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

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Execution version
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.

 

 
SUPPLY AGREEMENT
 
by and between
 
AKER BIOMARINE ANTARCTIC US INC.
 
and
 
SCHIFF NUTRITION GROUP, INC.
 

 

 
 
 

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Execution version
 
 

This Supply Agreement is entered into as of July 5, 2011 (the “Effective Date”)
by and between Aker BioMarine Antarctic US Inc., 410 Newport Way NW, Suite D,
Issaquah, WA 98027 USA (the “Supplier”) and Schiff Nutrition Group, Inc., 2002
S. 5070 West, Salt Lake City, UT, U.S.A. 84104 (the “Customer”).
 
The Supplier and the Customer are hereinafter collectively referred to as the
“Parties” or, individually, as a “Party”.
 
WHEREAS:
 
(i)  
The Customer and Aker BioMarine Antarctic AS (“AKBM”), the parent company of
Supplier, entered into a certain Sales Agreement dated August 31, 2009 (the
“Sales Agreement”) under which AKBM agreed to supply directly and/or through
Supplier and the Customer agreed to purchase and resell certain krill oil
products through specific sales channels in the US and certain other markets.

 
(ii)  
The Aker BioMarine group of companies has made a significant investment in the
harvesting of krill and the development of the Superba™ brand as the leading
ingredient brand for krill oil products.

 
(iii)  
The Customer has made a significant investment in its MegaRed™ dietary
supplement product and developed the market for such product in the United
States and in the sales channels covered by the Sales Agreement.

 
(iv)  
The Customer wishes to enhance its business and protect its investment by
acquiring certain exclusive rights to resell Supplier’s products in the markets
and through the sales channels set forth in this Agreement, and Supplier is
willing to grant such exclusive rights while retaining the freedom to expand and
develop its business outside of the scope of the exclusive rights granted to the
Customer herein.

 
(v)  
The Supplier and the Customer further wish to work with each other on a
preferred basis to develop and market new products and exploit additional
business opportunities on a mutually beneficial basis, all as more particularly
set forth in this Agreement.

 
NOW, THEREFORE, in consideration of the mutual promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties agree as follows:
 
1.  
DEFINITIONS

 
1.1  
Specific Terms.  For the purposes of this Agreement, the following words, terms
and phrases, where written with an initial capital letter, shall have the
meanings given to them below:

 
(a)  
“Agreement” shall mean this Supply Agreement together with the Appendices
attached hereto.

 
 
 
2

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(b)  
“Aker BioMarine Group” means all entities under the common control of Aker
BioMarine ASA.

 
(c)  
“Branded Products” means Customer’s MegaRed™ dietary supplement [*].

 
(d)  
“Effective Date” shall have the meaning set forth in the preamble of this
Agreement.

 
(e)  
“Exclusive Field” means the Field of Use and the Sales Channels on a worldwide
basis.

 
(f)  
“Innovation Products” means those categories of new products, concepts and
potential business opportunities set forth on Appendix I attached hereto, each
such category of new products, concepts or business opportunities an “Innovation
Product”, which the Parties mutually agree to discuss in good faith pursuant to
Section 11.1.

 
(g)  
“Field of Use” means the field of dietary supplements [*].

 
(h)  
“Non-Exclusive Sales Channels” means [*] in the Territory including [*], but
excluding the Sales Channels.

 
(i)  
“Patents” means the U.S. and foreign patent properties set forth in Appendix II
covering or related to the Product, and, divisionals, continuations, and
continuations-in-part of any listed patent applications; any patents issuing
from listed patent applications, any additional foreign patent applications
which are based on the patents and/or patent applications listed on Appendix II,
and any reissue or re-examination or other similar patents derived from any of
the preceding.

 
(j)  
“Private Label Products” means dietary supplement products [*].

 
(k)  
“Product Prices” means the initial prices for the Product set forth on Appendix
III attached hereto.

 
(l)  
“Product” means Supplier’s krill oil products which meet the Specifications set
forth in Appendix IV.

 
(m)  
“Sales Channels” means [*].

 
(n)  
“Specifications” means the specifications for the Product set forth in Appendix
IV attached hereto.

 
(o)  
“Term Year” means any twelve (12) month period during the term of this Agreement
commencing on July 1 of a year and ending on June 30 of the succeeding year.

 
(p)  
“Territory” means [*].

 
(q)  
“Trademarks” means the trademarks listed on Appendix V as such Appendix may be
amended from time to time during the term of this Agreement by the mutual
agreement of the Parties.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
3

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1.2  
Other Defined Terms; Interpretation.  All other terms, words or phrases, other
than those defined in Section 1.1 above, which are written with an initial
capital letter shall have the meanings given to them elsewhere in this
Agreement.  As used in this Agreement, any references to “appendices, articles
or sections” shall mean the Appendices, Articles or Sections of this Agreement,
unless the context requires otherwise.

 
 
2.  
APPOINTMENT

 
2.1  
Grant of Rights.  Subject to all of the terms and conditions of this Agreement,
the Supplier hereby grants the Customer the following rights in relation to the
Product:

 
(a)  
Supplier hereby grants Customer the exclusive, non-transferable and worldwide
right and license to incorporate Products having Omega 3, EPA, DHA and
phospholipid values that are within [*] of the values contained in the
Specifications into Customer’s Branded Products for sale in the Field of Use
through the Sales Channels; and

 
(b)  
Supplier hereby grants Customer the exclusive, non-transferable and worldwide
right and license to incorporate Products having Omega 3, EPA, DHA and
phospholipid values that are within [*] of the values contained in the
Specifications into Private Label Products for sale in the Field of Use through
the Sales Channels; and

 
(c)  
Supplier hereby grants Customer a non-exclusive, non-transferable, right and
license to incorporate Products having Omega 3, EPA, DHA and phospholipid values
that are within [*] of the values contained in the Specifications into
Customer’s Branded Products for sale in the Field of Use through the
Non-Exclusive Sales Channels in the Territory; and

 
(d)  
Supplier further hereby grants to Customer all rights and licenses under
Supplier’s Patents and other intellectual property necessary for the enjoyment
of the rights granted to Customer in Sections 2.1(a)-(c); provided, that nothing
in this Agreement shall be deemed to be the grant of a license under Supplier’s
Patents or other intellectual property to manufacture or have manufactured the
Product or any other Supplier krill oil products, [*].

 
2.2  
Reciprocal Commitments.  In consideration of the rights granted to the Customer
above, the Customer agrees that, during the term of this Agreement and except as
expressly permitted by any other terms of this Agreement, the Customer shall not
by any means manufacture, have manufactured, market, sell, represent, distribute
or deal with any krill oil products other than Supplier’s krill oil products or
sell any krill oil products other than Supplier’s krill oil products as
incorporated into the Branded Products and Private Label Products for sale in
the Exclusive Field or incorporated into the Branded Products for sale through
the Non-Exclusive Sales Channels in the Territory. Conversely, for so long as
the Customer is in compliance with its obligations under this Agreement,
Supplier shall not grant any licenses or rights to or supply, market or sell
krill oil products that have total Omega-3, EPA, DHA and phospholipid values
that are within [*] of the values contained in the Specifications to any third
party for use in a product which competes with the Branded Products and/or

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
4

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the Private Label Products sold by Customer in the Exclusive Field.  If Supplier
becomes aware of any violation by any of Supplier’s other licensees or customers
of the above exclusive rights granted to Customer, Supplier shall make such
licensee or customer aware of the exclusive rights granted to Customer hereunder
and use commercially reasonable efforts to ensure that such licensee or customer
ceases and desists from such violation. If Customer becomes aware of any
violation by any of Supplier’s other licensees or customers of the above
exclusive rights granted to Customer, Customer shall promptly notify Supplier,
and Supplier shall make such licensee or customer aware of the exclusive rights
granted to Customer hereunder and use commercially reasonable efforts to ensure
that such licensee or customer ceases and desists from such violation.  In
either case, if, despite Supplier’s efforts, the licensee or customer does not
comply with Supplier’s request to cease and desist within a reasonable time,
Supplier shall notify Customer, and the Parties shall meet and discuss
appropriate measures to take to cause such violation to end.
 
