Document:

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.

     

    
      
         

      

      
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    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.

     

    
      
         

      

      
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    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.

     

    
      
         

      

      
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    (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 55th
                  Street, 7th
                  Floor

                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.

     

    
      
         

      

      
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    (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]

     

    

    
      
         

      

      
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    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.DEPOSIT
      ACCOUNT CONTROL AGREEMENT

     

    Executed
      and Delivered as of February __, 2008

     

    PARTIES

     

    This
      Agreement is among the persons signing this Agreement as the “Secured
      Party”,
      the
“Debtor”
and
      the
“Bank”.

     

    BACKGROUND

     

    The
      Debtor is the Bank’s customer with respect to one or more deposit accounts
      identified by the account numbers specified below (individually and
      collectively, as re-numbered and including any funds in the account or accounts,
      the "Deposit
      Account").
      The
      Debtor has granted the Secured Party a security interest in the Deposit
      Account.
      The
      Debtor is requesting that the Bank enter into this Agreement.
      The
      Bank
      is willing to do so upon the terms contained in this Agreement.

     

    This
      Agreement includes the General Terms, the Specific Terms and the Exhibit, each
      as defined or referred to below.

     

    AGREEMENTS

     

    A. General
      Terms.
      This
      Agreement is subject to the General Terms for Deposit Account Control Agreement
      (the “General
      Terms”),
      attached herewith as Attachment B. The General Terms are incorporated in this
      Agreement by reference and without modification except as may be provided in
      Section 10 of the Specific Terms. 

    

    B. Specific
      Terms.
      The
      following terms (the “Specific
      Terms”)
      complete, supplement or modify the General Terms:

    

    1. Deposit
      Account (see
      “Background” above).
      The
      following deposit account(s) comprise the Deposit Account:

     

      
        

      

    

    

    2. Business
      Day (see
      definition of “Business Day” in Section 1 of the General
      Terms):
      

    

    A
      day
      will not be considered as a “Business Day” if commercial banks in Buffalo,
      New York are
      closed on that day. 

    

    3. Outside
      Time (see
      definition of “Outside Time” in Section 1 of the General
      Terms):
      

    

    The
      Outside Time is to be based on a period of two Business Days. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4. Disposition
      of less than all or multi-disposition of funds (see
      Section 4(a)(ii)(E) of the General Terms):
      

    

    A
      Disposition Instruction originated by the Secured Party must be for a
      disposition of all of the funds, and must require that the funds be sent to
      a
      single recipient.

    

    5. Reimbursement
      Claim Period (see
      Section 6(b) of the General Terms):
      

    

    The
      number of days following the termination of the Agreement in which a
      reimbursement claim must be made against the Secured Party under Section 6(b)
      of
      the General Terms is 90. 

    

    6. Electronic
      Records (see
      definition of “writing” in Section 1 of the General Terms):
      

    

    The
      parties do not permit a writing to include an electronic record and do not
      permit communications by email. 

    

    7. Governing
      Law (see
      Section 13(a) of the General Terms):
      

    

    The
      jurisdiction whose law governs this Agreement is the
      State of New York.
      

    

    8. Bank’s
      Jurisdiction for UCC Purposes (see
      Section 13(b) of the General Terms):
      

    

    The
      Bank’s jurisdiction for purposes of part 3 of UCC Article 9 is the
      State of New York.
      

    

    9. Delivery
      of Executed Copy (see
      Part D):
      

    

    The
      delivery of an executed copy of this Agreement may not be made by a form of
      electronic transmission other than facsimile.

    

    10. Additional
      Provisions (see
      Section 12(b) of the General Terms):
      

    

    The
      following provisions modify or supplement the General Terms:

     

    Time
      Deposit

     

    (a) Initial
      Block

     

    The
      Bank
      will not comply with the Debtor’s Disposition Instructions. All references in
      the General Terms to the Outside Time shall instead be to the Agreement Date.
      This Agreement is amended to delete the Exhibit and all references to the
      Initial Instruction and the Exhibit.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (b) Non-Demand
      Deposit Account

     

     

    (i) The
      words
“demand deposit accounts” in the first sentence of the first paragraph in the
“Background” section of the Specific Terms are deleted and replaced with
“deposit accounts”.

