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                                                                    EXHIBIT 10.3

                          CONFIDENTIAL TREATMENT REQUESTED BY VITAL LIVING, INC.

                                                                   REDACTED COPY

                        DEVELOPMENT AND LICENSE AGREEMENT

                  This Agreement, dated as of December 28, 2001 (the "EFFECTIVE
DATE"), by and between e-nutriceuticals, Inc., a Delaware corporation ("E-NUT"),
and SkyePharma PLC, a United Kingdom corporation ("SKYE").

                              W I T N E S S E T H:

                  WHEREAS, e-nut is in the business of developing and marketing
dietary and nutriceutical supplements throughout the world; and

                  WHEREAS, Skye owns certain technology, , that is useful in the
production of controlled release oral delivery compounds; and

                  WHEREAS, e-nut wishes to obtain a license to the Technology
for use in the Field (as defined below) and Skye wishes to grant a license to
e-nut for use in the Field under terms mutually favorable to both parties.

WHEREAS, Skye and e-nut wish to collaborate in the development of oral delivery
methods of certain dietary and nutriceutical supplements, using Skye's
proprietary technology.

                  NOW, THEREFORE, in consideration of the mutual promises,
covenants and conditions set forth below and in reliance on the representations
and warranties herein provided, the parties agree as follows:

                  1.       Definitions. For the purposes of this Agreement, the
following terms, when written with an initial capital letter, will have the
meaning ascribed to them below.

                           (a) ABANDONMENT means a decision by e-nut to stop
development work with respect to a Product or Additional Product.

                           (b) AFFILIATE means, with respect to either party
hereto, any corporation, partnership or other business entity controlled by,
controlling or under common control with either such party, with "CONTROL"
meaning direct or indirect beneficial ownership of at least 50% (or such lesser
percentage as is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction) of the voting stock of, or 50% or more interest in the
income of such corporation or other business entity.

                           (c) E-NUT INVENTION means any invention including any
invention relating to the Field that uses e-nut Technology and that is first
conceived solely by an employee licensee licensor (other than Skye) agent
consultant or contractor of e-nut or of any Affiliate of e-nut during the term
of this Agreement,.

                           (d) E-NUT KNOW-HOW means all information and
materials including but not limited to discoveries improvements processes
formulas data inventions know-how and trade secrets patentable or otherwise
which during the term of this Agreement (i) are in the

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possession or control of e-nut or its Affiliates (ii) are not generally known
(iii) are necessary or useful to e-nut in connection with Development under this
Agreement or the development manufacture marketing use or sale of the Product or
Additional Product and (iv) are in the Field.

                           (e) E-NUT PATENTS means all of the intellectual
property or other rights owned, licensed or acquired by e-nut or any of its
Affiliates during the term of this Agreement

                           (f) E-NUT TECHNOLOGY means any e-nut Patents or e-nut
Know-How

                           (g) FIELD means ***.

                           (h) JOINT INVENTION means the entire right title and
interest in all discoveries, improvements processes formulas data inventions
know-how and trade secrets, patentable or otherwise arising from Development
under this Agreement and that is not an e-nut Invention or a Skye Invention.

                           (i) JOINT PATENT means any United States or foreign
patent, patent application and equivalent, including any reissue, extension,
substitution, continuation, division and continuation-in-part based on any Joint
Invention or improvement to any Joint Invention.

                           (j) NET SALES OF PRODUCTS means all amounts received
by e-nut and/or an Affiliate of e-nut from sales of Products or Additional
Products to a third party, less deductions for royalties to other parties and
credits or allowances actually granted upon claims, rejections or returns of
Products or Additional Products, including recalls.

                           (k) PATENT COSTS means all preparation, filing,
prosecution and maintenance out-of-pocket fees and expenses, including legal
fees, incurred in connection with the establishment, maintenance and prosecution
of Skye or Joint Patents relating to any Product or Additional Product.

                           (l) PRODUCT DEVELOPMENT FEES means an amount equal to
Skye's development cost including the cost of labor, equipment, raw materials,
overhead and technical support, and test batch manufacture incurred directly and
exclusively for Development of the Products and/or Additional Products. The
Product Development Fees shall be no less favorable than fees charged by Skye
for development work performed by it for third parties.

                           (m) SKYE INVENTION means the entire right, title and
interest in all discoveries, improvements, processes, formulas, data,
inventions, know-how and trade secrets, patentable or otherwise including those
arising from Development under this Agreement developed or invented solely by
any employee licensee licensor agent consultant or contractor of Skye or of any
Affiliate of Skye.

                           (n) SKYE KNOW-HOW means all information and materials
including but not limited to discoveries improvements processes formulas data
inventions know-how and

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trade secrets patentable or otherwise which during the term of this Agreement
(i) are in the possession or control of Skye or its Affiliates (ii) are not
generally known and (iii) are necessary or useful to e-nut in connection with
Development under this Agreement or the development manufacture marketing use or
sale of the Product or Additional Product.

