Exhibit 10.1

PLAN SUPPORT AGREEMENT

This PLAN SUPPORT AGREEMENT is made and entered into as of August 26, 2011 (this
“Agreement”) by and among NUTRITION 21, INC. (“N21 INC.”), a New York
corporation, NUTRITION 21, LLC (“N21 LLC”), a New York limited liability
company, ICELAND HEALTH, LLC (“Iceland Health”), a New York limited liability
company, HEART’S CONTENT, INC. (“Heart’s Content” and, together with N21 INC.,
N21 LLC and Iceland Health, the “Company”), a New York corporation, and the
SERIES J SHAREHOLDERS (as defined below) signatory hereto (the “SUPPORTING
SHAREHOLDERS”).  The Company and the SERIES J SHAREHOLDERS and any subsequent
person or entity that becomes a party hereto in accordance with the terms hereof
are referred herein as the “Parties” and individually as a “Party.”

W H E R E A S

A.           On September 10, 2007, the Company sold 17,750 shares of Series J
8% Convertible Preferred Stock (the “Series J Preferred Stock”) to certain
parties (the “Series J Shareholders”) pursuant to Securities Purchase Agreement,
dated as of September 10, 2007, as reflected in the Certificate of Amendment of
the Certificate of Certificate of Incorporation of Nutrition 21 (the
“Certificate of Incorporation”) in exchange for $17,750,000.

B.           Pursuant to the Certificate of Incorporation, the Company, subject
to restrictions set forth in the Certificate of Incorporation and New York law
was to redeem the Series J Preferred Stock on September 10, 2011.

C.           Nutrition 21 is unable to redeem the Series J Preferred Stock.

D.           Prior to the date hereof, representatives of the Company and
certain of the Series J Shareholders have engaged in arm’s length, good faith
negotiations regarding a financial restructuring of the Company and satisfaction
of the Company’s indebtedness to the Company’s creditors and the cancellation of
the Company’s Equity Securities (as defined below), including the Series J
Shareholders, pursuant to the terms and conditions set forth in the Plan (as
defined below) and this Agreement (the “Restructuring”).

E.           The Company and the Supporting Shareholders have agreed to
implement the Restructuring of the Company via a sale of substantially all of
the Company’s assets pursuant to Bankruptcy Code (as defined below) section 363
(the “Sale”) and to distribute the proceeds thereof and any other remaining
assets of the Company pursuant to the terms and conditions set forth in the Plan
consistent with the terms hereof.

F.           In the exercise of its business judgment and consistent with its
fiduciary duties, the Company has decided to commence voluntary reorganization
proceedings (collectively, the “Chapter 11 Case”) under chapter 11 of title 11
of the United States Code (the “Bankruptcy Code”) in the United States
Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”)
to effect the Restructuring through the Plan that implements and is otherwise
consistent with the terms and conditions set forth in the Plan and this
Agreement.

 
 

--------------------------------------------------------------------------------

 
 
G.           This Agreement and the Plan set forth the agreement among the
Parties concerning their commitment, subject to the terms and conditions hereof
and thereof, to implement the Restructuring.

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, each Party, intending to be legally bound, hereby
agrees as follows:
 
 
1.
Definitions.  The following terms shall have the following definitions:

“Auction” means the auction for the Sale of the Assets pursuant to any order of
the Bankruptcy Court.

“Ballot” means the ballot distributed with the Plan for voting on the Plan.

“Business Day” means any day other than Saturday, Sunday and any day that is a
legal holiday or a day on which banking institutions in New York, New York are
authorized by law or other governmental action to close.

“Claim” means a claim, as defined in Bankruptcy Code Section 101(5), against the
Company.

“Commencement Date” means the date upon which voluntary petitions are filed by
the Company to commence the Chapter 11 Case.

“Disclosure Statement” means the disclosure statement in respect of the Plan,
which shall be in form and substance reasonably satisfactory to the Supporting
Shareholders.

“Equity Security” means an equity security, as defined in Bankruptcy Code
Section 101(16), issued by the Company.

“KEIP” means that certain key employee incentive plan the terms of which are set
forth on Exhibit B hereto.

“Disputed Claims” means any claims against the Company filed on account of those
certain causes of action or potential causes of action set forth on Schedule 1
hereto.