     

     

    (ii) Section
      7(ii) of the General Terms is deleted and replaced with the following: “(ii)
      maintains, in the ordinary course of the Bank’s business, the Deposit Account as
      a time, savings, passbook, or similar account not payable on demand,
      and”.

     

     

    (c) Other
      Matters

     

    (i) Any
      early
      withdrawal penalties as provided in the relevant Deposit-related Agreement
      resulting from withdrawal of funds from the Deposit Account prior to its
      maturity date shall be included as a charge permitted by Section 5(b) of the
      General Terms.

    

    (ii) This
      clause (ii) is subject to clause (iii) or (iv) of this paragraph (c). The Bank
      agrees that, absent any contrary Disposition Instruction originated by the
      Secured Party and received by the Bank within the time period provided in the
      relevant Deposit-related Agreement, or if not so provided, a reasonable time
      for
      the Bank to act thereon prior to the maturity date of the Deposit Account,
      the
      Deposit Account, together with all interest earned thereon, will automatically
      renew and be reinvested for the same period of time as was most recently
      applicable to the then maturing Deposit Account. If that period is unavailable,
      then the Deposit Account, together with all interest earned thereon, will
      automatically renew for such period as provided in the relevant Deposit-related
      Agreement, and if not so provided, then for such period of time as is in
      accordance with the Bank’s customary practice.

    

    (iii)
      o If
      this
      box is checked and the following line is filled in, then the Deposit Account,
      together with all interest earned thereon, shall automatically renew and be
      reinvested for a ____________ period, notwithstanding clause (ii) of this
      paragraph (c).

     

    (iv)
      o If
      this
      box is checked, the Secured Party directs that the disposition of the interest
      earned on the Deposit Account (but not the principal) as of any maturity date
      shall be made as directed by the Debtor, absent another Disposition Instruction
      from the Secured Party.

     

    (v) If,
      upon
      maturity, the renewal of the Deposit Account results in the creation of a new
      account, the term “Deposit Account” shall thereafter include the new
      account.

    

    If
      no
      provisions are inserted above in this Section 10, then there are no
      modifications to or supplements of the General Terms.

    

    C. Exhibit.
      The
      parties have completed and attach hereto the Exhibit to be used as the form
      of
      the Initial Instruction. 

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    D. Single
      Agreement; Counterparts.
      The
      General Terms, the Specific Terms and the Exhibit shall be read and construed
      together with the other provisions of this Agreement as a single agreement.
      Delivery of executed copies of this Agreement may be made by facsimile. This
      Agreement may be executed in counterparts, each of which shall constitute an
      original and all of which collectively shall constitute a single
      agreement.

     

    [remainder
      of page intentionally left blank]

     

     

    
 

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    SIGNATURES

    Debtor:

     

    Nutrition
      21, Inc.

     

     

    

    By:___________________________

    Name:
      

    Title:
      

    Address:

     

    Attention:
      

    Telephone
      Number (for information only):

    Facsimile
      Number:

    

     

    Secured
      Party:

     

    Gerber
      Finance, Inc.

     

     

    

    By:___________________________

    Name:
      

    Title:
      

    Address:

     

    Attention:
      

    Telephone
      Number (for information only):

    Facsimile
      Number:

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
 

    Bank:

     

    HSBC
      Bank
      USA, National Association

     

     

    

    By:___________________________

    Name:
      Bruce Wicks

    Title:  
      First Vice President

    Address
      for Notice: Legal Paper Processing, One HSBC Center, 12th
      Floor,
      Buffalo, NY 14203

     

    Telephone
      Number (for information only): 716-841-1349

    Facsimile
      Number: 716-841-7651

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    

    Exhibit

    

    [LETTERHEAD
      OF THE SECURED PARTY]

    

    DEPOSIT
      ACCOUNT CONTROL AGREEMENT

    

    INITIAL
      INSTRUCTION

    

    [Date]

    

    

    HSBC
      Bank
      USA, National Association

    One
      HSBC
      Center

    Buffalo,
      NY 14203

    

    Attention:
       Legal
      Paper Processing, 12th
      Floor

    

    Ladies
      and Gentlemen:

    

    This
      is
      the Initial Instruction as defined in the Deposit Account Control Agreement
      dated _______ __, 20__, among you, us and [Debtor] (the “Debtor”)
      (as
      currently in effect , the “Control
      Agreement”).
      A
      copy of the Control Agreement as fully executed is attached. Capitalized terms
      used in this Initial Instruction have the meanings given them in the Control
      Agreement

    

    This
      Initial Instruction directs the Bank no longer to comply with the Debtor’s
      Disposition Instructions.