                           (o) SKYE PATENTS means all of the following
intellectual property or other rights owned, licensed or acquired by Skye or any
of its Affiliates during the term of this Agreement:

                  i)       the patents and patent applications listed in Exhibit
                           1 attached hereto;

                  ii)      any patents issued with respect to the applications
                           identified in sub-clause (i) hereof and any divisions
                           and continuations of such applications;

                  iii)     any continuations in part applications and any
                           resulting patents that are directed to subject matter
                           described in the patents and applications identified
                           in sub-clauses (i) and (ii) hereof;

                  iv)      any patent applications and the resulting patents
                           that claim priority from or are directed to the
                           subject matter described in the patents and
                           applications identified in sub-clauses (i) (ii) and
                           (iii) hereof;

                  v)       any patent applications and the resulting patents
                           that cover or are related to Development under this
                           Agreement;

                  vi)      any resissues renewals extensions supplementary
                           protection certificates utility models and the like
                           and foreign equivalents thereof of any patents
                           described in sub-clauses (i) (ii) (iii) and (iv)
                           hereof.

                           (p) SKYE TECHNOLOGY means all of the following (but
in each case only in so far as Skye is free to license such technology to e-nut)
(i) the Skye Patents; and (ii) any Skye Know-How (including any patents or
patent applications filed after the date hereof which include any Skye Know-How)
currently owned or licensed to Skye (or its Affiliates) after the date hereof
and which relate to the implementation of the inventions which are the subject
of the Skye Patents..

                           (q) VALID CLAIM means a claim of any issued and
unexpired patent right under the Skye Patents or Joint Patents (excluding
Acquired Joint Patents, if any) which has not been finally canceled or declared
invalid by a patent office or by a court of competent jurisdiction in any
unappealed and unappealable decision.

                  2.       Product Identification and Licenses.

                  2.1.     Products. In the period to ***, (i) e-nut shall have
the exclusive right to identify up to *** product candidates in the Field for
Development using the Skye

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Technology (each, a "PRODUCT"), (ii) Skye shall not have the right to license
the Technology (or any Joint Patent) to third parties for products in the Field
and (iii) Skye shall not have the right to use the Technology (or any Joint
Patent) to independently develop products in the Field.

                  2.2.     Additional Products. During the *** commencing on ***
(i) e-nut shall have the right to identify additional product candidates in the
Field for Development using the Skye Technology provided that Skye is free to
develop any such Product (each, an "ADDITIONAL PRODUCT"), and (ii) Skye shall
have the right to license the Technology (and Joint Patents) to third parties
for products in the Field not identified by e-nut, provided that (i) if at the
time of identification of an Additional Product by e-nut, Skye has not granted
exclusive rights to another party to employ the Technology (it being understood
that Skye does not have the right to grant exclusive licenses to Joint Patents)
for such Additional Product in the Field, e-nut shall have the exclusive right
to employ the Technology (and any Joint Patents) for such Additional Product and
Skye shall not have the right to license the Technology (or Joint Patents) to
third parties for such product or to use the Technology (or Joint Patents) to
independently develop such product in the Field and (ii) if at the time of
identification of an Additional Product by e-nut, Skye has granted nonexclusive
rights to one or more third parties to employ the Technology (or related Joint
Patents) for such Additional Product in the Field, e-nut shall have the
nonexclusive right to employ the Technology (and related Joint Patents) for such
Additional Product.

                  2.3.     Extensions, Etc. For purposes of this Agreement, a
"Product" or "Additional Product" shall include extensions thereof utilizing
substantially the same active or primary ingredient.

                  2.4.     License to the Technology. Subject to the terms of
this Agreement, Skye hereby grants to e-nut and its Affiliates a worldwide right
and license to use the Skye Technology in the Field to make, have made, use,
have used, offer for sale, lease, market, sell, have sold or import Products
and, subject to the limitations set forth in Section 2.2 above, Additional
Products (the "LICENSE"). The License will be exclusive until ***, after which
date the License will be non-exclusive save with respect to Products and
Additional Products and Skye may grant licenses within the Field to other
parties. Without limiting the foregoing, e-nut or its Affiliates shall have the
right to sublicense any right licensed to it under this Agreement without the
prior consent of Skye provided any such sub-licence is in terms not dissimilar
to this Agreement. Notwithstanding the foregoing, the terms of any sublicense by
e-nut to a third party shall be consistent with the obligations and payments to
Skye under this Agreement.