2.3  
No Restrictions.  Notwithstanding Section 2.2 and subject to the terms of
Sections 10.1 and 11.1, nothing in this Agreement shall be construed as
precluding Supplier from itself manufacturing and/or selling Products or from
granting any such rights to any third party or from exploiting the
Patents,  Trademarks or other intellectual property rights of the Aker BioMarine
Group or granting any rights to third parties under such Patents, Trademarks or
other intellectual property rights of the Aker BioMarine Group outside of the
Exclusive Field.  For the avoidance of doubt, nothing in this Agreement shall
preclude or restrict the Supplier from supplying Products on a non-exclusive
basis to third parties for resale to the Non-Exclusive Sales Channels within or
outside of the Territory.

 
 
3.  
SUPPLY AND PURCHASE

 
3.1  
Supply and Purchase of Products.  The Supplier shall manufacture and supply
Products to the Customer in bulk in a timely manner and in accordance with
accepted purchase orders, and the Customer agrees to purchase all of its
requirements for krill oil and other krill oil derived products solely from
Supplier in the form of the Products in accordance with all of the terms of this
Agreement.  The Customer will not purchase any krill oil or krill oil derived
products from any person or third party other than the Supplier (or an
encapsulator that has purchased the Product from the Supplier on behalf of the
Customer), subject at all times to the Customer’s second-source rights set forth
in Section 3.7 and the terms of Section 10.2.  The Supplier shall not be
responsible for supplying Product in capsule or tablet form nor for any
liability resulting from the manufacture of capsules or tablets by the
Customer’s encapsulator.

 
3.2  
Forecasts.  No later than thirty (30) days prior to each Term Year, the Customer
will provide Supplier with a forecast of its intended purchases of Products for
the next twelve (12) months of which the first three (3) months shall be a
binding forecast and the remaining nine months’ forecast will be
non-binding.  The Customer will update the above forecast on a rolling basis no
later than the first day of each calendar quarter during the Term Year
throughout the term of this Agreement.  Any expenditure the Supplier may make
based on projected future sales to the Customer (including any forecasts by the
Customer or Supplier’s own forecasts) are Supplier’s responsibility and at the
Supplier’s own risk.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
5

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3.3  
Guaranteed Quantities.

 
(a)  
The Supplier agrees that, if the Customer places proper orders in accordance
with this Agreement, Supplier will deliver up to three hundred (300) metric tons
of Products during each Term Year and will deliver up to [*] metric tons of
Products in any one month.  Supplier shall have no obligation to accept purchase
orders from the Customer or deliver quantities of Products in excess of the
above minimum quantities.  In the event Customer desires to increase the yearly
or monthly volume of guaranteed quantities of Products set forth above, Customer
shall give Supplier at least twelve (12) months written notice.  Supplier shall
have thirty (30) days from receipt of written notice to either agree to increase
the amount of guaranteed quantities proposed by Customer or to decline.  If
Supplier declines to increase the guaranteed quantities as requested in
Customer’s notice, Customer shall be free to buy its requirements for Product
which are in excess of the then current guaranteed quantities from third party
suppliers.  Supplier agrees that it will source, purchase and warehouse all raw
materials and maintain sufficient inventories of ingredients and supplies to
meet its obligations to supply Products to Customer hereunder. Supplier agrees
that it will notify Customer as soon as reasonably practical of any actual or
anticipated delays in the supply of the Products or the ability of Supplier to
fulfill its obligations under this Agreement including, but not limited to,
ingredient supplies, labor shortages, or events of Force
Majeure.  Notwithstanding Supplier’s commitment to provide the minimum
quantities set forth above, nothing herein shall require Customer to purchase
any minimum amount of Products during any period of time during this Agreement.

 
(b)  
To the extent Supplier has an insufficient supply of Product to fully and timely
meet all of Customers’ orders for Products which Supplier is obligated to accept
in accordance with the terms of this Agreement and subject to any existing
contractual agreements specifically addressing rationing or allocation of
Product that Supplier may have with other of its customers as of the Effective
Date, Supplier shall allocate its available supply of Product by giving
preference and priority to Customer in accordance with the following:  (i) if
Supplier has not supplied 300 metric tons of Product during the Term Year or [*]
metric tons of Product in the relevant month to Customer (or such greater
minimum yearly or monthly quantities established pursuant to Section 3.3(a)),
Supplier shall fill Customer’s orders before filling any orders of any other
customers, and (ii) if Supplier has supplied 300 metric tons of Product during
the Term Year or [*] metric tons of Product in the relevant month to Customer
(or such greater minimum yearly or monthly quantities established pursuant to
Section 3.3(a)) and Supplier has accepted purchase orders from Customer for
additional Product in excess of the relevant minimum quantities, Supplier shall
allocate Product among its customers on a pro rata basis in relation to each
customer’s (including Customer’s) percentage of Supplier’s total sales of
Product.  If Supplier’s failure to fully and timely meet Customer’s orders for
Product is due to a breach of this Agreement by the Supplier, the above
allocation of available Product shall not relieve Supplier of its other
obligations hereunder or limit Customer’s available remedies under the terms of
this Agreement.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
6

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3.4  
Safety Stock.  The Supplier shall at all times maintain in the United States a
safety stock of at least [*] of inventory of Product based on the Customer’s
then current binding three (3) month forecast under Section 3.2.  Customer shall
have the right to select which lots or batches of Product shall be placed into
the safety stock.  Supplier will provide the Customer with a Certificate of
Analysis as described in Section 7.4 with each shipment of Products.  Prior to
deposit into the safety stock, all Products shall be subject to inspection and
acceptance by Customer in accordance with Section 5.1.  Upon removal of Product
from the safety stock and shipment to Customer, such Products shall be subject
to incoming inspection by Customer a second time to confirm there are no damages
or defects in the Products during storage or shipment and that the Products
conform to the Specifications.  Once a shipment of Products has been accepted by
Customer and placed in the safety stock, such Products shall not be subject to
any further price adjustment or discount pursuant to Paragraph 2 of Appendix II;
provided, that such Products may still be rejected by Customer if they are
damaged, defective or fail to conform to the Specifications on arrival at the
shipping destination.  Supplier may in its discretion fill accepted purchase
orders from the Customer out of the safety stock of inventory, provided Supplier
promptly replenishes the safety stock to the level existing prior to filling the
relevant purchase order from Customer.

 
3.5  
Purchase Orders.  The Customer may order Products by submitting to Supplier a
written purchase order signed by an authorized representative of customer by
telefax or by e mail which sets forth at a minimum: (a) a unique purchase order
number, (b) the quantity of Products, (c) requested delivery dates, and (d) the
shipping instructions and shipping address.  No purchase order shall be binding
on Customer unless and until it is in writing and signed by Customer’s
authorized representative.   All purchase orders submitted by Customer which are
in conformity with the terms and conditions of this Agreement, including the
quantity limitations set forth in Section 3.3, will be accepted by Supplier in
writing, by telefax or by e mail within two (2) business days of receipt of the
order from Customer. All accepted purchase orders are deemed binding on the
Parties at acceptance, and may only be modified or cancelled thereafter upon the
mutual agreement of the Parties; provided, that Customer may upon ten (10) days
written notice to Supplier delay delivery of any order for Products and such
delay shall not be deemed to be a breach of the purchase order or this
Agreement. All accepted purchase orders are subject to the terms and conditions
of this Agreement; in the event of a conflict between the terms of the purchase
order and this Agreement, the terms of this Agreement shall govern.