    

    [As
      an
      included Disposition Instruction, we direct you to send the funds in the Deposit
      Account to us by the method and at the address indicated below. We recognize
      that, as a condition to your complying with this Disposition Instruction and
      to
      the extent that we have not already done so, we must provide to you evidence
      reasonably required by you as to the authority of the person giving this
      Disposition Instruction to act for us. We also recognize that your obligation
      to
      comply with this Disposition Instruction is subject to the other provisions
      of
      Section 4(a)(ii) of the General Terms.] 

    

    Funds
      transfer instructions:

    

    Receiving
      bank: _____________________________________________.

    

    ABA
      routing number for domestic wire:________________________.

    

    ABA
      routing number for ACH transaction:_____________________.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    International:
      Swift Code No. ________________________________.

    

    Reference
      details:____________________________________________.]

    

    Very
      truly yours,

    

    

    [SECURED
      PARTY]

    

    

    By:______________________

    

    Title:____________________

    

    
 

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    Attachment B

     

     

    GENERAL
      TERMS FOR DEPOSIT ACCOUNT CONTROL AGREEMENT

     

     

    1. Definitions
      and Rules of Interpretation.
      In
      this
      Agreement (a) terms defined in the UCC and not otherwise defined in this
      Agreement have the same meanings in this Agreement as in the UCC,
      (b)
      the
      rules of interpretation in Article 1 of the UCC apply to the interpretation
      of
      this Agreement and (c) the term “or” is not exclusive. Unless otherwise stated,
      section references are to sections of these General Terms. In addition, the
      following terms in this Agreement have the following meanings or
      interpretations:

     

    This
      “Agreement”
means
      the Deposit Account Control Agreement dated the Agreement Date among the Secured
      Party, the Debtor and the Bank. The Deposit Account Control Agreement includes
      these General
      Terms
      (incorporated by reference), the Specific
      Terms
      and the
Exhibit
      read and
      construed together as a single agreement.

     

    “Agreement
      Date”
means
      the date set forth at the beginning of this Agreement as the date as of which
      this Agreement was executed and delivered by the parties.

     

    An
      “address”
      includes the person or persons or department of the Bank on an “attention” line.

     

    “Bank”
means
      the organization signing this Agreement as the Bank.

     

    “Business
      Day"
      means:

     

    (i)
      for
      communications to the Bank, a day other than a day (A) that is not a “business
      day” as defined in Federal Reserve Board Regulation CC, 12 CFR Part 229, (B) on
      which the office, branch or department of the Bank specified as the Bank’s
      address in the Exhibit
      is
      closed, or (C) on which commercial banks are closed in the city or cities set
      forth in the Specific
      Terms;
      and

     

    (ii)
      for
      communications to any other party, a day, other than a Saturday or Sunday,
      on
      which the other party is open for business at the location to which the
      communication is sent. 

     

    “Claim”
means
      a
      claim, loss, cost or expense, and includes out-of-pocket or allocable internal
      legal fees and expenses incurred in bringing or defending a claim.

     

    A
      “communication”
      includes the Initial Instruction, a Disposition Instruction or a
      notice.

     

    “Debtor”
means
      the person signing this Agreement as the Debtor.

     

    “Deposit
      Account”
has
      the
      meaning set forth in the “Background” of this Agreement. The Deposit Account is
      identified in Section 1 of the Specific
      Terms.

     

    “Deposit-related
      Agreements”
means,
      collectively, the deposit account agreement and any other agreements between
      the
      Bank and the Debtor governing the Deposit Account and any cash management or
      similar services provided by the Bank to the Debtor in connection with the
      Deposit Account.

     

    “Disposition
      Instruction”
means
      an instruction to the Bank directing the disposition of the funds in the Deposit
      Account.

     

    “Exhibit”
      means
      the Exhibit
      referred
      to in Part C of and attached to this Agreement as the form to be used as the
      Initial Instruction.

