIER also hereby agrees to consult with DISTRIBUTOR
concerning regulatory affairs, to review documents to be submitted to Korean
agencies for approval, and to take such other actions as may be necessary from
time to time to facilitate approval of Licensed Products for sale and use in
Korea. SUPPLIER also agrees to provide clinical data from its past, current or
future studies, that would be relevant to the testing, use or sale of Licensed
Products. SUPPLIER further agrees to provide, at its actual cost, sufficient
HBL IFN-containing lozenges for preliminary studies and clinical trials as may
be appropriate and necessary to support applications for approval and
commercialization of such products, including (if requested by DISTRIBUTOR)
placebo, packaging, instructions, and inserts.

                 3.3.     SUPPLIER shall provide to DISTRIBUTOR any support or
assistance requested by DISTRIBUTOR with respect to regulatory and clinical
activities, on a fully reimbursed basis.





                                      -7-
<PAGE>   8
                                   ARTICLE IV

                                 CONSIDERATION

                 4.1.     For all Licensed Product supplied by SUPPLIER to
DISTRIBUTOR (other than quantities provided for trials pursuant to Paragraph
3.2 above), SUPPLIER shall receive from DISTRIBUTOR the amount of two dollars
($2.00) per HBL IFN-containing lozenge, foil-stripped, plus SUPPLIER'S actual
costs for any additional packaging, labeling, instructions, and other inserts
requested by DISTRIBUTOR. The price shall be further adjusted from time to time
as may be necessary to reflect any increase in the Producers Price Index, Drugs
and Pharmaceuticals, Subdivision Code 063, after the date of this Agreement. In
addition, the price shall be further increased to reflect any increases for (i)
the incremental cost of any raw material or combination of raw materials that
increases by more than twenty percent (20%) from SUPPLIER'S cost at the date of
this Agreement, and (ii) the incremental cost arising from changes in product
specifications, manufacturing, testing, or release of the product. After
December 31, 2002, the price paid by DISTRIBUTOR shall be increased by fifty
cents ($.50) per lozenge for the remaining term of this Agreement, in addition
to any prior and/or subsequent adjustments made pursuant to the foregoing
provisions of this Paragraph 4.1. DISTRIBUTOR shall receive product at the
named port of destination in the Republic of Korea and the shipping
arrangements shall be made by SUPPLIER'S nominated shipping agent. DISTRIBUTOR
shall pay CIF price at the named port of destination in Republic of Korea
against the invoice price containing shipping





                                      -8-
<PAGE>   9
charge, freight, and insurance, in addition to the product price specified
above. Title to product purchased by DISTRIBUTOR shall transfer to DISTRIBUTOR,
and DISTRIBUTOR shall pay all freight charges and bear the risk of loss and
damage, from the time product is placed at the disposal of ship's rail at the
port of destination.

                 4.2.     From and after the Effective Date of this Agreement,
DISTRIBUTOR shall proceed with reasonable diligence, and shall make its best
effort, to seek and obtain, and to maintain, in each case at its own cost and
expense and without any contribution from SUPPLIER, all necessary licenses or
approvals required to be issued by the Republic of Korea or any agency or
instrumentality thereof as a pre-condition to the import and sale of Licensed
Products, and including any pricing or reimbursement approvals, and will
diligently market all approved Licensed Products throughout the term of this
Agreement. DISTRIBUTOR will conduct clinical trials at its own expense
(including conduct of Phase I, II and III trials, if required). Any approvals,
import licenses, or other licenses ultimately issuing from the Republic of
Korea or any agency or instrumentality thereof authorizing import and/or sale
of any Licensed Product shall be issued in the name of SUPPLIER, if permitted
by Korean law and regulations; and otherwise, shall be issued in the name of
DISTRIBUTOR for use only pursuant to this Agreement. If at any time during the
term of this Agreement DISTRIBUTOR should no longer be actively prosecuting the
application for any such approval or license, or if, having obtained such





                                      -9-
<PAGE>   10
approval or license, DISTRIBUTOR should no longer be actively developing or
marketing any Licensed Product under this Agreement, SUPPLIER shall have the
option to request assignment of such applications, approvals, and/or licenses
from DISTRIBUTOR, and upon such request by SUPPLIER to DISTRIBUTOR, DISTRIBUTOR
shall thereupon assign to SUPPLIER or its designee all of DISTRIBUTOR'S right,
title and interest in and to all such applications, approvals and/or licenses,
to the extent permitted by Korean law and regulations.

