Document:

EX 10.2

    THIS
      WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
      AND
      THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
      OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO EUGENE SCIENCE INC THAT SUCH REGISTRATION IS NOT
      REQUIRED.

    

    
      	 	
              Right
                to purchase ________ shares of Common Stock of KAL Energy, Inc. (subject
                to adjustment as provided herein)

            

    

    

    COMMON
      STOCK PURCHASE WARRANT

    
      	 	 
	
              No. 2007-__

            	
              Issue
                Date: June 10, 2007

            
	 	 

    

    KAL
      ENERGY, INC.,
      a
      corporation organized under the laws of the State of Delaware (the “Company”),
      hereby certifies that, for value received, _______________, or its successors
      or
      assigns (the “Holder”), is entitled, subject to the terms set forth below, to
      purchase from the Company at any time after the Issue Date until 5:00 p.m.,
      P.S.T. on the second (2nd) anniversary of the Issue Date (the “Expiration
      Date”), up to _______________ (_________) fully paid and nonassessable shares
      (“Warrant Shares”) of the common stock of the Company (the “Common Stock”), at a
      per share purchase price of $1.428. The aforedescribed purchase price per share,
      as adjusted from time to time as herein provided, is referred to herein as
      the
      "Purchase Price." The number and character of such shares of Common Stock and
      the Purchase Price are subject to adjustment as provided herein.

     

    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings: 

     

    (a) The
      term
“Company” shall include KAL Energy, Inc. and any corporation which shall succeed
      to or assume the obligations of KAL Energy, Inc. hereunder. 

     

    (b) The
      term
“Common Stock” includes (a) the Company's Common Stock and (b) any other
      securities into which or for which any of the securities described in
      (a) may be converted or exchanged pursuant to a plan of recapitalization,
      reorganization, merger, sale of assets or otherwise.

     

    (c) The
      term
“Other Securities” refers to any stock (other than Common Stock) and other
      securities of the Company or any other person (corporate or otherwise) which
      the
      holder of the Warrant at any time shall be entitled to receive, or shall have
      received, on the exercise of the Warrant, in lieu of or in addition to Common
      Stock, or which at any time shall be issuable or shall have been issued in
      exchange for or in replacement of Common Stock or Other Securities pursuant
      to
      Section 4 or otherwise. 

     

    1. Exercise
      of Warrant.

     

    1.1. Number
      of Shares Issuable upon Exercise.
      From
      and after the Issue Date through and including the Expiration Date the Holder
      hereof shall be entitled to receive, upon exercise of this Warrant in whole
      in
      accordance with the terms of subsection 1.2 or upon exercise of this
      Warrant in part in accordance with subsection 1.3, _________ shares of
      Common Stock of the Company, subject to adjustment pursuant to Sections 2 and
      3.

     

    1.2. Full
      Exercise.
      This
      Warrant may be exercised in full by the Holder hereof by delivery of an original
      or facsimile copy of the form of subscription attached as Exhibit A hereto
      (the
“Subscription Form") duly executed by such Holder and surrender of the original
      Warrant within seven

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (7)
      days
      of exercise, to the Company at its principal office or at the office of its
      Warrant Agent (as provided hereinafter), accompanied by payment, in cash, wire
      transfer or by certified or official bank check payable to the order of the
      Company, in the amount obtained by multiplying the number of shares of Common
      Stock exercisable under this Warrant by the Purchase Price then in effect or
      by
      cashless exercise in the manner set forth in Section 2. This Warrant may also
      be
      exercised in full on a "cashless exercise" basis in accordance with the
      provisions of Section 2.

     

    1.3. Partial
      Exercise.
      This
      Warrant may be exercised in part (but not for a fractional share) by surrender
      of this Warrant in the manner and at the place provided in subsection 1.2
      except that the amount payable by the Holder on such partial exercise shall
      be
      the amount obtained by multiplying (a) the number of whole shares of Common
      Stock designated by the Holder in the Subscription Form by (b) the Purchase
      Price then in effect. On any such partial exercise, the Company, at its expense,
      will forthwith issue and deliver to or upon the order of the Holder hereof
      a new
      Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon
      payment by such Holder of any applicable transfer taxes) may request, the whole
      number of shares of Common Stock for which such Warrant may still be
      exercised.