                  2.5.     License Fees. In consideration of the grant of the
right to identify Products and Additional Products described in Sections 2.1 and
2.2 above, and the license described in Section 2.3 above, (i) e-nut hereby pays
Skye a one time fee of *** and (ii) agrees to pay Skye quarterly in arrears
royalties equal to *** of e-nut's Net Sales of Products or Additional Products
during the term of this Agreement where the Product or Additional Product and
its exploitation under the terms of this Agreement are covered by a Valid Claim.
All payments to be made pursuant to this Agreement other than those made in
Shares (as defined below) shall be made by cash, check or wire transfer in
United States Dollars and all references herein to "$" shall mean United States
Dollars.

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                  3.       Product Development.

                  1.1.     Advisory Committee. 3.1.

                           (a)      Within 30 days of the Effective Date, e-nut
and the Contractor shall each appoint an equal number of persons to serve on an
advisory committee (the "ADVISORY COMMITTEE"). Upon identification of a Product
or an Additional Product, the Advisory Committee shall meet to determine the
work required ("DEVELOPMENT") to develop a Product or Additional Product,
including the work to be performed by e-nut and Skye (the "DEVELOPMENT PLAN)

                           (b)      The Advisory Committee shall within 30 days
of the end of each calendar year review and approve a budget for the following
calendar year's activities.

                           (c)      The Advisory Committee shall be responsible
for (i) amending the Development Plan and associated budget, (ii) deciding
strategies and problems with respect to the Development Plan, (iii) specifying
the information to be included in the reports referred to in Section 3.3(b)
below, and (iv) making recommendations as to the advisability of continuing or
abandoning the Development of a Product or Additional Product

                  3.2.     Product Development Fees. e-nut shall pay fees for
Product Development under the Development Plan ("PRODUCT DEVELOPMENT FEES") to
Skye for its work in developing Products and Additional Products. Product
Development Fees per Product shall be ***, of which *** will normally be
allocated to formulation of the Product and *** to test batch manufacture. The
Product Development Fees in respect of the Products will be ***, all of which
amount shall be due and payable on the Effective Date and will be satisfied by
*** at a price of ***, on the terms and conditions set out in the ***. Product
Development Fees in respect of Additional Products will be at the same per
product rate, adjusted for inflation in Switzerland if such inflation exceeds
*** per annum in U.S. dollars. Skye will issue invoices within 30 days of the
end of each calendar quarter for Development performed by Skye under the
Development Plan on Additional Products during such quarter and e-nut shall
remit payment within 30 days after the date of such invoice.

                  3.3.     Development Work.

                           (a) Skye agrees to make available through its wholly
owned subsidiary company Jagotec AG or an Affiliate thereof ("the CONTRACTOR")
suitable facilities and development personnel for the performance of Development
work to be performed pursuant to this Agreement.

                           (b) The Contractor shall carry out Development in a
good scientific manner and in compliance with applicable laws. The Contractor
shall provide e-nut with monthly summary reports and quarterly progress reports
with respect to the development work performed by it pursuant to this Agreement,
and shall permit e-nut representatives to enter the Contractor's facilities upon
reasonable notice and not more than once in each twelve month period for the
purpose of making quality assurance audits of the facilities at e-nut's expense.

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                           (c) It shall be the obligation of e-nut to provide
all active ingredients and associated materials other than materials directly
associated with the Skye Technology required by the Contractor to perform its
obligations under this Agreement.

                           (d) The parties acknowledge that the nature and
development of any Product or Additional Product is, as of the Effective Date,
speculative, and may ultimately entail work outside of their expertise (or with
respect to Skye, reasonable research or development capabilities). Therefore,
except as set forth in Section 3.3(a) above, nothing herein shall obligate
either party to make use of the other's services.

                           (e) E-nut will grant to the Contractor a
non-exclusive license to any intellectual property rights held in the Products
or Additional Products for the purpose only of enabling the Contractor to
perform its obligations under the Agreement.

                  3.4.     Recordkeeping and Audits.

                           (a) e-nut shall, and shall cause its Affiliates to,
keep complete and accurate books and records pertaining to the sale of the
Products and Additional Products. Such books and records shall be retained for
at least *** after the calendar year to which they related or for such longer
period if and as required by applicable law.

                           (b) The Contractor shall keep complete and accurate
books and records pertaining to the research and development work to be
performed by it pursuant to this Agreement. Such books and records shall be
retained for at least *** after the calendar year to which they related or for
such longer period if and as required by applicable law.

                  3.5.     Audit of Records. During the term of this Agreement
and for a period of *** thereafter, at the request of either party, the other
party shall, and shall cause its Affiliates to, permit the requesting party and
its representatives, at reasonable times and upon reasonable notice, but no more
than *** in any calendar year, to examine and audit the books and records
maintained by such other party pursuant to Section 3.5. If the audit establishes
that either party underpaid or overpaid the other party any amount in respect of
the Additional Products, the appropriate party shall promptly pay the other the
full amount of such underpayment or overpayment in accordance with this
Agreement.