                 4.3.     DISTRIBUTOR shall provide SUPPLIER by January 31 of
each year during the term of this Agreement, a report of ongoing efforts for
the development of Licensed Products, including a report of efforts by
DISTRIBUTOR with respect to formulation development, pre-clinical and clinical
testing, regulatory approval efforts, marketing/sales strategy, and any other
areas into which DISTRIBUTOR'S reasonable business efforts in accordance with
this paragraph may reasonably be categorized. Such report shall be accompanied
by labelling, instructions, promotional and other support materials developed
for DISTRIBUTOR'S sales force, patients, physicians, or other outside parties.
Such a report shall be prepared more often if SUPPLIER so requests in writing,
if SUPPLIER pays to DISTRIBUTOR the expenses incurred by DISTRIBUTOR in
generating such additional reports. It is understood that SUPPLIER will receive
all such information as DISTRIBUTOR Technical Information.





                                      -10-
<PAGE>   11
                 4.4.     DISTRIBUTOR shall seek SUPPLIER'S approval of
protocols for proposed clinical studies, and will share the results of such
studies with SUPPLIER. DISTRIBUTOR shall provide to SUPPLIER full access to all
of the data related to IFN-a generated by any trials, tests or studies
conducted by or for DISTRIBUTOR, or under contract from DISTRIBUTOR, or under
its auspices, and whether such trials, tests or studies are conducted before or
after drug approval. For purposes of this Section 4.4, "full access" shall mean
and include copies of all data related to IFN-a generated by such trials, tests
or studies, and copies of any analyses or compilations prepared by or for
DISTRIBUTOR, or under contract from DISTRIBUTOR, or under its auspices. All
such data, results, and compilations shall constitute DISTRIBUTOR Technical
Information under this Agreement.

                 4.5.     At any time during the term of this Agreement,
DISTRIBUTOR shall provide to SUPPLIER, within thirty (30) days of SUPPLIER'S
request, copies of all data not previously provided to SUPPLIER, relating to
the testing and development of Licensed Product generated by DISTRIBUTOR or by
others for DISTRIBUTOR during the term of this Agreement, to that date.

                 4.6.     DISTRIBUTOR shall commence marketing of a Licensed
Product within twelve (12) months after receiving government approval for
commercial sale of such product in Korea. DISTRIBUTOR shall use its best
efforts to advertise, promote and sell such product within Korea after
approval, and in that regard, SUPPLIER shall pay to DISTRIBUTOR the sum of
fifty cents ($.50) per lozenge





                                      -11-
<PAGE>   12
purchased by DISTRIBUTOR, for DISTRIBUTOR'S use in marketing and promotion.
Such funds shall be paid to DISTRIBUTOR on an annual basis with respect to
lozenges purchased by DISTRIBUTOR during that year, against receipt by SUPPLIER
of a current marketing and promotion budget prepared by DISTRIBUTOR.

                 4.7.     Unless specifically authorized in writing by
SUPPLIER, DISTRIBUTOR shall not sell, or offer for sale, or act as sales agent
for the solicitation of orders for any products (other than Licensed Products)
that contain any interferon derived from any species and designated, detailed,
or labeled for oral use for any Licensed Indication.  SUPPLIER shall not
authorize any third parties, directly or indirectly, to market or sell any
interferon in Korea for oral use in the treatment of any Licensed Indication.

                 4.8.     DISTRIBUTOR shall provide medical, pharmacovigilance
and other appropriate customer support services in connection with sale of
Licensed Products, and will report to SUPPLIER on a timely basis all material
adverse reactions, product complaints and other relevant customer feedback.
DISTRIBUTOR agrees to advise SUPPLIER fully with respect to all health, safety,
environmental, and other standards, specifications, and other requirements
imposed by law, regulation, or order in Korea and applicable to Licensed
Product. DISTRIBUTOR shall also advise SUPPLIER of all instructions, warnings,
and labels applicable to Licensed Product that are necessary or desirable under
laws, regulations, or practices in Korea. SUPPLIER shall be entitled to
increase the price charged to DISTRIBUTOR by the amount of any increase in
SUPPLIER'S cost of manufacturing attributable to compliance with any such
safety standards, specifications, labels or other requirements.





