<PAGE>

                 [LETTERHEAD CYANOTECH CORPORATION]

              SUPPLY AND EXCLUSIVE MARKETING AGREEMENT

This agreement is made this 8th day of July, 1994 between Cyanotech 
Corporation, (including its wholly owned subsidiary Nutrex, Inc.) 
(Cyanotech), a Nevada corporation having its principle place of business at: 
P.O. Box 4384, Kailua-Kona, Hawaii 96745, and Nutrition Gandalf (Gandalf) 
having its principle place of business at 2110 Cabot, Montreal, Quebec, 
Canada H4E1E4.

1) GRANTING OF EXCLUSIVE MARKETING RIGHTS  Cyanotech hereby grants Gandalf 
exclusive marketing rights for Products, as listed on Exhibit A, to 
use its best efforts to sell the Products in the Area of Primary 
Responsibility described in paragraph 2, on the terms and conditions set 
forth in this Agreement. Cyanotech agrees not to knowingly sell directly or to 
knowingly ship to any company or person inside the boarders of the 
countries in the Area of Primary Responsibility.

2) AREAS OF PRIMARY RESPONSIBILITY

     a) CYANOTECH BULK PRODUCTS.  Area of Primary Responsibility (the Area) as 
used herein for the sale of Cyanotech bulk products, as listed on Exhibit A, 
means the countries of Canada and Austria. Gandalf agrees not to sell 
directly to or ship to any company or person outside the borders of the 
countries in the Area of Primary Responsibility without advance written 
authorization from Cyanotech.

     b) NUTREX PRODUCTS.  Area of Primary Responsibility (the Area) as used 
herein for the sale of Nutrex products, as listed on Exhibit A, means the 
country of Canada. Gandalf agrees not to sell Nutrex products directly to any 
company or person outside the borders of the country in the Area of Primary 
Responsibility without advance written authorization from Cyanotech.

3) GUARANTEED SUPPLY OF PRODUCTS  Cyanotech guarantees to sell to Gandalf its 
Spirulina Products, as listed on Exhibit A, and will use its best efforts to 
supply Gandalf at least the quantities as shown on Exhibit B.

4) GUARANTEED PURCHASE OF PRODUCTS  Gandalf guarantees to purchase from 
Cyanotech Spirulina Products, as listed on Exhibit A, and will use its best 
efforts to purchase from Cyanotech at least the quantities as shown on 
Exhibit B.

5) PRICES AND PAYMENT TERMS  Selling prices of Cyanotech Products will be the 
current published prices of Cyanotech. Current prices, FOB Kona Hawaii are 
[*] per kg for bulk Spirulina Pacifica powder and [*] for bulk Spirulina 
Pacifica 1000 mg tablets. [*] Cyanotech products which are sold by Gandalf 
under the Nutrex name and/or trademark. [*]


                  [*CONFIDENTIAL TREATMENT REQUESTED*]

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[*]

6) ADDITIONAL TERMS

     a) Gandalf will be responsible for and bear all costs for all sales 
promotion of Nutrex products including printed material, radio and television 
advertisements, and demonstrations.

7) CYANOTECH SPIRULINA ONLY SPIRULINA SOLD BY GANDALF   For the duration of 
this agreement, Gandalf agrees that only Spirulina Products manufactured by 
Cyanotech shall be sold, and/or used in products which Gandalf sells in the 
Area.

8) TRADEMARKS  The trademark Spirulina Pacifica and all other present or 
future trademarks of Cyanotech may be displayed and used by Gandalf in the 
sale and promotion of the Products in a manner identical or similar to 
Cyanotech's own practice. Such trademarks are and shall remain the sole 
property of Cyanotech and any use thereof by Gandolf shall be limited to the 
Cyanotech Products, or such other products as may be authorized by Cyanotech. 
It is expressly agreed that Gandalf's use of Cyanotech trademarks is with and 
on the consent of Cyanotech and that Gandalf shall acquire no rights in said 
trademarks because of its use thereof.