“Material Adverse Change” means any change, effect, event, occurrence,
development, circumstance or state of facts occurs which has had or would
reasonably be expected to (i) have a materially adverse effect on the Company’s
ability to perform its obligations under this Agreement and the Plan or (ii)
have a materially adverse effect on or prevent or materially delay the
consummation of the transactions contemplated by this Agreement.  For the
avoidance of doubt, (i) the filing of voluntary petitions commencing the Chapter
11 Case contemplated by this Agreement or (ii) the Sale being authorized for an
amount less than $17,500,000 shall not constitute a Material Adverse Change.

 
-2-

--------------------------------------------------------------------------------

 
 
“Person” means an individual, a partnership, a joint venture, a limited
liability company, a corporation, a trust, an unincorporated organization, a
group or any legal entity or association.

“Plan” means a plan of reorganization in respect of the Chapter 11 Case the
terms of which are substantially consistent with the Plan Term Sheet.

“Plan Term Sheet” means the material terms of a plan of reorganization in
respect of the Chapter 11 Case set forth on Exhibit A hereto.

“Plan Effective Date” means the date the Plan shall be substantially
consummated.

“Sale Procedures Motion” means a motion, in form and substance reasonably
acceptable to counsel for the Supporting Shareholders, to be filed with the
Bankruptcy Court seeking relief on shortened notice to conduct the Sale and for
approval of sale procedures in connection therewith.

“Series J Shareholder Interests” means the Equity Securities held by the Series
J Shareholders in Nutrition 21 solely on account of the Series J Preferred
Stock.

“Severance Claims” means the contingent claims of the Severance Recipients on
account of severance obligations solely in the amounts set forth on Exhibit C
hereto.

2.           Acknowledgment.  The Company acknowledges that (i) the Series J
Preferred Stock constitutes Equity Securities validly issued and authorized by
the Company and has no objection, dispute, disallowance, defense, counterclaim,
avoidance, or offset of any kind or nature with respect to the Series J
Preferred Stock and (ii) the Stated Value (as defined in the Certificate of
Incorporation), plus any accrued and unpaid dividends thereon as provided for in
the Certificate of Incorporation will equal at least $17,750,000 as of the
Commencement Date (the “Stated Value Amount”).

3.           Delivery of Budgets.

 
A.
Attached hereto as Exhibit C is a pro forma rolling thirteen week cash flow
budget for the Company on a consolidated basis (the “Initial Cash Flow
Budget”).  On or before each Friday beginning with September 2, 2011, the
Company shall deliver an updated pro forma thirteen week rolling cash flow
budget (each such budget, together with the Initial Cash Flow Budget, a “Cash
Flow Budget”) shall (i) be updated to reflect the Company and its subsidiaries’
current forecasts and results, and (ii) commencing with September 9, 2011 a
reconciliation of the actual results for the immediately preceding week period
to the projected results for the immediately proceeding week as set forth in the
Cash Flow Budget and a detailed explanation of all material variances from the
Cash Flow Budget.

 
-3-

--------------------------------------------------------------------------------

 

 
B.
The Company agrees that all payments shall be made and expenses incurred in
accordance with the Cash Flow Budget; provided, however, that it shall not be
deemed a breach of this Agreement if the actual payments or expenses incurred
for any two particular weeks do not exceed more than 10% of the aggregate
budgeted payments and expenses for such two week period; provided, however that
this Section 3B shall not apply to any fees or expenses due or charged by
professionals retained by or to be paid by the Company’s bankruptcy estate in
connection with the Bankruptcy Cases or any fees payable to the Office of the
United States Trustee.

4.           Milestones.  The Company shall comply with the following and file
the following documents on or prior to the date indicated for each such material
action or document below (each, a “Milestone”), subject to change based upon the
Bankruptcy Court’s availability and mutual agreement of the Parties:
 
 
A.
The Commencement Date will occur on a date mutually agreed to by the Company and
Supporting Shareholders (but in no event later than August 29, 2011);

 
B.
On or prior to the fifth day of the Bankruptcy Cases, the Company shall file
with the Bankruptcy Court the Sale Procedures Motion;

 
C.
On or prior to the 25th day of the Bankruptcy Cases, the Company shall file the
Disclosure Statement for the Plan and procedures for soliciting votes with
respect to the Plan along with a copy of the Plan;

