Document:

Exhibit
10.01

       

      Asset
Purchase Agreement

       

      This
Asset Purchase Agreement (the “Agreement”) is made  this 29th day of
December 2009, by and between  Nutrition 21, Inc., a New York
corporation, (“Nutrition 21”) ( the “Seller”)) and Nature’s Products,
Inc.,  a Florida corporation (“Buyer”).

       

      Whereas,
Seller conduct a business that sells finished and packaged end-products to
retailers for ultimate sale to end users without further fabrication or
packaging (the “Business”)

       

      WHEREAS, Nutrition 21 also
conducts (i) a business that sells raw materials, formulations, compounds,
blends, and bulk and other materials, whether or not encapsulated, to third
party non-end users to be further fabricated, blended or packaged for ultimate
sale to end users with or without prescriptions; and (ii) a “consumer business”
which sells finished and packaged nutritional supplement end-products directly
to end users by direct response under the name Iceland Health, neither of which
businesses are included in the Business; and

       

      WHEREAS, subject to the terms
and conditions hereof, Seller desires to sell, transfer and assign to Buyer, and
Buyer desires to purchase from Seller, certain of the properties, rights and
assets used or held for use in connection with the Business.

       

      Now
therefore, in consideration of the mutual covenants and agreement herein
contained, the parties hereto agree as follow:

       

      ARTICLE 1

      PURCHASE AND SALE OF
ASSETS.

       

      1.1          Sale of
Assets.  Upon
the terms and subject to the conditions set forth in this Agreement, and the
performance by the parties hereto of their respective obligations hereunder,
Seller agrees to sell, assign, transfer and deliver to Buyer, free and clear of
all Liens, and Buyer agrees to purchase from Seller, all of Seller’s right,
title and interest in and to all assets of the Business wherever located,
including the following rights, interests, properties and assets, but subject to
the exclusions hereinafter expressly set forth:

       

      (a)           All
inventory owned by Seller as of the Closing Date relating to the Business and
listed as “Included Inventory” in the Working Capital Adjustment Schedule that
is Exhibit 1.5 attached hereto, and inclusive of all components, packaging
materials and bulk utilized in the production of the Business, but exclusive, of
Inventory listed in Exhibit 1.5 as “Excluded Inventory” (the inventory being
sold hereunder being collectively referred to as the
“Inventory”);Seller;

       

      
        
           

        

        
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      (b)           All
accounts receivable exclusive, however, of accounts receivable listed on the
Working Capital Adjustment Schedule that is an attachment to Exhibit 1.5
attached hereto(“Excluded Receivables”); the receivables being sold hereunder
being collectively referred to as the “Receivables”);

       

      (bb)    The contracts of Seller
with third parties that are listed on Schedule 1.1(bb) attached hereto (the
“Assigned Contracts”);

       

      (c)           All
Intellectual Property (as defined below) owned or utilized by Seller in the
operation of the Business, all as set forth on Schedule 1.1(c)
attached hereto.  For purposes hereof, the term “Intellectual
Property” includes:  (i) all trade names and all trade logos, slogans,
Internet domain names, registered and unregistered trademarks and service marks
and applications (collectively “Marks”); (ii) all copyrights in both published
and unpublished works, including, without limitation, all compilations,
databases and computer programs, sales and marketing materials,  and
all copyright registrations and applications (collectively, “Copyrights”); (iii)
a patent license in the form of Exhibit 6.4(d) (the “Patent License”) in respect
of certain patents and patent applications owned by Seller (collectively,
“Patents”), it being understood that certain other Patents used in the Business
that are not owned by Seller shall also be licensed to Buyer as provided
elsewhere herein; (iv) all know-how, trade secrets, formulae, products under
development, confidential or proprietary information, customer and supplier
lists of the Business, (collectively, “Trade
Secrets”); (v) all Internet web-sites and addresses (“IP Addresses”), all domain
name registrations and reservations, web-site content and underlying software
(collectively, “Websites”); and (vi) all goodwill, franchises, licenses,
permits, consents, approvals, technical information, and claims of infringement
against third parties (the “Rights”);