                                      -12-
<PAGE>   13
                                   ARTICLE V

                              ORDERS AND SHIPMENTS

                 5.1.     Within ninety (90) days of the date hereof, and at
least ninety (90) days prior to the commencement of each calendar year during
the term of this Agreement, DISTRIBUTOR will furnish SUPPLIER with its
projected requirements for HBL IFN-containing lozenges during the next
succeeding calendar year. DISTRIBUTOR may amend its projected requirements from
time-to-time, provided, however, that SUPPLIER shall be obligated only to make
its best effort to comply with any requests in excess of annual projections
received by it at least ninety (90) days prior to the commencement of the
calendar year in question. Under no circumstances shall SUPPLIER be required to
deliver to DISTRIBUTOR hereunder, an amount of HBL IFN which exceeds the amount
SUPPLIER is able, in good faith, to acquire from HBL, or from HBL's contract
manufacturers. HBL IFN delivered under this Agreement by SUPPLIER to
DISTRIBUTOR may be delivered in the form of 150 I.U. lozenges, unless otherwise
agreed by both Parties. Such lozenges may contain such other ingredients as are
permitted to be contained in lozenges approved by U.S. FDA for U.S. trials
and/or sales, and the exact composition of such lozenges shall be disclosed in
writing by SUPPLIER to DISTRIBUTOR. If DISTRIBUTOR should at any time desire
some other composition or formulation, it shall specify the requested
composition or formulation in writing to SUPPLIER, and SUPPLIER





                                      -13-
<PAGE>   14
shall exercise its best efforts to obtain such composition or formulation;
provided, however, that SUPPLIER shall not be responsible for any loss, cost or
damages of whatsoever nature which may arise to DISTRIBUTOR, its Affiliates,
purchasers, or distributees by reason of SUPPLIER'S inability, for whatever
reason, to obtain such alternate formulation; and further provided that
SUPPLIER shall be entitled to be compensated for any cost or expense incurred
by it in obtaining such alternate composition or formulation. Subject to the
foregoing, SUPPLIER shall use its best efforts to deliver HBL IFN-containing
lozenges in accordance with DISTRIBUTOR'S projected requirements and product
specifications.

                 5.2.     SUPPLIER shall ship product within fifteen (15) days
of request by DISTRIBUTOR, against an irrevocable letter of credit (or other
financial surety acceptable to SUPPLIER or to the agent nominated by SUPPLIER)
in an amount sufficient to cover the CIF price payable to SUPPLIER or the agent
nominated by SUPPLIER under Paragraph 4.1 above. The letter of credit shall be
issued by a financial institution acceptable to SUPPLIER or to the agent
nominated by SUPPLIER, shall be in U.S. dollars and shall not expire until the
final payment for the respective shipment has been made to SUPPLIER or to the
agent nominated by SUPPLIER.

                 5.3.     Orders of product for commercial sales shall be made
for "full lot" quantities of one hundred thousand (100,000) lozenges. A minimum
of two hundred thousand (200,000) lozenges shall be purchased by DISTRIBUTOR
during each year during the term of this Agreement, commencing with the first
full calendar year after all necessary approvals for marketing and
reimbursement have been obtained.





                                      -14-
<PAGE>   15
                                   ARTICLE VI

                              TERM AND TERMINATION

                 6.1.     This Agreement and all rights granted hereunder by
each Party shall terminate upon December 31, 2007, provided, however, that if
DISTRIBUTOR does not commence one (1) Phase I, Phase II or Phase III trial, as
may be required or advisable, within one (1) year after DISTRIBUTOR receives
all supporting documentation required for application to the Health Authority
for approval of commencement of such trial; and after approval of at least one
(1) Licensed Product, place orders for minimum annual shipments as provided in
Paragraph 5.3, above; then SUPPLIER shall have the right to terminate this
Agreement upon thirty (30) days prior written notice to DISTRIBUTOR.
DISTRIBUTOR will proceed diligently to obtain market approval according to a
timetable to be agreed upon between SUPPLIER and DISTRIBUTOR by December 31,
1998. In this connection, SUPPLIER and DISTRIBUTOR agree and stipulate that the
time required to obtain market approval might reasonably be expected to be five
(5) years from commencement of a Phase I trial; three (3) to four (4) years
from commencement of a Phase II trial; and two (2) to three (3) years from
commencement of a Phase III trial.