     

    1.4. Fair
      Market Value.
      Fair
      Market Value of a share of Common Stock as of a particular date (the
      "Determination Date") shall mean: 

     

    (a) If
      the
      Company's Common Stock is traded on an exchange or is quoted on the National
      Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ") Global
      Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the
      American Stock Exchange, LLC (“AMEX”), then the closing or last sale price,
      respectively, reported for the last business day immediately preceding the
      Determination Date;

     

    (b) If
      the
      Company's Common Stock is not traded on an exchange or on the NASDAQ Global
      Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or AMEX,
      but
      is traded in the over-the-counter market, then the average of the closing bid
      and ask prices reported for the last business day immediately preceding the
      Determination Date;

     

    (c) Except
      as
      provided in clause (d) below, if the Company's Common Stock is not publicly
      traded, then as the Holder and the Company agree, or in the absence of such
      an
      agreement, by arbitration in accordance with the rules then standing of the
      American Arbitration Association, before a single arbitrator to be chosen from
      a
      panel of persons qualified by education and training to pass on the matter
      to be
      decided; or

     

    (d) If
      the
      Determination Date is the date of a liquidation, dissolution or winding up,
      or
      any event deemed to be a liquidation, dissolution or winding up pursuant to
      the
      Company's charter, then all amounts to be payable per share to holders of the
      Common Stock pursuant to the charter in the event of such liquidation,
      dissolution or winding up, plus all other amounts to be payable per share in
      respect of the Common Stock in liquidation under the charter, assuming for
      the
      purposes of this clause (d) that all of the shares of Common Stock then
      issuable upon exercise of all of the Warrants are outstanding at the
      Determination Date.

     

    1.5. Company
      Acknowledgment.
      The
      Company will, at the time of the exercise of the Warrant, upon the request
      of
      the Holder hereof acknowledge in writing its continuing obligation to afford
      to
      such Holder any rights to which such Holder shall continue to be entitled after
      such exercise in accordance with the provisions of this Warrant. If the Holder
      shall fail to make any such request, such failure shall not affect the
      continuing obligation of the Company to afford to such Holder any such rights.
      

     

    
      
        
        

      

      
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      1.6 Delivery
      of Stock Certificates, etc. on Exercise.
      The
      Company agrees that the shares of Common Stock purchased upon exercise of this
      Warrant shall be deemed to be issued to the Holder hereof as the record owner
      of
      such shares as of the close of business on the date on which this Warrant shall
      have been surrendered and payment made for such shares as aforesaid. As soon
      as
      practicable after the exercise of this Warrant in full or in part, and in any
      event within five (5) business days thereafter, the Company at its expense
      (including the payment by it of any applicable issue taxes) will cause to be
      issued in the name of and delivered to the Holder hereof, or as such Holder
      (upon payment by such Holder of any applicable transfer taxes) may direct in
      compliance with applicable securities laws, a certificate or certificates for
      the number of duly and validly issued, fully paid and nonassessable shares
      of
      Common Stock (or Other Securities) to which such Holder shall be entitled on
      such exercise, plus, in lieu of any fractional share to which such Holder would
      otherwise be entitled, cash equal to such fraction multiplied by the then Fair
      Market Value of one full share of Common Stock, together with any other stock
      or
      other securities and property (including cash, where applicable) to which such
      Holder is entitled upon such exercise pursuant to Section 1 or otherwise.

     

    2. Adjustment
      for Reorganization, Consolidation, Merger, etc.; Adjustment for Issuance of
      Additional Securities

     

    2.1. Reorganization,
      Consolidation, Merger, etc.
      In case
      at any time or from time to time, the Company shall (a) effect a
      reorganization, (b) consolidate with or merge into any other person or
      (c) transfer all or substantially all of its properties or assets to any
      other person under any plan or arrangement contemplating the dissolution of
      the
      Company, then, in each such case, as a condition to the consummation of such
      a
      transaction, proper and adequate provision shall be made by the Company whereby
      the Holder of this Warrant, on the exercise hereof as provided in
      Section 1, at any time after the consummation of such reorganization,
      consolidation or merger or the effective date of such dissolution, as the case
      may be, shall receive, in lieu of the Common Stock (or Other Securities)
      issuable on such exercise prior to such consummation or such effective date,
      the
      stock and other securities and property (including cash) to which such Holder
      would have been entitled upon such consummation or in connection with such
      dissolution, as the case may be, if such Holder had so exercised this Warrant,
      immediately prior thereto, all subject to further adjustment thereafter as
      provided in Section 3.