     

    “Initial
      Instruction”
means
      the first instruction to the Bank originated by the Secured Party directing
      that
      the Bank no longer comply with the Debtor’s Disposition Instructions. The
      Initial Instruction may also contain a Disposition Instruction originated by
      the
      Secured Party. 

     

    “Order
      or Process”
means
      an order, judgment, decree or injunction, or a garnishment, restraining notice
      or other legal process, directing, or prohibiting or otherwise restricting,
      the
      disposition of the funds in the Deposit Account.

     

    
      
         

      

      
        B-9

        
          

        

      

      
         

      

    

    "Outside
      Time"
      means,
      unless an earlier Outside Time is stated in the Specific
      Terms,
      the
      opening of business on the second Business Day after the Business Day on which
      the Initial Instruction in substantially the form of the Exhibit
      is
      actually received at the address for the Bank specified in the Exhibit.
      If the
      Initial Instruction is actually received at that address after 12:00 noon,
      local
      time, at that address, then in determining the Outside Time, the Initial
      Instruction will be considered to have been actually received on the following
      Business Day.

     

    “Secured
      Party”
means
      the person signing this Agreement as the Secured Party, whether the person
      is
      acting in a representative capacity or otherwise.

     

    “Specific
      Terms” means
      the
      terms contained in Part B of this Agreement.

     

    “UCC”
means
      the Uniform Commercial Code of the jurisdiction whose law governs this Agreement
      or, if relevant to any matter other than the meaning of a defined term, the
      Uniform Commercial Code of the jurisdiction whose law applies to the matter
      under the choice of law rules of the jurisdiction whose law governs this
      Agreement.

     

    A
      “writing”
means
      a
      tangible writing, including a facsimile and, if the Specific
      Terms
      permit,
      an electronic record; “written”
refers
      to a communication in the form of a writing.

     

    2. The
      Debtor’s Dealings with the Deposit Account.
      

     

    (a) Except
      as
      provided in Section 2(b), the Bank may comply with the Debtor’s Disposition
      Instructions in accordance with the Deposit-related Agreements.
      

     

    (b) The
      Bank
      will not comply with the Debtor’s Disposition Instructions after the Outside
      Time. In its discretion the Bank may cease complying with the Debtor’s
      Disposition Instructions at an earlier time as permitted by Section
      4(a)(iv).

     

    3. The
      Secured Party’s Right to Give Instructions as to the Deposit
      Account.
      The Bank
      will comply with the Initial Instruction, and with any Disposition Instructions
      originated by the Secured Party, in each case (i) without the Debtor’s further
      consent, and (ii) even if following the instruction results in the dishonoring
      by the Bank of items presented for payment from the Deposit Account or the
      Bank
      otherwise not complying with the Debtor’s Disposition Instructions. The Initial
      Instruction may not be rescinded or otherwise modified without the Bank’s
      consent.

     

    4. Exculpation
      of the Bank.

    

    (a) Notwithstanding
      the Bank’s agreements in Sections 2 and 3, the Bank will not be liable to any
      other party for:

     

    (i) either
      failing to follow an Initial Instruction that (A) is not in the form of the
      Exhibit,
      (B)
      does not specify the address to which the Initial Instruction was to have been
      sent, (C) is not otherwise completed, or (D) does not have attached to it a
      copy
      of this Agreement as fully executed or, as a result of any such defect in the
      Initial Instruction, continuing to comply with the Debtor’s Disposition
      Instructions;

     

    (ii) failing
      to follow a Disposition Instruction originated by the Secured Party (A) before
      the Outside Time, (B) that requires the disposition of the funds in the Deposit
      Account by a method not available to the Debtor under the Deposit-related
      Agreements, (C) that the Bank determines would result in the Bank’s failing to
      comply with a statute, rule or regulation, or an Order or Process, binding
      upon
      the Bank, (D) that requires the disposition of funds that are not immediately
      available in the Deposit Account, (E) that, unless otherwise set forth in the
      Specific
      Terms,
      directs
      the disposition of less than all the funds in the Deposit Account or directs
      that the funds be sent to more than one recipient, or (F) for which the Bank
      has
      not received evidence reasonably required by the Bank as to the authority of
      the
      person giving the Disposition Instruction to act for the Secured
      Party;

     

    (iii) complying
      with the Debtor’s Disposition Instructions, or otherwise completing a
      transaction involving the Deposit Account, that the Bank or an affiliate had
      started to process before the Outside Time; or

