Exhibit
      10.01

     

     

    AMENDMENT
      TO LOAN AND SECURITY AGREEMENT

    AND
      WAIVER OF DEFAULT

     

    THIS
      AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAVIER OF DEFAULTS (this
“Amendment”), dated as of May __, 2008, is entered into by and among Nutrition
      21, Inc., a New York corporation, Nutrition 21, LLC, a New York limited
      liability company, Iceland Health, LLC a New York limited liability company
      (each a “Borrower” and collectively, “Borrowers”) and Gerber Finance Inc.
      (“Lender”).

     

    RECITALS

     

    Borrowers
      and Lender are parties to a Loan and Security Agreement dated June 30, 2007
      (as
      amended from time to time, the “Loan Agreement”).

     

    Borrower
      has requested that certain amendments be made to the Loan Agreement and that
      Lender waive a certain Event of Default arising under the Loan Agreement, which
      Lender is willing to make and do pursuant to the terms and conditions set forth
      herein.

     

    NOW,
      THEREFORE, in consideration of the premises and of the mutual covenants and
      agreements herein contained, it is agreed as follows:

     

    1. Definitions.
      Capitalized terms used in this Amendment have the meanings given to them in
      the
      Loan Agreement unless otherwise specified.

     

    2. Amendments.
      Upon the
      terms and subject to the conditions set forth in this Amendment, the Loan
      Agreement is hereby amended as follows:

     

    (a) The
      following defined term in Section 1(a) is amended to provide as
      follows:

     

    “Eligible
      Inventory”
means
      Inventory owned by Borrower which Lender, in its sole and absolute discretion,
      determines: (a) is subject to a first priority perfected Lien in favor of Lender
      and is subject to no other Liens whatsoever other than Permitted Liens; (b)
      is
      located in a public warehouse known to Lender; (c) is located on premises with
      respect to which Lender has received a landlord, mortgagee or warehouse
      agreement acceptable in form and substance to Lender; (d) is not in transit;
      (e)
      is not covered by a negotiable document of title, unless such document and
      evidence of acceptable insurance covering such Inventory has been delivered
      to
      Lender; (f) is in good condition and meets all standards imposed by any
      governmental agency, or department or division thereof having regulatory
      Governmental Authority over such Inventory, its use or sale including the
      Federal Fair Labor Standards Act of 1938 as amended, and all rules, regulations
      and orders thereunder; (g) is currently either usable or salable in the normal
      course of Borrower’s business; (h) is not placed by Borrower on consignment or
      held by Borrower on consignment from another Person; (i) is in conformity with
      the representations and warranties made by Borrower to Lender with respect
      thereto; (j) is not subject to any licensing, patent, royalty (except for
      chromium picolinate), trademark, trade name or copyright agreement with any
      third parties; (k) does not require the consent of any Person for the completion
      of manufacture, sale or other disposition of such Inventory by Lender following
      an Event of Default and such completion, manufacture or sale does not constitute
      a breach or default under any contract or agreement to which Borrower is a
      party
      or to which such Inventory is or may be subject; (l) is not work-in-process;
      (m)
      is covered by casualty insurance acceptable to Lender;(n) does not include
      Selenomax; (o) does not include inventory owned or sold to Iceland Health,
      LLC
      (p) does not include inventory branded or labeled as Iceland Health and (q)
      not
      to be ineligible for any other reason.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Minimum
      Average Monthly Loan Amount”
shall
      now mean $1,000,000. 

     

    (b) Section
      13 is amended to provide as follows

     

    “Financial
      Covenants” 

     

    (b) The
      consolidated liabilities of Borrowers and their subsidiaries at the end of
      each
      month shall not exceed five and one quarter (5.25) times the net worth of
      Borrowers and their Subsidiaries on a consolidated basis.

     

    3. No
      Other Changes.
      Except
      as explicitly amended by this Amendment, all of the terms and conditions of
      the
      Loan Agreement shall remain in full force and effect.

     

    4. Waiver
      of Default.
      Upon
      the terms and subject to the conditions set forth in this Amendment, Lender
      hereby waives the Event of Default arising solely from (a) Borrowers and their
      subsidiaries having consolidated liabilities greater than two times the net
      worth of Borrowers and their Subsidiaries on a consolidated basis at March
      31,
      2008. This foregoing waiver shall be effective only in this specific instance
      and for the specific purpose for which it is given, and this waiver shall not
      entitle any Borrower to any other or further waiver in any similar or other
      circumstances.

     

    5. Amendment
      Fee.
      Borrowers shall pay Lender as of the date hereof a fully earned, non-refundable
      fee in the amount of $15,000 in consideration of Lender’s execution and delivery
      of this Amendment.

     

    
      
         

      

      
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    6. Conditions
      Precedent.
      This
      Amendment, and the waiver set forth in Paragraph 4 hereof shall be effective
      when Lender shall have received an executed original hereof, together with
      each
      of the following, each in substance and form acceptable to Lender in its sole
      discretion:

     

    (a) A
      Certificate of the Secretary of each Borrower certifying as to (i) the
      resolutions of the board of directors of each Borrower approving the execution
      and delivery of this Amendment, (ii) the fact that the articles of incorporation
      or formation and bylaws or operating agreement of each Borrower, which were
      certified and delivered to Lender pursuant to the Secretarial Certificate of
      each Borrower’s secretary or assistant secretary dated June 30, 2007 continue in
      full force and effect and have not been amended or otherwise modified except
      as
      set forth in the Certificate to be delivered, and (iii) certifying that the
      officers and agents of each Borrower who have been certified to Lender, pursuant
      to the Secretarial Certificate of each Borrower’s secretary or assistant
      secretary dated June 30, 2007, as being authorized to sign and to act on behalf
      of each Borrower, other than Paul Intlekofer, continue to be so authorized
      or
      setting forth the sample signatures of each of the officers and agents of each
      Borrower authorized to execute and deliver this Amendment and all other
      documents, agreements and certificates on behalf of each Borrower;