       

      (d)           All
of the goodwill of Seller in, and the going concern value of, the Business, and
all of the business assets associated therewith, including customer and supplier
lists, sales and marketing materials including, without limitation, all
commercials, film and statistical marketing reports and results, catalogs,
proprietary information, and trade secrets related to the Business (Exhibit
1.1(d) contains a list of marketing materials of the Business that are not owned
by the Seller);

       

      (e)           All
of the equipment used in the operation of the Business, including, without
limitation, the items listed on Exhibit 1.1(e);

       

      (f)           All
of the Seller’s revenue producing contracts related to the Business, including,
without limitation, those listed on Exhibit 1.1 (f); and

       

      (g)           The
telephone and facsimile numbers, e-mail addresses, restrictive covenants,
licenses, computer software, customer lists, manufacturer, vendor and supplier
lists, operating guides and manuals, financial and accounting records, creative
materials, advertising and marketing  materials and data, promotional
materials, studies, reports, correspondence and other similar documents and
records.

       

      
        
           

        

        
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      The
assets, properties and business of Seller being sold to and purchased by Buyer
under and as identified in this Section 1.1 are
referred to herein collectively as the “Assets.”

       

      1.2          Excluded
Assets.  In
addition to the Excluded Inventory and the Excluded Receivables, there shall
also be excluded from the Assets and retained by Seller (i) to the extent in
existence on the Closing Date, cash, cash equivalents, (ii) barter agreements
with Active International and Icon International, Inc.; (iii) deposits related
to credit card processing; and (iv) all patents. All assets that are excluded
from the Assets are collectively referred to as “Excluded Assets”).

       

      1.3          Liabilities;
Excluded Liabilities; Employees.

       

      (a)          Assumption
of Liabilities.  The Buyer shall assume (i) the Seller’s trade
accounts payable for the Business as of the Closing, specifically
excluding  payables which are subject to litigation against the
Seller, (ii) present and future obligations of Seller under the Assigned
Contracts, (iii) and any existing or future claims by retailers for returns and
allowances, charge backs, "unsalables" and promotional allowances, or equivalent
deductions or charges however called,  whether known on unknown
and (iv) any future product liability claims in respect of any
Product  sold by Buyer after Closing excluding sale of Seller’s
existing Inventory sold and delivered to Buyer hereunder (collectively “Assumed
Liabilities”). Other than the Assumed Liabilities, Buyer does not and shall not
accept or assume, and shall have no liability or responsibility for or with
respect to any liability or obligation of the Seller (“Excluded
Liabilities.”).  The term Excluded Liabilities means, except for the
Assumed Liabilities, (i) any and all liabilities or obligations arising out of
Seller’s ownership of the Assets or Seller’s operation of the Business; and (ii)
any and all other obligations and liabilities of Seller of any nature whatsoever
at any time existing, arising or asserted, whether, known, unknown, fixed,
contingent or otherwise, including, without limitation, for vacation pay, sick
pay and holiday pay with respect to the Employees (as defined below), patent
claims against Seller related to the sale by Seller of any
product  that is a combination of glucosamine and fish oil, and for
any obligations, “earn-out” or notes of Seller associated with the Seller’s
acquisition of the Business.

       

      (b)          Excluded
Liabilities.  It is expressly
understood that, notwithstanding anything herein to the contrary, Buyer shall
not assume, pay or be liable for any of the Excluded Liabilities, all of which
shall be retained, and remain the responsibility and obligation of
Seller.

       

      (c)          Employees,
Wages and Benefits.