 
D.
On or prior to the 30th day of the Bankruptcy Cases, the Bankruptcy Court shall
enter an order, in form and substance acceptable to counsel for the Supporting
Shareholders, approving the Sale Procedures Motion;

 
E.
On or prior to October 25, 2011, the Company shall conduct the Auction;

 
 
-4-

--------------------------------------------------------------------------------

 
 
 
F.
On or prior to November 1, 2011, the Bankruptcy Court shall have entered an
order approving the Sale to the person or entity selected as the highest and
best bidder at the Auction and approved the asset purchase agreement in
connection therewith;

 
G.
On or prior to five business days following the Auction, the Company shall have
filed an amendment to the Disclosure Statement as necessary to comply with
Bankruptcy Code section 1125 with respect to the results of the Auction (the
“Amendment”);

 
H.
If the Bankruptcy Cases are not administered as “small business cases” as
defined in Bankruptcy Code section 101(51C), on or prior to the fifteenth day
following the filing of the Amendment the Bankruptcy Court shall enter an order
approving the Disclosure Statement; and

 
I.
On or prior to the 30th day following the filing of the Amendment, the
Bankruptcy Court shall enter an order confirming the Plan and approving the
Disclosure Statement.

5.           Commitment of the Supporting Shareholders.  For so long as this
Agreement remains in effect, and subject to the Company fulfilling its
obligations as provided hereto the Supporting Shareholders shall:
 
 

 
A.
Timely vote or cause to be voted the Series J Preferred Stock and any other
Claims or Equity Securities now or hereafter beneficially owned or acquired by
it or for which it now or hereafter serves as the nominee, investment manager or
advisor for beneficial holders thereof, in favor of the Plan in accordance with
the applicable procedures set forth in the Disclosure Statement and accompanying
solicitation materials, and timely return a duly-executed Ballot in connection
therewith, and to support the transactions contemplated therein and to be
effected thereby, provided, however, that the Supporting Shareholders shall not
be obligated to vote in favor of the Plan if the terms thereof are materially
inconsistent with the Plan Term Sheet.

 
B.
Support the Sales Procedures Motion and not object thereto.

 
C.
Support confirmation of and not object or support or encourage any other party
to object to confirmation of the Plan, or otherwise commence any proceeding to
oppose or alter the Plan or support an alternative restructuring or an
alternative plan of reorganization.

 
 
-5-

--------------------------------------------------------------------------------

 
 
 
D.
Support payment of the Severance Claims and not object thereto or support or
encourage any other party or cause any other party to object to any Severance
Claims; provided, that no Severance Claim is greater than the Severance Claim
set forth on Exhibit C hereto opposite each Severance Recipients’ (as defined in
Exhibit C hereto) name; provided, further, that with respect to an individual
Severance Recipient such individual has not been employed by the purchaser of
the Company’s assets following the Sale.

 
E.
Support the KEIP and not object to the KEIP or any payments thereunder or
support or encourage any other party or cause any other party to object thereto;
provided that the final terms thereof are not more favorable to the KEIP
Recipients (than the terms set forth in Exhibit B hereto).  For the avoidance of
doubt it is acknowledged that (i) KEIP Recipients all have agreed to the
treatment and further that they shall be entitled to payments under the KEIP
even if they are employed by the purchaser of the Company’s assets following the
Sale, (ii) that, if the KEIP is approved by the Bankruptcy Court and the KEIP
Recipients have been offered and tendered their respective payments thereunder,
each KEIP Recipient shall waive any severance claims they may have against the
Company; and (iii) if the KEIP is not approved, the KEIP Recipients shall be
entitled to assert severance claims provided that the Supporting Shareholders
reserve their rights to object to any severance claim asserted by a KEIP
Participant.

 
F.
Except as otherwise permitted herein, not withdraw, change or revoke its vote or
support (or cause its vote or support (as applicable) to be withdrawn, changed
or revoked) with respect to the Plan, the Sale, Disclosure Statement, the
Severance Claims or the KEIP; and except as otherwise permitted herein, not take
any other action, including, without limitation, initiating or joining any legal
proceeding, that is inconsistent with, or that would materially prevent, hinder
or delay the consummation of, the Restructuring, Sale, Plan, allowance of the
Severance Claims or implementation of the KEIP.