                  4.       Patents and Inventions.

                  4.1.     Ownership. Except as provided in Section 4.3(b) below
and the licenses granted in this Agreement, as between Skye and e-nut, all
rights in and to (i) the Skye Patents and Skye Inventions shall be the exclusive
property of Skye, and (ii) the e-nut Patents and e-nut Inventions shall be the
exclusive property of e-nut.

                  4.2.     Maintenance. During the term of this Agreement, Skye
shall maintain in force all Skye Patents.

                  4.3.     Patent Applications.

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                           (a) Skye shall of its own accord, file and prosecute,
at Skye's expense, such patent applications regarding any portion of the Skye
Technology which in its reasonable discretion it considers useful for the
Development of the Product or Additional Products.

                           (b) If for any reason Skye declines to file any
patent application under Section 4.3(a), or, having filed such application,
declines to prosecute such application or maintain any such Skye Patent, e-nut
may so file, prosecute or maintain such patent application and resulting patent
in e-nut's name and at e-nut's expense (a "TRANSFERRED PATENT") in such country,
in which event Skye shall, at e-nut's request and expense, provide all
reasonable assistance, including disclosure of all information which is
reasonably necessary to permit e-nut to file such patent applications. e-nut
shall grant to Skye a non-exclusive, royalty-free license, without any warranty
or representation, to use such Transferred Patent in connection with research
and development, but Skye shall have no right to commercialize such Transferred
Patent.

                  4.4.     Joint Inventions and Joint Patents.

                           (a) Ownership. Subject to Section 4.4(d), the parties
shall jointly retain all right, title and interest in and to the Joint
Inventions and other intellectual property rights relating thereto, and all
patents and patent applications claiming such Joint Inventions.

                           (b) Prosecution. Each party will promptly notify the
other of Joint Inventions. The parties shall discuss in good faith a patent
strategy with respect to all patentable Joint Inventions. The parties shall
mutually determine which party shall draft, prosecute and maintain, and, subject
to 4.4(c) below, shall share equally the Patent Costs related to, all patent
applications for Joint Patents. The party responsible for filing a patent
application shall give the other party an opportunity to comment upon any such
application and shall not amend any claims during the prosecution of such
application without the consent of the other party, which shall not be
unreasonably withheld or delayed. Neither party shall take any significant steps
relating to the Joint Patents without the prior approval of the other party for
so long as the other party is paying the applicable Patent Costs in accordance
with the terms of this Agreement.

                           (c) Procedure if Disagreement. If the parties cannot
agree on (i) whether to file a patent application for a Joint Patent or (ii)
which party has responsibility for preparing, filing, prosecuting or maintaining
such an application, then, either party may file such patent application for
such Joint Patent (but only in the country or countries in which the parties
have been unable to agree upon a patent strategy). The party that files the
patent application for a Joint Patent shall provide the other party with notice
thereof, a copy of such filing and all information pertaining to such filing.

                           (d) Acquired Joint Patent. Subject to the terms of
this Agreement, each party may make, use, sell, offer for sale, import, license
and assign its rights in Joint Inventions and Joint Patents in any country
without the consent of or an accounting to the other party. A party shall be
deemed to have assigned, and hereby does assign, all of its rights in a Joint
Invention and the Joint Patent claiming such Joint Invention (collectively an
"ACQUIRED JOINT PATENT") to the other party if it does not pay its share of the
Patent Costs related thereto.

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                  5.       Infringement.

                  5.1.     Patent.

                           (a) A party shall promptly notify the other party
when any infringement of any Skye Patent which is or might be relevant to the
Field is uncovered or suspected. Skye shall have the first right to enforce any
Skye Patent against any infringement or alleged infringement thereof, and shall
at all times keep e-nut informed as to the status thereof. Skye may (i) in its
sole judgment and at its own expense institute a suit against any such infringer
or alleged infringer, (ii) control, settle and defend such suit, and (iii)
recover for its own account any damages, awards or settlements resulting
therefrom (subject to the provisions of this Agreement). e-nut shall reasonably
cooperate in any such litigation at Skye's expense.

                           (b) If Skye elects not to prosecute an infringement
of a Skye Patent which is or might be relevant to the Field, then it shall so
notify e-nut in writing within 60 days of receiving a request from e-nut to
prosecute such infringement. Thereafter, e-nut may (i) in its sole judgment and
at its own expense institute a suit against any such infringer or alleged
infringer, (ii) control, settle and defend such suit, and (iii) recover for its
own account any damages, awards or settlements resulting therefrom (subject to
the provisions of this Agreement). Skye shall reasonably cooperate in any such
litigation at e-nut's expense.

