Document:

Exhibit 10.49 123106

    Exhibit
      10.49

    EMLOYMENT
      CONTRACT

    

    This
      Employment Contract (“Contract”) is entered into by and between Amarillo
      Biosciences, Inc., a Texas corporation (“Employer”) and Gary Coy (“Employee”).
      ABI and its controlled subsidiaries shall be hereinafter collectively referred
      to as “ABI Companies”. Employer hereby employs Employee, and Employee accepts
      employment, on the following terms and conditions.

    

    ARTICLE
      I

    TERM
      OF EMPLOYMENT

    

    1.01.
      By this
      Contract, Employer employs Employee, and Employee accepts employment with
      Employer starting April 15, 2006, and with such ABI Companies as Employer shall
      designate, until this Contract shall have been terminated by either party by
      the
      serving of three months’ advance, written notice of such termination upon the
      other party.

    

    ARTICLE
      II

    COMPENSATION

    

    2.01.
      As
      compensation for all services rendered under this Contract, Employee shall
      be
      paid by Employer a salary of TEN THOUSAND FOUR HUNDRED SIXTEEN AND 66/100
      DOLLARS ($10,416.66) per month, payable at least monthly during the term of
      this
      Contract. The amount paid is to be prorated for any partial employment period.
      Furthermore, Employee recognizes that Employer may experience periodic cash
      shortages, and in such event, Employee will accept payment in Employer’s voting
      common stock, which stock shall be registered by Employer on Form S-8, or other
      suitable registration statement.

    

    ARTICLE
      III

    DUTIES
      OF EMPLOYEE

    

    3.01.
      Employee
      is employed as Chief Financial Officer of Employer, and shall work in Travis
      County, Texas. Employee shall perform the duties of Chief Financial Office,
      as
      such duties may be further set fourth in the Bylaws of Employer, or by
      resolution of the Board of Directors of Employer. Employee shall devote his
      entire productive time, ability, attention and energies to the business of
      Employer during the term of this Contract, and during such time, Employee shall
      not directly or indirectly render any services of a business, commercial or
      professional nature to any other person or organization, whether or not for
      compensation, without the prior consent of the Board of Directors of Employer,
      except for Ontra Inc. which may retain Dr. Coy to complete his obligations,
      not
      to exceed 10 hours per month.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      IV

    EMPLOYEE’S
      OBLIGATIONS AS TO INSURANCE

    

    4.01.
      Employee
      agrees to submit to physical examination as may be required for the obtaining
      by
      Employer of insurance on Employee’s life, and agrees to consent to the issuance
      of a policy or policies of insurance on his life, such policies to be owned
      by
      Employer, and naming Employer as beneficiary. Upon termination of Employee’s
      employment for any reason, and if requested by Employee, Employer shall assign
      any such policy to Employee, so that Employee shall have the option of keeping
      the policy in force at Employee’s expense. The forgoing notwithstanding,
      Employer shall be entitled to retain the accumulated cash value of any such
      policy.

    

    ARTICLE
      V

    EMPLOYEE
      BENEFITS

    

    5.01.
      If
      Employer provides hospital, surgical, medical, dental, group life insurance,
      or
      other fringe benefits to its employees, or any of them, at any time during
      the
      term of this Contract, Employee shall be entitled to participate in such
      benefits, on terms and conditions at least as favorable as those accorded to
      other employees of Employer, subject to insurability. At the present time,
      it is
      Employer’s intention that at the commencement date of this Contract, the
      healthcare plan available to Employees will be a health savings account, funded
      by Employees with pre-tax dollars from payroll withholding. Employee shall
      be
      entitled to vacation time as if the employee had been employed since March
      of
      2003, but with no vacation time carried forward from periods prior to April
      1,
      2006.

    

    ARTICLE
      VI

    REIMBURSEMENT
      OF EXPENSES INCURRED BY EMPLOYEE

    

    6.01.
      Employee
      is authorized to incur reasonable business expenses for promoting the business
      of Employer, including expenditures for entertainment and travel. Employer
      will
      reimburse Employee for all such expenses upon Employee’s presentation of written
      expense vouchers, itemizing such expenditures.