Notwithstanding the foregoing, nothing in this Agreement shall be construed to
prohibit the Supporting Shareholders from appearing as a party-in-interest in
any matter to be adjudicated in the Chapter 11 Case so long as such appearance
and the positions advocated in connection therewith are not materially
inconsistent with this Agreement and are not for the purpose of materially
hindering, delaying or preventing the confirmation and consummation of the Plan.

 
-6-

--------------------------------------------------------------------------------

 
 
6.           Commitment of the Company.  Subject to its fiduciary duties as
debtor in possession, the Company agrees to use its best efforts to (i) support
and complete the Restructuring, the Sale and all transactions contemplated by
the Plan in accordance with the Milestones, (ii) take any and all necessary and
appropriate actions in furtherance of the Restructuring, the Sale and the Plan,
(iii) complete the Restructuring, the Sale and achieve confirmation of the Plan
in accordance with the Milestones, including, without limitation, by filing the
Plan, Disclosure Statement and all other documents necessary or appropriate in
connection with the Sale, the Disclosure Statement and the Plan, with the
Bankruptcy Court in accordance with the Milestones, (iv) not take any other
action that is inconsistent with, or that would delay or obstruct the proposed
solicitation as to or confirmation or consummation of the Plan and (v) object to
any Disputed Claims.

7.           Effective Date.  This Agreement shall be effective as of the date
of receipt by the Company of a counterpart of this Agreement duly executed and
delivered by a number of Series J Shareholders holding, with the power to vote
in connection with the Plan (when solicited), at least 67% of the Series J
Shareholder Interests.

8.           Termination.  This Agreement may be terminated (unless such Party
seeking to terminate either (i) caused the Termination Event (as defined below)
or (ii) is in material breach of its obligations under this Agreement, upon the
occurrence of any of the following events (each a “Termination Event”):
 
 
A.
At the option of the Supporting Shareholders, if the Company files any motion or
pleading with the Bankruptcy Court that is not consistent in any material
respect with this Agreement or the Plan;

 
 
B.
At the option of the Supporting Shareholders, if the Company fails to comply
with (i) Section 3A hereof within five (5) business days of any deadline
contained therein or (ii) Section 3B hereof;

 
 
C.
At the option of the Supporting Shareholders, if the Bankruptcy Court grants
relief that is materially inconsistent with this Agreement or the Plan and the
Company fails to obtain the entry of one or more orders reconsidering, reversing
or otherwise removing any Material Adverse Change caused by such grant within
ten (10) Business Days thereof;

 
 
D.
At the option of the Supporting Shareholders, if the Company fails to commence
the Chapter 11 Case on or before September 1, 2011;

 
 
E.
At the option of the Supporting Shareholders, if the Company fails to obtain
entry of an order confirming the Plan by December 26, 2011;

 
 
-7-

--------------------------------------------------------------------------------

 
 
 
F.
At the option of the Supporting Shareholders, if the Plan Effective Date shall
not have occurred by January 15, 2012;

 
 
G.
At the option of the Supporting Shareholders, upon the occurrence of a Material
Adverse Change;

 
 
H.
At the option of the Supporting Shareholders, if the Company withdraws the Plan
or files, proposes or otherwise supports any plan of reorganization other than
the Plan;

 
 
I.
At the option of the Company, if the Supporting Shareholder breach any of their
obligations in Section 5 hereof;

 
 
J.
Entry of an order by the Bankruptcy Court, or any other court of competent
jurisdiction, declaring, in a final nonappealable order, that this Agreement is
unenforceable.

 
 
K.
An interim or permanent trustee, a responsible officer or an examiner with
powers beyond the duty to investigate and report (as set forth in sections
1106(a)(3) and (4) of the Bankruptcy Code) shall be appointed to oversee or
operate the Company in the Bankruptcy Cases.

 
 
L.
The Bankruptcy Cases shall have been dismissed or converted to cases under
chapter 7 of the Bankruptcy Code.

The date on which this Agreement is terminated in accordance with the foregoing
provisions shall be referred to as the “Termination Date.”  The act of
termination by any Party pursuant to this Agreement shall not be a violation of
the automatic stay of Section 362 of the Bankruptcy Code; provided, however,
that nothing herein shall prejudice any Party’s rights to argue that the
termination was not proper under the terms of this Agreement.