 
3.6  
Delivery Terms.  Supplier shall bear all costs, fees, duties, tariffs, freight
and insurance associated with importing the Product into the United States and
delivering the Product directly to Customer at its requested shipping
destination in the United States or to Supplier’s facility in the United States
to be placed in the safety stock.  For all deliveries of Product from the safety
stock to a shipping address designated by Customer in the United States,
Customer shall bear all costs, fees and freight and Supplier shall bear the cost
of insurance for the shipment.  Title and risk of loss shall pass to the
Customer at the Customer’s shipping destination.  Nothing in this Section 3.6
shall affect Customer’s right to inspect and reject non-conforming Products
pursuant to Sections 5.1 and 5.2 hereof.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
7

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3.7  
Second Source Rights

 
(a)  
In the event Supplier fails for any reason to supply Products ordered by
Customer in accordance with the terms of this Agreement (subject to the
limitations on Term Year and monthly quantities contained in Section 3.3),
Supplier shall promptly notify Customer in writing including the reasons and
causes of Supplier’s failure to supply Products hereunder. In such event,
notwithstanding Customer’s undertakings in Section 2.2, Customer shall be free
to purchase or otherwise source krill oil products from one or more third
parties (“Third Party Products”) for so long as Supplier continues to fail to
supply Products under this Agreement.

 
(b)  
If the reason for Supplier’s inability to fulfill its obligation to supply
Products hereunder is any cause other than an event of Force Majeure, the
Supplier shall pay to the Customer [*].  If the reason for Supplier’s inability
to supply Products is due to an event of Force Majeure, the Customer shall be
entitled to [*].

 
(c)  
If Supplier fails to supply 300 metric tons of Product during the relevant Term
Year or [*] metric tons of Product in the relevant month (as such minimum
quantities may be adjusted pursuant to Section 3.3(a)) for any reason other than
the occurrence of an event of Force Majeure and Customer is unable to purchase a
sufficient amount of Third Party Products to meet its requirements and provided
Customer is then in compliance with its obligations under this Agreement,
Customer, at its option, may require Supplier to pay to Customer [*].  Supplier
also shall pay to Customer [*].

 
(d)  
At such time as the Supplier is once again able to supply Products as required
and ordered by Customer under this Agreement, the Parties will cooperate to
effect an orderly transition back to full supply of Products by Supplier, and
Customer will cease purchasing and selling Third Party Products, subject to its
contractual obligations to such third parties and in a manner so as not to
create undue risk or burden for the Customer.

 
 
4.  
PRICES AND PAYMENT

 
4.1  
Product Prices.  The price for the Products for the Term Year commencing on the
Effective Date is set forth on Appendix III.  Product Prices shall be subject to
adjustment as provided in Appendix III and the other terms and conditions of
this Agreement.

 
4.2  
Payment.  Payment for the Products shall be made to the Supplier by in full,
free of bank charges, within [*] of the date of delivery of the Products to the
Customer together with Supplier’s invoice for the Products shipped.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
8

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4.3  
Taxes.  The Product Prices do not include any taxes.  Customer shall be solely
responsible for any U.S. taxes, including any applicable state sales taxes and
all corporate taxes on the Customer’s net income.  The Supplier shall be solely
responsible for foreign taxes, import duties and all corporate taxes on the
Supplier’s net income.

 
4.4  
[*] Pricing.

 
(a)  
The Supplier [*]. Subject to Section 4.4(b), [*].  In calculating the price, the
Supplier shall [*].

 
(b)  
Notwithstanding the provisions of Section 4.4(a), in the event Customer has (i)
rejected any ordered Products shipped by Supplier and returned such Products to
Supplier or (ii) on the basis of Certificates of Analyses provided to the
Customer by Supplier, refused to accept any ordered Products prior to shipment
by Supplier, Supplier shall, [*].

 
(c)  
The Customer shall have the right, [*], to have an independent third party
auditor reasonably acceptable to the Supplier audit the Supplier’s books and
records relating to the sales of the Product.  The Supplier agrees to provide
the auditor with access to any books, records, or other information reasonably
necessary for the auditor to determine the Supplier’s compliance with its
obligations under this Agreement.

 
4.5  
[*].  In the event that the Customer [*].  For purposes of this Section 4.5
only, [*].

 
 
5.  
WARRANTIES AND LIABILITY

 
5.1  
Inspection.  The Customer shall conduct an inspection of the Products within
thirty (30) days after receipt of each shipment of Products at the shipping
destination and shall notify the Supplier in writing of any damaged or defective
goods. Defects that could not reasonably be detected during the initial
inspection shall be reported to the Supplier in writing promptly after such
defects are discovered or should have been discovered. Products that are not
rejected in writing within the above time-limits shall be deemed to be accepted.

 
5.2  
Acceptance or Rejection.  The Customer may reject any Products which are (i) not
in conformity with the Specifications, (ii) defective or damaged, (iii) not in
conformity with the Product descriptions in the relevant purchase order, (iv)
not in compliance with any sample mutually agreed to by the Parties, or (v) no
longer required as a result of the Supplier’s failure to supply Product and the
cancellation of the orders for Branded Products or Private Label Products by one
or more customers of the Customer as a result of such failure to timely supply
Product. Upon rejection, the Customer, at its option, may return the
nonconforming Products to Supplier at the Supplier’s expense and require
Supplier to ship replacement Products at Supplier’s expense within five (5)
business days or receive a credit for the value of the defective
Products.  Customer’s failure to discover any defects in the Products during the
acceptance inspection period shall not relieve the Supplier of its obligations
under the terms of this Agreement.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
9

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5.3  
Product Warranties.  The Supplier warrants that the Products when delivered to
Customer (a) shall be free from defects in material and workmanship, (b) shall
be in conformity with the Specifications, and (c) shall have a minimum of [*]
remaining shelf-life from the date the Products were produced and [*] remaining
shelf-life from the date the Products are delivered to the Customer’s shipping
address; provided, that the Products are properly stored after such delivery by
Customer, its encapsulator or its customers in accordance with the
Specifications, and, (d) shall contain sufficient levels of EPA and DHA that
when the shelf-life of the Product expires, the EPA and DHA levels in the
Product shall still comply in all material respects with the Specifications. The
Specifications may be amended by written agreement of the Parties from time to
time. The Customer understands that changes to the Specifications requested by
the Customer may require changes in the Product Prices to the extent of any
actual increases in the cost to the Supplier of manufacturing and supplying the
Products.

 
5.4  
Excluded Claims and Limited Warranty.  The Supplier shall have no obligation
under Section 5.3 in the event that Products are rendered non-conforming or
defective in whole or in part by the acts or omissions of the Customer or if the
Products are not properly stored by Customer, its encapsulator or its customers
in accordance with the Specifications.  For the avoidance of doubt, Supplier’s
failure to properly store the Products in accordance with the Specifications
when the Products are part of the safety stock shall not relieve Supplier of its
Product warranty obligations hereunder.  Without limiting Supplier’s obligations
under Section 12.1 in respect of third party claims, the Supplier’s sole
obligation to the Customer in the event that any Products fail to comply with
the warranties set forth in Section 5.3 shall be (i) at the Customer’s option,
to replace the non-conforming Products with replacement Products which conform
to the above warranties at no cost to the Customer or provide the Customer with
a credit for the non-conforming Products, and (ii) to compensate Customer to the
extent of Customer’s cost of goods sold for any Branded Products or Private
Label Products that are returned to Customer by its distributors or customers as
a result of the Products failure to comply with such warranties.  The warranties
set forth in Section 5.3 are solely for the benefit of the Customer and, subject
to Supplier’s additional warranties given under Section 5.6, are in lieu of all
other warranties, express or implied, with respect to the Products, including
without limitation, any warranty of merchantability or fitness for a particular
purpose.