    

    ARTICLE
      VII

    PROPERTY
      RIGHTS OF PARTIES

    

    7.01.
      Employee
      has had access to and become familiar with, and during the term of continued
      employment, will continue to have access to and become familiar with, various
      trade secrets, consisting of formulas, devices, secret inventions, processes,
      compilations of information, records, and specifications owned by ABI Companies
      and regularly used in the operation of ABI Companies. Employee shall not
      disclose any such trade secrets directly or indirectly nor use them in any
      way
      either during the term of this Contract or at any time thereafter except as
      required in the course of his employment. All files, records, documents,
      drawings, specifications, equipment and similar items relation to the business
      of ABI Companies, whether or not prepared by Employee, shall 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    remain
      the exclusive property of ABI Companies and shall not be removed from the
      premises of Employer under any circumstances, except in pursuit of the trade
      and
      business of ABI Companies

    

    7.02.
      On the
      termination of employment or whenever requested by Employer, Employee shall
      immediately deliver to Employer all property in Employee’s possession or under
      Employee’s control belonging to ABI Companies, including but not limited to all
      accounting records, computer terminals and tapes, disks, or other data storage
      mechanisms, accounting machines, and all office furniture and fixtures, supplies
      and other personal property in the possession or under the control of Employee,
      in good condition, ordinary wear and tear excepted, and including without
      limitation all correspondence files, research date, and patent information
      or
      data, of every sort.

    

    7.03.
      Employee
      does not claim any rights or interests in and to trade secrets, formulas,
      devices, inventions, processes, patents, applications, continuations,
      copyrights, trademarks, compilations of information, records, specifications,
      rights, interests and date of any other sort, affecting or pertaining directly
      or indirectly to the business of ABI Companies as now conducted, or to the
      patents, trade secrets, and other rights now owned by ABI Companies

    

    7.04.
      Employee
      agrees that he will promptly and fully inform and disclose to Employer all
      inventions, designs, improvements and discoveries that Employee may have during
      the term of this Contract that pertain or relate to the business of ABI
      Companies or to any experimental work carried on by ABI Companies, whether
      conceived by Employee alone or with others and whether or not conceived during
      regular working hours. All such inventions, designs, improvements and
      discoveries shall be the exclusive property of Employer. Employee shall assist
      ABI Companies in obtaining patents on all such inventions, designs, improvements
      and discoveries deemed patentable by ABI Companies, and shall execute all
      documents and do all things necessary to obtain such patents for Employer or
      ABI
      Companies

    

    7.05.
      It is
      contemplated that Employee in the course of his employment will be engaged
      in
      work involving various patents and secret processed owned by ABI Companies.
      All
      experiments, developments, formulas, patterns, devices, secret inventions and
      compilations of information, records and specifications regarding such matter
      are trade secrets, which Employee shall not disclose directly or indirectly
      to
      anyone other than ABI Companies or their agents, or use in any way either during
      the term of this Contract or at any time after the termination of this Contract,
      except as required in the course and scope of his employment.

    

    7.06.
      During
      the term of this Contract, Employee shall not directly or indirectly either
      as
      an employee, employer, consultant, agent, principal, partner, stock holder,
      corporate office, director, or in any other individual or representative
      capacity engage or participate in any business that is in competition in any
      manner whatsoever with the business of ABI Companies; provided, however, that
      Employee may without restriction invest in professionally managed mutual funds
      and Employee may purchase, own and 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    sell
      stock or other securities, as long as Employee is not directly or indirectly
      through one or more intermediaries in control of or controlled by or under
      common control with any such company. Furthermore, upon the termination of
      this
      Contract, Employee expressly agrees not to engage or participate directly or
      indirectly in any business that is in competition with the business of ABI
      Companies, for a period of three (3) years; and further provided, that no
      business will be considered to be in competition with ABI Companies unless
      its
      business relates to the manufacture, sale, testing or development of products
      containing alpha
      interferon.
      Employer and Employee recognize and agree that ABI Companies may obtain or
      develop additional technologies from time to time, and if that is the case,
      Employer may expand the terms of this non-competition provision by giving
      written notice to Employee of the additional technologies that are to be
      protected.

