Document:

Exhibit
10.03

    

    SUPPLY
AGREEMENT

    

    THIS
SUPPLY AGREEMENT (this “Agreement”), made and effective the 29th day of
December, 2009 (the “Effective Date”), is by and between NUTRITION 21, INC.
(hereinafter referred to as “Nutrition 21”), a New York corporation, having a
place of business at 4 Manhattanville Road, Purchase, NY 10577 and NATURE’S
PRODUCTS, INC., a Florida corporation, having a place of business at 1301
Sawgrass Corporate Parkway, Sunrise, FL 33323.

     

    Nature’s
Products, Inc. and its affiliated entities, including, without limitation,
Iceland Health, Inc., a Florida corporation, are hereinafter collectively
referred to as “NPI.” Nutrition 21 and NPI are each individually sometimes
referred to as a “Party” and collectively as the “Parties.”

     

    Preliminary
Statement

     

    
      	
               
      

            	
              a.

            	
              Nutrition
      21 currently sells Chromium Picolinate, Chromium Histidinate, Chromium
      Picolinate-Biotin Blend, and Arginine-Silicate-Inositol Blend (the
      “Ingredients”). Nutrition 21 also uses the Ingredients in the manufacture
      of the end-products whose SKU’s are listed in Exhibit 1 (the “Listed
      SKUs”).

            

    

     

    
      	
               
      

            	
              b.

            	
              NPI
      wishes to purchase the Ingredients from Nutrition 21 on the terms
      hereinafter set forth.

            

    

     

    In
consideration of the foregoing and the mutual obligations undertaken in this
Agreement, and for other consideration, the value and sufficiency of which are
hereby acknowledged, the Parties agree as follows:

     

    
      	
               
      

            	
              1.

            	
              Sale
      and Purchase of Ingredients.

            

    

     

    
      	
               
      

            	
              a.

            	
              NPI
      agrees to purchase from N21 all of NPI’s requirements for the Ingredients,
      and Nutrition 21 agrees to sell NPI all of its requirements for such
      Ingredients.

            

    

     

    
      	
               
      

            	
              b.

            	
              Exhibit
      2 sets forth the prices to be charged by Nutrition 21 to NPI for
      Ingredients that are ordered through December 31, 2013 for use by NPI in
      the manufacture of any Listed SKUs (“Discounted
  Prices”).

            

    

     

    
      	
               
      

            	
              c.

            	
              Prices
      for Ingredients that are ordered by NPI for use by NPI from and after
      January 1, 2014 for use in manufacturing any Listed SKUs shall be computed
      on a most favored nation basis for customers who purchase similar volumes
      of Ingredients.

            

    

     

    
      	
               
      

            	
              d.

            	
              From
      and after the date of this Agreement, prices for Ingredients that are
      ordered for use by NPI for manufacturing any product other than a Listed
      SKU shall be computed on a most favored nation basis for customers who
      purchase similar volumes of
Ingredients.

            

    

     

    
      	
               
      

            	
              e.

            	
              Payment
      hereunder shall be due and payable no later than thirty (30) days
      following the date that Nutrition 21 has issued an invoice.  NPI
      shall pay all invoices by check.  Any amount not paid when due
      shall bear interest at the maximum lawful interest rate from the due date
      until paid in full.

            

    

     

    
      	
               
      

            	
              f.

            	
              All
      payments hereunder will be made in U.S.
dollars.

            

    

     

    
      	
               
      

            	
              g.

            	
              If
      at any time during the term of this Agreement, Nutrition 21 is not able or
      willing to supply any of the Ingredients to NPI (called a “Period of
      Unavailability”), Nutrition 21 hereby grants to NPI a non-exclusive
      license during the Period of Unavailability to purchase or have
      manufactured by a third party or to manufacture for its own account any
      such Ingredients for Licensed Uses, as such term is defined in a License
      Agreement of even date herewith.  After any Period of
      Unavailability ends, NPI shall again purchase all of its requirements for
      Ingredients from Nutrition 21. If the failure of Nutrition 21 to supply
      the Ingredients to NPI occurs at a time that Nutrition 21 is supplying the
      Ingredients to third parties or offering such Ingredients as available for
      purchase, Nutrition 21 shall indemnify NPI for the additional cost NPI
      incurs in obtaining the Ingredients from an alternate
    source.

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              2.

            	
              Audit
      Rights, etc.

            

    

     

    
      	
               
      

            	
              a.