     

    
      
         

      

      
        B-10

        
          

        

      

      
         

      

    

    (iv) after
      the
      Bank becomes aware that the Secured Party has sent the Initial Instruction,
      but
      before the Outside Time, complying with the Initial Instruction or a Disposition
      Instruction originated by the Secured Party, notwithstanding any fact or
      circumstance and even if the Initial Instruction (A) has not been actually
      received at the address specified in the Exhibit,
      (B)
      fails to have attached to it a copy of this Agreement as fully executed, or
      (C)
      is not completed or otherwise fails to be in the form of Initial Instruction
      set
      forth on the Exhibit.

     

    (b) The
      Bank
      will not be liable to any other party for:

     

    (i) wrongful
      dishonor of any item as a result of the Bank following the Initial Instruction
      or any Disposition Instruction originated by the Secured Party,

     

    (ii) failing
      to comply or delaying in complying with the Initial Instruction, any Disposition
      Instruction or any provision of this Agreement due to a computer malfunction,
      interruption of communication facilities, labor difficulties, act of God, war,
      terrorist attack, or other cause, in each case beyond the Bank’s reasonable
      control, 

     

    (iii) any
      other
      Claim, except to the extent directly caused by the Bank’s gross negligence or
      willful misconduct, or

     

    (iv) any
      indirect, special, consequential or punitive damages.

     

    (c) The
      Bank
      will have no fiduciary duties under this Agreement to any other party, whether
      as trustee, agent, bailee or otherwise.
      The
      Bank
      will have no duties to the Secured Party except as expressly set forth in this
      Agreement.
      The
      Bank
      will have no duty to inquire into or determine the existence or enforceability
      of the Debtor’s obligations to the Secured Party or whether, under any separate
      agreement between the Debtor and the Secured Party, the Debtor’s obligations to
      the Secured Party are in default, the Debtor may originate a Disposition
      Instruction or the Secured Party may originate the Initial Instruction or any
      Disposition Instruction. 

     

    5. The
      Bank’s Recourse to the Deposit Account.

     

    (a) Except
      for amounts referred to in Section 5(b), the Bank (i) subordinates any security
      interest, lien or other encumbrance against the Deposit Account to the Secured
      Party's security interest and (ii) will not exercise any right of recoupment,
      setoff or debit against the Deposit Account.
      This
      subordination will not apply to any security interest that the Bank has in
      an
      item under UCC Article 4 as a collecting bank.

     

     

    (b) Notwithstanding
      Section 5(a), and regardless of any agreement of the Debtor to compensate the
      Bank by means of balances in the Deposit Account, the Bank may charge the
      Deposit Account, to the extent permitted by any of the Deposit-related
      Agreements or applicable law, for: 

     

    (i)
      the
      face amount of a check, draft, money order, instrument, wire transfer of funds,
      automated clearing house entry, credit from a merchant card transaction, other
      electronic transfer of funds or other item (A) deposited in or credited to
      the
      Deposit Account, whether before or after the Agreement Date, and returned unpaid
      or
      otherwise uncollected or subject to an adjustment entry, whether for
      insufficient funds or for any other reason and without regard to the timeliness

      of the return or adjustment or the occurrence or timeliness of any other
      person’s notice of nonpayment or adjustment,
      (B)
      subject to a claim against the Bank for breach of transfer, presentment,
      encoding, retention or other warranty under Federal Reserve Regulations or
      Operating Circulars, clearing house rules, the UCC or other applicable law,
      or
      (C) for a merchant card transaction, against which a contractual demand for
      chargeback has been made;

     

    (ii)
      normal service charges or fees payable to the Bank in connection with the
      Deposit Account or any related services; 

     

    (iii)
      any
      adjustments or corrections of any posting or encoding errors; and

     

    (iv)
      reimbursements for out-of-pocket or allocable internal legal fees and expenses
      in connection with the negotiation, administration or enforcement of this
      Agreement
      by the
      Bank.

     

    
      
         

      

      
        B-11

        
          

        

      

      
         

      

    

    6. Indemnification
      and Reimbursement.

     

    (a) The
      Debtor indemnifies the Bank against all Claims incurred, sustained or payable
      by
      the Bank arising out of this Agreement except to the extent directly caused
      by
      the Bank’s gross negligence or willful misconduct.

