PLEDGE
      AND SECURITY AGREEMENT




This
      PLEDGE AND SECURITY AGREEMENT (this “ Agreement )
      made as
      of this ____ day of February, 2008, by and between Nutrition 21, Inc., a
      Delaware corporation (“ Pledgor ”)
      and
      Gerber Finance Inc. (“ Lender ”).




BACKGROUND




Pledgor,
      Nutrition 21, LLC and Iceland Health LLC (collectively, “ Borrowers ”)
      and
      Lender are parties to a certain Loan and Security Agreement dated as of June
      30,
      2007 (as may be further amended, restated, supplemented or otherwise modified
      from time to time, the “ Loan
      Agreement ”)
      pursuant to which, inter  alia ,
      Lender
      will provide the Borrowers with certain financial accommodations.




Borrowers
      and Lender have entered into a certain Amendment to Loan and Security Agreement
      and Waiver of Defaults dated as of February __, 2008 (the “ Amendment ”).




In
      order
      to induce Lender to enter into the Amendment and to secure Borrowers’
obligations to Lender under the Loan Agreement, Pledgor has agreed to pledge
      and
      grant a security interest in the collateral described herein to Lender, on
      the
      terms and conditions set forth herein.




NOW,
      THEREFORE, in consideration of the premises and for other good and valuable
      consideration the receipt of which is hereby acknowledged, the parties hereto
      agree as follows:




1.  Definitions .
      All
      capitalized terms used herein which are not defined shall have the meanings
      given to them in the Loan Agreement.




2.  Pledge
      and Grant of Security Interest .




To
      secure
      the full and punctual payment and performance of (a) the Obligations and
      (b) all other indebtedness, obligations and liabilities of Pledgor to
      Lender whether now existing or hereafter arising, direct or indirect, liquidated
      or unliquidated, absolute or contingent, due or not due arising under this
      Agreement ((a) and (b) collectively, the “ Indebtedness ”),
      Pledgor hereby assigns, transfers and pledges, assigns, hypothecates, transfers
      and grants to Lender, a security interest in the personal property described
      on Schedule
      A annexed
      hereto and all interest, dividends, options, warrants, increases, profits and
      income received therefrom, in all substitutions therefor and in all proceeds
      thereof in any form (collectively, the “ Collateral ”).




3.  Representations
      and Warranties of Pledgor .
      Pledgor
      represents and warrants to Lender (which representations and warranties shall
      be
      deemed to continue to be made until all of the Indebtedness has been irrevocably
      paid in full and the Commitments and the Guaranty have been irrevocably
      terminated) that:




(a)  The
      execution, delivery and performance by Pledgor of this Agreement and the pledge
      of the Collateral hereunder do not and will not result in any violation of
      any
      agreement, indenture, instrument, license, judgment, decree, order, law,
      statute, ordinance or other governmental rule or regulation applicable to
      Pledgor.







(b)  This
      Agreement constitutes the legal, valid, and binding obligation of Pledgor
      enforceable against Pledgor in accordance with its terms.




(c)  No
      consent or approval of any person, corporation, governmental body, regulatory
      authority or other entity, is or will be necessary for the execution, delivery
      and performance of this Agreement or, the exercise by Lender of any rights
      with
      respect to the Collateral or for the pledge and assignment of, and the grant
      of
      a security interest in, the Collateral hereunder.




(d)  There
      are
      no pending or, to the best of Pledgor’s knowledge, threatened actions or
      proceedings before any court, judicial body, administrative agency or arbitrator
      which may adversely affect the Collateral.




(e)  Pledgor
      has the requisite power and authority to enter into this Agreement and to pledge
      and assign the Collateral to Lender in accordance with the terms of this
      Agreement.




(f)  Pledgor
      owns each item of the Collateral and, except for the pledge and security
      interest granted to Lender hereunder, the Collateral is free and clear of any
      other security interest, pledge, claim, lien, charge, hypothecation, assignment,
      offset or encumbrance whatsoever (collectively, “ Liens ”).




(g)  The
      pledge and assignment of the Collateral and the grant of a security interest
      under this Agreement vest in Lender all rights of Pledgor in the Collateral
      as
      contemplated by this Agreement.