9.           Transfer of Equity Securities and Claims.  If, following execution
of this Agreement by the Supporting Shareholders, any Supporting Shareholder
sells or otherwise transfers or disposes of all or any of its Series J Preferred
Stock, Equity Securities or any Claim (any of the foregoing, a “Transfer”) to
any Person (each such Person, a “Transferee”), the Transferee must, as a
condition precedent to such Transfer execute an assumption agreement to this
Agreement in form and substance reasonably acceptable to the Company pursuant to
which the Transferee shall agree to be bound by the terms of this
Agreement.  Any Transfer in violation of this section shall be void ab initio.

 
-8-

--------------------------------------------------------------------------------

 
 
10.           Entire Agreement.  This Agreement, including the exhibits,
schedules and annexes hereto constitutes the entire agreement of the Parties
with respect to the subject matter of this Agreement, and supersedes all other
prior negotiations, agreements and understandings, whether written or oral,
among the Parties with respect to the subject matter of this Agreement.

11.           No Waiver.  Nothing herein shall be construed as a waiver by any
Party of any or all of such Party’s rights, and the Parties expressly reserve
any and all of their respective rights.  Pursuant to Federal Rule of Evidence
408, state law equivalents and any other applicable rules of evidence, this
Agreement and all negotiations relating hereto shall not be admissible into
evidence in any proceeding other than a proceeding to enforce its terms.

12.           Reservation of Rights.  This Agreement and the Plan are part of a
proposed compromise and settlement of the Series J Interests by and between the
Company and the Supporting Shareholders.  Except as expressly provided in this
Agreement, nothing herein is intended to, or does, in any manner waive, limit,
impair or restrict the ability of each of the Parties hereto to protect and
preserve their rights, remedies and interests.  Except as expressly set forth
herein, nothing herein shall be deemed an admission of any kind.  If the
transactions contemplated herein are not consummated, or if this Agreement is
terminated for any reason, the parties hereto fully reserve any and all of their
rights, pursuant to Federal Rule of Evidence 408 and any applicable state rules.

13.           Representations and Warranties of all Parties.  Each Party
represents to each other Party that, as of the date of this Agreement, (a) such
Party is duly organized, validly existing, and in good standing under the laws
of the jurisdiction of its organization, and has all requisite corporate,
partnership or limited liability company power and authority to enter into this
Agreement and to carry out the transactions contemplated by, and perform its
respective obligations under, this Agreement; (b) the execution and delivery of
this Agreement and the performance of such Party’s obligations hereunder have
been duly authorized by all necessary corporate or other action on its part; (c)
the execution, delivery and performance of this Agreement by such Party do not
and shall not (i) violate any provision of law, rule or regulation applicable to
it or any of its subsidiaries or its certificate of incorporation, bylaws or
other organizational documents or those of any of its subsidiaries or (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any material contractual obligation to which it or
any of its subsidiaries is a party or under its certificate of incorporation,
by-laws or other organizational documents; and (d) such Party (i) is a
sophisticated Person with respect to the matters set forth in this Agreement;
(ii) has adequate information to make an informed decision to enter into this
Agreement; and (iii) has independently and without reliance upon any other
Party, and based on such information as such Party has deemed appropriate, made
its own analysis and decision to enter into this Agreement.

14.           Additional Representations and Warranties of the Supporting
Shareholders. Each Supporting Shareholder represents and warrants that it holds
or has the power to vote in connection with the Plan (when solicited), the
Series J Shareholder Interests set forth on its respective signature page
hereto.

 
-9-

--------------------------------------------------------------------------------

 
 
15.           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which, when so executed, shall constitute the same
instrument and the counterparts may be delivered by facsimile transmission or by
electronic mail in portable document format (.pdf).

16.           Amendments.  Except as otherwise provided herein, this Agreement
may not be modified, amended or supplemented without prior written consent of
the Company and the Supporting Shareholders.

17.           Headings.  The headings of the sections, paragraphs and
subsections of this Agreement are inserted for convenience only and shall not
affect the interpretation hereof.