 
5.5  
Manufacturing Inspections.   The Customer shall have the option to inspect (i)
the facilities in which the Product is manufactured, packaged or stored; (ii)
the Product, including raw materials used in the manufacture or packaging of the
Product, goods in process and finished goods; and (iii) the records relating
thereto. The Customer will provide a minimum of ten (10) days prior written
notice to Supplier of any such inspection. All inspections shall be conducted at
reasonable times and shall not unduly interfere with the Supplier’s
manufacturing processes or business in general.  Any inspection or failure to
inspect in accordance with the foregoing shall not relieve Supplier of any
responsibility or liability with respect to the Product, including the materials
used in the manufacture or packaging of the Product, nor shall an inspection be
interpreted as an acceptance of any shipment of the Product by Customer.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
10

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5.6  
Supplier’s Additional Warranties.  The Supplier hereby represents and warrants
to the Customer that (i) the Supplier has the full power, capacity and right to
enter into this Agreement; (ii) the Aker BioMarine Group is the sole owner of
the Patents and the Trademarks; (iii) the Supplier has been granted a license by
and has full authority from the relevant company within the Aker BioMarine Group
to grant the rights and give the undertakings to the Customer hereunder with
respect to the Patents and Trademarks;  (iv) the Products as supplied by
Supplier [*]; (v) the Supplier has not entered into any agreements or granted
any rights or licenses under the Trademarks, the Patents or any other of its
intellectual property rights which would conflict with the rights and licenses
granted to Customer hereunder; (vi) the Supplier shall convey good, clear and
unencumbered title to all Products supplied hereunder; (vii) the Product as
supplied by Supplier has been manufactured and produced in accordance with
applicable U.S. laws and regulations, including current good manufacturing
practices applicable to the dietary supplement industry; (viii) neither the
execution and delivery of this Agreement nor compliance with the obligations of
the Supplier hereunder, will violate any law or regulation, or any order or
decrees of any court or government instrumentality, or will conflict with, or
result in the breach of, or constitute a default under, any contract, agreement,
instrument or judgment to which the Supplier is a party; (ix) the Product
supplied by Supplier shall not be adulterated or misbranded within the meaning
of the Federal Food, Drug and Cosmetic Act and is not an article which may not,
under such Act, be introduced into interstate commerce; (x) the Product as
supplied by Supplier is of the same qualitative and quantitative formula as the
products tested by Supplier in applicable clinical studies; and (xi) to the best
of Supplier's knowledge, no action, approval or consent by any United States,
European or Norwegian federal, state, municipal or other governmental agency,
commission, board, bureau or instrumentality is necessary in order to constitute
this Agreement as a valid, binding and enforceable obligation of the Supplier in
accordance with its terms. Supplier makes no other representations or warranties
other than those expressly made in Section 5.3 and this Section 5.6 and hereby
expressly disclaims any other warranties.  Supplier shall have no obligation for
any alleged breach of the warranties in Section 5.6(iv) in the event that [*].

 
5.7  
Customer Warranties.  The Customer hereby represents and warrants to the
Supplier that (i) it has the full power, capacity and right to enter into the
Agreement; (ii) neither the execution and delivery of this Agreement nor
compliance with the obligations of the Customer hereunder will violate any law
or regulation, or any judgment, order or decree of any court or governmental
instrumentality, or will result in breach of, or constitute a default under, any
contract, agreement instrument or judgment to which the Customer is a party; and
(iv) to the best of Customer’s knowledge, no action, approval or consent,
including but not limited to, any action, approval or consent by any United
States federal, state, municipal or other governmental agency, commission,
board, bureau or instrumentality is necessary in order to constitute this
Agreement as a valid, binding and enforceable obligation of the Customer in
accordance with its terms.

 
5.8  
Limitation of Liability.  Except as provided in Section 3.7(c), in no event
shall either Party have any liability to the other Party under this Agreement
for any special, indirect, incidental or consequential losses or damages,
including specifically lost profits, even if the Party shall have been advised
of the possibility of such loss or damage.  The foregoing exclusion of certain
damages shall not apply to any losses or damages suffered by one Party as a
result of the willful misconduct or gross negligence of the other Party.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
11

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6.  
MARKETING

 
6.1  
Marketing Plans.  Both parties have the intention to work in close relationship
and, at least twice each year have formal review meetings to discuss marketing
plans and the market conditions for the sales of the Product, and provide
updates of significant changes in marketing plans in between such meetings, in
each case to the extent the foregoing does not present a competitive risk to the
Customer (as determined by the Customer in its sole discretion). The Supplier
agrees that all such discussions will constitute Confidential Information for
purposes of this Agreement.

 
6.2  
Marketing Spend.  Customer agrees that, [*], Customer shall spend a minimum of
[*] for the purpose of marketing [*].  The Supplier shall have the right, upon
reasonable notice to the Customer and during reasonable business hours and at
Supplier’s expense, to have an independent third party auditor reasonably
acceptable to the Customer audit the Customer’s books and records relating to
the Marketing Spend.  The Customer agrees to provide the auditor with access to
any books, records, or other information reasonably necessary for the auditor to
determine the Customer’s compliance with its obligations under this Agreement.

 
6.3  
Marketing Compliance.  The Customer shall be solely responsible for marketing
the Product and for the use of marketing materials and claims. The Customer will
not market the Product in any country or territory or in any manner which is not
in compliance with all applicable laws, rules and regulations in such country.

 
 
7.  
SUPPLIER AND CUSTOMER UNDERTAKINGS

 
7.1  
Product Awareness.  The Supplier shall in its own reasonable discretion and free
of charge make available to the Customer know-how for building knowledge and
awareness of the Product.

 
7.2  
Technical Information.  The Supplier shall throughout the term of this Agreement
provide or grant access to the Customer to all relevant technical material,
including the results of clinical research and clinical studies carried out
Supplier or by third party research institutions as well as reports on practical
experience with the Products; provided, that Supplier is not contractually
precluded from providing such results of clinical research or clinical studies
to Customer by reason of its agreements with third parties.  At the Customer’s
request, the Supplier shall, at its sole expense, provide to the Customer any
information reasonably available to or in the possession of the Supplier
relating to the contents of the Product or as required by any governmental
authorities in countries where Customer is selling Products in accordance with
this Agreement.

 
7.3  
Market Date.  Each Party may at the request of the other Party provide the other
Party with market research and market data concerning the Product.

 
7.4  
Quality Control.  The Supplier shall deliver to the Customer all documentation
necessary to adequately document the safety and quality of all ingredients
contained therein and the efficacy of the Product. Such documentation shall also
include, without limitation, a certificate (the “Certificate of Analysis”) which
provides qualitative and quantitative confirmation of the active ingredient
content of the Product and the accompanying laboratory results for each and
every lot of the Products. A Certificate of Analysis will be supplied with each
shipment of Products.  The Customer may rely on the content of the Certificate
of Analysis for any purpose reasonably related to the performance of this
Agreement.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
12

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7.5  
Compliance with Laws.  Both the Customer and the Supplier shall materially
comply with applicable laws, regulations, rules and orders, including, without
limitation, those of the U.S. Federal Food and Drug Administration (the “FDA”)
and those relating to the Dietary Supplements and Health Education Act of 1994,
as amended, and comparable laws, regulations and rules as they exist in any
country or territory in which the Customer sells Branded Products and Private
Label Products in accordance with the terms of this Agreement.  The Supplier
shall promptly notify the Customer of any customer complaints, governmental
inquiries, quality issues or product liability issues relating to the Product or
any of its components.

 
7.6  
Notification of Change in Market Conditions.  Each Party shall promptly notify
the other as soon as possible of any material change in the market conditions
concerning the Products, of all acts of unfair competition and of all
infringements and alleged or attempted infringements of the Patents, Trademarks
or other intellectual property rights of the Supplier relating to the Products
which comes to such Party’s attention.