4.  Affirmative
      Covenants .
      Until
      such time as all of the Indebtedness has been irrevocably paid in full in cash
      and any commitments to provide financing under the Loan Agreement have been
      irrevocably terminated, Pledgor shall:




(a)  Defend
      the Collateral against the claims and demands of all other parties and keep
      the
      Collateral free from all Liens, except for the Lien granted to Lender under
      this
      Agreement.




(b)  In
      the
      event Pledgor comes into possession of any portion of the Collateral, hold
      the
      same in trust for Lender and deliver to Lender such Collateral in the form
      received no later than one (1) Business Day following Pledgor’s receipt
      thereof.




(c)  In
      the
      event any portion of the Collateral is held by a third party, take all action
      that Lender may reasonably request so as to maintain the validity,
      enforceability, perfection and priority of Lender’s security interest in the
      Collateral.




(d)  Within
      two (2) Business Days of obtaining knowledge of any person or entity asserting
      a
      Lien against the Collateral, notify Lender of same.




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(e)  Furnish
      to Lender such other information relating to the Collateral as Lender may from
      time to time reasonably request.




(f)  Within
      fifteen (15) days following the receipt thereof by Pledgor, provide Lender
      a
      copy of all statements relating to the accounts set forth on Schedule
      A (the
“ Accounts ”).




(g)  If
      the
      Collateral includes securities or any other financial or other asset maintained
      in a securities account or deposit account (as such term is defined in Article
      9
      of the Uniform Commercial Code, as adopted in New York **)** ,
      cause
      the securities intermediary, or other financial institution, on whose books
      and
      records the ownership interest of Pledgor in the Collateral appears, to execute
      and deliver immediately a notification and control agreement (each a
“ Control
      Agreement ”)
      satisfactory to Agent in its sole discretion in order to perfect and protect
      Lender’s Lien in the Collateral.




(h)  Following
      Lender’s request at any time and from time to time, at Pledgor’s sole expense,
      promptly take such action and execute and deliver Control Agreements and further
      instruments, agreements and documents as Lender may reasonably request in order
      to more fully perfect, evidence or effectuate the pledge and assignment
      hereunder and the security interest granted hereby and to enable Lender to
      exercise and enforce its rights and remedies hereunder. Pledgor authorizes
      Lender to file one or more financing or continuation statements under the
      Uniform Commercial Code of the State of New York as in effect from time to
      time
      (the “ UCC ”)
      relating to the Collateral, naming Lender as “secured party.”




5.  Negative
      Covenants .
      Until
      such time as the Indebtedness has been paid in full and any commitments to
      provide financing under the Loan Agreement have been irrevocably terminated,
      Pledgor shall not, without the written consent of Lender, (a) sell, convey,
      or
      otherwise dispose of any of the Collateral or any interest therein, (b) incur
      or
      permit to exist any Lien whatsoever with respect to any of the Collateral or
      the
      proceeds thereof other than that created hereby, (c) withdraw any money or
      property from the Account and/or (d) make any trades in the
      Account.




6.  Events
      of Default .




The
      term
“Event of Default” wherever used herein shall mean the occurrence of any one of
      the following events:




(a)  An
“Event
      of Default”, as such term is defined in the Loan Agreement, shall have occurred;




(b)  Pledgor’s
      failure to comply with or perform any of its undertakings or obligations under
      any agreement between Pledgor and Lender including, without limitation, this
      Agreement;




(c)  Any
      representation, warranty, statement or covenant made or furnished to Lender
      by
      or on behalf of Pledgor in connection with this Agreement proves to have been
      false in any material respect when made or furnished or is breached, violated
      or
      not complied with;




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(d)  Pledgor
      shall (i) apply for, consent to, or suffer to exist the appointment of, or
      the
      taking of possession by, a receiver, custodian, trustee, liquidator or other
      fiduciary of itself or of all or a substantial part of its property, (ii) make
      a
      general assignment for the benefit of creditors, (iii) commence a voluntary
      case
      under any state or federal bankruptcy laws (as now or hereafter in effect),
      (iv)
      be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take
      advantage of any other law providing for the relief of debtors, (vi) acquiesce
      to, or fail to have dismissed, within thirty (30) days, any petition filed
      against it in any involuntary case under such bankruptcy laws, or (vii) take
      any
      action for the purpose of effecting any of the foregoing;




(e)  The
      Collateral is subjected to levy of execution, attachment, distraint or other
      judicial process; or the Collateral is the subject of a claim (other than by
      Lender) of a Lien or other right or interest in or to the
      Collateral;




(f)  Pledgor’s
      failure to comply with or perform any of its undertakings or obligations under
      any Control Agreement; or




(g)  The
      aggregate value, as determined by Lender in its reasonable discretion, of the
      Collateral, shall, at any date, be less than $1,000,000.