18.           Specific Performance.  It is understood and agreed by the Parties
that money damages would be an insufficient remedy for any breach of this
Agreement by any Party and each non-breaching Party shall be entitled to
specific performance and injunctive or other equitable relief as a remedy of any
such breach, including, without limitation, an order of the Bankruptcy Court or
other court of competent jurisdiction requiring any Party to comply promptly
with any of its obligations hereunder.

19.           Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to such
state’s choice of law provisions which would require the application of the law
of any other jurisdiction.  By its execution and delivery of this Agreement,
each of the Parties irrevocably and unconditionally agrees for itself that any
legal action, suit or proceeding against it with respect to any matter arising
under or arising out of or in connection with this Agreement or for recognition
or enforcement of any judgment rendered in any such action, suit or proceeding,
may be brought in the United States District Court for the District of New York,
and by execution and delivery of this Agreement, each of the Parties irrevocably
accepts and submits itself to the exclusive jurisdiction of such court,
generally and unconditionally, with respect to any such action, suit or
proceeding.  Notwithstanding the foregoing consent to New York jurisdiction, if
the Chapter 11 Case is commenced, each Party agrees that the Bankruptcy Court
shall have exclusive jurisdiction of all matters arising out of or in connection
with this Agreement.

20.           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

21.           Severability.  If any provision of this Agreement is found by any
court of competent jurisdiction to be invalid or unenforceable, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the fullest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

 
-10-

--------------------------------------------------------------------------------

 
 
22.           Notices.  All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally, by internationally recognized overnight courier service, by
facsimile transmission, or by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following addresses or facsimile
numbers:

If to the Company:
 
Nutrition 21, Inc.
4 Manhattanville Road
Purchase, NY 10577
Attn: Alan Kirschbaum
Telephone: (914) 701-4548
Facsimile:  (877) 270-9170
E-mail: akirschbaum@nutrition21.com
 
with a copy to (which shall not constitute notice):

Richards Kibbe & Orbe LLP
One World Financial Center
New York, NY  10281-1003
Attn:  Michael Friedman, Esq.
Telephone:  (212) 530-1846
Facsimile:  (917) 344-8846
E-mail:  mfriedman@rkollp.com

If to the Supporting Shareholders:

At the address set forth on the signature pages hereto

with a copy to (which shall not constitute notice):

Olshan Grundman Frome Rosenzweig & Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, NY 10022
Attn:  Adam Friedman, Esq.
Attn:  Michael Fox, Esq.
Telephone: 212-451-2300
Facsimile:  (212) 451-2222
E-mail: afriedman@olshanlaw.com
E-mail: mfox@olshanlaw.com

 
-11-

--------------------------------------------------------------------------------

 
 
Any notice given by delivery, mail or courier shall be effective when
received.  Any notice given by facsimile shall be effective upon oral or machine
confirmation of transmission.

23.           Remedies Cumulative.  All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power, or remedy thereof by any Party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such Party.

24.           No Third-Party Beneficiaries.  The terms and provisions of this
Agreement are intended solely for the benefit of the Parties hereto, the KEIP
Recipients and the Severance Recipients and their respective successors and
permitted assigns, and it is not the intention of the Parties to confer
third-party beneficiary rights upon any other Person (other than the KEIP
Recipients and the Severance Recipients).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
-12-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.

 
NUTRITION 21, INC.
         
 
By:
/s/ Alan Kirschbaum             Name: Alan Kirschbaum             Title: CFO    
     

 
NUTRITION 21, LLC
         
 
By:
/s/ Alan Kirschbaum             Name: Alan Kirschbaum             Title: CFO    
     

 

 
ICELAND HEALTH, LLC
         
 
By:
/s/ Alan Kirschbaum             Name: Alan Kirschbaum             Title: CFO    
     

 
HEART’S CONTENT, INC.
         
 
By:
/s/ Alan Kirschbaum             Name: Alan Kirschbaum             Title: CFO    
     

 
 
 

--------------------------------------------------------------------------------

 

 
SUPPORTING SHAREHOLDERS:
               
MIDSUMMER CAPITAL LLC
         
 
By:
/s/ Michel A. Amsalem             Name: Michel A. Amsalem             Title:
President            
Number of Series J Shareholder Interests Held: 5,000
           
Address for notice purposes:
           
295 Madison Avenue, 38th Floor, New York, NY 10017
 

[signatures to continue on following page]
 
 
 

--------------------------------------------------------------------------------

 

 
PHARMACHEM LABORATORIES, INC.
         