     

    2.2. Dissolution.
      In the
      event of any dissolution of the Company following the transfer of all or
      substantially all of its properties or assets, the Company, prior to such
      dissolution, shall at its expense deliver or cause to be delivered the stock
      and
      other securities and property (including cash, where applicable) receivable
      by
      the Holder of the Warrants after the effective date of such dissolution pursuant
      to this Section 2 to a bank or trust company (a "Trustee") having its
      principal office in Orange County, California, as trustee for the Holder of
      the
      Warrants. 

     

    2.3. Continuation
      of Terms.
      Upon
      any reorganization, consolidation, merger or transfer (and any dissolution
      following any transfer) referred to in this Section 2, this Warrant shall
      continue in full force and effect and the terms hereof shall be applicable
      to
      the Other Securities and property receivable on the exercise of this Warrant
      after the consummation of such reorganization, consolidation or merger or the
      effective date of dissolution following any such transfer, as the case may
      be,
      and shall be binding upon the issuer of any Other Securities, including, in
      the
      case of any such transfer, the person acquiring all or substantially all of
      the
      properties or assets of the Company, whether or not such person shall have
      expressly assumed the terms of this Warrant as provided in Section 3. In
      the event this Warrant does not continue in full force and effect after the
      consummation of the transaction described in this Section 2, then only in
      such event will the Company's securities and property (including cash, where
      applicable) receivable by the Holder of the Warrants be delivered to the Trustee
      as contemplated by Section 2.2.

     

    
      
        
        

      

      
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    2.4 Subsequent
      Equity Sales.
      Other
      than Excluded Securities, if the Company or any subsidiary thereof, as
      applicable, at any time while Warrants are outstanding, shall offer, sell,
      grant
      any option to purchase or offer, sell or grant any right to reprice its
      securities, or otherwise dispose of or issue (or announce any offer, sale,
      grant
      or any option to purchase or other disposition) any Common Stock or warrants,
      options or convertible debt (“Common Stock Equivalents”) entitling any person to
      acquire shares of Common Stock, at an effective price per share less than the
      then Purchase
      Price
      (“Dilutive Issuance”), the Purchase
      Price
      shall be adjusted downward, but never upward, by multiplying the Purchase
      Price by
      a fraction, the numerator of which is the number of shares of Common Stock
      outstanding immediately prior to the Dilutive Issuance plus the number of shares
      of Common Stock which the offering price for such Dilutive Issuance would
      purchase at the then
      Purchase
      Price,
      and the denominator of which shall be the sum of the number of shares of Common
      Stock outstanding immediately prior to the Dilutive Issuance plus the number of
      shares of Common Stock so issued or issuable in connection with the Dilutive
      Issuance. Such adjustment shall be made whenever such Common Stock or Common
      Stock Equivalents are issued. The Company shall notify the Holder in writing,
      no
      later than the business day following the issuance of any Common Stock or Common
      Stock Equivalents subject to this section, indicating therein the applicable
      issuance price, or of applicable reset price, exchange price, conversion price
      and other pricing terms. In the event the Purchase Price is decreased due to
      a
      Dilutive Issuance, the number of shares of Common Stock issuable on exercise
      of
      the Warrants will be determined by multiplying the number of shares of Common
      Stock issuable on exercise of the Warrants immediately prior to the Dilutive
      Issuance by a fraction the numerator of which will be the Purchase Price
      immediately prior to the Dilutive Issuance and the denominator of which will
      be
      the Purchase Price adjusted by the Dilutive Issuance. 