7.  Remedies .




Upon
      the
      occurrence of an Event of Default, Lender may:




(a)  Demand,
      collect, receipt for, settle, compromise, adjust, sue for, foreclose or realize
      upon the Collateral (or any part thereof) and/or otherwise deal with the
      Collateral in any and all respects as the holder thereof, in each case as Lender
      may determine in its sole discretion;




(b)  Remove
      any Collateral from any of the Accounts;




(c)  Exercise
      voting, conversion, registration, purchase or other rights of holder of any
      of
      the Collateral;




(d)  Transfer
      the Collateral into its name or into the name of its nominee or nominees and/or
      cause any Account to be registered or transfer any Account to another securities
      intermediary or financial institution in Lender’s name;




(e)  Require
      that all interest and dividends paid with respect to the Collateral be delivered
      to Lender as additional collateral security for the Indebtedness;
      and




(f)  Subject
      to the requirements of applicable law, sell, assign and deliver the whole or,
      from time to time any part of the Collateral, with or without demand,
      advertisement or notice of the time or place of sale or adjournment thereof
      or
      otherwise (all of which are hereby waived, except such notice as is required
      by
      applicable law and cannot be waived), for such price or prices and on such
      terms
      as Lender in its sole discretion may determine.




Pledgor
      acknowledges and agrees that five (5) days’ prior written notice of the time and
      place of any public sale of any of the Collateral or any other intended
      disposition thereof shall be reasonable and sufficient notice to Pledgor within
      the meaning of the UCC. Pledgor hereby waives and releases any and all right
      or
      equity of redemption, whether before or after sale hereunder. In addition to
      the
      foregoing, Lender shall have all of the rights and remedies of a secured party
      under applicable law and the UCC.




4


8.  Proceeds
      of Collateral Agreement .
      The
      proceeds of any disposition under this Agreement of the Collateral pledged
      to it
      by Pledgor shall be applied as follows:




(a)  First,
      to
      the payment of all costs, expenses and charges of Lender and to the
      reimbursement of Lender for the prior payment of such costs, expenses and
      charges incurred in connection with the care and safekeeping of the Collateral
      (including, without limitation, the expenses of any sale or any other
      disposition of any of the Collateral), the expenses of any taking, attorneys’
fees and expenses, court costs, any other expenses incurred or expenditures
      or
      advances made by Lender in the protection, enforcement or exercise of its
      rights, powers or remedies hereunder;




(b)  Second,
      to the payment of the Indebtedness, in whole or in part, in such order as Lender
      may elect, whether or not such Indebtedness is then due;




(c)  Third,
      to
      such persons, firms corporations or other entities as required by applicable
      law
      including, without limitation, Section 9-615 of the UCC; and




(d)  Fourth,
      to the extent of any surplus to Pledgor or as a court of competent jurisdiction
      may direct.




9.  Waiver
      of Marshaling .
      Pledgor
      hereby waives any right to compel any marshaling of any of the
      Collateral.




10.  No
      Waiver .
      Any and
      all of Lender’s rights with respect to the pledge, assignment and security
      interest granted hereunder shall continue unimpaired, and Pledgor shall be
      and
      remain obligated in accordance with the terms hereof, notwithstanding (a) the
      bankruptcy, insolvency or reorganization of Pledgor, (b) the release or
      substitution of any item of the Collateral at any time, or of any rights or
      interests therein, or (c) any delay, extension of time, renewal, compromise
      or
      other indulgence granted by Lender in reference to any of the Indebtedness.
      Pledgor hereby waives all notice of any such delay, extension, release,
      substitution, renewal, compromise or other indulgence, and hereby consents
      to be
      bound hereby as fully and effectively as if Pledgor had expressly agreed thereto
      in advance. No delay or extension of time by Lender in exercising any power
      of
      sale, option or other right or remedy hereunder, and no failure by Lender to
      give notice or make demand, shall constitute a waiver thereof, or limit, impair
      or prejudice Lender’s right to take any action against Pledgor or to exercise
      any other power of sale, option or any other right or remedy.