       

      Buyer
shall have no obligation to offer employment to any persons who, as of the
Closing Date, are employed in the operation of the Business or otherwise by
Seller.  Buyer shall not be obligated under and hereby specifically
disclaims any assumption of any liability with respect to any employee benefit
plan policy, plant closing obligation, practice or agreement including but not
limited to group health, post-retirement medical or life insurance benefits,
severance benefits, qualified retirement plans, non-qualified plans to which
Seller are parties or under which any of Seller’s employees or former employees
is covered, all of which are included in Excluded Liabilities.

       

      
        
           

        

        
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      1.4          The
Closing.  The
transactions contemplated by this Agreement shall take place at a closing (the
“Closing”) to be held at 2:00 p.m., local time, at the offices of Buyer’s
counsel, on December 29, 2009 (the “Closing Date”) or at such other time as
shall be agreed by Seller and Buyer.

       

      1.5          Purchase
Price  In
consideration of the sale by the Seller to Buyer of the Assets, and subject to
the satisfaction of the terms and conditions contained herein, Buyer shall pay
Seller $1,000,000, plus or minus any adjustment to be made at Closing in
accordance with Exhibit 1.5 hereto (the “Purchase Price”), which Purchase Price
is payable by wire transfer on the Closing Date.

       

      1.6          Debt
Satisfaction.  With
respect to the following matters (the “Debt”), on or before the
Closing:

       

      (a)           Except
for the Assumed Liabilities, all secured and unsecured liabilities and
obligations of Seller affecting the Assets or the Business shall have been fully
satisfied, paid and extinguished by Seller and Seller shall have provided to
Buyer satisfactory evidence thereof (with the exception of the “earn-out” or
notes of Seller associated with the Seller’s acquisition of the Business, trade
payables that are the subject of litigation or good faith dispute, and other
liabilities and obligations not to exceed $25,000);

       

      (b)           Seller
shall have fully satisfied all Taxes accrued and due and payable by Seller that
affect the Assets or the Business;

       

      (c)           Seller
shall have provided to Buyer satisfactory evidence that any and all Liens
affecting the Assets and Business have been released, terminated and
extinguished on or before the Closing Date. No advertising obligation shall be
due in connection with the telephone numbers or web addresses of the
Business.

       

      1.7          Purchase
Price Allocation.  The
Buyer and Seller agree that the Buyer shall supply to the Seller the allocation
of the Purchase Price within 30 days of Closing.  Such allocation
shall be binding upon Buyer and Seller for all purposes.  Buyer and
Seller each further agree to file their Federal income tax returns and other tax
returns reflecting such allocation, Form 8594 and any other reports required by
Section 1060 of the Code.

       

      1.8          Further
Assurances.  Seller
from time to time after the Closing at the request of Buyer and without further
consideration, shall execute and deliver further instruments of transfer and
assignment and take such other action as Buyer may reasonably require to more
effectively transfer and assign to, and vest in, Buyer the Assets free and clear
of all Liens (as defined hereinafter).

       

      
        
           

        

        
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      1.9           Sales and
Transfer Taxes.  All
sales, transfer, use, recordation, documentary, stamp, excise taxes, personal
property taxes, fees and duties, (including any real estate transfer taxes)
under applicable law incurred in connection with this Agreement or the
transactions contemplated thereby will be borne and paid by Seller, and Seller
shall promptly reimburse Buyer for the payment of any such tax, fee or duty
which Buyer is required to make under applicable law.

       

      1.10 Access to Original
Records.

       

      After the
Closing, at reasonable times and on reasonable notice, Seller shall have access
to the books and records pertaining to operations of the Business prior to the
Closing, and Buyer shall retain such books and records, for a period of three
years after the Closing, and prior to disposing of such records shall offer to
deliver them to Seller.

       

      1.11 Matters Relating to
Excluded Receivables

       

      Seller
agree that until the 180th day
after the Closing they will not contact any obligor to collect an Excluded
Receivable, and Buyer shall forward to Seller all payments received thereon.
Should Buyer generate any new receivables after the Closing from any obligor,
payments from that obligor shall be applied to receivables from that obligor
based on the indication of the obligor on or accompanying the
payment.