            	
              Orders
      that NPI submits as being entitled to Discounted Prices shall be
      accompanied by such documentation as Nutrition 21 reasonably requires to
      confirm this entitlement. NPI shall from time to time give to Nutrition 21
      and its representatives access to NPI’s books and records to the extent
      necessary to confirm that prior purchases by NPI at Discounted Prices were
      in fact entitled to Discounted
Prices.

            

    

     

    
      	
               
      

            	
              3.

            	
              Uses
      Subject to Patent License.

            

    

     

    
      	
               
      

            	
              a.

            	
              Nutrition
      21 owns patents on the composition and/or the use of the Ingredients.
      Concurrently herewith, Nutrition 21 is by separate instrument granting
      patent licenses to use the Ingredients in the specific manner set forth in
      the patent licenses. Nothing in this Agreement shall be deemed to enlarge
      or expand the scope of the patent licenses, and NPI shall use the
      Ingredients only to the extent consistent with the Patents and the patent
      licenses.

            

    

     

    
      	
               
      

            	
              4.

            	
              The
      term of this Agreement shall be for the period commencing on the date of
      this Agreement (the “Commencement Date”) and ending on August 21,
      2022.

            

    

     

    
      	
               
      

            	
              5.

            	
              Orders
      and Forecasts

            

    

     

    
      	
               
      

            	
              a.

            	
              Orders.

            

    

     

    
      	
               
      

            	
              i.

            	
              NPI
      will submit electronic purchase orders for the purchase of Ingredients in
      accordance with the lead-time requirements and capacity limits set forth
      in Section 4.1(b) below and Exhibit B hereto (each such purchase order, an
      “Order”).

            

    

     

    
      	
               
      

            	
              ii.

            	
              Ingredients
      purchased in connection with any Order will be delivered in accordance
      with the schedule, and subject to the daily capacity and other
      limitations, set forth in Exhibit B.  Orders received after 4:30
      pm shall be deemed received by Nutrition 21 as of 8:00 am on the Business
      Day following the day of actual
receipt.

            

    

     

    
      	
               
      

            	
              iii.

            	
              Delivery
      will be effected F.O.B. Nutrition 21’s US point of
    shipment.

            

    

     

    
      	
               
      

            	
              iv.

            	
              While
      Ingredients are in Nutrition 21’s possession, Nutrition 21 will bear the
      risk of loss only to the extent of the cost of manufacture of any
      Ingredients actually lost or damaged.  Upon transfer of the
      Ingredients to a common carrier at Nutrition 21’s US point of shipment,
      title and risk of loss with respect to the Ingredients shall transfer to
      NPI.

            

    

     

    
      	
               
      

            	
              b.

            	
              Forecasts.

            

    

     

    
      	
               
      

            	
              i.

            	
              NPI
      will provide quarterly to Nutrition 21 forecasted purchases for the next
      twelve-months and will update the forecast quarterly one week prior to the
      start of each succeeding quarter.

            

    

     

    
      	
               
      

            	
              6.

            	
              Nutrition
      21 Product Warranty and Limitation of
Liability.

            

    

     

    
      	
               
      

            	
              a.

            	
              Nutrition
      21 warrants that the Ingredients supplied by it under this Agreement shall
      meet Nutrition 21’s specifications (“Specifications”).  If any
      Ingredient supplied under this Agreement proves to be a Defective
      Ingredient and the defect is attributable to Nutrition 21, Nutrition 21’s
      obligation with respect to the Defective Ingredient shall be, at NPI’s
      option, to replace such Ingredient or to issue a credit or refund to NPI
      in the amount of the price received by Nutrition 21 from NPI for the
      Ingredients (plus any documented commercially reasonable out-of-pocket
      freight charges actually incurred by NPI in connection with replacing and
      returning such Ingredient).  Nutrition 21 shall have no
      liability whatsoever for any defects unless notified within a commercially
      reasonable period by NPI in writing identifying any such
      defects.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              b.

            	
              “Defective
      Ingredients” means Ingredients that materially differ from agreed to
      Specifications.

            

    

     

    
      	
               
      

            	
              c.

            	
              All
      claims under this warranty must be reported in writing to Nutrition 21 as
      promptly as practicable after discovery.  Nutrition 21 will
      provide NPI with a return materials authorization (RMA) number and
      shipping instructions within three days after receipt of NPI’s report of
      the claim, and NPI must ship the Ingredients claimed to be defective to
      Nutrition 21 within thirty (30) days after NPI’s receipt of the RMA number
      and shipping instructions.

            

    

     

    
      	
               
      

            	
              7.