 
By:
/s/ David A. Holmes             Name: David A. Holmes             Title: C.E.O.
           
Number of Series J Shareholder Interests Held: 3,000
           
Address for notice purposes:
 

 

[signatures to continue on following page]
 
 
 

--------------------------------------------------------------------------------

 

 
ISLANDIA, LP
         
 
By:
/s/ Richard O. Berner             Name: Richard O. Berner             Title:
President of John Lang, Inc., GP            
Number of Series J Shareholder Interests Held: 2,500
           
Address for notice purposes:
           
485 Madison Avenue, 23rd Floor, New York, NY 10022
 

[signatures to continue on following page]
 
 
 

--------------------------------------------------------------------------------

 

 
UBS-O’CONNOR
         
 
By:
/s/ James M. Hnilo             Name: James M. Hnilo             Title: Manager,
General Counsel            
Number of Series J Shareholder Interests Held: 2,000
           
Address for notice purposes:
 

[signatures to continue on following page]
 
 
 

--------------------------------------------------------------------------------

 

 
ENABLE GROWTH PARTNERS, L.P.
         
 
By:
/s/ Mitch Levine             Name: Mitch Levine             Title: Managing
Partner            
Number of Series J Shareholder Interests Held:1,500
           
Address for notice purposes:
         

[signatures to continue on following page]
 
 
 

--------------------------------------------------------------------------------

 

 
SHEA VENTURES, LLC
         
 
By:
/s/ John C. Morrissey             Name: John C. Morrissey             Title:
Managing Director            
Number of Series J Shareholder Interests Held: 1,000
           
Address for notice purposes:
           
655 Brea Canyon Rd., Walnut, CA 91789
 

 
[signatures to continue on following page]
 
 
 

--------------------------------------------------------------------------------

 

 
ROCKMORE INVESTMENT MASTER FUND LTD
         
 
By:
/s/ Michael Di Lania             Name: Michael Di Lania             Title:
General Counsel            
Number of Series J Shareholder Interests Held: 1,000
           
Address for notice purposes:
           
c/o Rockmore Capital, LLC
   
150 East 58th Street, 28th Floor, New York, NY 10155
 

 
[signatures to continue on following page]
 
 
 

--------------------------------------------------------------------------------

 

 
ROSWELL CAPITAL PARTNERS
         
 
By:
/s/ Charles M. Whiteman             Name: Charles M. Whiteman             Title:
Director Private Equity            
Number of Series J Shareholder Interests Held: 1,000
           
Address for notice purposes:
           
1120 Sanctuary Parkway, Suite 325, Alpharetta, GA 30009
 

 
[signatures to continue on following page]
 
 
 

--------------------------------------------------------------------------------

 

ACKNOWLEDGED AND AGREED
TO WITH RESPECT TO SECTION 5E:

KEIP PARTICIPANTS:

/s/ Alan Kirschbaum
Alan Kirschbaum

/s/ James Komorowski
James Komorowski

/s/ Benjamin Sporn
Benjamin Sporn

/s/ William Levi
William Levi

 
 

--------------------------------------------------------------------------------

 
 
Exhibit A

PLAN TERM SHEET
 
 
Any Plan filed with the Bankruptcy Court shall provide that:
 
Initial Plan Distributions to holders of Administrative Expenses and Claims
On the effective date of the Plan (the “Effective Date”), the following
distributions (the “Effective Date Payments”) shall be made as follows:
 
First, to pay in full, in cash any administrative expenses of the Bankruptcy
Cases, including the KEIP, allowed by the Bankruptcy Court pursuant to
Bankruptcy Code sections 503 and 507 and any estimated professional fees of the
Company not yet allowed;
 
Second, to pay in full, in cash any priority unsecured claims allowed by the
Bankruptcy Court pursuant to Bankruptcy Code sections 502 and 507, plus interest
from the Commencement Date until the date of repayment at the lesser of (i) the
rate established by the Bankruptcy Court or (ii) the rate set forth in any
agreement between the holder of the Claim and the Company; and
 
Third, to pay in full, in cash any unsecured claims allowed by the Bankruptcy
Court pursuant to Bankruptcy Code section 502, plus interest from the
Commencement Date until the date of repayment at the lesser of (i) the rate
established by the Bankruptcy Court or (ii) the rate set forth in any agreement
between the holder of the Claim and the Company.
   
