Exhibit 10.40

SECOND AMENDMENT TO LICENSE AGREEMENT

AMENDING THE FIRST AMENDMENT DATED MARCH 17, 2001

TO LICENSE AGREEMENT DATED APRIL 28, 1997

 

1. Roger Harris and Mark Dunnett (collectively, “LICENSOR”), and Natural
Alternatives International, Inc. (“LICENSEE”) entered into a License Agreement
(“The Agreement”) effective on April 28, 1997.

 

2. LICENSOR and LICENSEE would hereby like to amend that Agreement by extending
the term for an additional five years.

 

3. Therefore, LICENSOR and LICENSEE hereby agree as follows:

 

  a. Section 7.1 shall be deleted, and the following new Section 7.1 shall be
substituted:

“7.1 Term. The term of this agreement shall be from its Effective Date until the
last to expire patents included with Licensed Rights.”

 

  b. Section 7.2 shall be modified to delete entirely the following language:

“unless one Party gives written notice of termination to the other Party at
least 60 days before the end of the original Term or of any one-year renewal
term. The original Term and any extension Term shall be subject to early
termination under the provisions of this Section.”

 

  c. A new Section 2.8 shall be added, as follows:

“2.8 Right to Make Nonexclusive. In the event that the aggregate royalties paid
by LICENSEE to LICENSOR under Section 4.2 for Transfers made by LICENSEE during
the tenth year of the Term of this agreement shall be less than $50,000.00,
LICENSOR shall have the right, which must be exercised within 90 days of
LICENSOR’S receipt of a payment and/or a statement for the fourth quarter of the
tenth year, to convert the license granted to LICENSEE under Section 2 from
exclusive to non-exclusive. However, LICENSEE shall have the right to augment
the payment for the aforesaid fourth quarter to bring the payment for the tenth
year up to the above-stated amount, in which case, LICENSOR shall not have this
right to convert. For each additional year between the tenth and the fifteenth
year, if the payment is not at least the aforesaid amount increased 20% for each
additional year (calculated cumulatively), LICENSOR shall have the same right to
convert unless, of course, LICENSEE augments the fourth quarter payment as set
forth above. After the fifteenth year, the license shall remain exclusive for
the remainder of its Term irrespective of the royalties paid. Any payments made

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Second Amendment to License Agreement

Amending the First Amendment Dated March 17, 2001

To License Agreement Dated April 28, 1997

Between Roger Harris, Mark Dunnett and Natural Alternatives International, Inc.

Page 2 of 2

 

under this Section 2.8 by LICENSEE to bring a quarterly payment up to the
required amount shall be nonrefundable and shall not be credited against any
future royalty obligations of LICENSEE.

 

  d. In Section 9.1, line 2, delete the phrase “and involving less than
$50,000”.

 

  e. Except as set forth above, the Agreement shall remain the same.

 

Signature:   /s/ Roger Harris     Date Signed: 20 March 2007   Roger Harris    
  Signature:   /s/ Mark Dunnett     Date Signed: 14 March 2007   Mark Dunnett  
    Signature:   /s/ Randell Weaver     Date Signed: 26 March 2007   Randell
Weaver, President         Natural Alternatives International, Inc.