 
 
8.  
PATENTS AND IMPROVEMENTS

 
8.1  
Patents.  All Products purchased by the Customer from the Supplier hereunder
shall come with a flow-through license under the Patents in any country in which
the Patents are registered to the extent that such flow-through license under
the Patents is necessary for Customer to advertise, package, ship, market,
distribute and sell the Branded Products and Private Label Products as
contemplated by this Agreement. The Parties acknowledge and agree that the Aker
BioMarine Group is the owner of the Patents, and any cooperation between the
Parties shall be on the basis of this understanding.  If the Customer
contributes to the development of any new patent rights by Supplier related to
the Product, [*].  To the extent that Customer is permitted to purchase, use and
sell Third Party Products under the terms of this Agreement, Supplier covenants
that it will not assert the Patents against or make any claim of infringement of
the Patents against the Customer arising out of the use, marketing, or sale of
any such Third Party Products.

 
8.2  
Improvements.  The Parties agree that [*].

 
8.3  
Enforcement.  The Supplier shall have sole responsibility for promptly and
diligently enforcing the Trademarks and the Patents in such manner as Supplier
deems appropriate in the circumstances, including the obligation to use
commercially reasonable efforts to enforce such Trademarks and Patents in
furtherance of Supplier’s obligations under Section 2.2. The Supplier shall
control any action to enforce and protect the validity of the Trademarks and
Patents at its sole expense. Such action may include, but not be limited to,
[*]. The Customer shall cooperate with the Supplier in any such enforcement or
protection actions and shall comply, [*], with all reasonable requests for
assistance in connection therewith, including, without limitation, the
furnishing of documents and making its officers or other persons reasonably
designated by the Supplier appear as witnesses.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
13

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9.  
TRADEMARKS AND LOGOS

 
9.1  
Limited License.  Supplier hereby grants Customer a non-transferable,
royalty-free right and license under the Trademarks to use such Trademarks in
connection with the advertising, packaging, marketing and selling of Branded
Products, subject to all the terms of this Agreement.  Customer shall display
the Trademark prominently on its packaging and, to the extent reasonably
practicable, in any marketing, branding or advertising materials relating to the
Branded Products in accordance with the Brand Guidelines provided to the
Customer by the Supplier upon execution of this Agreement and such other
standards as Supplier from time to time reasonably prescribes with respect to
the size, design, position and appearance of the Trademarks and/or the quality
of the Branded Products.  The Brand Guidelines may be amended from time to time
by the Supplier in its sole discretion and will become effective upon written
notice to the Customer; provided that such amendments do not require the
Customer to comply with more onerous requirements; and provided further that the
Customer shall have the right for a reasonable period from the date of such
notice to effect an orderly transition with its customers and to sell though its
existing inventory of packaging and other marketing materials.

 
9.2  
Use with Branded Products.  The Customer shall place the Trademarks on the front
panel of all Branded Product packaging and use commercially reasonable efforts
to display the Trademarks in all other advertising, promotional and marketing
material relating to the Branded Product. Supplier shall have the right of
advance review of any product labels, advertising, packaging or marketing
materials that use the Trademarks. The Customer’s obligation to place the
Trademarks on the front panel of all Branded Product packaging shall not apply
(i) where the Customer can demonstrate that its customer refuses such use of the
Trademarks, or (ii) where such use of the Trademarks is claimed by a third party
to represent an infringement of such third party’s intellectual property rights.

 
9.3  
Restrictions.  The Customer acknowledges that, as between the Parties, the Aker
BioMarine Group owns the Trademarks. The Customer undertakes not to challenge
the validity of any Trademark registrations or commit any act which would render
the Trademark registrations invalid, and undertakes not to apply for
registration of the Trademark or confusingly similar trademarks in the
Territory. The Customer shall not utilize the Trademark for any other purpose
than as set forth in Section 9.1 or merge the Trademarks with any trademark of
Customer or register any web domain containing the Trademarks without the prior
approval of Supplier. The Customer shall not in any way alter the Trademark
unless otherwise permitted by the Brand Guidelines or consented to in writing by
the Supplier. In no event shall the Customer use the Trademarks with any
advertising, marketing, promotional materials or packaging relating to [*]. The
Supplier will not allow any use of the Superba™ logo on [*], and will make
commercially reasonable efforts to prevent any use of the Superba™ logo on [*].

 
9.4  
Termination of Use.  Subject to Section 14.3, the right to use the Trademarks,
packaging, labeling and design as provided for above, shall cease immediately
for the Customer on the expiration or termination of this Agreement.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
14

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9.5  
Non-Compliance.  The Supplier retains the right to review and inspect all
materials on which the Trademarks are displayed and to inspect samples of such
materials from time to time upon reasonable request to the Customer. Failure of
the Customer to conform its use of the Trademarks in all material respects to
the standards set out in the Brand Guidelines within thirty (30) days after
written notice from the Supplier shall be grounds for the Supplier to terminate
Customer’s license to use the Trademarks, without prejudice to any other rights
or remedies Supplier may have under this Agreement; provided, that Customer
shall be deemed to have complied with its obligation to conform its use of the
Trademarks to the Brand Guidelines if Customer, within thirty (30) days of
receiving written notice from the Supplier, makes the necessary modifications to
its use of the Trademarks on a prospective basis.  In such case, Customer shall
have no obligation to pull any Branded Products previously sold or then in
inventory of finished goods or modify any of its existing advertising materials
or labels even if they are not in conformity with the Brand Guidelines.

 
9.6  
MSC Logo.  To the extent permitted by the Marine Stewardship Council (the
“MSC”), the Customer shall place the MSC logo on all [*], and the Supplier shall
pay all license fees and other costs related to placing the MSC logo on the [*].
Supplier shall have no obligation to pay the MSC for any marketing or other
costs under any MSC marketing programs. [*].

 
 
10.  
RIGHTS OF FIRST NEGOTIATION

 
10.1  
Additional Exclusive Rights.  If the Customer notifies the Supplier in writing
at any time during the term of this Agreement that it desires to purchase the
Product on an exclusive basis for use in [*], then the Parties shall enter into
good faith negotiations for purposes of reaching an agreement on an exclusive
grant of rights to the Customer for such additional sales channels and/or
territories.  [*].

 
10.2  
New Fields of Use.  If Customer wishes to enter into a field of use for the
Products which is outside the Field of Use, the Customer shall provide the
Supplier with written notice of such request, and the Parties shall enter into
good faith negotiations for purposes of reaching an agreement for the purchase
and supply of Products for use by the Customer in such new field of use.  If the
Parties, after conducting good faith negotiations for up to [*], fail to reach a
mutual agreement regarding such supply of Products by the Supplier for such new
field of use, then[*].

 
10.3  
Blended and Formulation Products.  If Customer wishes to offer, market, or sell
a product [*] that uses the Products in combination with [*] (“Formulation
Products”), the Customer shall provide the Supplier with written notice of such
request, and the Parties shall enter into good faith negotiations for purposes
of reaching an agreement for the license, purchase and/or supply of Products for
use by the Customer in Formulation Products.  If the Parties, after conducting
good faith negotiations for up to [*], fail to reach a mutual agreement
regarding such license or supply of Products by the Supplier for such
Formulation Products, then[*].

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
15

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11.  
INNOVATION PRODUCTS AND OPPORTUNITIES

 
11.1  
First Negotiation Rights for Innovation Products.  In the event that the
Supplier desires to commercialize any of the Innovation Products within the
Territory, then the Supplier shall by written notice to the Customer offer such
Innovation Product to the Customer before offering it to any third party within
the Territory. Upon receipt of such written notice, the Parties shall enter into
exclusive good faith negotiations for purposes of reaching a mutually acceptable
agreement regarding such Innovation Product. If the Parties, after having
conducted good faith negotiations for [*], have failed to reach a mutually
acceptable agreement, then [*].