    

    7.07.
      In the
      event of a breach of Employee of any provisions of this Article VII, the parties
      hereto agree that Employer, in addition to any other remedies to which Employer
      may be entitled at law, shall be entitled to the remedy of specific performance,
      it being understood and agreed by the parties hereto that damages may be
      difficult to ascertain, and that an award of damages would in all probability
      not sufficiently compensate Employer for any breach of Employee of such
      provisions. ABI Companies are intended third-party beneficiaries of the
      provisions of this Article VII.

    

    ARTICLE
      VIII

    STOCK
      OPTION

    

    8.01.
      Employer
      hereby grants to Employee non-transferable stock options to purchase 400,000
      shares of Employer’s voting common stock, subject to the terms and conditions
      hereinafter set forth in this Article VIII. Where required by applicable laws
      or
      regulation, or by administrative necessity, the Board of Directors of Employer
      may prescribe additional terms and conditions regarding the issuance and
      administration of the stock option, as long as such additional terms and
      conditions do not conflict with the terms and conditions hereinafter set
      forth.

    

    8.02.
      The
      options granted pursuant to Section 8.01 above, shall be exercisable as
      follows:

    

    
      	 	
              a. 
                

            	
              as
                to 100,000 shares, between April 1, 2007 and March 31, 2012, inclusive;
                

            

    

    

    
      	 	
              b. 
                

            	
              as
                to 100,000 shares, between April 1, 2008 and March 31, 2013, inclusive;
                and

            

    

    

    	c. 	
            as
              to 100,000 shares, between April 1, 2009 and March 31, 2014, inclusive;
              and

          

    

    	d. 	
            as
              to 100,000 shares, between April 1, 2010 and March 31, 2015,
              inclusive.

          

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    The
      exercise price for all options shall be $ 0.75 per share.

    

    The
      foregoing notwithstanding, no options which are not already theretofore
      exercisable shall become exercisable at any time after the termination of
      Employee’s full time active employment with Employer, nor at any time after
      Employee receives notice of a pending or completed Change of Control as defined
      in Section 8.03, below.

    

    8.03.
      In the
      event of death or complete disability of Employee, or a voluntary termination
      of
      employment (which shall include the resignation of Employee, or the giving
      of a
      notice of termination of this Contract, or a successor or amended employment
      contract, by Employee pursuant to Section 1.01, above),or notice of a pending
      or
      completed Change of Control as hereinafter defined, Employee (or if applicable,
      Employee’s estate or personal representative) shall have a period of sixty (60)
      days within which to exercise any matured (exercisable) options which have
      not
      theretofore been exercised; and after the expiration of said sixty (60) day
      period, such options shall expire and be of no further force or effect.

    

    For
      purposes of this Agreement, “Change in Control” shall mean when any entity,
      person or group other than Employer or a Subsidiary of Employer or Hayashibara
      Biochemical Laboratories, Inc. or an affiliate thereof acquires shares of
      Employer in a transaction or series of transactions that result in such entity,
      person or group directly or indirectly owning beneficially fifty-one percent
      (51%) or more of Employer’s outstanding shares of voting common
      stock.

    

    8.04.
      Stock for Stock Exercise.
      Where
      Employee so elects by written notification to Employer prior to or
      simultaneously with the exercise of one or more options, the exercise may be
      accomplished on a “stock for stock” basis as follows: in lieu of payment to
      Employer of the cash exercise price with respect to the options exercised,
      there
      shall be calculated the number of shares that could be purchased for the cash
      exercise price; and that number of shares shall be deducted from the shares
      issuable to Employee, with respect to that option exercise. 

    

    8.05.
      The
      stock
      options herein granted are not qualified or incentive stock options within
      the
      meaning of the Internal Revenue Code of 1986, or successor provisions. Employer
      has provided no tax advice to Employee with respect to the taxation of the
      grant
      and/or exercise of such options, and/or the disposition of the underlying
      shares, and Employee has been advised to consult with his own tax advisor
      regarding such matters. Furthermore, the underlying shares will not be
      registered with the SEC, and will therefore be “Restricted Securities” within
      the meaning of Rule 144, promulgated under the Securities Act of 1933. Employer
      cannot insure that its securities will continue to qualify for sale or resale
      under Rule 144, and in the event Rule 144 should at some time, be no longer
      available with regard to such sales, Employee might find it difficult or
      impossible to sell the option shares.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      IX

    ENTIRETY
      OF AGREEMENT; AMENDMENTS; SURVIVAL

    

    9.01.
      This
      Contract supersedes all other agreements, either oral or in writing, between
      the
      parties to this Contract with respect to the employment of Employee by Employer.
      This Contract contains the entire understanding of the parties and all of the
      covenants and agreements between the parties with respect to such
      employment.