     

    “Excluded
      Securities” shall mean (i) securities issued in connection with this Warrant;
      (ii) securities issued upon conversion of any securities outstanding as of
      the
      date of this Warrant; (iii) securities issued pursuant to the acquisition of
      another business or business segment of any such entity by the Company by
      merger, purchase of substantially all the assets or other reorganization whereby
      the Company will own more than fifty percent (50%) of the voting power of such
      business entity or business segment of any such entity; (iv) securities issued
      to employees, consultants, officers, directors or advisors of the Company
      pursuant to any stock option, stock purchase or stock bonus plan, agreement
      or
      arrangement approved by the Board of Directors of the Company; (v) securities
      issued in connection with obtaining lease financing, whether issued to a non
      affiliated lender, lessor, guarantor or other person and approved by the Board
      of Directors of the Company; (vi) securities issued to leasing companies,
      landlords and other providers of goods and services to the Company and approved
      by the Board of Directors; (vii) securities issued in connection with strategic
      transactions involving the Company and other entities, including (A) joint
      ventures, manufacturing, marketing or distribution arrangements or (B)
      technology license, transfer or development arrangements; provided that such
      strategic transactions and the issuance of shares therein, have been approved
      by
      the Board of Directors of the Company; and (viii) any right, option or warrant
      to acquire any security convertible into the securities pursuant to subsections
      (i) through (vii) above.

     

    3. Extraordinary
      Events Regarding Common Stock.
      In the
      event that the Company shall (a) issue additional shares of the Common Stock
      as
      a dividend or other distribution on outstanding Common Stock, (b) subdivide
      its
      outstanding shares of Common Stock, or (c) combine its outstanding shares of
      the
      Common Stock into a smaller number of shares of the Common Stock, then, in
      each
      such event, the Purchase Price shall, simultaneously with the happening of
      such
      event, be adjusted by multiplying the then Purchase Price by a fraction, the
      numerator of which shall be the number of shares of Common Stock outstanding
      immediately prior to such event and the denominator of which shall be the number
      of shares of Common Stock outstanding immediately after such event, and the
      product so obtained shall thereafter be the Purchase Price then in effect.
      The
      Purchase Price, as so adjusted, shall be readjusted in the same manner upon
      the
      happening of any successive event or events described herein in this Section
      3.
      The number of shares of Common Stock that the Holder of this Warrant shall
      thereafter, on the exercise

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    hereof
      as
      provided in Section 1, be entitled to receive shall be adjusted to a number
      determined by multiplying the number of shares of Common Stock that would
      otherwise (but for the provisions of this Section 3) be issuable on such
      exercise by a fraction of which (a) the numerator is the Purchase Price in
      effect immediately prior to such event (but for the provisions of this Section
      3), and (b) the denominator is the Purchase Price in effect on the date of
      such
      event. 

     

    4. Certificate
      as to Adjustments.
      In each
      case of any adjustment or readjustment in the shares of Common Stock (or Other
      Securities) issuable on the exercise of the Warrants, the Company at its expense
      will promptly cause its Chief Financial Officer or other appropriate designee
      to
      compute such adjustment or readjustment in accordance with the terms of the
      Warrant and prepare a certificate setting forth such adjustment or readjustment
      and showing in detail the facts upon which such adjustment or readjustment
      is
      based, including a statement of (a) the consideration received or
      receivable by the Company for any additional shares of Common Stock (or Other
      Securities) issued or sold or deemed to have been issued or sold, (b) the
      number of shares of Common Stock (or Other Securities) outstanding or deemed
      to
      be outstanding, and (c) the Purchase Price and the number of shares of
      Common Stock to be received upon exercise of this Warrant, in effect immediately
      prior to such adjustment or readjustment and as adjusted or readjusted as
      provided in this Warrant. The Company will forthwith mail a copy of each such
      certificate to the Holder of the Warrant and any Warrant Agent of the Company
      (appointed pursuant to Section 10 hereof).

     

    5. Reservation
      of Stock, etc. Issuable on Exercise of Warrant; Financial
      Statements.
      The
      Company will at all times reserve and keep available, solely for issuance and
      delivery on the exercise of the Warrants, all shares of Common Stock (or Other
      Securities) from time to time issuable on the exercise of the Warrant. This
      Warrant entitles the Holder hereof to receive copies of all financial and other
      information distributed or required to be distributed to the holders of the
      Company's Common Stock. 