 
11.2  
Exclusive Negotiation Rights.  If the Supplier decides, in its absolute
discretion, to offer [*] to the Customer, then the Customer shall be granted [*]
exclusive negotiation rights for purposes of reaching an agreement with the
Supplier regarding [*].  If the Parties are unable to reach a mutual agreement
with respect to [*] within such [*] period, then [*].

 
 
12.  
INDEMNIFICATION; INSURANCE

 
12.1  
Supplier’s Indemnification Obligations.   The Supplier shall defend, indemnify,
and hold harmless the Customer and its directors, officers, employees,
shareholders, agents, permitted successors and assigns (collectively, the
“Customer Indemnified Parties”), from and against all suits, claims, injuries,
liabilities, losses, damages, judgments, settlements, expenses, and costs
(including, without limitation, reasonable attorneys’ fees and costs resulting
therefrom) arising out of any claim by a third party (hereinafter a “Claim”)
concerning (a) [*]; (b) [*]; (c) [*] or (d) [*]; provided, in no event shall
Supplier have any liability under this Section 12.1 if the Claim is based on (i)
the modification of the Products from the Specifications (unless such
modification is approved in advance by the Supplier), (ii) the combination of
the Products with other products, materials or ingredients not supplied by
Supplier (provided such Claim would have been avoided if the Products had not
been combined with such other products, materials or ingredients), (iii)
products, materials or ingredients not provided by Supplier that are used in
combination with the Product; or (iv) the result of the gross negligence or
willful misconduct of any of the Customer Indemnified Parties.

 
12.2  
Customer’s Indemnification Obligation.  The Customer shall defend, indemnify,
and hold harmless the Supplier and its directors, officers, employees,
shareholders, agents, permitted successors and assigns (collectively, the
“Supplier Indemnified Parties”), from and against all suits, claims, injuries,
liabilities, losses, damages, judgments, settlements, expenses, and costs
(including, without limitation, reasonable attorneys’ fees and costs resulting
therefrom) whether as a direct or indirect result of any Claim by a third party
concerning (a) [*], (b) [*], or (c) [*]; provided, in no event shall Customer
have any liability under this Section 12.2 if the Claim is (i) the result of the
gross negligence or willful misconduct of any of the Supplier Indemnified
Parties, or (ii) is based on or results from the Product as incorporated into
the Branded Products or Private Label Products.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
16

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12.3  
Notice.  Any of the Customer Indemnified Parties or Supplier Indemnified Parties
entitled to indemnification under Section 12.1 or 12.2 (an “Indemnified Party”)
shall give prompt written notice to the Party against whom indemnity is sought
(either Customer or Supplier, and each individually an “Indemnifying Party”) of
the assertion by any third party of any Claim in respect of which indemnity may
be sought under Section 12.1 or 12.2 (the “Third Party Claims”).  The failure by
the Supplier or the Customer to so notify either Indemnifying Party shall not
relieve either Indemnifying Party from any liability that it may have to such
Indemnified Party with respect to any Claim made pursuant to this Section 12,
except to the extent such failure shall actually prejudice the Indemnifying
Party.

 
12.4  
Indemnification Procedures.  The Indemnifying Party shall within [*] after
receiving notice of a Third Party Claim retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and shall pay the
fees and disbursements of such counsel with regard thereto, and shall be
entitled to control the defense and/or settlement of such Third Party Claim
(except as otherwise provided in this Section 12.4).  Notwithstanding the
foregoing, the Indemnified Party shall have the right to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Party.  Notwithstanding the foregoing, the
Indemnified Party shall have the right to [*], if (i) the use of counsel chosen
by the Indemnifying Party to represent the Indemnified Party would present such
counsel with a conflict of interest (based upon written advice of counsel to the
Indemnified Party), or (ii) the actual or potential defendants in, or targets
of, any such action include both the Indemnified Party and the Indemnifying
Party and the Indemnified Party shall have reasonably concluded that there may
be legal defenses available to it that are different from or additional to those
available to the Indemnifying Party, or (iii) the Indemnifying Party fails to
assume the defense of the Indemnified Parties against a Third Party Claim.

 
12.5  
Cooperation and Settlement.  The Indemnifying Party shall take all steps
necessary in the defense or settlement of such Third Party Claims; and shall at
all times diligently and promptly pursue the resolution of such Third Party
Claims. The Indemnified Party shall, and shall cause its representatives to,
cooperate with the Indemnifying Party in the defense of any Third Party Claim
defended by the Indemnifying Party.  [*].

 
12.6  
Assumption of Defense.  Notwithstanding the foregoing, in the event the
Indemnifying Party fails to assume the defense of and defend against a Third
Party Claim or, having assumed such defense, fails in good faith to diligently
defend or contest in any material respect against any Third Party Claim, in each
case after written notice thereof, the Indemnified Party shall have the right,
but not the obligation, to assume the defense of such Third Party Claim and take
such other action as it may elect to defend, protect against or settle such
Third Party Claim as it may determine at the Indemnifying Party’s expense.

 
12.7  
Enjoinment.  In the event that a court issues a judgment that reasonably
determines that the Product or the Trademarks infringe a third party’s
intellectual property rights, or if the Customer’s sale of the Product or its
use of the Trademarks is enjoined, the Supplier shall, at its sole expense and
option and to the extent commercially reasonable: (a) [*], (b) [*], or (c) if
the infringement relates to the Trademarks, [*].  If Supplier is unable to [*],
Supplier and Customer shall [*].

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
17

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12.8  
For purposes of clarity, the obligations and liabilities of the Indemnifying
Party pursuant to this Section 12 with respect to the Indemnified Parties shall
be deemed to be direct damages and not limited by Section 5.8.

 
12.9  
Insurance Cover.  Each Party shall maintain in full force and effect throughout
the term of this Agreement general product liability insurance with limits of
not less than [*] per occurrence and [*] in the aggregate.  Each Party’s
insurance shall name the other Party and the other Party’s affiliates as
additional named insured parties, shall have broad form vendor’s coverage, and
shall be placed with an insurance company which has a most recent rating given
by Best’s Key Rating Guide of at least an “A2” or above.  Each of Customer and
Supplier agree to promptly deliver a certificate of said insurance to the other
Party on request.

 
 
13.  
CONFIDENTIALITY

 
13.1  
Confidential Information.  The Parties acknowledge that, in the course of the
negotiation and performance of this Agreement, each Party may disclose (the
“Disclosing Party”) to the other Party (the “Receiving Party”) certain
information that is confidential and proprietary to the Disclosing Party.  For
purposes of this Agreement, “Confidential Information” shall mean any
information, whether transmitted orally, in writing or in graphical form or
obtained by observation during any visit, inspection or audit of another Party’s
facilities or records, relating to or constituting scientific, medical,
clinical, or technical information, processes, methods, know-how or commercial
data, information relating to research, development, manufacturing, distribution
or marketing of products, customer lists, trade secrets, formulae, drawings,
prototypes or samples, or information regarding pricing, business plans or the
general business operations of a Party, including the terms of this Agreement.

 
13.2  
Non-Disclosure.  Each Party agrees that, except as permitted by Section 13.3 or
with the written consent of the other Party, it shall keep confidential, not
disclose to any third party and not reproduce or use for its own benefit or the
benefit of a third party, all Confidential Information provided to it by the
Disclosing Party.  All Confidential Information provided to the Receiving Party
by the Disclosing Party shall remain the property of the Disclosing Party and
shall be promptly returned to the Disclosing Party or destroyed at the request
of the Disclosing Party upon the termination of this Agreement or at the written
request of the Disclosing Party.