11.  Expenses .
      The
      Collateral shall secure, and Pledgor shall pay to Lender on demand, from time
      to
      time, all expenses, (including but not limited to, attorneys’ fees and costs,
      taxes, and all transfer, recording, filing and other charges) of, or incidental
      to, the custody, care, transfer, administration of the Collateral, or in any
      way
      relating to the enforcement, protection or preservation of the rights or
      remedies of Lender under this Agreement or with respect to any of the
      Indebtedness.




5


12.  Agent
      Appointed Attorney-In-Fact and Performance by Agent .
      Upon
      the occurrence of an Event of Default, Pledgor hereby irrevocably constitutes
      and appoints Lender as Pledgor’s true and lawful attorney-in-fact, with full
      power of substitution, to execute, acknowledge and deliver any instruments
      and
      to do in Pledgor’s name, place and stead, all such acts, things and deeds for
      and on behalf of and in the name of Pledgor, which Pledgor could or might do
      or
      which Lender may deem necessary, desirable or convenient to accomplish the
      purposes of this Agreement, including, without limitation, to execute such
      instruments of assignment or transfer or orders and to register, convey or
      otherwise transfer title to the Collateral into Lender’s name. Pledgor hereby
      ratifies and confirms all that said attorney-in-fact may so do and hereby
      declare this power of attorney to be coupled with an interest and irrevocable.
      If Pledgor fails to perform any agreement herein contained, Lender may itself
      perform or cause performance thereof, and any expenses of Lender incurred in
      connection therewith shall be paid by Pledgor as provided in Section 11
      hereof.




13.  Dividends
      and Interest .
      All
      dividends and interest paid with respect to the Collateral shall constitute
      part
      of the Collateral.




14.  Captions .
      All
      captions in this Agreement are included herein for convenience of reference
      only
      and shall not constitute part of this Agreement for any other
      purpose.




15.  Termination;
      Release of Liens .
      This
      Agreement shall terminate and Lender agrees to release its Lien on the
      Collateral upon the earlier of (a) the irrevocable termination of any obligation
      of Lender to extend credit to the Borrowers under the Loan Agreement and the
      payment in full of the Indebtedness or (b) at least six (6) months have elapsed
      from the date hereof, provided no Event of Default (as such term is defined
      in
      the Loan Agreement) shall have occurred and be continuing at such time, upon
      the
      request of Pledgor, provided Borrowers shall have experienced no Net Loss in
      the
      immediately preceding fiscal quarter and the fiscal quarter in which such
      request is made.




16.  Miscellaneous .




(a)  This
      Agreement constitutes the entire and final agreement among the parties with
      respect to the subject matter hereof and may not be changed, terminated or
      otherwise varied except by a writing duly executed by the parties
      hereto.




(b)  No
      waiver
      of any term or condition of this Agreement, whether by delay, omission or
      otherwise, shall be effective unless in writing and signed by the party sought
      to be charged, and then such waiver shall be effective only in the specific
      instance and for the purpose for which given.




(c)  In
      the
      event that any provision of this Agreement or the application thereof to Pledgor
      or any circumstance in any jurisdiction governing this Agreement shall, to
      any
      extent, be invalid or unenforceable under any applicable statute, regulation,
      or
      rule of law, such provision shall be deemed inoperative to the extent that
      it
      may conflict therewith and shall be deemed modified to conform to such statute,
      regulation or rule of law, and the remainder of this Agreement and the
      application of any such invalid or unenforceable provision to parties,
      jurisdictions, or circumstances other than to whom or to which it is held
      invalid or unenforceable, shall not be affected thereby nor shall same affect
      the validity or enforceability of any other provision of this
      Agreement.




6


(d)  This
      Agreement shall be binding upon Pledgor, and Pledgor’s heirs, executors,
      administrators, successors and assigns, and shall inure to the benefit of Lender
      and its successors and assigns.