9) GANDALF TO INDEMNIFY CYANOTECH  Gandalf agrees to indemnify and save 
harmless Cyanotech for all loss and damages (including attorney's fees), that 
either or both may sustain or become liable for by reason of claims against 
it or them resulting from unauthorized acts or statements of Gandalf or its 
employees agents or representatives.

10) CYANOTECH TO INDEMNIFY GANDALF  Cyanotech agrees to indemnify and save 
harmless Gandalf for all loss and damages (including attorney's fees), that 
either or both may sustain or become liable for by reason of claims against 
it or them resulting from unauthorized acts or statements of Cyanotech or its 
employees agents or representatives.

11) INSURANCE  During the term of this Agreement, both Gandalf and Cyanotech, 
each on their own accord, will maintain, at their own expense, product 
liability insurance with a minimum liability of $1,000,000. Proof of such 
insurance will be provided upon written request by the other party.

12) TERM AND TERMINATION  This Agreement shall be in force and effective 
beginning as of the date first above written and shall continue in force from 
the date of this agreement unless terminated as provided below:

     a) In the event of a default by Gandalf in any of the obligations which 
it undertakes by entering into this Agreement and/or purchasing Products from 
Cyanotech, Cyanotech shall have the right to terminate this Agreement thirty 
(30) days after sending a notice in writing to Gandalf specifying the nature 
of the default and Cyanotech's intention to terminate, unless



                  [*CONFIDENTIAL TREATMENT REQUESTED*]


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within said thirty (30) day period, Gandalf shall have cured the default to 
Cyanotech's satisfaction.

     b) This Agreement shall terminate one day prior to Gandalf becoming 
insolvent, or bankrupt or Gandalf's business being placed in the hands of a 
receiver or trustee for the benefit of creditors, whether by voluntary act of 
Gandalf or otherwise.

     c) Gandalf's exclusivity in a country of its Area of Primary 
Responsibility will terminate if Gandalf does not purchase at least 80% of 
the annual quantity of the Products for that country as specified in Exhibit 
B. At the request written of Cyanotech, Gandalf will, within 10 days after 
receiving such request, provide documentation to substantiate the quantity of 
products shipped to each country.

     d) This Agreement will terminate four (4) years after the date first 
above written. At the end of the first year of this agreement, Cyanotech and 
Gandalf agree to negotiate in good faith to extend or modify this agreement 
upon its termination. In this manner both Cyanotech and Gandalf will have as 
much as three years notice should there be any change to the supply and 
exclusive marketing arrangement.

13) FAILURE TO ENFORCE PROVISIONS  The failure to either party to enforce at 
any time or for any period of time the provisions hereof shall not be 
construed to be a waiver of such provisions or right of such party thereafter 
to enforce such provisions.

14) FORCE MAJEURE  Neither party hereto shall be responsible for failure or 
delay in the performance of any of its obligations hereunder or under any 
purchase contract(s) made between Cyanotech and Gandalf hereunder by reason 
of force majeure, including, but not limited to, industrial disputes, riots, 
mobs, fires, floods, wars, shortage of labor, power, fuel, raw materials, or 
transportation, laws, regulations, orders or administrative guidelines of any 
government or its agencies or any other circumstances beyond the control of 
such party.

15) GANDALF NOT AGENT OR LEGAL REPRESENTATIVE OF CYANOTECH  This Agreement 
does not constitute Gandalf the agent or legal representative of Cyanotech 
for any purpose whatsoever. Gandalf is not granted any right or authority to 
assume or to create any obligation or responsibility, express or implied, on 
behalf of or in the name of Cyanotech or to bind it in any manner or thing 
whatsoever.

16) LIABILITY  Should either Cyanotech or Gandalf breach any of the terms of 
this agreement, the damaged party has the right to collect unspecified 
damages from the offending party and the offending party has the liability to 
pay such unspecified damages which resulted from the breach of terms.