            	
              Force
      Majeure

            

    

     

    
      	
               
      

            	
              a.

            	
              Neither
      Party shall be liable for any failure of or delay in performance of its
      obligations under this Agreement to the extent such failure or delay is
      due to circumstances beyond its control, including acts of God, acts of a
      public enemy, fires, floods, wars, civil disturbances, sabotage,
      terrorism, accidents, insurrections, blockades, embargoes, storms,
      explosions, damage to its plants, labor disputes (whether or not the
      employees’ demands are reasonable and within the Party’s power to
      satisfy), acts of any governmental body (whether civil or military,
      foreign or domestic), all perils of the seas and other waters, failure or
      delay of third parties or governmental bodies from whom either Party is
      obtaining or must obtain rights of way, easements, franchises, permits,
      machinery, materials, equipment, transportation, independent contracting,
      or supplies to grant or deliver the same, or inability to obtain labor,
      materials, equipment, or transportation (collectively referred to herein
      as “Force Majeure Event”).

            

    

     

    
      	
               
      

            	
              b.

            	
              Each
      Party shall provide written notice to the other within thirty (30) days
      after a Force Majeure Event which has resulted in such Party’s failure of
      or delay in performance of its obligations under this
      Agreement.

            

    

     

    
      	
               
      

            	
              c.

            	
              Each
      Party shall use its reasonable efforts (without being obligated to incur
      any additional expenses) to minimize the duration and consequences of any
      failure of or delay in performance resulting from a Force Majeure
      Event.

            

    

     

    
      	
               
      

            	
              8.

            	
              Use
      of Trademarks.  Except as provided herein or in Asset Purchase
      Agreements among Nutrition 21, NPI and other parties, NPI shall not use
      any trademark (including Nutrition 21’s logo) owned and or controlled by
      Nutrition 21.

            

    

     

    
      	
               
      

            	
              9.

            	
              Miscellaneous

            

    

     

    
      	
               
      

            	
              a.

            	
              Notices.  All
      notices and other communications which may be required or are desired to
      be given hereunder shall be in
writing.

            

    

     

    
      	
               
      

            	
              b.

            	
              No
      Waivers of Rights, Etc.  No failure or delay on the part of any
      Party in exercising any right, power or privilege hereunder shall operate
      as a waiver thereof, nor shall any single or partial exercise thereof
      preclude any other or further exercise thereof or the exercise of any
      other right, power or privilege.

            

    

     

    
      	
               
      

            	
              c.

            	
              Amendments.  Any
      provision of this Agreement may be amended or waived if, but only if, such
      amendment or waiver is in writing and is signed by Nutrition 21 and
      NPI.

            

    

     

    
      	
               
      

            	
              d.

            	
              Assignments
      and Successors.

            

    

     

    
      	
               
      

            	
              i.

            	
              Nutrition
      21 may assign this Agreement or any of its rights or delegate any of its
      obligations hereunder to an affiliate or to any person or entity who is
      acquiring all or substantially all of its assets or with whom Nutrition 21
      may merge or enter into other business combination. Nutrition 21 shall not
      have the right to assign or sublicense any of its rights or to delegate
      any of its obligations hereunder to any other person or entity without the
      consent of NPI, which consent shall not be unreasonably withheld or
      delayed.

            

    

     

    
      	
               
      

            	
              ii.

            	
              The
      foregoing in no way shall limit Nutrition 21’s right to subcontract any of
      its obligations hereunder.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              iii.

            	
              NPI
      shall not have the right to assign or sublicense any of its rights or to
      delegate any of its obligations hereunder to any other person or Person
      without the consent of Nutrition
21.

            

    

     

    
      	
               
      

            	
              e.

            	
              No
      Third-Party Beneficiaries.  This Agreement does not create, and
      shall not be construed as creating, any rights enforceable by any person
      not a party to this Agreement.

            

    

     

    
      	
               
      

            	
              f.

            	
              No
      Joint Venture.  The Parties hereto are independent
      contractors.  The Parties hereto are not partners, joint
      venturers, or agents of one another and nothing in this Agreement or in
      the performance thereof shall be construed to place them in the
      relationship of partners or joint venturers or to make one an agent of the
      other.  Neither Party hereto shall have the power to obligate or
      to bind the other in any manner or for any
  purpose.

            

    

     

    
      	
               
      

            	
              g.

            	
              Entire
      Agreement.  This Agreement constitutes the entire agreement
      among the Parties hereto with respect to the subject matter hereof and
      supersedes all prior agreements and undertakings, both written and oral,
      relating to the subject matter
hereof.