                           (c) In the event of a recovery of compensatory (i.e.,
non-punitive damages net of legal fees and out-of-pocket costs) under Section
5.1(b) above, e-nut shall pay to Skye the applicable royalty rate on infringing
Net Sales of Products. Infringing Net Sales of Products shall be calculated from
the amount of infringing sales on which the award of compensatory damages is
based. In the event of recovery of punitive damages under Section 5.1(b), e-nut
shall pay to Skye an amount equal to 10% thereof.

                  5.2.     Joint Patent.

                           (a) A party shall promptly notify the other party
when any infringement of any Joint Patent is uncovered or suspected. A party
which owns an Acquired Joint Patent shall have the sole right, but not the
obligation, at its sole expense, to institute, prosecute, and control any action
or proceeding with respect to an infringement of such Acquired Joint Patent.

                           (b) The parties shall mutually agree upon which party
shall have the first right to enforce such Joint Patent against any infringement
or alleged infringement thereof, and shall at all times keep the other party
informed as to the status thereof. Such party may (i) in its sole judgment and
at its own expense institute a suit against any such infringer or alleged
infringer, and (ii) control, settle and defend such suit. Each party shall give
reasonable assistance to the other in connection with any action or proceeding
regarding a Joint Patent (including being joined as a party plaintiff if
necessary to prosecute the action).

                           (c) Any damages or other monetary awards recovered in
an action against an infringer of a Joint Patent (other than an Acquired Joint
Patent) shall be applied to the reimbursement of the parties' respective
out-of-pocket expenses (including reasonable attorneys' fees and expenses)
incurred in prosecuting such infringement action on a pro rata

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basis based upon their respective out-of-pocket expenses until all such expenses
have been recovered, and any remaining balance shall be divided equally between
the parties.

                  5.3.     Settlement with a Third Party. A party may not settle
an action or proceeding against an infringer under Section 5.1 or Section 5.2
(except with respect to an Acquired Joint Patent) without the written consent of
such other party, such consent not to be unreasonably withheld or delayed.

                  6.       Trademarks, Etc.

                  6.1.     Protection. Each party shall be solely responsible
for protecting its trademarks. Each party agrees to notify the other party
promptly of any unauthorized use, known by it, of the other party's trademarks.

                  7.       Representations and Warranties.

                  7.1.     By Skye. As of the Effective Date, Skye represents
and warrants to e-nut as follows:

                           (a) Due Organization and Power. Skye is a duly
organized and validly existing corporation in good standing under the laws of
England and has all requisite corporate power and authority for the ownership
and operation of its properties and for the carrying on of its business as now
conducted and as now proposed to be conducted, and for the due execution and
delivery hereof and performance of its obligations hereunder.

                           (b) Authorization. All corporate action on the part
of Skye, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the performance of
all of Skye's obligations hereunder has been taken. This Agreement constitutes
the valid and legally binding obligation of Skye enforceable in accordance with
its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies.

                           (c) Governmental Approvals. No authorization,
consent, approval, license, exemption of or filing or registration with any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, under any applicable laws, rules or
regulations presently in effect, is or will be necessary for, or in connection
with, the performance by Skye of its obligations under this Agreement.

                           (d) Technology. Except as set forth in SCHEDULE 7.1,
there are no facts known to Skye which would reasonably serve as a basis of any
claim that Skye does not have the right to use or to license the Technology to
e-nut as contemplated by the this Agreement. Skye has not licensed or otherwise
transferred, or entered into any agreement, commitment or arrangement (whether
oral or written) to license or otherwise transfer, to any other person any of
the Technology or any rights thereto or interests therein, which now, or with
the passage of time will, conflict with or impair the rights to and interests in
the Technology transferred to e-nut pursuant to this Agreement.

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                           (e) Litigation. There is no litigation or
governmental proceeding or investigation pending or, to the knowledge of Skye,
threatened against Skye which could reasonably be expected to materially and
adversely affect the performance by Skye of its obligations under this
Agreement.

                  7.2.     By e-nut. As of the Effective Date, e-nut represents
and warrants to Skye as follows:

                           (a) Due Organization and Power. e-nut is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware and has all requisite corporate power and authority for
the ownership and operation of its properties and for the carrying on of its
business as now conducted and as now proposed to be conducted, and for the due
execution and delivery hereof and performance of its obligations hereunder,
including the issuance of the Shares.

                           (b) Authorization. All corporate action on the part
of e-nut, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, and for the performance
of all of its obligations hereunder, including the issuance of the Shares, has
been taken. This Agreement constitutes the valid and legally binding obligation
of e-nut enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies.

                           (c) Governmental Approvals. No authorization,
consent, approval, license, exemption of or filing or registration with any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, under any applicable laws, rules or
regulations presently in effect, is or will be necessary for, or in connection
with, the performance by e-nut of its obligations under this Agreement.