(e)  Any
      notice or request hereunder may be given to Pledgor or to Lender at their
      respective addresses set forth below or at such other address as may hereafter
      be specified in a notice designated as a notice of change or address under
      this
      Section. Any notice or request hereunder shall be given by (a) hand delivery,
      (b) registered or certified mail, return receipt requested, or (c) telecopy
      to
      the number set out below (or such other number as may hereafter be specified
      in
      a notice designated as a notice of change of address) with telephone
      communication to a duly authorized officer of the recipient confirming its
      receipt as subsequently confirmed by registered or certified mail. Any notice
      or
      other communication required or permitted pursuant to this Agreement shall
      be
      deemed given (a) when personally delivered to any officer of the party to whom
      it is addressed, (b) on the earlier of actual receipt thereof or three (3)
      Business Days following posting thereof by certified or registered mail, postage
      prepaid, (c) upon actual receipt thereof when sent by a recognized overnight
      delivery service or (d) upon actual receipt thereof when sent by telecopier
      to
      the number set forth below with telephone communication confirming receipt
      and
      subsequently confirmed by registered, certified or overnight mail to the address
      set forth below, in each case addressed to each party at its address set forth
      below or at such other address as has been furnished in writing by a party
      to
      the other by like notice:




(A) 
              If to Lender:
            Gerber
                Finance Inc.
              110
                  East 55thStreet, 7thFloor
                New
                  York, New York 10022-1540
                Attention:
                  Jennifer McGuiness
                Telephone:
                  212-888-1637
                Telecopy:
                  212-888-3833




(B) 
              If to Pledgor:
            Nutrition
                21, Inc.
              4
                  Manhattanville Road
                Purchase,
                  New York 10577
                Attention:
                  Alan J. Kirschbaum
                Telephone:
                  914-701-4548
                Telecopier:
                  877-170-9170




(f)  This
      Agreement shall be governed by and construed and enforced in all respects in
      accordance with the laws of the State of New York (without regard to principles
      of conflicts of law) applied to contracts to be performed wholly within the
      State of New York.




(g)  PLEDGOR
      AND LENDER EACH HEREBY EXPRESSLY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY
      IN
      ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR IN ANY WAY CONNECTED
      WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY
      OTHER
      AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
      RELATING HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
      ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE; AND PLEDGOR AND
      LENDER EACH HEREBY AGREE AND CONSENT THAT ANY SUCH ACTIONS OR PROCEEDINGS SHALL
      BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT EITHER PARTY MAY FILE AN
      ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
      EVIDENCE OF THE CONSENT OF THE OTHER PARTY TO THE WAIVER OF ITS RIGHT BY TRIAL
      BY JURY.




7


(h)  PLEDGOR
      EXPRESSLY CONSENTS TO THE JURISDICTION AND VENUE OF THE SUPREME COURT OF THE
      STATE OF NEW YORK, COUNTY OF NEW YORK, AND OF THE UNITED STATES DISTRICT COURT
      FOR THE SOUTHERN DISTRICT OF NEW YORK FOR ALL PURPOSES IN CONNECTION WITH THIS
      AGREEMENT. ANY JUDICIAL PROCEEDING BY PLEDGOR AGAINST LENDER INVOLVING, DIRECTLY
      OR INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR
      CONNECTED WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE SUPREME COURT OF
      THE
      STATE OF NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR
      THE SOUTHERN DISTRICT OF NEW YORK. PLEDGOR FURTHER CONSENTS THAT ANY SUMMONS,
      SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE
      OR MOTION OR OTHER APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A
      JUDGE
      THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE
      SERVED INSIDE OR OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT
      OF
      NEW YORK BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY
      PERSONAL SERVICE PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR
      IN
      SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. PLEDGOR
      WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON
      AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR
      BASED
      UPON FORUM  NON  CONVENIENS .




(i)  This
      Agreement may be executed in one or more counterparts, each of which taken
      together shall constitute one and the same instrument.




[Signature
      Page to Follow]







8




IN
      WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
      and
      year first above written.




NUTRITION 21, INC.By:Name:Title:




GERBER FINANCE INC.By:Name:Title:







SCHEDULE
      A




Description
      of Collateral






All
      of
      Pledgor’s right, title and interest in and to account number
      ____________________ maintained with HSBC Bank, National Association and all
      interest, dividends, options, warrants, increases, profits and income received
      therefrom, all substitutions therefor and all proceeds thereof.