    

    9.02.
      This
      Contract may be amended only by an instrument signed in writing by both parties;
      and provided further, that no amendment may be executed on behalf of Employer,
      except pursuant to a resolution of the Board of Director of
      Employer.

    

    9.03.
      The
      following provisions shall survive the expiration of this Agreement: ARTICLES
      VII, VIII, and IX.

    

    IN
      WITNESS WHEREOF, this Contract is executed by the undersigned as of this
      13th
      day of
      March, 2006.

    

    

      
        	
                EMPLOYEE:

              	 	
                EMPLOYER:

              
	 	 	 
	
                /s/
                  Gary Coy

              	 	
                /s/
                  Joseph M. Cummins

              
	
                Gary
                  Coy

              	 	
                Joseph
                  M. Cummins

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EMPLOYMENT
      CONTRACT

    AMENDMENT
      SEPTEMBER 10, 2007

    

    

    ARTICLE
      II

    COMPENSATION

    

    2.01.
      As
      compensation for all services rendered under this Contract, Employee shall
      be
      paid by Employer a salary of ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS
      ($125,000.00) per year, payable at least monthly during the term of this
      Contract. The amount paid is to be prorated for any partial employment period.
      Furthermore, Employee recognizes that Employer may experience periodic cash
      shortages, and in such event, Employee will accept partial (no more than 50%)
      payment in Employer’s voting common stock, which stock shall be registered by
      Employer on Form S-8, or other suitable registration statement.

    

    ARTICLE
      VIII

    STOCK
      OPTION

    

    

    The
      foregoing notwithstanding, no options which are not already theretofore
      exercisable shall become exercisable at any time after the termination of
      Employee’s full time active employment with Employer, nor at any time after
      Employee receives notice of a pending or completed Change of Control as defined
      in Section 8.03, below.Exhibit 10.50 123106

    Exhibit
      10.50

    EMLOYMENT
      CONTRACT

    

    This
      Employment Contract (“Contract”) is entered into by and between Amarillo
      Biosciences, Inc., a Texas corporation (“Employer”) and Joseph M. Cummins
      (“Employee”). ABI and its controlled subsidiaries shall be hereinafter
      collectively referred to as “ABI Companies”. Employer hereby employs Employee,
      and Employee accepts employment, on the following terms and
      conditions.

    

    ARTICLE
      I

    TERM
      OF EMPLOYMENT

    

    1.01.
      By this
      Contract, Employer employs Employee, and Employee accepts employment with
      Employer starting September 10, 2006, and with such ABI Companies as Employer
      shall designate, until this Contract shall have been terminated by either party
      by the serving of three months’ advance, written notice of such termination upon
      the other party.

    

    ARTICLE
      II

    COMPENSATION

    

    2.01.
      As
      compensation for all services rendered under this Contract, Employee shall
      be
      paid by Employer a salary of ONE HUNDRED SEVENTY FIVE THOUSAND DOLLARS
      ($175,000.00) per YEAR, payable at least monthly during the term of this
      Contract. The amount paid is to be prorated for any partial employment period.
      Furthermore, Employee recognizes that Employer may experience periodic cash
      shortages, and in such event, Employee will accept partial (no more than 50%)
      payment in Employer’s voting common stock, which stock shall be registered by
      Employer on Form S-8, or other suitable registration statement.