                           (d) Litigation. There is no litigation or
governmental proceeding or investigation pending or, to the knowledge of e-nut,
threatened against e-nut which could reasonably be expected to materially and
adversely affect the performance by e-nut of its obligations under this
Agreement.

                           (e) Noncontravention. The execution, delivery and
performance by e-nut of this Development Agreement does not and will not (i)
contravene or conflict with its certificate of incorporation or bylaws, (ii)
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to e-nut, (iii) constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or obligation of e-nut
or to a loss of any benefit to which e-nut or is entitled under any provision of
any agreement, contract or other instrument binding upon e-nut or any license,
franchise, permit or other similar authorization held by e-nut, or (iv) result
in the creation or imposition of any lien on any asset of e-nut, except, in the
case of those items specified in (ii), (iii) or (iv) above which would not,
individually or in the aggregate, have a material adverse effect on the ability
of e-nut to perform its obligations under this Agreement.

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                           (f) The Shares. Upon issuance in accordance with this
Agreement, the Share will be validly issued, fully-paid and nonassessable, and
free from all preemptive rights.

                  8.       Indemnification; Limitation of Liability.

                  8.1.     Indemnification by Skye. Skye hereby agrees to
defend, and hold e-nut, its Affiliates and their officers, directors, employees,
agents and consultants harmless from and against any and all losses, damages,
liabilities, costs and expenses (including reasonable attorneys' fees and
expenses) (collectively, "LOSSES") resulting from or arising out of: (i) the
development work conducted by Skye, (ii) the negligence or willful misconduct of
Skye or its Affiliates, sublicensees, and its or their directors, officers,
agents, employees, or consultants, or (iv) Skye's material breach of any
provision of or representation contained in this Agreement.

                  8.2.     Indemnification by e-nut. e-nut hereby agrees to
save, defend and hold Skye, its Affiliates and their officers, directors,
employees, agents and consultants harmless from and against any and all Losses
resulting from or arising out of (i) product development work conducted by
e-nut, (ii) the negligence or intentional misconduct of e-nut, or its
Affiliates, sublicensees, and its or their directors, officers, agents,
employees, consultants or clinical investigators, or (iii) e-nut's material
breach of any provision of or representation contained in this Agreement.

                  8.3.     Indemnification Procedure.

                           (a) A party seeking indemnification (the
"INDEMNITEE") shall give prompt notice to the other party (the "INDEMNITOR") and
shall furnish copies of all papers and documents in the Indemnitee's possession
or control which relate to any Losses. The Indemnitee shall cooperate with the
Indemnitor in connection with the defense of the claim underlying the Losses.
The Indemnitor shall diligently pursue, and have sole control of, the defense of
any claims. The Indemnitee may participate in such defense with counsel of its
own choice at its own expense. If the Indemnitor does not so assume the defense
of such claim, the Indemnitee may conduct the defense with counsel of the
Indemnitee's choice (the costs for which to be reimbursed by the Indemnitor on a
calendar quarter basis so long as the Indemnitee controls the defense of the
claim). A party may not settle any dispute or enter into a judgment on behalf of
the other (including the Indemnitee if it has assumed its own defense) without
the other's written consent, not to be unreasonably withheld or delayed.

                  8.4.     Limitation of Liability. EXCEPT IN CONNECTION WITH A
MATERIAL BREACH UNDER SECTION 9 OR SECTION 7.1(D), UNDER NO CIRCUMSTANCES SHALL
A PARTY BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR
SPECIAL DAMAGES.

                  9.       Confidentiality, Disclosure and Publications.

                  9.1.     Confidentiality.

                           (a)      Except as otherwise provided in this
Agreement during the term of this Agreement and for a period of seven years
following expiration or termination of this

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<PAGE>

Agreement, each party shall maintain in confidence all information and materials
disclosed or provided by the other including, without limitation, information
provided by either party to the other party hereto prior to the date hereof or
information that such party knows or has reason to know is a or contains trade
secret or other proprietary information relating to the business or properties
of the other party, or the business plans of the other party, and shall not use
such trade secrets or proprietary information for any purpose including, without
limitation, for the purpose of developing, manufacturing or selling products
except as permitted by this Agreement or disclose the same to anyone other than
those of its Affiliates, sublicensees, employees, consultants, agents or
subcontractors as are necessary in connection with such party's activities as
contemplated in this Agreement.

                           (b)      The Contractor shall maintain records and
results of Development on the same conditions of confidentiality as provided in
sub-section (a) above.