       

      ARTICLE 2

      REPRESENTATIONS AND
WARRANTIES OF SELLER

       

      In order
to induce Buyer to enter into this Agreement, Seller hereby makes the following
representations and warranties to Buyer subject to exceptions that are fully
disclosed on schedules attached hereto (collectively, the
“Schedules”).  For the purposes of this Agreement, a “Material Adverse
Effect” means an unfavorable or harmful effect upon the assets, properties,
business prospects, condition (financial or other) or results of operations of
the Business which is material in magnitude, nature or other
respects.

       

      2.1           Organization;
Subsidiaries.  Seller
is duly qualified to do business in the State of New York.  Seller has
the full power and authority, corporate or otherwise, to own or lease its
properties and to conduct its business in the manner and in the places where
such properties are owned or leased or such business is currently conducted or
proposed to be conducted. Seller does not own any equitable or ownership
interest in any other business.  Seller is not required to be
authorized to do business in any State other than New York, Ohio, Maine, Indiana
and Pennsylvania, except to the extent that the failure to qualify will not
materially affect Seller or the Business.

       

      2.2           Required
Action.  All
actions and proceedings necessary to be taken by or on the
part of Seller in connection with the transactions contemplated by this
Agreement have been, or by the Closing will have been, duly and validly taken,
and this Agreement and each other agreement, document and instrument to be
executed and delivered by or on behalf of Seller pursuant to, or as contemplated
by, this Agreement (collectively, the “Seller Document(s)”) has been, or by the
Closing will have been, duly and validly authorized, executed and delivered by
Seller and no other action on the part of Seller is required in connection
therewith.  Seller has full right, authority, power and capacity to
execute and deliver this Agreement and each other Seller Document and to carry
out the transactions contemplated hereby and thereby.  This Agreement
and each other Seller Document constitutes, or when executed and delivered will
constitute, the legal, valid and binding obligation of Seller enforceable in
accordance with its respective terms.

       

      
        
           

        

        
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      2.3           No
Conflicts.  The
execution, delivery and performance by Seller of this Agreement and each other
Seller Document does not and will not (i) violate any provision of its
Certificate of Incorporation, as amended to date, or the bylaws or any agreement
among shareholders , (ii) constitute a violation of, or conflict with or result
in any breach of, acceleration of any obligation under, right of termination
under, or default under, any agreement or instrument to which it is a party or
by which it  or the Assets are bound, (iii) violate any judgment,
decree, order, statute, rule or regulation applicable to Seller, or the Assets,
(iv) require Seller  to obtain any approval, consent or waiver of, or
to make any filing with, any person or entity (governmental or otherwise) that
has not been obtained or made, or (v) result in the creation or imposition of
any and all mortgages, pledges, security interests, claims, charges, liens,
assessments, restrictions on or conditions to transfer or assignment and
encumbrances or restrictions of any kind whatsoever (individually, a “Lien” and
collectively, “Liens”) on any of the Assets.  The signatories who
execute this Agreement and the other Seller Documents contemplated hereby on
behalf of Seller have and shall have all requisite power to do so in the name of
and on behalf of Seller.

       

      2.4           Taxes.  Seller
has properly filed all federal, state and local tax returns and estimates
required to be filed by the Seller for any and all federal, state, foreign, or
local income, property, sales, use ad valorem, license, business, excise,
franchise, employment, withholding, worker’s compensation or other taxes, fees
or assessments (together with interest additions and penalties) (the
“Taxes”).  All Taxes which are due and payable by the Seller, or which
will become due and payable by the Seller prior to or after the Closing Date,
have been, or will be, paid in full in a timely manner.  No issues
have been raised in writing by, and are currently pending with, any taxing
authority in connection with any such returns.  Seller have never been
part of an “affiliated group” or a party to an allocation or sharing agreement
for Tax purposes.