    

    ARTICLE
      III

    DUTIES
      OF EMPLOYEE

    

    3.01.
      Employee
      is employed as President, Chief Executive Officer and Chairman of the Board
      of
      Directors of Employer, and shall work at the corporate offices in Amarillo,
      Texas. Employee shall perform the duties of as President, Chief Executive
      Officer and Chairman of the Board of Directors, as such duties may be further
      set fourth in the Bylaws of Employer, or by resolution of the Board of Directors
      of Employer. Employee shall devote his entire productive time, ability,
      attention and energies to the business of Employer during the term of this
      Contract, and during such time, Employee shall not directly or indirectly render
      any services of a business, commercial or professional nature to any other
      person or organization, whether or not for compensation, without the prior
      consent of the Board of Directors of Employer.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ARTICLE
      IV

    EMPLOYEE’S
      OBLIGATIONS AS TO INSURANCE

    

    4.01.
      Employee
      agrees to submit to physical examination as may be required for the obtaining
      by
      Employer of insurance on Employee’s life, and agrees to consent to the issuance
      of a policy or policies of insurance on his life, such policies to be owned
      by
      Employer, and naming Employer as beneficiary. Upon termination of Employee’s
      employment for any reason, and if requested by Employee, Employer shall assign
      any such policy to Employee, so that Employee shall have the option of keeping
      the policy in force at Employee’s expense. The forgoing notwithstanding,
      Employer shall be entitled to retain the accumulated cash value of any such
      policy.

    

    ARTICLE
      V

    EMPLOYEE
      BENEFITS

    

    5.01.
      If
      Employer provides hospital, surgical, medical, dental, group life insurance,
      or
      other fringe benefits to its employees, or any of them, at any time during
      the
      term of this Contract, Employee shall be entitled to participate in such
      benefits, on terms and conditions at least as favorable as those accorded to
      other employees of Employer, subject to insurability. 

    

    ARTICLE
      VI

    REIMBURSEMENT
      OF EXPENSES INCURRED BY EMPLOYEE

    

    6.01.
      Employee
      is authorized to incur reasonable business expenses for promoting the business
      of Employer, including expenditures for entertainment and travel. Employer
      will
      reimburse Employee for all such expenses upon Employee’s presentation of written
      expense vouchers, itemizing such expenditures.

    

    ARTICLE
      VII

    PROPERTY
      RIGHTS OF PARTIES

    

    7.01.
      Employee
      has had access to and become familiar with, and during the term of continued
      employment, will continue to have access to and become familiar with, various
      trade secrets, consisting of formulas, devices, secret inventions, processes,
      compilations of information, records, and specifications owned by ABI Companies
      and regularly used in the operation of ABI Companies. Employee shall not
      disclose any such trade secrets directly or indirectly nor use them in any
      way
      either during the term of this Contract or at any time thereafter except as
      required in the course of his employment. All files, records, documents,
      drawings, specifications, equipment and similar items relation to the business
      of ABI Companies, whether or not prepared by Employee, shall remain the
      exclusive property of ABI Companies and shall not be removed from the premises
      of Employer under any circumstances, except in pursuit of the trade and business
      of ABI Companies.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    7.02.
      On the
      termination of employment or whenever requested by Employer, Employee shall
      immediately deliver to Employer all property in Employee’s possession or under
      Employee’s control belonging to ABI Companies, including but not limited to all
      accounting records, computer terminals and tapes, disks, or other data storage
      mechanisms, accounting machines, and all office furniture and fixtures, supplies
      and other personal property in the possession or under the control of Employee,
      in good condition, ordinary wear and tear excepted, and including without
      limitation all correspondence files, research date, and patent information
      or
      data, of every sort.

    

    7.03.  With
      the
      exception of inventor royalties currently owned by Employee, arising out of
      his
      previous employment by the University of Illinois and Texas A&M University,
      and relating to certain royalty payments receiv-able by Employee with respect
      to
      certain licenses heretofore granted by said Universities, Employee hereby
      promises and agrees to convey and assign to Employer any and all other rights
      or
      interests he may now have in and to trade secrets, formulas, devices,
      inventions, processes, patents, applica-tions, continuations, copyrights,
      trademarks, compilations of information, records, specifications, rights,
      interests and data of every other sort, affecting or pertaining directly or
      indirectly to the business of ABI Companies as now conducted, or to the patents,
      trade secrets, and other rights not owned by ABI Companies. In further
      clarification of the preceding sentence, it is not Employee's intention to
      retain individual-ly any such rights or interests, other than those heretofore
      specifically excepted. Except for the rights heretofore excepted, Employee
      does
      not claim any rights or interests in and to trade secrets, formulas, devices,
      inventions, processes, patents, applications, continuations, copyrights,
      trade-marks, compilations of information, records, specifications, rights,
      interests and data of any other sort, affecting or pertaining directly or
      indirectly to the business of ABI Companies as now conducted, or to the patents,
      trade secrets, and other rights now owned by ABI Companies.