            

    

     

    
      	
               
      

            	
              h.

            	
              Governing
      Law.  This Agreement shall be governed by, and construed in
      accordance with, the laws of the State of Florida without regard to
      conflict of law principles.

            

    

     

    
      	
               
      

            	
              i.

            	
              Consent
      to Jurisdiction.  Nutrition 21 and NPI hereby irrevocably submit
      to the jurisdiction of any court of the State of Florida sitting in
      Broward County and any Federal court sitting in Broward County, Florida in
      respect of any suit brought by Nutrition 21, and sitting in Westchester
      County New York in respect of any suit brought by NPI or its affiliates,
      and any appellate court from any thereof in any action or proceeding
      arising out of or relating to this Agreement, and Nutrition 21 and NPI
      hereby irrevocably agree that all claims in respect of such action or
      proceeding may be heard and determined in such
  court.

            

    

     

    
      	
               
      

            	
              j.

            	
              Counterparts.  This
      Agreement may be executed in counterparts, and by the different Parties
      hereto in separate counterparts, each of which when executed shall be
      deemed to be an original but all of which taken together shall constitute
      one and the same agreement.

            

    

     

    IN
WITNESS WHEREOF, the Parties hereto have duly caused the execution of this
Agreement by their duly authorized officers, as of the day and year first above
written.

     

    
      
        	
                NUTRITION
      21, INC.

              
	 
      	 
      
	
                By:      

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              
	 
      	 
      
	
                NATURE’S
      PRODUCTS, INC.

              
	 
      	 
      
	
                By:
            

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Exhibit 1
Listed SKU’s

    

    
      
        	
                Item Num

              	 
      	
                Description

              
	
                10601769731333

              	 
      	
                IH
      Appetite Control (12/Case)

              
	
                050428858431

              	 
      	
                CVS  100ct  200mcg  (24/Case)

              
	
                050428095829

              	 
      	
                CVS  100ct  400mcg  (24/Case)

              
	
                050428095836

              	 
      	
                CVS  250ct  200mcg  (24/Case)

              
	
                10041520871388

              	 
      	
                CareOne
      (Ahold)  60ct  500mcg  (24/Case)

              
	
                10041520871371

              	 
      	
                CareOne
      (Ahold) 300ct  200mcg  (24/Case)

              
	
                10601769736253

              	 
      	
                Club:
      Chromax AMF 90ct  (12/Case)

              
	
                10601769734266

              	 
      	
                Club:
      Chromax Ultra 250ct  (12/Case)

              
	
                10601769995902

              	 
      	
                DE
      Diachrome  60ct  (12/Case)

              
	
                10601769737403

              	 
      	
                DE
      Diachrome 30ct (12/Case)

              
	
                10601769737502

              	 
      	
                DE
      NTG - Tea 10ct sticks (12/Case)

              
	
                10601769737205

              	 
      	
                DE
      NTG Multi Vitamin - Citrus  (12/Case)

              
	
                10041163438368

              	 
      	
                Equaline
      Chromium 200mcg 100ct (24/Case)

              
	
                10041163438375

              	 
      	
                Equaline
      Chromium 400mcg 100ct (24/Case)

              
	
                10601769736154

              	 
      	
                IH
      Advanced MF 45ct (12/Case)

              
	
                10601769731326

              	 
      	
                IH
      Chromax 1000mcg 250ct  (12/Case)

              
	
                20601769731323

              	 
      	
                IH
      Chromax 1000mcg 250ct Sams Display

              
	
                10601769734068

              	 
      	
                IH
      Chromax Extra Strength 75ct (12/Case)

              
	
                10601769734167

              	 
      	
                IH
      Chromax Ultra Strength 60ct (12/Case)

              
	
                10601769996015

              	 
      	
                International
      Diachrome  60ct  (12/Case)

              
	
                10011822009314

              	 
      	
                Pharmassure
      1000mcg CP 100ct  (24/Case)

              
	
                10011822375419

              	 
      	
                Rite
      Aid  100ct  400mcg  (24/Case)

              
	
                10011822880531

              	 
      	
                Rite
      Aid  300ct  200mcg  (24/Case)

              
	
                10048107049314

              	 
      	
                Rite
      Aid Pharmass 100ct 200mcg (24/Case)

              
	
                10011822375402

              	 
      	
                Rite
      Aid Pharmass 100ct 400mcg (24/Case)

              
	
                10311917099078

              	 
      	