       

      2.5           Compliance
with Laws.  Seller
have operated the Business, and presently Seller’s operation of the Business is,
in compliance in all material respects with, and Seller are responsible for no
act or omission which reasonably could be expected to result in material
liability under, any and all applicable statutes, ordinances, orders, rules and
regulations promulgated by any federal, state, municipal or other governmental
authority (collectively, “Laws”), and Seller has not received notices of
violations or alleged violations of any such Laws.  Seller has not
received any information to indicate that any of its policies or practices are
being audited or investigated by any government.  Seller are not bound
by any order, decree or judgment or similar administrative government
arrangement which may have a Material Adverse Effect.

       

      
        
           

        

        
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      2.6           Contracts.  Schedule 2.6 attached
hereto contains a true, correct and complete list of all  leases,
contracts, agreements and arrangements, whether oral or written, (the
“Contracts”) (and a description of each oral Contract, if any), and Seller has
provided Buyer with true and complete copies of all written Contracts related to
the Business.  Neither the Seller nor, to the knowledge of the
Seller,  any other party is in default or in arrears in performance
under any Contract, nor does any condition exist that with notice or lapse of
time or both would constitute such a default, and no waiver or indulgence has
been granted by any party under any Contract.  Seller has not received
notice of, and Seller has no knowledge of, any fact which would result in a
termination, repudiation or breach of any Contract.  Seller has not
entered into any other agreement or arrangement with any other party with
respect to the sale, transfer or any other disposition of the Business or the
Assets, in whole or in part.  Seller is not subject to or bound by any
agreement which may have a Material Adverse Effect.

       

      2.7           Title.  Seller
has good and marketable title to all of the Assets free and clear of all
Liens.  Except for the Excluded Assets, the Assets include all of the
assets and properties (i) held for use by Seller to conduct the Business as
presently conducted; (ii) necessary for Buyer to operate the Business in the
same manner as such business is currently operated by Seller; and all data
related to the Business that is housed with or serviced by a third party
vendor.  All of the tangible Assets have been well maintained and are
in good condition, and comply in all material respects with applicable laws,
ordinances and regulations. Seller warrants to Buyer that, at the time of
Closing, all Assets shall be free and clear of all any charge, claim, community
or other marital property interest, condition, equitable interest, lien, option,
pledge, security interest, mortgage, right of way, easement, encroachment,
building or use restriction, servitude, conditional sales agreement, right of
first option, right of first refusal or similar restriction, encumbrance or
right of third parties, whether voluntarily or by operation of law, and
includes, without limitation, any agreement to give any of the foregoing in the
future, and any contingent sale or other title retention agreement or lease in
the nature thereof.

       

      2.8           No
Litigation.  Seller
is not involved in nor, to the knowledge of Seller, is Seller threatened to be
involved in any litigation or legal or other proceedings related to or affecting
the Business or any Asset or which would prevent or hinder the consummation of
the transactions contemplated by this Agreement.  Seller has not been
operating the Business under, and the Business is not subject to, any order,
injunction or decree of any federal, state or municipal court or other
governmental agency.

       

      2.9           Employee;
Labor Matters.  Seller
is not delinquent in payment to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed for
it to the date hereof or amounts required to be reimbursed to such
employees.  Neither the termination of the employment of any of said
employees, nor the consummation of the transactions contemplated hereby will
result in any liability to any of said employees for any bonus, accrued sick,
vacation or holiday severance or other compensation payments.  There
are no charges of employment discrimination or unfair labor practices threatened
against or involving Seller.  No collective bargaining agreement
exists and no question concerning representation exists, respecting any group of
employees of Seller.