                  9.2.     Exceptions. The obligation of confidentiality
contained in this Agreement shall not apply to the extent that (A) either party
(the "RECIPIENT") is required to disclose information by order or regulation of
a governmental agency or a court of competent jurisdiction or (B) the Recipient
can demonstrate that (i) the disclosed information was at the time of such
disclosure by the Recipient already in the public domain or known in the
pharmaceutical or dietary and nutriceutical supplement industry other than as a
result of actions of the Recipient, its Affiliates, employees, licensees, or
subcontractors, in violation hereof, (ii) the disclosed information was
rightfully known by the Recipient or its Affiliates (as shown by its written
records) prior to the date of disclosure to the Recipient in connection with the
negotiation execution or performance of this Agreement; or (iii) the disclosed
information was received by the Recipient or its Affiliates on an unrestricted
basis from a source unrelated to any party to this Agreement and not under a
duty of confidentiality to the other party, or (C) disclosure is made to
Affiliates, sublicensees, employees, consultants, agents or subcontractors in
connection with the transactions contemplated by this Agreement, provided in the
case of item (A) of this Section 9.2 that Recipient gives written notice to the
other party (so that it may seek confidential treatment) and takes advantage of
any available protective provisions regarding such disclosures of confidential
information.

                  10.      Term and Termination.

                  10.1.    Term. This Agreement shall remain in effect until
***, unless terminated by the parties pursuant to Sections 10.2 or 10.3 below.
Notwithstanding the foregoing, the rights granted to e-nut under Sections 2.1,
2.2, and 2.3 above shall terminate with respect to a particular Product or
Additional Product upon the Abandonment of such Product or Additional Product;
provided however, that e-nut may continue to refer to such abandoned product in
its promotional or other materials (subject to Section 6).

                  10.2.    Termination by Mutual Agreement. This Agreement may
be terminated by the written agreement of the parties.

                  10.3.    Termination by Default. If either party materially
defaults in the performance of, or fails to be in material compliance with, any
material term, condition or covenant of this Agreement, the nondefaulting party
may terminate this Agreement if such

                                       12

<PAGE>

default or noncompliance shall not have been remedied, or steps shall not have
been initiated to remedy the same to the nondefaulting party's reasonable
satisfaction, within 30 days after receipt by the defaulting party of a written
notice thereof from the nondefaulting party.

                  10.4.    Effect of Termination or Material Breach.

                           (a) Mutual Agreement or e-nut Material Breach. In the
event of termination of this Agreement pursuant to this Section 10 by mutual
agreement or for a material breach by e-nut, e-nut and Skye shall have no rights
or obligations under this Agreement; provided that (a) Skye will have the right
to receive all payments accrued prior to the effective date of such termination
and the parties shall retain any other rights to indemnification or remedies for
breach of this Agreement they may otherwise have, and (b) e-nut may sell-off any
Product or Additional Product in its possession or control, or in the process of
being manufactured, subject to the royalty provisions of this Agreement.

                           (b) Skye Material Breach. In the event of a material
breach by Skye of this Agreement, if e-nut elects by written notice not to
terminate this Agreement, the license grant set forth in Section 2.3 shall
become royalty-free so that e-nut may continue to use the Skye Technology in
connection with development of Products or Additional Products.

                           (c) Skye Know-How. Upon termination of this Agreement
for any reason, e-nut shall have a non-exclusive, worldwide royalty-free license
to use the Skye Know-How directly related to the development of Products or
Additional Products (e.g., project data, studies, etc.) in connection with
e-nut's continued development and commercialization of such products following
the termination hereof.

                  10.5.    Survival. Notwithstanding any provision of this
Agreement to the contrary, the following Sections shall survive any termination
of this Agreement (except as limited by the terms of such sections): 3.4, 3.5,
4.1, 4.4, 8, 9, 10 and 11.

                  11.      Miscellaneous.

                  11.1.    Assignment. This Agreement and the licenses herein
granted shall be binding upon and shall inure to the benefit of the parties,
their Affiliates, successors and assigns.

                  11.2.    Agency. Neither party is, nor shall either party be
deemed to be, an employee, agent, co-venturer or legal representative of the
other party for any purpose. Neither party shall be entitled to enter into any
contracts in the name of, or on behalf of the other party.

                  11.3.    Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all previous agreements, whether written or oral. This
Agreement shall not be changed or modified orally, but only by an instrument in
writing signed by both parties.

                  11.4.    Severability. If any provision of this Agreement is
declared invalid, illegal or unenforceable by a court of last resort or by any
court from the decision of which an appeal is not taken within the time provided
by law, then and in such event, this Agreement will

                                       13

<PAGE>

be deemed to have been terminated only as to the portion thereof which relates
to the provision invalidated by the decision and only in the relevant
jurisdiction, but this Agreement, in all other respects and all other
jurisdictions, will remain in force; provided, however, that if the provision so
invalidated is essential to the Agreement as a whole, then the parties shall
negotiate in good faith to amend the terms hereof as nearly as practical to
carry out the original interest of the parties. Each undertaking in this
Agreement shall be construed as a separate undertaking.