     

    6. Assignment;
      Exchange of Warrant.
      Subject
      to compliance with applicable securities laws, this Warrant, and the rights
      evidenced hereby, may be transferred by any registered holder hereof (a
      "Transferor"). On the surrender for exchange of this Warrant, with the
      Transferor's endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form") and together with an opinion of counsel
      reasonably satisfactory to the Company that the transfer of this Warrant will
      be
      in compliance with applicable securities laws, the Company at its expense,
      but
      with payment by the Transferor of any applicable transfer taxes, will issue
      and
      deliver to or on the order of the Transferor thereof a new Warrant or Warrants
      of like tenor, in the name of the Transferor and/or the transferee(s) specified
      in such Transferor Endorsement Form (each a "Transferee"), calling in the
      aggregate on the face or faces thereof for the number of shares of Common Stock
      called for on the face or faces of the Warrant so surrendered by the Transferor.
      No such transfers shall result in a public distribution of the
      Warrant.

     

    7. Replacement
      of Warrant.
      On
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of any such loss,
      theft or destruction of this Warrant, on delivery of an indemnity agreement
      or
      security reasonably satisfactory in form and amount to the Company or, in the
      case of any such mutilation, on surrender and cancellation of this Warrant,
      the
      Company at its expense, twice only, will execute and deliver, in lieu thereof,
      a
      new Warrant of like tenor.

     

    8. Warrant
      Agent.
      The
      Company may, by written notice to the Holder of the Warrant, appoint an agent
      (a
“Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities)
      on the exercise of this Warrant pursuant to Section 1, exchanging this
      Warrant pursuant to Section 7, and replacing this Warrant pursuant to
      Section 7, or any of the foregoing, and thereafter any such issuance,
      exchange or replacement, as the case may be, shall be made at such office by
      such Warrant Agent. 

    
      
        
        

      

      
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    9. Transfer
      on the Company's Books.
      Until
      this Warrant is transferred on the books of the Company, the Company may treat
      the registered holder hereof as the absolute owner hereof for all purposes,
      notwithstanding any notice to the contrary. 

     

    10. Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be the addresses set forth in the applicable subscription
      agreements.

     

    11. Miscellaneous.
      This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. This Warrant shall
      be construed and enforced in accordance with and governed by the laws of
      California. Any dispute relating to this Warrant shall be adjudicated only
      in
      County of Orange in the State of California. The headings in this Warrant are
      for purposes of reference only, and shall not limit or otherwise affect any
      of
      the terms hereof. The invalidity or unenforceability of any provision hereof
      shall in no way affect the validity or enforceability of any other provision.
      

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above. 

     

    
      	 	
              KAL
                ENERGY, INC.

               

               

                

              

              By: Cameron
                Reynolds

              Its:
                 President
                and Chief Executive Officer

            

    

    

    
      
        
        

      

      
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    Exhibit A

    

    FORM
      OF
      SUBSCRIPTION

    (to
      be
      signed only on exercise of Warrant)

    

    TO:
      EUGENE SCIENCE INC 

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (No.2007-1), hereby irrevocably elects to purchase (check applicable
      box):

    

    ___ ________
      shares of the Common Stock covered by such Warrant; or

    ___ the
      maximum number of shares of Common Stock covered by such Warrant pursuant to
      the
      cashless exercise procedure set forth in Section 2.

    

    The
      undersigned herewith makes payment of the full purchase price for such shares
      at
      the price per share provided for in such Warrant, which is $___________. Such
      payment takes the form of (check applicable box or boxes):

    

    ___ $__________
      in lawful money of the United States; and/or

    ___ the
      cancellation of such portion of the attached Warrant as is exercisable for
      a
      total of _______ shares of Common Stock (using a Fair Market Value of $_______
      per share for purposes of this calculation); and/or

    

    ___ the
      cancellation of such number of shares of Common Stock as is necessary, in
      accordance with the formula set forth in Section 2, to exercise this
      Warrant with respect to the maximum number of shares of Common Stock purchasable
      pursuant to the cashless exercise procedure set forth in
      Section 2.