                Walgreen
      CP FN 200mg 100ct (24/Case)

              
	
                10311917099092

              	 
      	
                Walgreen
      CP FN 200mg 250ct (24/Case)

              
	
                10311917099085

              	 
      	
                Walgreen
      CP FN 400mg 100ct (24/Case)

              
	
                10311917101696

              	 
      	
                Walgreen
      FN Advanced JR 120ct (24/Case)

              
	
                10311917107193

              	 
      	
                Walgreen
      FN CP 1000mcg 100ct (24/Case)

              
	
                10311917101689

              	 
      	
                Walgreen
      FN Chol Relief 120ct (24/Case)

              
	
                10311917107209

              	 
      	
                Walgreen
      FN Dia Health MV 30ct (24/Case)

              
	
                10681131928622

              	 
      	
                Walmart  CP
      100ct  800mcg  (24/Case)

              
	
                10681131312681

              	
                  

              	
                Walmart
      100ct
1000mcg  (24/Case)

              

      

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    Exhibit 2
Prices, etc. for Listed SKUs

    

    Chromium
Picolinate  [**confidential material is omitted and is filed
separately with the Securities and Exchange Commission**]

    

    Chromium
Histidinate  [**confidential material is omitted and is filed
separately with the Securities and Exchange Commission**]

    

    Chromium
Picolinate-Biotin Blend  [**confidential material is omitted and is
filed separately with the Securities and Exchange Commission**]

    

    Arginine-Silicate-Inositol
Blend  [**confidential material is omitted and is filed separately
with the Securities and Exchange Commission**]

    

    Lead-time
Requirements

    

    Chromium
Picolinate - 10 working days

    Chromium
Histidinate - 20 working days

    Chromium
Picolinate-Biotin blend - 20 working days

    Arginine
Silicate Inositol blend - 20 working days

    

    Capacity
Limits

    

    Not
Applicable

    

    Allowed
Time Between Order and Shipping

    

    For
materials in stock - five business daysExhibit
10.04

    PATENT
LICENSE

     

    THIS
PATENT LICENSE (this “Agreement”), made and effective as of the 29th day of
December, 2009 (the “Effective Date”), is by and between NUTRITION 21, INC.
(hereinafter referred to as “Nutrition 21”), a New York corporation having a
place of business at 4 Manhattanville Road, Purchase, NY 10577, as Licensor, and
NATURE’S PRODUCTS, INC., a Florida corporation, having a place of business at
1301 Sawgrass Corporate Parkway, Sunrise, FL 33323, as Licensee.

     

    Nature’s
Products, Inc. and its affiliated entities, including, without limitation,
Iceland Health, Inc., a Florida corporation, are hereinafter collectively
referred to as “NPI.” Nutrition 21 and NPI are each individually sometimes
referred to as a “Party” and collectively as the “Parties.”

     

    Preliminary
Statement

     

    
      	
               
      

            	
              a.

            	
              Nutrition
      21 currently sells among other things Chromium Picolinate, Chromium
      Histidinate, Chromium Picolinate-Biotin Blend, and
      Arginine-Silicate-Inositol Blend (the “Ingredients”). Nutrition 21 also
      uses the Ingredients in the manufacture of the end-products whose SKU’s
      are listed in Exhibit 1 (the “Listed
SKUs).

            

    

     

    
      	
               
      

            	
              b.

            	
              "Patents"
      means the patents and pending patent applications that are listed in
      Exhibit 2.

            

    

     

    
      	
               
      

            	
              c.

            	
              The
      Patents cover the composition and/or use of the Ingredients and/or
      end-products incorporating the
Ingredients.

            

    

     

    
      	
               
      

            	
              d.

            	
              NPI
      has by a Supply Agreement of even date herewith agreed to purchase
      Ingredients from Nutrition 21 on the terms set forth in the Supply
      Agreement. The Supply Agreement among other things provides for Discounted
      Prices (as defined) on the terms and conditions therein set
      forth;

            

    

     

    
      	
               
      

            	
              e.

            	
              Nutrition
      21 wishes to grant to NPI patent licenses to use Ingredients purchased
      from Nutrition 21 under the Supply Agreement for the following purposes
      (the “Licensed Uses”):

            

    

     

    
      	
               
      

            	
              i.

            	
              the
      fabrication, finishing and packaging by NPI of nutritional supplement
      end-products that are not to be further fabricated or packaged by others;
      and

            

    

     

    
      	
               
      

            	
              ii.