                  11.5.    Notices. Any legal notice or report required or
permitted to be given under this Agreement shall be in writing and shall be
mailed by certified mail, or facsimiled or delivered by courier, as follows and
shall be effective five days after such mailing or delivery or upon such
facsimile:

                             (a)    If to Skye:

                             SkyePharma PLC
                             105 Piccadilly
                             London, England, WIJ 7NJ
                             Attention: Donald Nicholson
                             Telecopier: +44-20-7491-3338

                             (b)    with a copy to:

                             Sullivan & Cromwell
                             St. Olave's House
                             9a Ironmonger Lane
                             London, England, EC2V 8EY
                             Attention: Kathryn A. Campbell, Esq.
                             Telecopier: +44-20-7710-6565, and

                             (c)    If to e-nut:

                             e-nutriceuticals Inc.
                             10 East 63rd Street

                             New York, NY 10021
                             Attention: Stephen P. Morris
                             Telecopier: +1 212 753 9053

                             (d)    with a copy to:

                             Bingham Dana LLP
                             399 Park Avenue

                             New York, NY 10022

                             Attention: Brian Beglin
                             Telecopier: +1-212-207-1200

                                       14

<PAGE>

                  or to such other addresses or facsimile number as either party
may notify to the other in accordance with the provisions of this section.

                  11.6.    Choice of Law. The validity, performance,
construction, and effect of this Agreement shall be governed by the laws of the
State of New York.

                  11.7.    Dispute Resolution. In the case of any disputes
between the parties arising from this Agreement, and in case this Agreement does
not provide a solution for how to resolve such disputes, the parties shall
discuss and negotiate in good faith a solution acceptable to both parties and in
the spirit of this Agreement. If after negotiating in good faith pursuant to the
foregoing sentence, the parties fail to reach agreement within thirty days then
the Chief Executive Officers or Chief Operating Officers of e-nut and of Skye
shall discuss in good faith an appropriate answer to the dispute. If these
executives fail, after good faith discussions, to reach an amicable agreement
within 30 days then the parties may seek relief in any state or federal court
located in the State of New York having jurisdiction thereof. Each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) and waives any objection to venue laid therein, including any
claim of forum nonconveniens in connection with any such claim. Process in any
such action or proceeding may be served on any party anywhere in the world and
the parties agree that mailing of process or other papers in connection with any
such action or proceeding in such manner as may be permitted by law shall be
valid and sufficient service thereof.

                  11.8.    Publicity. Both parties agree to issue mutual press
releases concerning their entry into this Agreement, with the content of such
releases to be approved in advance by both parties. In all other respects,
neither party shall use the name of the other party in any publicity release
without the prior written permission of such other party, which shall not be
unreasonably withheld. The other party shall have a reasonable opportunity to
review and comment on any such proposed publicity release. Except as required by
law, neither party shall publicly disclose the terms of this Agreement or issue
any publicity release with regard thereto unless expressly authorized to do so
by the other party, which authorization shall not be unreasonably withheld,
whereupon the parties will work together to develop a mutually acceptable
disclosure.

                  11.9.    Headings. The captions used herein are inserted for
convenience of reference only and shall not be construed to create obligations,
benefits, or limitations.

                  11.10.   Compliance. Each of the parties hereto agrees to
comply with all applicable laws and regulations in connection with the
execution, delivery and performance of its obligations under this Agreement.

                  11.11.   Further Assurances. Each party agrees to execute and
deliver, or cause to be executed and delivered, such further instruments and do
and cause to be done such further acts and things including, without limitation,
the filing of such assignments, agreements, documents and instruments, as may be
necessary or as the other party may reasonably request in connection with this
Agreement to carry out more effectively the provisions and purposes of this
Agreement.

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<PAGE>

                  11.12.   Remedies.

                           (a) Cumulative, Etc. Except as otherwise provided
herein, the parties agree that each remedy herein provided is cumulative and in
addition to any further remedies that may be provided by law or by any other
provisions herein.

                           (b) Specific Performance, Etc. The parties agree that
the rights and privileges hereunder are of a unique and special character and in
the event of a breach of any provision of this Agreement, the aggrieved party
will be without an adequate remedy at law. The parties therefore agree that in
the event of a breach of any provisions of this Agreement, the aggrieved party
may institute and prosecute proceedings in any court of competent jurisdiction
to enforce specific performance or to enjoin the continuing breach of such
provision, as well as to obtain damages for breach of this Agreement. By seeking
or obtaining any such relief, the aggrieved party will not be precluded from
seeking or obtaining any other relief to which it may be entitled.

                  11.13.   Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

                                   E-NUTRICEUTICALS, INC.

                                   By______________________________
                                      Name:  S. P. Morris
                                      Title: Director

                                   SKYEPHARMA PLC

                                   By________________________________
                                      Name:  Donald Nicholson
                                      Title: Finance Director

                                       17