Creation of Liquidating Trust
On the plan effective date, a liquidating trust (the “Liquidating Trust”) will
be created for the benefit of holders of Equity Securities.
   
Trust Assets
The Liquidating Trust’s assets (the “Trust Assets”) shall include all of the
Company’s assets (the “Assets”), including any and all causes of action
(including any avoidance claims under chapter 5 of the Bankruptcy Code) and the
proceeds from the sale (the “Sale Proceeds”) less the Effective Date Payments
(the “Remaining Sale Proceeds”).
   
Purpose of Liquidating Trust
The Liquidating Trust shall have all power necessary to (i) object to or
continue the prosecution of any objection to any Claim or Equity Security
interest and (ii) liquidate any and all of the Company’s remaining assets,
including prosecuting any claims and causes of action transferred to the
Liquidating Trust; provided, however, that none of the Remaining Sale Proceeds
shall be used to prosecute any causes of action unless sufficient reserves have
been made for the payment of all disputed Claims in full, in cash.

 
 
 

--------------------------------------------------------------------------------

 
 
Distributions from Liquidating Trust
Following the effective date, the Liquidating Trust shall establish a reserve
for the payment in full, in cash of all administrative expenses not paid on the
Effective Date and all disputed Claims (plus interest).  Upon such
administrative expenses or disputed Claims becoming allowed they shall be
promptly paid by the Liquidating Trust.
 
Subject to the establishment of appropriate reserves, the Liquidating Trust
shall distribute the proceeds of the Trust Assets as follows:
 
First, to pay the Stated Value Amount; and
 
Second, the remainder, if any, to holders of the Junior Securities (as defined
in the Certificate of Incorporation).
   
Releases
The Plan shall provide release, injunction and exculpation provisions,
substantially similar to those appearing below.
 
On and after the effective date of the Plan (the “Effective Date”), for good and
valuable consideration, including the services of the Releasees (as defined
below)to facilitate the expeditious restructuring of the Debtors and the
implementation of the Plan, each of the Releasees shall be deemed to have
unconditionally released one another from any and all Claims, obligations,
rights, suits, damages, remedies and liabilities whatsoever, including any
Claims that could be asserted on behalf of the Debtors, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity
or otherwise, that the Releasees or their subsidiaries would have been legally
entitled to assert in their own right (whether individually or collectively) or
on behalf of the holder of any Claim or Equity Security or other person or
entity, based in whole or in part upon any act or omission, transaction,
agreement, event or other occurrence taking place on or before the Effective
Date; provided, however, that these releases will have no effect on the
liability of any Releasee arising from any act constituting fraud, gross
negligence or willful misconduct.
 
On and after the Effective Date of the Plan, for good and valuable
consideration, each holder of a Claim or Equity Security shall be deemed to have
unconditionally released the Releasees from any and all claims, obligations,
rights, suits, damages, remedies and liabilities whatsoever, including any
claims that could be asserted on behalf of the Debtors, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity
or otherwise, that such holder of a Claim would have been legally entitled to
assert in its own right (whether individually or collectively), based in whole
or in part upon any act or omission, transaction, agreement, event or other
occurrence taking place on or before the Effective Date, in any way relating or
pertaining to (w) the purchase or sale, or the rescission of a purchase or sale,
of any security of the Debtors, (x) the Debtors, (y) the Chapter 11 Cases or (z)
the negotiation, formulation and preparation of the Plan, or any related
agreements, instruments or other document including, without limitation, the
Liquidating Trust; provided, however, that these releases will have no effect on
the liability of any Releasee arising from any act constituting fraud, gross
negligence or willful misconduct.
 
“Releasees” means the Debtors’ officers and directors and the Debtors’ employees
and consultants (and each of the Debtors' attorneys, financial advisors,
investment bankers, accountants, and other professionals) and the Series J
Preferred Shareholders and their respective attorneys, financial advisors,
investment bankers, accountants and professionals.

 
 

--------------------------------------------------------------------------------