    

    The
      undersigned requests that the certificates for such shares be issued in the
      name
      of, and delivered to:

     

    
      
        

      

    

    whose
      address is:

     

    
      
        

      

    

    

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable upon exercise of the within Warrant shall be made
      pursuant to registration of the Common Stock under the Securities Act of 1933,
      as amended (the "Securities Act"), or pursuant to an exemption from registration
      under the Securities Act.

    

    
      	
              Dated:___________________

            	
              ____________________________________

              (Signature
                must conform to name of holder as 

              specified
                on the face of the Warrant)

               

              _________________________________________

              _________________________________________

              (Address)

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit B

     

    FORM
      OF
      TRANSFEROR ENDORSEMENT

    (To
      be
      signed only on transfer of Warrant)

     

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto the
      person(s) named below under the heading "Transferees" the right represented
      by
      the within Warrant to purchase the percentage and number of shares of Common
      Stock of KAL ENERGY, INC. to which the within Warrant relates specified under
      the headings "Percentage Transferred" and "Number Transferred," respectively,
      opposite the name(s) of such person(s) and appoints each such person Attorney
      to
      transfer its respective right on the books of KAL ENERGY, INC. with full power
      of substitution in the premises.

     

    

    
      	
              Transferees

            	
              Percentage
                Transferred

            	
              Number
                Transferred

            
	   
	  
	  

	   
	  
	  

	   
	  
	  

    

    

    

    
      	
              Dated:
                ______________, ________________

               

               

               

              Signed
                in the presence of:

               

              ____________________________________

              (Name)

               

               

              ACCEPTED
                AND AGREED:

              [TRANSFEREE]

              ____________________________________

              (Name)

            	
              __________________________________________

              (Signature
                must conform to name of holder as specified 

              on
                the face of the warrant)

               

              ___________________________________________

              ___________________________________________

              (address)

               

               

              ______________________________________

              ______________________________________

              (address)Exhibit
      10.1

    

    

    Consulting
      Agreement

    

    Parties:

    

    This
      Consulting Agreement is entered into, effective as of the 15th day of October
      2007, by and between Nutrition 21, Inc., having an office at 4 Manhattanville
      Road, Purchase, NY 10577 (“N21”), and Peter C. Mann, Clinton Corners, NY 12514
      (“Consultant”).

    

    Description:

    

    Consultant
      agrees to provide consulting services related to N21’s business. 

    

    Personal
      Performance 

    

    The
      consulting services described herein will be performed exclusively by Consultant
      personally and cannot be assigned to others. Consultant represents that he
      has
      not been debarred by the US. Food and Drug Administration. Further, Consultant
      agrees to make every reasonable effort to accommodate N21’s scheduling
      needs.

    

    Consulting
      Period

    

    The
      consulting services will be provided for a period of six months effective as
      of
      October, 15, 2007, unless the services are earlier terminated by either party
      as
      set forth below. Unless earlier terminated as set forth below, at the end of
      the
      consulting period N21 may offer to extend the consulting period.

    

    Fee
      Structure and Billing:

    

    N21
      will
      compensate Consultant at a rate of $5,000 per month. Consultant will submit
      invoices for services monthly. No other compensation or benefits related to
      the
      consulting services will be provided by N21.

    

    Other
      Clients 

    

    N21
      acknowledges that other parties may use Consultant’s consulting services and it
      is understood and agreed that Consultant is not to disclose to N21 any
      confidential information of other parties.

    

    Confidentiality 

    

    (a)
      During the period of Consultant providing consulting services to N21, Consultant
      will acquire from N21 technical and commercial information which N21 considers
      to be proprietary and confidential (“Information”). Consultant agrees to keep
      confidential and not to use or divulge, except with the consent of N21, any
      such
      Information as well as all information developed by Consultant as a result
      of
      services provided for N21 under this Agreement (“Developed Information”). Upon
      termination of this Agreement or at any other time N21 requests, Consultant
      will
      transmit to N21 any written, printed, or other materials embodying such
      Information or Developed Information, including all copies and excerpts thereof.
      These obligations on Consultant’s part with respect to N21’s Information and
      Developed Information shall continue at all times during and beyond the
      Consulting Period. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)
      Notwithstanding the above, this Agreement shall not restrict Consultant’s use or
      disclosure of any Information which: 

    

    
      	
            	i.	
              is
                or later becomes publicly known through no fault of
                Consultant;

            

    

    

    
      	
            	ii.	
              was
                already known to Consultant at the time of its receipt from N21,
                as
                evidenced by Consultant's written records;
                or

            

    

    

    
      	
            	iii.	
              is
                lawfully and in good faith made available to Consultant by a third
                party
                without restriction and disclosure or
                use.