            	
              the
      sale, marketing and distribution of such end-products either (i) directly
      to end users by direct response or other means or (ii) to retailers or
      wholesale sellers for ultimate sale to end
  users.

            

    

     

    
      	
               
      

            	
              f.

            	
              Without
      limiting the generality of the foregoing, the following are not Licensed
      Uses:

            

    

     

    
      	
               
      

            	
              i.

            	
              the
      resale or other disposition of the Ingredients to third parties for
      further fabrication or packaging;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              ii.

            	
              the
      sale or marketing or distribution of products other than (i) directly to
      end users by direct response or other means or (ii) to retailers or
      wholesale sellers for ultimate sale to end
  users.

            

    

     

    In
consideration of the foregoing and the mutual obligations undertaken in this
Agreement, and for other consideration, the value and sufficiency of which are
hereby acknowledged, the Parties agree as follows:

     

    
      	
            	
              1.

            	
              Patent
      Licenses.

            

    

     

    
      	
               
      

            	
              a.

            	
              Nutrition
      21 grants to NPI perpetual, fully paid-up non-exclusive and world-wide
      rights and licenses under the Patents to use the Ingredients purchased
      from Nutrition 21 at Discounted Prices under the Supply Agreement for
      Licensed Uses in the Listed SKUs and only for Licensed Uses in the Listed
      SKUs.

            

    

     

    
      	
               
      

            	
              b.

            	
              Nutrition
      21 grants to NPI perpetual, fully paid-up non-exclusive and world-wide
      rights and licenses under the Patents to use the Ingredients purchased
      from Nutrition 21 under the Supply Agreement on most favored nation
      pricing for Licensed Uses in non-Listed SKUs as well as in Listed
      SKUs.

            

    

     

    
      	
               
      

            	
              c.

            	
              If
      at any time Nutrition 21 is not able to supply any of the Ingredients as
      provided for in the Supply Agreement (called a “Period of
      Unavailability”), Nutrition 21 hereby grants under Patents owned by
      Nutrition 21 to NPI a non-exclusive license during the Period of
      Unavailability to make or have made any such Ingredients for Licensed
      Uses. After any Period of Unavailability ends, NPI shall again
      purchase all of its requirements for Ingredients from Nutrition
      21.

            

    

     

    
      	
               
      

            	
              d.

            	
              “Other
      Patent Licenses” as used herein means the license (the “USDA License”)
      dated December 6, 2006 by US Department of Agriculture (USDA) to Nutrition
      21, and the license (the “McLeod License”) dated April 23, 2005 by McLeod
      Discoveries LLC to Nutrition 21.

            

    

     

    
      	
               
      

            	
              e.

            	
              Nutrition
      21 hereby irrevocably appoints NPI as the agent of Nutrition 21 under the
      Other Patent Licenses to have Ingredients made on behalf of Nutrition 21
      and at Nutrition 21’s expense during Periods of Unavailability for
      delivery to NPI during such Periods for Licensed Uses.   At
      the request of NPI, Nutrition 21 shall with the approval of USDA appoint
      NPI as sublicensee under the USDA License for Licensed Uses for Periods of
      Unavailability (USDA may not unreasonably withhold its approval to such
      sublicense). At the request of NPI, Nutrition 21 shall sublicense the
      McLeod License to NPI for Licensed Uses for Periods of
      Unavailability.

            

    

     

    
      	
               
      

            	
              f.

            	
              NPI
      shall from time to time on reasonable notice give access to Nutrition 21
      and its representatives to NPI’s product list of products sold by it that
      utilize the Ingredients to confirm that the licenses are used only as
      contemplated in this Agreement.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              2.

            	
              All
      licenses granted to NPI are, and will otherwise be deemed to be, for
      purposes of Section 365(n) of the US Bankruptcy Code (the “Code”) and any
      similar laws in any other country, licenses of rights to “intellectual
      property” as defined under Section 101 of the Code.  NPI will
      retain and may fully exercise all of its protections, rights and elections
      under the Code and any similar laws in any other
  country.

            

    

     

    
      	
            	
              3.

            	
              The
      term of this Agreement and of the licenses hereunder shall be for the
      period commencing on the date of this Agreement and ending on August 21,
      2022.

            

    

     

    
      	
            	
              4.

            	
              Miscellaneous

            

    

     

    
      	
               
      

            	
              a.

            	
              Notices.  All
      notices and other communications which may be required or are desired to
      be given hereunder shall be in writing.

            

    

     

    
      	
               
      

            	
              b.