      

        
          
             

          

          
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        2.10        Financial
Statements.  Included
in Schedule
2.10 attached hereto are copies of the: (1) unaudited balance sheet of
Seller as of September 30, 2009 (the “Base Balance Sheet”), (2) the unaudited
statement of income and expense and statement of retained earnings of Seller for
the period July 1 to September 30, 2009, (3) the audited Comparative Balance
Sheet of Seller as of June 30 of 2007 and 2008, (collectively the “Financial
Statements”).  The Financial Statements have been prepared in
accordance with GAAP and Seller’s historical accounting practices during the
periods covered thereby, and present fairly and accurately the financial
condition of the Business, as combined with the business described in clause
(ii) of the second Whereas clause at the head of this Agreement, at the dates of
said balance sheets and the results of operations of the Business as so combined
for the periods covered by such Statements of Income and
Expenses.   Seller had no liabilities or obligations of any kind
with respect to the Business, whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), that are
not disclosed and adequately reserved against on the Base Balance Sheet, except that the
representation as to  any future claims by retailers for returns and
allowances, charge backs, "unsalables" and promotional allowances, or equivalent
deductions or charges however called related to the sale of Products by Seller,
is made only to the knowledge of Seller.

         

        2.11        Business
Since the Base Balance Sheet Date.  Since
the Base Balance Sheet Date, there has been no material adverse change, material
obligation in liability incurred by Seller or with respect to the Business or
the Assets, operations or financial condition of the Business; and the Business
has been conducted in the ordinary course of business and in substantially the
same manner as it was conducted before the date of the Base Balance
Sheet.

         

        2.12         Approvals;
Consents.  No
approval, consent, authorization permit, license or exemption from or filing
with any government agency or any person or entity not a party to this Agreement
is required to be obtained or made by Seller in connection with the execution
and delivery of this Agreement and the Seller Documents and the consummation of
the transactions contemplated hereby and thereby.

         

        2.13        Customers
and Suppliers; Warranties.  Seller’s
relations with its customers and suppliers are good and there are not pending
or, to Seller’s knowledge, threatened claims or controversies with any customer
or suppliers that are material to the Assets or the Business or reasonably can
be deemed to pose a risk of resulting in a Material Adverse
Effect.  The products of the Business have the warranties listed on
Schedule 2.13 hereto. Also set forth on Schedule 2.13 hereto is, to the best
knowledge of Seller, a list of existing or future claims by retailers for
returns and allowances, charge backs, "unsalables" and promotional allowances,
or equivalent deductions or charges of any nature.

         

        2.14        Inventory. 
The Inventory is merchantable and fit for the purpose for which it was procured
or manufactured and none of which is damaged, or defective. No material supplier
of the Seller has indicated any intention to not continue its business relations
with Seller or Buyer as a result of the transaction contemplated hereby or
otherwise.

         

        
          
             

          

          
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        2.15        Brokers.  Other
than Nature’s Equity, LLC, Seller has not retained, nor are Seller aware of, any
broker or finder or other person who would have any valid claim against any of
the parties to this Agreement for a commission or brokerage fee in connection
with this Agreement or the transactions contemplated hereby. The fee of Nature’s
Equity is the sole responsibility of the Seller.

         

        2.16        Intellectual
Property.

         

        (a)           Identity of Intellectual
Property. Schedule 1.1(c) attached
hereto sets forth all Intellectual Property of Seller which is or has been
utilized in the operation of the Business.

         