            

    

    

    (c)
      Specific information disclosed to Consultant by N21 or developed by Consultant
      in Consultant's consulting capacity to N21 shall not be deemed to be available
      to the public or in Consultant's prior possession merely because it is embraced
      by more general information available to the public or in Consultant's prior
      possession. 

    

    Inventions
      and Work Product 

    

    Any
      and
      all inventions, discoveries, designs, or other work product (including Developed
      Information), whether or not patentable or registrable as copyrighted material
      or trademarks, which Consultant develops, conceives and/or makes within the
      Consulting Period, and for a period of one year following termination of the
      Consulting Period, related to Consultant's work for N21 hereunder or based
      on
      Information received from N21 (“Intellectual Property”), shall be promptly and
      fully disclosed to N21 and shall be the sole and exclusive property of N21.
      Consultant will, at the request of N21, promptly execute any and all
      applications, assignments or other instruments which N21 shall deem necessary
      or
      useful in order to convey to N21 the sole and exclusive right, title and
      interest in and to said Intellectual Property and in order to procure, maintain
      and enforce patent protection, copyright protection or other forms of protection
      world-wide for said Intellectual Property. N21 shall bear the costs of preparing
      and filing all said instruments.

    

    Relationship
      of the Parties 

    

    While
      providing services for N21 in a consulting capacity, Consultant will be acting
      as an independent contractor and not as an employee of N21 and Consultant will
      not be entitled to any of the benefits, direct or indirect, of an employee
      of
      N21. From time to time Consultant may be granted authority to act as an agent
      of
      N21 insofar as required to fulfill Consultant's consulting responsibilities
      described herein.

    

    Termination
      

    

    Either
      party may terminate this Agreement on two (2) weeks prior written notice. Upon
      termination, N21 shall only be obligated to pay you for consulting rendered
      up
      to the date of termination.

    

    Survival

    

    All
      obligations which by their nature would continue beyond the termination of
      this
      Agreement, shall survive termination of this Agreement, including, but not
      limited to, confidentiality and assignment of inventions.

    

    Notices

    

    All
      notices or other communications required or permitted to be given hereunder
      shall be in writing. All such notices and other communications pursuant to
      the
      terms of this Agreement shall be deemed to have been duly given or delivered
      when delivered personally, or sent by telegram, facsimile with confirmation
      of
      receipt, courier service or by Certified Mail-return receipt requested, to
      the
      address first set forth above.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Law
      Governing 

    

    The
      validity, interpretation and performance of this Agreement shall be governed
      and
      construed in accordance with the laws of the state of New York. 

    

    Arbitration 

    

    All
      claims or controversies arising out of or relating to this Agreement shall
      be
      settled by arbitration. Either party may demand arbitration. Within thirty
      (30)
      days of a demand for arbitration, each party shall select one arbitrator and
      the
      arbitrators shall select a third arbitrator. The arbitration shall be in
      accordance with the rules of the American Arbitration Association and be held
      in
      New York, New York. The arbitration award may be entered in any court of
      competent jurisdiction and enforced as any other judgment, decree or order
      of
      such court. 

    

    Complete
      Agreement 

    

    This
      Agreement contains all the understandings and representations between us
      relating to the matters referred to herein, supersedes any arrangements
      previously entered into with respect thereto, and can be amended only in a
      writing duly executed on behalf of each party. 

    

    

    
      	
              Nutrition
                21, Inc.

            	 	
              Peter
                C. Mann

            	 
	 	 	 	 	 
	
              By:
                

            	/s/
              Paul Intlekofer	 	
              /s/
                Peter C. Mann

            	 
	 	 	 	 	 
	
              Name:

            	
              Paul
                Intlekofer

            	 	 	 
	 	 	 	 	 
	
              Title:

            	
              President
                & CEO

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