            	
              No
      Waivers of Rights, Etc.  No failure or delay on the part of any
      Party in exercising any right, power or privilege hereunder shall operate
      as a waiver thereof, nor shall any single or partial exercise thereof
      preclude any other or further exercise thereof or the exercise of any
      other right, power or
privilege.  

            

    

     

    
      	
               
      

            	
              c.

            	
              Amendments.  Any
      provision of this Agreement may be amended or waived if, but only if, such
      amendment or waiver is in writing and is signed by Nutrition 21 and
      NPI.

            

    

     

    
      	
               
      

            	
              d.

            	
              Assignments
      and Successors.

            

    

     

    
      	
               
      

            	
              i.

            	
              Nutrition
      21 may assign this Agreement or any of its rights or delegate any of its
      obligations hereunder to an affiliate or to any person or entity who is
      acquiring all or substantially all of its assets or with whom Nutrition 21
      may merge or enter into other business combination. Nutrition 21 shall not
      have the right to assign or sublicense any of its rights or to delegate
      any of its obligations hereunder to any other person or entity without the
      consent of NPI, which consent shall not be unreasonably withheld or
      delayed.

            

    

     

    
      	
               
      

            	
              ii.

            	
              The
      foregoing in no way shall limit Nutrition 21’s right to subcontract any of
      its obligations hereunder.

            

    

     

    
      	
               
      

            	
              iii.

            	
              NPI
      shall not have the right to assign or sublicense any of its rights or to
      delegate any of its obligations hereunder to any other person or Person
      without the consent of Nutrition 21, which consent shall not be
      unreasonably withheld.

            

    

     

    
      	
               
      

            	
              e.

            	
              No
      Third-Party Beneficiaries.  This Agreement does not create, and
      shall not be construed as creating, any rights enforceable by any person
      not a party to this Agreement. 

            

    

     

    
      	
               
      

            	
              f.

            	
              No
      Joint Venture.  The Parties hereto are independent
      contractors.  The Parties hereto are not partners, joint
      venturers, or agents of one another and nothing in this Agreement or in
      the performance thereof shall be construed to place them in the
      relationship of partners or joint venturers or to make one an agent of the
      other.  Neither Party hereto shall have the power to obligate or
      to bind the other in any manner or for any
  purpose.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              g.

            	
              Entire
      Agreement.  This Agreement constitutes the entire agreement
      among the Parties hereto with respect to the subject matter hereof and
      supersedes all prior agreements and undertakings, both written and oral,
      relating to the subject matter
hereof.

            

    

     

    
      	
               
      

            	
              h.

            	
              Governing
      Law.  This Agreement shall be governed by, and construed in
      accordance with, the laws of the State of Florida without regard to
      conflict of law principles.

            

    

     

    
      	
               
      

            	
              i.

            	
              Consent
      to Jurisdiction.  Nutrition 21 and NPI hereby irrevocably submit
      to the jurisdiction of any court of the State of Florida sitting in
      Broward County and any Federal court sitting in Broward County, Florida in
      respect of any suit brought by Nutrition 21, and sitting in Westchester
      County New York in respect of any suit brought by NPI or its affiliates,
      and any appellate court from any thereof in any action or proceeding
      arising out of or relating to this Agreement, and Nutrition 21 and NPI
      hereby irrevocably agree that all claims in respect of such action or
      proceeding may be heard and determined in such
      court.  

            

    

     

    
      	
               
      

            	
              j.

            	
              Counterparts.  This
      Agreement may be executed in counterparts, and by the different Parties
      hereto in separate counterparts, each of which when executed shall be
      deemed to be an original but all of which taken together shall constitute
      one and the same agreement.

            

    

     

    IN
WITNESS WHEREOF, the Parties hereto have duly caused the execution of this
Agreement by their duly authorized officers, as of the day and year first above
written.

     

    NUTRITION
21, INC.

     

    By:

    Name:

    Title:

     

    NATURE’S
PRODUCTS, INC.