     

    (b) Payment
      of the fee described in Paragraph 5 of this Amendment; and

     

    7. Representations
      and Warranties.
      Each
      Borrower hereby represents and warrants to Lender as follows:

     

    (a) Such
      Borrower has all requisite power and authority to execute this Amendment and
      any
      other agreements or instruments required hereunder and to perform all of its
      obligations hereunder, and this Amendment and all such other agreements and
      instruments has been duly executed and delivered by such Borrower and constitute
      the legal, valid and binding obligation of Borrower, enforceable in accordance
      with its terms.

     

    (b) The
      execution, delivery and performance by such Borrower of this Amendment and
      any
      other agreements or instruments required hereunder have been duly authorized
      by
      all necessary corporate action and do not (i) require any authorization, consent
      or approval by any governmental department, commission, board, bureau, agency
      or
      instrumentality, domestic or foreign, (ii) violate any provision of any law,
      rule or regulation or of any order, writ, injunction or decree presently in
      effect, having applicability to such Borrower, or the articles of incorporation
      or formation or by-laws or operating agreement of such Borrower, or (iii) result
      in a breach of or constitute a default under any indenture or loan or credit
      agreement or any other agreement, lease or instrument to which such Borrower
      is
      a party or by which it or its properties may be bound or affected.

     

    (c) All
      of
      the representations and warranties contained in the Loan Agreement are correct
      on and as of the date hereof as though made on and as of such date, except
      to
      the extent that such representations and warranties relate solely to an earlier
      date.

     

    
      
         

      

      
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    8. References.
      All
      references in the Loan Agreement to “this Agreement” shall be deemed to refer to
      the Loan Agreement as amended hereby; and any and all references in the
      Ancillary Agreement to the Loan Agreement shall be deemed to refer to the Loan
      Agreement as amended hereby.

     

    9. No
      Other Waiver.
      Except
      as otherwise provided in Paragraph 4 hereof, the execution of this Amendment
      and
      the acceptance of all other agreements and instruments related hereto shall
      not
      be deemed to be a waiver of any Default or Event of Default under the Loan
      Agreement or a waiver of any breach, default or event of default under any
      Ancillary Agreement, whether or not known to Lender and whether or not existing
      on the date of this Amendment.

     

    10. Release.
      Each
      Borrower hereby absolutely and unconditionally releases and forever discharges
      Lender, and any and all participants, parent corporations, subsidiary
      corporations, affiliated corporations, insurers, indemnitors, successors and
      assigns thereof, together with all of the present and former directors,
      officers, agents and employees of any of the foregoing, from any and all claims,
      demands or causes of action of any kind, nature or description, whether arising
      in law or equity or upon contract or tort or under any state or federal law
      or
      otherwise, which such Borrower has had, now has or has made claim to have
      against any such person for or by reason of any act, omission, matter, cause
      or
      thing whatsoever arising from the beginning of time to and including the date
      of
      this Amendment, whether such claims, demands and causes of action are matured
      or
      unmatured or known or unknown.

     

    11. Costs
      and Expenses.
      Each
      Borrower hereby reaffirms its agreement under the Loan Agreement to pay or
      reimburse Lender on demand for all costs and expenses incurred by Lender in
      connection with the Loan Agreement and the Ancillary Agreements, including
      without limitation all reasonable fees and disbursements of legal counsel.
      Without limiting the generality of the foregoing, Borrowers, jointly and
      severally, specifically agree to pay all fees and disbursements of counsel
      to
      Lender for the services performed by such counsel in connection with the
      preparation of this Amendment and the documents and instruments incidental
      hereto. Each Borrower hereby agrees that Lender may, at any time or from time
      to
      time in its sole discretion and without further authorization by Borrower,
      make
      a loan to Borrower under the Loan Agreement, or apply the proceeds of any loan,
      for the purpose of paying any such fees, disbursements, costs and
      expenses and
      the
      fee required under Paragraph 5 of this Amendment.

     

    12. Governing
      Law.
      This
      Amendment shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and assigns and shall be governed by and
      construed in accordance with the laws of the State of New York.

     

    
      
         

      

      
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    13. Headings.
      Section
      headings in this Amendment are included herein for convenience of reference
      only
      and shall not constitute a part of this Amendment for any other
      purpose.

     

    14. Counterparts;
      Facsimile.
      This
      Amendment may be executed by the parties hereto in one or more counterparts,
      each of which shall be deemed an original and all of which when taken together
      shall constitute one and the same agreement. Any signature delivered by a party
      by facsimile transmission shall be deemed to be an original signature
      hereto.

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
      executed as of the date first above written.

     

    
      	
              GERBER
                FINANCE INC.

            	
              NUTRITION
                21, INC.

            
	 	 
	
              By:
                

              
                

              

              Name:

              Title:

            	
              By:
                 

              
                
                  

                

              

              Name:

              Title:

            
	 	 
	
              NUTRITION
                21, LLC

            	
              ICELAND
                HEALTH, LLC

            
	 	 
	
              By:
                

              
                
                  

                

              

              Name:

              Title:

            	
              By:
                 

              
                
                  

                

              

              Name:

              Title:

            


    

     

    


    
      
         

      

      
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