     

    (b) The
      Secured Party agrees to reimburse the Bank for any charge against the Deposit
      Account under Section 5(b) for which there were insufficient funds in the
      Deposit Account to satisfy the charge.
      Such
      reimbursement will be limited to the aggregate amount transferred from the
      Deposit Account as a result of the Bank’s acting upon Disposition Instructions
      originated by the Secured Party or pursuant to Section 9(b). Any demand by
      the
      Bank for reimbursement must be made within the number of days after the
      termination of this Agreement set forth in the Specific
      Terms.
      The Bank
      may not make a Claim for reimbursement under this subsection unless (i) the
      Debtor fails to satisfy the Claim within 15 days after the Bank makes a demand
      on the Debtor under Section 6(a) or (ii) the Bank is enjoined, stayed or
      prohibited by operation of law from making the demand on the
      Debtor.

     

    (c) The
      Secured Party’s reimbursement obligations under Section 6(b) will not apply to
      (i) a charge for reimbursement of or indemnification for any out-of-pocket
      or
      allocable internal legal fees and expenses incurred by the Bank in connection
      with any claim or defense by the Bank against the Secured Party relating to
      this
      Agreement or (ii) the amount of any loss incurred by the Bank to the extent
      directly caused by the Bank’s gross negligence or willful misconduct.
      If
      the
      Bank satisfies any Claim against the Debtor referred to in the foregoing clause
      (i) by charging the Deposit Account, the amount of the Secured Party’s maximum
      liability for reimbursement obligations under Section 6(b) will be reduced
      by
      the amount of the Claim so satisfied. 

     

    (d) If
      the
      Secured Party fails to reimburse the Bank for any amount under Section 6(b),
      the
      Secured Party will pay the Bank’s out-of-pocket or allocable internal legal fees
      and expenses in collecting from the Secured Party the amount
      payable.

     

    (e) The
      Secured Party indemnifies the Bank against all other Claims incurred, sustained
      or payable by the Bank arising from the Bank following an Initial Instruction
      or
      a Disposition Instruction originated by the Secured Party, or from the Bank’s
      remittance of funds pursuant to Section 9(b), except to the extent directly
      caused by the Bank’s gross negligence or willful misconduct.

     

    7. Representations
      and Warranties; Agreements with Other Persons.
      The
      Bank
      represents and warrants to the Secured Party that the Bank (i) is an
      organization engaged in the business of banking, (ii) maintains the Deposit
      Account as a demand deposit account or accounts in the ordinary course of the
      Bank’s business and (iii) has not entered into any currently effective agreement
      with any person under which the Bank may be obligated to comply with Disposition
      Instructions originated by a person other than the Debtor or the Secured
      Party.
      The
      Bank
      will not enter into any agreement with any person under which the Bank may
      be
      obligated to comply with Disposition Instructions originated by a person other
      than the Debtor or the Secured Party.

     

    8. Deposit
      Account Information.
      If the
      Secured Party so requests, to the extent that the Bank has the operational
      ability to do so, the Bank will provide to the Secured Party, whether by
      Internet access or otherwise, a copy of each periodic account statement relating
      to the Deposit Account ordinarily furnished by the Bank to the
      Debtor.
      The
      Bank’s liability for failing to provide the account statement will not exceed
      the Bank’s cost of providing the statement. The Debtor authorizes the Bank to
      provide to the Secured Party, whether by Internet access or otherwise, any
      other
      information concerning the Deposit Account that the Bank may agree to provide
      to
      the Secured Party at the Secured Party’s request.

     

    9. Termination;
      Closure of the Deposit Account.

     

    (a) Neither
      the Debtor nor the Bank will close the Deposit Account prior to termination
      of
      this Agreement. This Agreement may not be terminated by the Debtor except by
      a
      notice to the Bank given jointly by the other parties. This Agreement may be
      terminated (i) by the Secured Party at any time by notice to the other parties
      and (ii) by the Bank (A) immediately upon notice to the other parties if the
      Bank becomes obligated to terminate this Agreement or to close the Deposit
      Account under any statute, rule or regulation, or any Order or Process, binding
      upon the Bank, (B) upon five Business Days’ notice to the other parties if any
      other party is in material breach of any of the Deposit-related Agreements
      or
      this Agreement, and (C) otherwise upon 30 days’ notice to the other
      parties.