    

    7.04. Employee
      agrees that he will promptly and fully inform and disclose to Employer all
      inventions, designs, improvements and discoveries that Employee may have during
      the term of this Contract that pertain or relate to the business of ABI
      Companies or to any experimental work carried on by ABI Companies, whether
      conceived by Employee alone or with others and whether or not conceived during
      regular working hours. All such inventions, designs, improvements and
      discoveries shall be the exclusive property of Employer. Employee shall assist
      ABI Companies in obtaining patents on all such inven-tions, designs,
      improvements and discoveries deemed patentable by ABI Companies, and shall
      execute all documents and do all things necessary to obtain such patents for
      Employer or ABI Companies.

    

    7.05.
      It is
      contemplated that Employee in the course of his employment will be engaged
      in
      work involving various patents and secret processed owned by ABI Companies.
      All
      experiments, developments, formulas, patterns, devices, secret inventions and
      compilations of information, records and specifications regarding such matter
      are trade secrets, which Employee shall not disclose directly or indirectly
      to
      anyone other than ABI Companies or their agents, or use in any way either during
      the 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    term
      of
      this Contract or at any time after the termination of this Contract, except
      as
      required in the course and scope of his employment.

    

    7.06.
      During
      the term of this Contract, Employee shall not directly or indirectly either
      as
      an employee, employer, consultant, agent, principal, partner, stock holder,
      corporate office, director, or in any other individual or representative
      capacity engage or participate in any business that is in competition in any
      manner whatsoever with the business of ABI Companies, excluding
      any cattle derived dietary supplements;
      provided, however, that Employee may without restriction invest in
      professionally managed mutual funds and Employee may purchase, own and sell
      stock or other securities, as long as Employee is not directly or indirectly
      through one or more intermediaries in control of or controlled by or under
      common control with any such company. Furthermore, upon the termination of
      this
      Contract, Employee expressly agrees not to engage or participate directly or
      indirectly in any business that is in competition with the business of ABI
      Companies, for a period of three (3) years; and further provided, that no
      business will be considered to be in competition with ABI Companies unless
      its
      business relates to the manufacture, sale, testing or development of products
      containing alpha
      interferon.
      Employer and Employee recognize and agree that ABI Companies may obtain or
      develop additional technologies from time to time, and if that is the case,
      Employer may expand the terms of this non-competition provision by giving
      written notice to Employee of the additional technologies that are to be
      protected.

    

    7.07.
      In the
      event of a breach of Employee of any provisions of this Article VII, the parties
      hereto agree that Employer, in addition to any other remedies to which Employer
      may be entitled at law, shall be entitled to the remedy of specific performance,
      it being understood and agreed by the parties hereto that damages may be
      difficult to ascertain, and that an award of damages would in all probability
      not sufficiently compensate Employer for any breach of Employee of such
      provisions. ABI Companies are intended third-party beneficiaries of the
      provisions of this Article VII.

    

    ARTICLE
      VIII

    STOCK
      OPTION

    

    8.01.
      Employer
      hereby grants to Employee non-transferable stock options to purchase 400,000
      shares of Employer’s voting common stock, subject to the terms and conditions
      hereinafter set forth in this Article VIII. Where required by applicable laws
      or
      regulation, or by administrative necessity, the Board of Directors of Employer
      may prescribe additional terms and conditions regarding the issuance and
      administration of the stock option, as long as such additional terms and
      conditions do not conflict with the terms and conditions hereinafter set
      forth.

    

    8.02.
      The
      options granted pursuant to Section 8.01 above, shall be exercisable as
      follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 	
              a. 
                

            	
              as
                to 100,000 shares, between September 10, 2007 and September 9, 2012,
                inclusive; 

            

    

    

    
      	 	
              b. 
                

            	
              as
                to 100,000 shares, between September 10, 2008 and September 9, 2013,
                inclusive; and

            

    

    

    	c. 	
            as
              to 100,000 shares, between September 10, 2009 and September 9, 2014,
              inclusive; and

          

    

    	d. 	
            as
              to 100,000 shares, between September 10, 2010 and September 9, 2015,
              inclusive.