17) ENTIRE AGREEMENT  This instrument cancels and supersedes any and all 
previous agreements, arrangements, or understandings between the parties, and 
contains the entire agreement between the parties respecting the subject 
matter hereof, and any representations, promises or conditions not 
incorporated herein shall not be binding upon Cyanotech until signed on its 
behalf by an officer of Cyanotech nor shall any modification, renewal, 
termination or waiver of any of the provisions herein contained, or any 
future representation, promise, warranty of condition in connection with the 
subject matter hereof be binding upon Cyanotech unless made in writing and 
signed on its behalf by one of its officers.

18) ARBITRATION  All disputes, controversies, differences, or claims arising 
out of this



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Agreement, or the breach thereof, are to be finally settled by final and 
binding arbitration in the state of California in accordance with the rules 
of the American Arbitration Association then existing. The losing party is to 
bear the cost of its and the prevailing party's reasonable attorney's and 
expert witness fees. Gandalf and Cyanotech agree that no party is to request 
and the arbitrator is to have no authority to award punitive or exemplary 
damages to the prevailing party against the other party.

19) APPLICABLE LAW  This agreement shall be construed in accordance with the 
laws in the state of California.

20) NOTICES  Any payment, notice or other communication required or permitted 
to be made or given by either party hereto pursuant to this Agreement shall 
be sufficiently made or given on the date of mailing if sent to such party by 
registered or certified air mail, postage prepaid, addressed to it at its 
address set forth above, or to such other address as it shall designate by 
written notice given to the other party at said address.

21) AGREEMENT NOT ASSIGNABLE  This Agreement constitutes a personal contract 
between Cyanotech and Gandalf and Gandalf shall not transfer or assign any 
part thereof without Cyanotech's written consent.

22) SEVERABILITY  In the event that any part of this Agreement between 
Cyanotech and Gandalf shall be found to be illegal, or a violation of public 
policy, or for any reason unenforceable in law. Such finding shall in no 
event invalidate any other part of this Agreement.

The signed officers of Cyanotech and Gandalf have the personal obligation to 
make their respective Board of Directors, any new management and any new 
owners aware of this agreement. Any new management or owners of either 
Cyanotech and Gandalf will have the responsibility to abide by this agreement.

IN WITNESS WHEREOF the parties hereto have executed this Agreement in 
duplicate as of the day and year first above written.



Cyanotech Corporation                     Nutrition Gandalf
_____________________                     _________________


By  /s/ Gerald R. Cysewski                By   /s/ Charles Goulet


Its   President & CEO                     Its   Directeur Finances et Secretaire



                  [*CONFIDENTIAL TREATMENT REQUESTED*]


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                                   EXHIBIT A


CYANOTECH BULK PRODUCTS

1) Spirulina Pacifica -TM- bulk powder

2) Spirulina Pacifica bulk Crystal Flakes -TM-

3) Spirulina Pacifica -TM- bulk 1,000 mg tablets

4) Spirulina Pacifica -TM- bulk 500 mg tablets


NUTREX PRODUCTS

1) Spirulina Pacifica -TM- powder

2) Spirulina Pacifica -TM- tablets

3) Hawaiian Energizer powder

4) Hawaiian Energizer tablets

5) Papaya Pacifica -TM- tablets

6) Spirulina Pacifica Crystal Flake -TM-



                  [*CONFIDENTIAL TREATMENT REQUESTED*]


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                                   EXHIBIT B

Gandalf Purchases of CYANOTECH BULK PRODUCTS Required to Maintain Area 
Exclusivity and Agreement Renewal for Cyanotech Bulk Products. (Numbers in 
1,000 Kilograms)



                              Country        [*]
                              _______

                              Canada         [*]
                              Austria        [*]
                                [*]          [*]
                              _______
                               Total         [*]
                                [*]          [*]
                                [*]

                  [*CONFIDENTIAL TREATMENT REQUESTED*]