 
13.3  
Exceptions.  The Receiving Party shall not have any obligation of
confidentiality with respect to information provided to it by the Disclosing
Party to the extent such information (i) is at the time of disclosure or
thereafter becomes part of the public domain through no fault of the Receiving
Party, (ii) was at the time of disclosure known to the Receiving Party as
evidenced by the Receiving Party’s records, (iii) is independently developed by
the Receiving Party as evidenced by the Receiving Party’s records, (iv) is or
becomes available to a Receiving Party on a non-confidential basis from a source
other than the Disclosing Party, provided such source is not bound by any
contractual or legal obligation of confidentiality with respect to such
information, or (v) is required to be disclosed by the Receiving Party by court
order or as a matter of law to governmental agencies or any stock exchange to
which jurisdiction or rules the Receiving Party is subject, in which case the
Receiving Party shall promptly notify the Disclosing Party and only disclose
such Confidential Information as is required by the relevant governmental agency
or stock exchange.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
18

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13.4  
Previous Agreements.  That certain Confidentiality Agreement between the Parties
dated March 10, 2008 is hereby terminated and superseded by the terms and
conditions of this Section 14 and the other terms of this Agreement to the
extent relevant to the subject of confidentiality.

 
 
14.  
TERM AND TERMINATION

 
14.1  
Initial Term.   This Agreement shall become effective as of the Effective Date
and shall remain in force until June 30, 2016 (the “Initial Term”) unless
earlier terminated in accordance with Section 14.2.  At the expiry of the
Initial Term this Agreement will automatically be extended for succeeding (12)
month periods (each an “Extended Term”) unless either Party provides the other
Party with at least six (6) month’s prior written notice that it does not desire
to renew this Agreement for the relevant Extended Period, which notice may be
given during the Initial Term or any Extended Term.

 
14.2  
Termination.  Each Party may terminate the Agreement immediately on written
notice to the other Party in the event the other Party (i) has committed a
material breach of its obligations arising out of the Agreement and fails to
cure such breach within thirty (30) days from the date of a written notice from
the non-breaching Party specifying in reasonable detail the nature of the
material breach, (ii) enters into voluntary or involuntary bankruptcy, enters
into liquidation or dissolution proceedings, becomes insolvent, makes an
assignment for the benefit of creditors or otherwise loses legal control of its
business, or (iii) undergoes an event of Force Majeure which prevents such
Party’s performance of its obligations under this Agreement as provided in
Section 15.4.

 
14.3  
Effects of Termination.  Upon termination of this Agreement for any reason, and
without prejudice to its obligations pursuant to this Agreement accrued at the
date of termination, the Customer shall have the right to continue the use of
the Trademarks and Patents in conjunction with the sale of the Branded Products
and Private Label Products in order for the Customer to effect an orderly
transition with its customers and to sell its existing inventory of the Products
and related packaging materials, for so long as the relevant Branded Products
and Private Label Products incorporate the Products, but in no event beyond a
period of twelve (12) months from the date of termination.  After such twelve
(12) month period, the Customer shall cease all use of the Trademarks and
Patents and the Customer’s licenses and rights to use the Trademarks, the
Patents, and the Supplier’s intellectual property shall immediately
terminate.  Upon termination of this Agreement, the Customer shall cease using
any and all advertising and promotional materials or other technical or
commercial brochures, documents or information provided by the Supplier, and
shall promptly return all such material to the Supplier.  All costs of such
return, including carriage and insurance, shall be borne exclusively by the
Supplier.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
19

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15.  
FORCE MAJEURE

 
15.1  
Definition.  An event of Force Majeure shall include, but not be limited to,
acts of God, fire, flood, earthquake, hurricane, wars, sabotage, civil strife or
demonstrations, strikes, lockouts or other labor disputes, prolonged shortage of
energy supplies, government actions, governmental laws, rules or regulations,
including specifically fishing regulations, or any other event or condition not
reasonably foreseeable as of the date of this Agreement and not within the
control of either Party (“Force Majeure”).

 
15.2  
Notice.  Promptly upon the occurrence of an event of Force Majeure, the Party
whose performance is affected by such event shall give written notice to the
other Party describing the event of Force Majeure, its cause and possible
consequences.  The Party affected by an event of Force Majeure shall likewise
promptly give written notice to the other Party upon the termination of such
event.

 
15.3  
Suspension of Performance.  Upon giving notice to the other Party, a Party
affected by an event of Force Majeure will be released without any liability
from the performance of its obligations under this Agreement, except for the
obligation to pay any amounts due and owing to the other Party, to the extent
and for the period that its performance is prevented by the event of Force
Majeure.  During the period that the performance by one of the Parties of its
obligations under this Agreement has been suspended by reason of an event of
Force Majeure, the other Party may likewise suspend the performance of all or
part of its obligations under this Agreement to the extent that such suspension
is commercially reasonable.

 
15.4  
Termination.  If an event of Force Majeure shall last for a period of three (3)
consecutive months or two or more events of Force Majeure occur during any
twelve (12) month period in which a Party’s performance is prevented for a total
of four (4) months, the Party whose performance is not affected by the event of
Force Majeure may terminate this Agreement upon written notice to the Party
whose performance is affected by the event in accordance with the terms of
Section 14.2.

 
 
16.  
GOVERNING LAW - DISPUTES

 
16.1  
Governing Law.  This Agreement and all sales according to this Agreement shall
be governed by, and construed in accordance with, the laws of the state of New
York, USA, without reference to the conflict of laws provisions thereof.  For
the sake of clarity, the UN Convention on Contracts for the Sale of
International Goods does not apply to this Agreement.

 
16.2  
Arbitration.  Any dispute arising out of or in connection with this Agreement,
including any question regarding its existence, validity, or termination, shall
be referred to and finally resolved by arbitration under the auspices of the
International Centre for Dispute Resolution, in accordance with its
international Dispute Resolution Procedures, to the extent those Procedures are
not inconsistent with the provisions of this paragraph.  The number of
arbitrators shall be three, all independent and neutral.  Within 15 days after
commencement of the arbitration, each Party shall select one person to act as
arbitrator and the two selected shall select a third arbitrator within 15 days
of their appointment.  The third arbitrator shall chair the proceedings.  The
seat, or legal place, of arbitration shall be New York City, USA.  The

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
20

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language to be used in the arbitral proceedings shall be English, Within 30 days
following the appointment of the arbitrators, each Party shall provide to the
other Party copies of all documents relevant to the issues raised by any claim
or counterclaim.  Discovery disputes shall be resolved upon application to the
chair of the arbitration panel; the chair’s resolution shall be final.  To the
extent not inconsistent with this paragraph, the International Bar Association
Rules on the Taking of Evidence in International Commercial Arbitrations shall
be applied.  Hearings shall be held on four contiguous dates within 150 days
after the arbitrators are appointed, and the Award shall be issued within 200
days after the arbitrators are appointed.  It is the intent of the Parties that
these time limits be strictly enforced, but they may be extended by agreement of
the Parties, and failure to adhere to them shall not constitute a basis for
challenging the award.  The arbitrators shall use best efforts to agree to
comply with this paragraph before accepting appointment.
 
16.3  
Confidential Proceedings.  The Parties agree that the arbitration proceedings
and the arbitration decision shall not be public unless otherwise agreed.

 
16.4  
Equitable Relief.  Notwithstanding the foregoing, a Party may at any time seek
equitable relief, including injunctive relief, in any court of competent
jurisdiction in any country, in order to prevent infringement of any of its
intellectual or industrial property rights.

 
16.5  
Fees and Expenses.  The prevailing party in any arbitration, litigation or other
proceeding arising out of or relating to this Agreement, or the subject matter,
enforceability or breach thereof, shall be entitled to recover from the
non-prevailing party its costs and reasonable attorneys’ fees, as determined by
the arbitrator(s) or court.