                 6.2.     Termination of this Agreement for any reason shall
not relieve the Parties of any obligation accruing prior to such termination.
In addition, ARTICLE VIII ("Confidentiality") shall survive termination of this
Agreement.





                                      -15-
<PAGE>   16
                 6.3.     On termination of this Agreement for any reason,
DISTRIBUTOR shall cease to use or evaluate any HBL IFN-containing products in
its possession and shall cease to sell Licensed Product and shall surrender to
SUPPLIER all SUPPLIER Technical Information that it may have received during
the term of this Agreement, and shall assign any license it holds on behalf of
SUPPLIER in accordance with Paragraph 4.2, above. Any accrued payment
obligations shall be paid within thirty (30) days of the termination of this
Agreement.

                                  ARTICLE VII

                          WARRANTY AND INDEMNIFICATION

                 7.1.     SUPPLIER represents and warrants that as of the date
of this Agreement, it is the exclusive owner of the right to sell and
distribute HBL IFN for oral use in humans in the country of Korea. SUPPLIER
further warrants that at the time of shipment, all product supplied by it (i)
shall meet product specifications as set forth in this Agreement, or as
otherwise previously agreed in writing between SUPPLIER and DISTRIBUTOR; (ii)
shall not be adulterated or misbranded; and (iii) shall be manufactured in
accordance with good manufacturing practices. SUPPLIER shall indemnify and hold
DISTRIBUTOR harmless from any and all costs, expenses, damages, judgments, and
liabilities incurred by or rendered against DISTRIBUTOR arising from any claim
made or suit brought as a result of a breach by SUPPLIER of its warranties
under this Paragraph 7.1.





                                      -16-
<PAGE>   17
                 7.2.     DISTRIBUTOR warrants that its operations and
activities in Korea shall be in compliance with Korean law, statutes and
regulations; and DISTRIBUTOR shall indemnify and hold SUPPLIER harmless from
any and all costs, expenses, damages, judgments, and liabilities incurred by or
rendered against SUPPLIER or its affiliates arising from the use, testing,
recall, labelling, promotions, sale or distribution of Licensed Product.

                                  ARTICLE VIII

                                CONFIDENTIALITY

                 8.1.     SUPPLIER owns or is licensed under confidential or
secret information relating to the Licensed Products, and DISTRIBUTOR intends
to conduct trials in Korea which will generate confidential or secret
information relating to the Licensed Products, and it is the intention of both
SUPPLIER and DISTRIBUTOR to maintain this confidentiality.

                 8.2.     Each Party agrees to maintain confidential and secret
all Technical Information which may be disclosed or provided to it by the other
Party or that the Parties may together subsequently acquire.

                 8.3.     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 Technical Information, when the
recipient Party can demonstrate that such item of information:





                                      -17-
<PAGE>   18
                          8.3.1.  Is publicly known and available through some
means other than by the recipient Party's act or omission; or

                          8.3.2.  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

                          8.3.3.  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 said information
lawfully and not under circumstances forbidding its disclosure.

                 8.4.     Neither Party will permit the other Party's Technical
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 such
information and/or documents with the same precautions it uses to safeguard its
own confidential or secret information.

                 8.5.     Each Party will notify the other promptly if it has
knowledge that an unauthorized third party possesses Technical Information of
the other Party.

                 8.6.     DISTRIBUTOR shall have the right to use SUPPLIER'S
Technical Information, and to access SUPPLIER'S US FDA Drug Master File for HBL
IFN, to the extent reasonably necessary to accomplish the objectives of this
Agreement, including specifically the right to disclose such information to its
contract consultants and scientific investigators (from whom DISTRIBUTOR shall
secure Confidential Non-Disclosure Agreements) and to regulatory agencies in
support of applications for regulatory agency approval to make, test and/or
sell Licensed Product.





                                      -18-
<PAGE>   19
                 8.7.     SUPPLIER shall have the right to use DISTRIBUTOR'S
Technical Information for the purposes of designing protocols and studies
outside Korea, and for submission to regulatory authorities in any country
other than Korea, in connection with an application for drug approval.