     

    
      
         

      

      
        B-12

        
          

        

      

      
         

      

    

    (b) If
      the
      Bank terminates this Agreement pursuant to clause (A) of Section 9(a)(ii),
      the
      Bank will remit any funds in the Deposit Account on the date of termination
      (i)
      at the direction of the Secured Party if the direction is received by the Bank
      prior to the date of termination of this Agreement or (ii) if no such direction
      is received by the Bank prior to such date, by check mailed to the address
      of
      the Secured Party for receiving communications under this Agreement. If the
      Bank
      terminates this Agreement pursuant to clause (B) or (C) of Section 9(a)(ii),
      the
      Bank will remit any funds in the Deposit Account on the date of termination
      at
      the direction of the Secured Party only if the direction is received by the
      Bank
      prior to the date of termination of this Agreement. Any obligation of the Bank
      to remit any funds to or at the direction of the Secured Party under this
      subsection is subject to clauses (B) through (F) of Section
      4(a)(ii).

     

    (c) Except
      as
      provided in Section 9(b) and in any event if the Secured Party has communicated
      to the Bank that the Secured Party does not wish to receive or direct the
      disposition of the funds, the Secured Party will not receive from the Bank
      any
      remittance of funds from the Deposit Account upon termination of this Agreement
      by the Bank.

     

    (d) The
      termination of this Agreement will not affect any rights created or obligations
      incurred under this Agreement before the termination.
      Sections
      4 and 6 will survive the termination of this Agreement for actions taken or
      omitted before the termination.
      Sections
      9(b) and (c) will survive the termination of this Agreement, and Section 5
      will
      survive the termination of this Agreement solely for any funds to be remitted
      to
      or at the direction of the Secured Party pursuant to Section 9(b).

     

    10. Communications.
      

     

    (a) All
      communications under this Agreement must be in writing and must be delivered
      by
      hand or overnight courier service, mailed by certified or registered mail,
      or
      sent by facsimile to the party addressee.
      If
      the
Specific
      Terms
      permit a
      writing to include an electronic record, a communication, other than the Initial
      Instruction, may be sent by email.

     

    (b) For
      a
      communication under this Agreement to be effective, it must be received (i)
      for
      the Initial Instruction, at the Bank’s address specified on the Exhibit
      and (ii)
      in all other cases, at the party’s address indicated below the party’s signature
      to this Agreement, in each case subject to any change in address provided in
      Section 10(c). Receipt of the Initial Instruction does not occur until it is
      received by the person or persons or department specified on the “attention”
line on the Exhibit.
      If more
      than one person is specified, receipt occurs when the Initial Instruction is
      received by one of the persons.

     

    (c) The
      Bank
      may communicate to the Secured Party changes in the address for the Initial
      Instruction, and any party may communicate to the other parties changes in
      its
      address for communications under this Agreement. 

     

    11. Successors
      and Transferees.
      

     

    (a) This
      Agreement will inure to the benefit of, and be binding upon, the parties and
      their respective successors and other transferees permitted under this
      Section.
      Except as
      provided in this Section, a voluntary transfer of a party’s rights or duties
      under this Agreement without the written consent of the other parties will
      be
      void.

     

    (b) The
      Bank
      may transfer its rights and duties under this Agreement to a transferee to
      which, by contract or operation of law, the Bank transfers substantially all
      of
      its rights and duties under the Deposit-related Agreements.

     

    (c) The
      Secured Party may transfer its rights and duties under this Agreement to (i)
      a
      transferee to which, by contract or operation of law, the Secured Party
      transfers substantially all of its rights and duties under the financing or
      other arrangements between the Secured Party and the Debtor for which the
      Deposit Account acts as collateral security or (ii) if the Secured Party is
      acting as a trustee, indenture trustee, agent, collateral agent, or other
      representative in whose favor a security interest is created or provided for,
      a
      transferee that is a successor trustee, indenture trustee, agent, collateral
      agent, or other representative.