     

    By:

    Name:

    Title:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Exhibit 1
Listed SKU’s

    

    
      	
              Item
      Num

            	 
      	
              Description

            
	
              10601769731333

            	 
      	
              IH
      Appetite Control (12/Case)

            
	
              050428858431

            	 
      	
              CVS  100ct  200mcg  (24/Case)

            
	
              050428095829

            	 
      	
              CVS  100ct  400mcg  (24/Case)

            
	
              050428095836

            	 
      	
              CVS  250ct  200mcg  (24/Case)

            
	
              10041520871388

            	 
      	
              CareOne
      (Ahold)  60ct  500mcg  (24/Case)

            
	
              10041520871371

            	 
      	
              CareOne
      (Ahold) 300ct  200mcg  (24/Case)

            
	
              10601769736253

            	 
      	
              Club:
      Chromax AMF 90ct  (12/Case)

            
	
              10601769734266

            	 
      	
              Club:
      Chromax Ultra 250ct  (12/Case)

            
	
              10601769995902

            	 
      	
              DE
      Diachrome  60ct  (12/Case)

            
	
              10601769737403

            	 
      	
              DE
      Diachrome 30ct (12/Case)

            
	
              10601769737502

            	 
      	
              DE
      NTG - Tea 10ct sticks (12/Case)

            
	
              10601769737205

            	 
      	
              DE
      NTG Multi Vitamin - Citrus  (12/Case)

            
	
              10041163438368

            	 
      	
              Equaline
      Chromium 200mcg 100ct (24/Case)

            
	
              10041163438375

            	 
      	
              Equaline
      Chromium 400mcg 100ct (24/Case)

            
	
              10601769736154

            	 
      	
              IH
      Advanced MF 45ct (12/Case)

            
	
              10601769731326

            	 
      	
              IH
      Chromax 1000mcg 250ct  (12/Case)

            
	
              20601769731323

            	 
      	
              IH
      Chromax 1000mcg 250ct Sams Display

            
	
              10601769734068

            	 
      	
              IH
      Chromax Extra Strength 75ct (12/Case)

            
	
              10601769734167

            	 
      	
              IH
      Chromax Ultra Strength 60ct (12/Case)

            
	
              10601769996015

            	 
      	
              International
      Diachrome  60ct  (12/Case)

            
	
              10011822009314

            	 
      	
              Pharmassure
      1000mcg CP 100ct  (24/Case)

            
	
              10011822375419

            	 
      	
              Rite
      Aid  100ct  400mcg  (24/Case)

            
	
              10011822880531

            	 
      	
              Rite
      Aid  300ct  200mcg  (24/Case)

            
	
              10048107049314

            	 
      	
              Rite
      Aid Pharmass 100ct 200mcg (24/Case)

            
	
              10011822375402

            	 
      	
              Rite
      Aid Pharmass 100ct 400mcg (24/Case)

            
	
              10311917099078

            	 
      	
              Walgreen
      CP FN 200mg 100ct (24/Case)

            
	
              10311917099092

            	 
      	
              Walgreen
      CP FN 200mg 250ct (24/Case)

            
	
              10311917099085

            	 
      	
              Walgreen
      CP FN 400mg 100ct (24/Case)

            
	
              10311917101696

            	 
      	
              Walgreen
      FN Advanced JR 120ct (24/Case)

            
	
              10311917107193

            	 
      	
              Walgreen
      FN CP 1000mcg 100ct (24/Case)

            
	
              10311917101689

            	 
      	
              Walgreen
      FN Chol Relief 120ct (24/Case)

            
	
              10311917107209

            	 
      	
              Walgreen
      FN Dia Health MV 30ct (24/Case)

            
	
              10681131928622

            	 
      	
              Walmart  CP
      100ct  800mcg  (24/Case)

            
	
              10681131312681

            	 
      	
              Walmart
      100ct 1000mcg  (24/Case)

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Exhibit
2

    

    
      
        
          
            
              
                	
                        Description

                      
	
                        Patents
      Owned by Nutrition 21

                           

                        United
      States Patents and Patent Expiration Dates

                           

                        Arginine-Silicate-Inositol

                        5,707,970  2/12/17

                        6,156,735  2/12/17

                        6,344,444  2/12/17

                        7,576,132  8/22/23

                           

                        Chromium
      Picolinate

                        6,329,361  12/11/18

                           

                        Chromium
      Picolinate + Biotin

                        RE
      39,480  8/8/17

                           

                        Chromium
      Histidinate Patent Applications:

                           

                        Chromium
      histidinate uses: PCT/US2008/052352 filed 29 Jan 2008
      (pending)

                           

                        Chromium
      histidinate + chromium picolinate composition and uses: PCT/US2008/056545
      filed 11 Mar 2008 (pending)

                      
	
                          
      

                        Foreign
      equivalents of the above-identified Patents

                      
	
                        Patents
      Licensed to Nutrition 21

                           

                        United
      States Patents

                           

                        6,034,125
      licensed by McLeod

                           

                        6,689,383
      licensed by
USDA

                      

              

            

          

        

      

    

     

    
      
        
        

      

      
        1

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