 
 
17.  
GENERAL PROVISIONS

 
17.1  
Severability.  If any covenant or other provision of this Agreement is deemed to
be invalid, illegal or incapable of being enforced, by reason of any rule, law
or public policy, all other covenants and provisions of the Agreement shall
nevertheless remain in full force and effect and no covenant or provision shall
be deemed dependent on any other covenant or provision unless so expressed
herein.  To the extent this Agreement is in violation of applicable law, then
the Parties consent and agree to negotiate in good faith to amend the Agreement,
to the extent possible consistent with its purposes, to conform to law.

 
17.2  
No Waivers.  The failure or delay of any Party in exercising any right granted
it hereunder shall not constitute a waiver of any such right and any single or
partial exercise of any particular right by such Party shall not exhaust the
same or constitute a waiver of any other right provided herein.

 
17.3  
Binding Effect.  This Agreement shall be binding upon and inure to the benefit
of the Parties hereto, and their respective representatives, successors and
authorized assigns.

 
17.4  
Press Releases.  If either Party issues a press release announcing this
Agreement, the other Party has the right to review and approve said press
release prior to its release.  Both Parties further agree to participate in
future releases as warranted by advances, changes, upgrades, and other
newsworthy events as they occur.

 
 
[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
 
21

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17.5  
Interpretation of Agreement.  Should any provision of this Agreement require
interpretation or construction, it is agreed by the Parties hereto that the
court, arbitrator(s), administrative body, or other entity interpreting or
construing this Agreement shall not apply a presumption that the provisions
thereof shall be more strictly construed against one Party by reason of the rule
of construction that a document is to be construed more strictly against the
party who itself or through its agents prepared the same, it being agreed that
the Parties or their respective attorneys and agents have fully participated in
the preparation of all provisions of this Agreement.

 
17.6  
Counterparts.  This Agreement may be executed in any number of counterparts and
each thereof shall be deemed to be an original; and all such counterparts shall
constitute but one and the same instrument.

 
17.7  
Cumulative Rights.  Each Party agrees that money damages would not be a
sufficient remedy for any breach of this Agreement and that the non-breaching
party shall be entitled to seek specific performance and injunctive or equitable
relief as a remedy for any such breach and agrees to waive any requirement for
the security or posting of any bond in connection with such remedy.  The rights
and remedies provided in this Agreement are cumulative and the use of any right
or remedy does not limit a party’s right to use any or all other remedies, all
rights and remedies in this Agreement are in addition to any other legal rights
of the Parties.

 
17.8  
Divisions and Headings.  The divisions of this Agreement into clauses, sections,
and subsections and the use of captions and headings in connection therewith is
solely for convenience and shall not affect in any way the meaning or
interpretation of this Agreement.

 
17.9  
Assignment.  Neither Party shall assign or otherwise dispose of the whole or any
part of its rights and obligations under this Agreement without the prior
written consent of the other Party, such consent not to be unreasonably
withheld.  Either Party may, however, assign its rights and obligations under
this Agreement to an affiliate or to any acquirer of such Party’s business, in
whole or in part.

 
17.10  
Notices.  All notices provided for in this Agreement shall be in writing in
English and shall be deemed validly sent when sent by first class post, special
delivery, registered mail, or air mail postage prepaid, addressed to the
respective Parties as follows:

 
If to the Customer at:

 
Schiff Nutrition Group, Inc.
2002 S. 5070 West
Salt Lake City, UT 84104 USA
Telefax:
Contact Point:
 
If to the Supplier at:

 
Aker BioMarine Antarctic US Inc.
410 Newport Way NW, Suite D
Issaquah, WA 98027 USA
Telefax:
Contact Point:
 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
 
22

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Execution version

With a copy to:
 
Aker BioMarine Antarctic AS
Fjordalleen 16
N-0112 Oslo
Norway
Telefax:
Contact Point:
 
Notices under this Agreement shall also be deemed to be validly sent if sent by
facsimile to the facsimile number of the Parties as each last gave written
notice of to the other or by e-mail to either Party’s contact person with
confirmed delivery.  Facsimile or e-mail notices shall be confirmed by first
class post, special delivery, registered mail, airmail postage prepaid, but
failure to do so shall not render any notice invalid.
 
17.11  
Entire Agreement.  This Agreement (including the Appendices attached
hereto) constitutes the entire agreement between the Parties with respect to the
subject matter hereof and supersedes the Sales Agreement which is hereby deemed
to be terminated as well as all previous agreements, proposals, oral or written
and all negotiations, conversations and discussions thereof.

 
 
[Remainder of this page left blank intentionally]

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
 
23

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Execution version

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the Effective Date.
 

 
As Supplier:
Aker BioMarine Antarctic US Inc.
 
By:  /s/ Matts Johansen
 
As Customer:
Schiff Nutrition Group, Inc.
 
By:  /s/ Tarang P. Amin
Name:   Matts Johansen
 
Name:  Tarang P. Amin
Title:     President
 
Title:    President and Chief Executive Officer

 

Appendices:
 
Appendix I — Innovation Products
 
Appendix II — Patents
 
Appendix III — Product Prices
 
Appendix IV — Specifications
 
Appendix V — Trademarks
 
Appendix VI — Guarantee
 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
 
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Execution version
 
 

APPENDIX I
INNOVATION PRODUCTS

”Innovation Products” shall mean the following categories of products:
 
i.  
[*] to be used in products within the field of dietary supplements in the form
of, [*] for which the primary claim is [*].

 
ii.  
[*] to be used in products within the field of dietary supplements in the form
of [*].

 
iii.  
[*] to be used in products in the field of dietary supplements in the form of
[*] for which the primary claim is [*].

 
iv.  
Use of the Product within the field of dietary supplements in the form of [*]
for which the primary claim is [*].

 
v.  
Use of the Product within the field of dietary supplements in the form of [*]
for which the primary claim is [*].

 
vi.  
Use of the Product within the field of dietary supplements in the form of [*]
for which the primary claim is [*].

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
 
 

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Execution version
 
 

APPENDIX II
PATENTS

 
Countries:
Aker BioMarine patents:
United States of America
AKBM06 – krill oil:
US2008274203A1
AKBM02 – alternative krill extraction:
US2009061067A1
AKBM02 – low viscosity can be added to AKBM02 (Optional Continuation in Part)
 
EPO: Enlarged European Union (European Patent Organisation members), including
United Kingdom
AKBM06 – krill oil (PCT): designation deadline Sept. 09
AKBM02 – alternative krill extraction (PCT): designation deadline Feb. 2010
AKBM02 – low viscosity may be filed (PCT option): deadline Aug. 2011
Canada
PCT member state – idem EPO
Australia
PCT member state – idem EPO
Mexico
PCT member state – idem EPO
Korea
PCT member state – idem EPO
Taiwan
Not PCT member state – only AKBM02 low viscosity may be filed within February
2009

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
 
 

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Execution version
 
 

APPENDIX III
PRODUCT PRICES

1.  
Subject to [*], the price for the Products shall be [*].

 
2.  
[*].

 

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
 
 

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Execution version
 
 

APPENDIX IV
SPECIFICATIONS

[superba1.jpg]

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
 
 

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Execution version
 
 

APPENDIX V
TRADEMARKS

SUPERBA Design:
US Serial Number 77393406

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
 
 

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APPENDIX VI
GUARANTEE

IN CONSIDERATION of the Customer entering into the Supply Agreement of even date
herewith with the Supplier and for other consideration, the receipt and
sufficiency of which is hereby acknowledged, Aker BioMarine Antarctic AS (the
“Guarantor”) hereby gives to the Customer the following guarantee and related
waivers:
 
 
1  
Scope of Guarantee

 
(a)  
[*].

 
(b)  
[*].

 
 
2  
Guarantor’s Waivers

 
Guarantor hereby waives [*].
 
IN WITNESS WHEREOF, the Guarantor has executed this Guarantee as of the date set
forth below.
 
As Guarantor:
Aker BioMarine Antarctic AS
 
By: /s/ Hallvard Muri
Name:   Hallvard Muri
Title:     Chief Executive Officer

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
 
 

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