                                   ARTICLE IX

                                 MISCELLANEOUS

                 9.1.     Force Majeure. The failure of DISTRIBUTOR, SUPPLIER,
or any of their Affiliates to take any action required by this Agreement if
such failure is 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 circumstance 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 equipment, equipment breakdown, labor trouble or compliance with any
order, direction, action or request of any governmental officer, department or
agency and whether in any case such circumstances now exist or hereafter arise,
shall not subject said Party to any liability to the other.

                 9.2.     Communication. Any payment, notice or other
communication required or permitted to be made or given to either Party
pursuant to this Agreement shall be sufficiently made or given on the date of
sending if sent to such Party by certified or





                                      -19-
<PAGE>   20
registered mail, facsimile transmission, or by courier service, postage or
delivery charge prepaid, addressed to it at its address set forth below, or to
such other address as it may have designated by written notice given to the
other Party:

                          In case of DISTRIBUTOR:

                                  President
                                  Global Damon Pharmaceutical
                                  Suite 1803, Garden Tower Building
                                  98-78 Wooni-Dong, Chongro-Ku
                                  Seoul, Korea
                                  Fax: 82-2-3673-2369

                          In case of SUPPLIER:

                                  President
                                  Amarillo Biosciences, Inc.
                                  800 W. 9th
                                  Amarillo, Texas 79101
                                  Fax: 806/376-9301

                          And:

                                  Edward L. Morris
                                  Morris, Moore, Moss & Douglass, P.C.
                                  P. O. Box 15208
                                  Amarillo, TX 79105

                 9.3.     Amendments to Agreement. This Agreement constitutes
the entire agreement between the Parties hereto on this subject matter and
supersedes all previous arrangements whether written or oral. Any amendment or
modification of this Agreement shall be effective only if made in writing, and
executed by both Parties.

                 9.4.     Enforceability. To the extent permitted by law, each
Party waives any provision of law which renders any provision herein invalid,
illegal or unenforceable in any respect.

                 9.5.     Relationship of Parties. All purchases and resales of
Licensed Product by DISTRIBUTOR shall be for DISTRIBUTOR'S own





                                      -20-
<PAGE>   21
account as a principal and not as an agent of SUPPLIER. DISTRIBUTOR shall act
in all respects as an independent contractor and not as a representative or
agent of SUPPLIER. This Agreement shall not be construed to create a
relationship of partners, joint venturers, brokers, employees, agents, master
or servant between the Parties. Neither Party shall have any right or authority
to assume or create any responsibility, express or implied, in the name of the
other Party or to bind the other Party in any manner whatsoever.

                 9.6.     Assignment. Neither Party hereto shall assign any of
its rights under this Agreement to another person or entity without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld.

                 9.7.     Dispute Resolution.

                          A.      Conciliation. All disputes arising between
the Parties concerning the validity, construction, or effect of this Agreement,
or the rights and obligations created hereunder, shall be brought before a
conciliation committee of executives representing both Parties that shall,
within two (2) weeks after being informed of the dispute, attempt to work out a
recommendation for settlement of the dispute and transmit such recommendation
to both Parties for due consideration.

                          B.      Arbitration. Any dispute that cannot be
settled amicably by conciliation as provided above shall be heard, settled, and
decided by binding arbitration. Such arbitration if initiated by SUPPLIER shall
take place in Seoul, Korea; and if initiated by DISTRIBUTOR shall take place in
Amarillo, Texas,





                                      -21-
<PAGE>   22
U.S.A. In each case, the arbitration will take place under applicable laws and
regulations in force at the specified situs. The award in such arbitration
shall be final and enforceable in any court of competent jurisdiction.

                 9.8.     Governing Language. The English language of this
Agreement shall govern and control any translations of the Agreement into any
other language. Documents furnished by DISTRIBUTOR to SUPPLIER under the terms
of this Agreement shall be furnished in English, or alternatively, may be
furnished in Korean, accompanied by an English translation.



                 IN WITNESS WHEREOF, the Parties hereunto have caused this
instrument to be executed in duplicate by their duly authorized representatives
as of the date first above written.

SUPPLIER:                                  DISTRIBUTOR:

AMARILLO BIOSCIENCES, INC.                 GLOBAL DAMON PHARMACEUTICAL

By:                                        By:
   --------------------------------           --------------------------------
   Joseph M. Cummins,                         D. K. Kim, President
   President




                                      -22-