          

    

    The
      exercise price for all options shall be the closing price of ABI stock on
      September 8, 2006.

    

    The
      foregoing notwithstanding, no options which are not already theretofore
      exercisable shall become exercisable at any time after the termination of
      Employee’s full time active employment with Employer.

    

    8.03.
      In the
      event of death or complete disability of Employee, or a voluntary termination
      of
      employment (which shall include the resignation of Employee, or the giving
      of a
      notice of termination of this Contract, or a successor or amended employment
      contract, by Employee pursuant to Section 1.01, above), Employee (or if
      applicable, Employee’s estate or personal representative) shall have a period of
      sixty (60) days within which to exercise any matured (exercisable) options
      which
      have not theretofore been exercised; and after the expiration of said sixty
      (60)
      day period, such options shall expire and be of no further force or effect.
      In
      the event of notice of a pending or completed Change in Control, as hereinafter
      defined, all options held by Employee under this Employment Contract shall
      be
      immediately exercisable, and Employee shall thereupon have a period of sixty
      (60) days within which to exercise any or all of such options; and after the
      expiration of said sixty (60) day period, such options shall expire and be
      of no
      further force or effect.

    

    For
      purposes of this Agreement, “Change in Control” shall mean when any entity,
      person or group other than Employer or a Subsidiary of Employer or Hayashibara
      Biochemical Laboratories, Inc. or an affiliate thereof acquires shares of
      Employer in a transaction or series of transactions that result in such entity,
      person or group directly or indirectly owning beneficially fifty-one percent
      (51%) or more of Employer’s outstanding shares of voting common
      stock.

    

    8.04.
      Stock for Stock Exercise.
      Where
      Employee so elects by written notification to Employer prior to or
      simultaneously with the exercise of one or more options, the exercise may be
      accomplished on a “stock for stock” basis as follows: in lieu of payment to
      Employer of the cash exercise price with respect to the options exercised,
      there
      shall be calculated the number of shares that could be purchased for

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    the
      cash
      exercise price; and that number of shares shall be deducted from the shares
      issuable to Employee, with respect to that option exercise. 

    

    8.05.
      The
      stock
      options herein granted are not qualified or incentive stock options within
      the
      meaning of the Internal Revenue Code of 1986, or successor provisions. Employer
      has provided no tax advice to Employee with respect to the taxation of the
      grant
      and/or exercise of such options, and/or the disposition of the underlying
      shares, and Employee has been advised to consult with his own tax advisor
      regarding such matters. Furthermore, the underlying shares will not be
      registered with the SEC, and will therefore be “Restricted Securities” within
      the meaning of Rule 144, promulgated under the Securities Act of 1933. Employer
      cannot insure that its securities will continue to qualify for sale or resale
      under Rule 144, and in the event Rule 144 should at some time be no longer
      available with regard to such sales, Employee might find it difficult or
      impossible to sell the option shares.

    

    ARTICLE
      IX

    ENTIRETY
      OF AGREEMENT; AMENDMENTS; SURVIVAL

    

    9.01.
      This
      Contract supersedes all other agreements, either oral or in writing, between
      the
      parties to this Contract with respect to the employment of Employee by Employer.
      This Contract contains the entire understanding of the parties and all of the
      covenants and agreements between the parties with respect to such
      employment.

    

    9.02.
      This
      Contract may be amended only by an instrument signed in writing by both parties;
      and provided further, that no amendment may be executed on behalf of Employer,
      except pursuant to a resolution of the Board of Director of
      Employer.

    

    9.03.
      The
      following provisions shall survive the expiration of this Agreement: ARTICLES
      VII, VIII, and IX.

    

    IN
      WITNESS WHEREOF, this Contract is executed by the undersigned as of this 10th
      day of September, 2006.

    

    
      	
              EMPLOYEE:

            	 	
              EMPLOYER:

            
	 	 	
              AMARILLO
                BIOSCIENCES, INC.

            
	 	 	 
	
              /s/
                Joseph M. Cummins

            	 	
              /s/
                Gary W. Coy

            
	
              Joseph
                M. Cummins

            	 	
              Gary
                W. Coy, VP, CFO

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