     

    (d) 
      No
      transfer under this Section will be binding upon a non-transferring party until
      the transferring party or the transferee notifies the non-transferring parties
      of the transfer in a writing signed by the transferee that identifies the
      transferee, gives the transferee’s address for communications under this
      Agreement, and states that the transferee is a successor of the transferor
      or
      other transferee permitted under this Section and is entitled to the benefit
      of
      the transferring party’s rights and has assumed all of the transferring party’s
      duties under this Agreement.
      

     

    
      
         

      

      
        B-13

        
          

        

      

      
         

      

    

    (e) A
      non-transferring party need not request proof of any transfer or that the
      transferee is a successor of the transferor or other transferee permitted by
      this Section.
      If
      requested by a non-transferring party, however, the transferring party or the
      transferee will provide reasonable proof thereof.
      If
      the
      Bank or the Secured Party, as a non-transferring party, requests such proof,
      then the effectiveness of the notification of transfer as to the
      non-transferring party will be suspended until the proof is
      provided.

     

    (f) When
      a
      transfer becomes binding on the non-transferring parties, the transferring
      party
      will not be entitled to exercise any rights, and will be relieved of its
      obligations, accruing under this Agreement from and after that time. Those
      rights may be exercised and those obligations will be incurred by the
      transferee.

     

    (g) The
      provisions of subsections (d) and (e) requiring notification for a transfer
      to
      be binding on the non-transferring parties and suspending the effectiveness
      of
      the notification of transfer until reasonable proof of the transfer has been
      provided do not apply to the Bank as the transferring party if the transfer
      is
      by operation of law and by operation of the law (i) the transferee succeeds
      to
      all or substantially all of the rights and becomes generally bound by all of
      the
      duties of the Bank, including the Bank’s duties under this Agreement, and (ii)
      the Bank ceases to exist.

     

    12. Entire
      Agreement; Relation to Other Agreements.
      

     

    (a) This
      Agreement constitutes the entire agreement of the parties, and supersedes all
      previous and contemporaneous negotiations, understandings and agreements, with
      respect to its subject matter, all of which have become merged and finally
      integrated into this Agreement. 

     

    (b) If
      a term
      in the Specific
      Terms
      conflicts with a term of this Agreement not in the Specific
      Terms,
      the
      term in the Specific
      Terms
      controls.

     

    (c) If
      this
      Agreement conflicts with any of the Deposit-related Agreements, this Agreement
      will control.
      However,
      this Agreement will not (i) derogate from any Claim or defense that the Bank
      may
      have against the Debtor under any of the Deposit-related Agreements or (ii)
      create any third party beneficiary rights under any of the Deposit-related
      Agreements in favor of the Secured Party.

     

    (d) This
      Agreement does not amend or otherwise modify any of the agreements between
      the
      Debtor and the Secured Party or provide any rights for the Debtor to originate
      a
      Disposition Instruction in contravention of any agreement between the Debtor
      and
      the Secured Party.

     

    13. Governing
      Law, Depositary Bank’s Jurisdiction and Waiver of Jury Trial.
      

     

    (a) Except
      as
      otherwise required by Article 9 of the UCC, this Agreement will be governed
      by
      the law of that jurisdiction set forth in the Specific
      Terms
      without
      giving effect to any choice of law rule that would require the application
      of
      the law of another jurisdiction.
      

     

    (b) If
      the
Specific
      Terms
      are
      completed expressly to designate the Bank’s jurisdiction for purposes of part 3
      of Article 9 of the UCC, then the Deposit-related Agreements are amended to
      provide that for those purposes that jurisdiction is the Bank’s jurisdiction so
      designated.

     

    (c) To
      the extent permitted by applicable law, each party waives all rights to trial
      by
      jury in any action, claim or proceeding (including any counterclaim) of any
      type
      arising out of or directly or indirectly relating to this
      Agreement.

     

    14. Miscellaneous.

     

    (a) No
      amendment to this Agreement will be binding on any party unless it is in writing
      and signed by all of the parties. Any provision of this Agreement benefiting
      a
      party may be waived only by a writing signed by that party.

     

    (b) If
      a
      provision of this Agreement is held invalid or unenforceable in any respect,
      the
      validity or enforceability of the remaining provisions will not in any way
      be
      affected, it being understood that the invalidity or unenforceability of an
      affected provision in a particular jurisdiction will not in and of itself affect
      the validity or enforceability of the provision in any other
      jurisdiction.

     

    
      
         

      

      
        B-14

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