        (b)           Title to Intellectual
Property.  Seller has exclusive ownership of, and have good,
valid and marketable title or interest as a licensee in and to, all of the
Intellectual Property, free and clear of any Liens, and have the right to use,
license, transfer, distribute and bring infringement actions with respect to all
of the Intellectual Property without payment to any third
party.  Seller has not licensed or granted any rights in the
Intellectual Property and Seller’s rights in all of such Intellectual Property
are freely transferable.  There are no claims or demands pending or,
to the knowledge of Seller, threatened by any other person pertaining to any of
such Intellectual Property and no proceedings have been instituted or are
pending or, to the knowledge of Seller, threatened against Seller and/or its
officers, employees and consultants which challenge the validity and
enforceability of Seller’s rights in respect of the Intellectual
Property.  The use of the Intellectual Property in the Business has
not infringed and currently does not infringe (and, following Closing, Buyer
will be able to continue to use the Intellectual Property in the same manner as
heretofore used by Seller without infringing) on the proprietary rights of any
third party, and Seller has not received any notice or allegation of
infringement.  The Patents, Marks and Copyrights are currently in
compliance with formal legal requirements (including without limitations payment
of filing, examination and maintenance fees and proofs of working or use), are
valid and enforceable, and are not subject to any maintenance fees, taxes or
actions falling due within ninety (90) days after the Closing
Date.  In each case where a Patent, Mark or Copyright is held by
Seller by assignment, the assignment has been duly recorded with the appropriate
governmental authority and all other jurisdictions of
registration.  No Patent has been or is now involved in any
interference, reissue, re-examination or opposition proceeding.  There
is no potentially interfering Patent of any third party.  Any products
made, used or sold under the Patents have been marked with the proper patent
notice.  No Mark has been or is now involved in any opposition,
invalidation or cancellation proceeding and, to the knowledge of Seller, no such
actions are threatened with respect to any of the Marks.  All products
and materials containing a Mark bear the proper notice where permitted by
law.  All copies of works encompassed by the Copyrights have been
marked with the proper copyright notice.

         

        
          
             

          

          
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        2.17        Absence
of Certain Business Practices.   Neither
Seller nor any present officer, employee or agent of Seller nor any other person
or entity acting on their behalf, including to the best knowledge of the Seller
any past officer of the Seller, has, directly or indirectly, during the
ownership of the Business or Assets given or agreed to give any gift or similar
benefit to any customer, supplier, governmental employee or other Person who is
or may be in a position to help or hinder the Business (or assist Seller in
connection with any actual or proposed transaction relating to the Business)
which (a) if not given in the past, might have had a material and adverse effect
on the assets, business or operations of the Seller as reflected in the
Financial Statements, or (b) if not continued in the future, might materially
and adversely affect the Seller’s assets, business, operations or prospects or
which might subject Seller  to suit or penalty in any private or
governmental litigation or proceedings.

         

        2.18        Disclosure   The
representations, warranties and statements contained in this Agreement and in
the certificates, exhibits, and Schedules delivered by Seller to Buyer pursuant
to this Agreement do not contain any untrue statement of a material fact, and,
when taken together, do not omit to state a material fact required to be stated
therein or necessary in order to make such representations, warranties or
statements not materially misleading in light of the circumstances under which
they were made.  There are no facts known to Seller about the Business
or Assets which presently or would in the future have a Material Adverse Effect
which have not been specifically disclosed herein or in a Schedule
furnished.

         

        ARTICLE 3

        REPRESENTATIONS AND
WARRANTIES OF BUYER.

         

        As a
material inducement to Seller entering into this Agreement, Buyer hereby
represents and warrants to Seller as follows:

         

        3.1           Organization.  Buyer
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware.  Buyer has all
requisite power and authority to conduct its business as it is now conducted and
to own, lease and operate its properties and assets.

         

        3.2           Required
Actions.  All
actions and proceedings necessary to be taken by or on the part of Buyer in
connection with the transactions contemplated by this Agreement have been duly
and validly taken, and this Agreement and each other agreement, document and
instrument to be executed and delivered by or on behalf of Buyer pursuant to, or
as contemplated by, this Agreement (collectively, the “Buyer Documents”) has
been, or by the Closing Date will have been, duly and validly authorized,
executed and delivered by Buyer.  Buyer has full right, authority,
power and capacity to execute and deliver this Agreement and each other Buyer
Document and to carry out the transactions contemplated hereby and
thereby.  This Agreement and each other Buyer Document constitutes, or
when executed and delivered will constitute, the legal, valid and binding
obligation of Buyer enforceable in accordance with its respective
terms.

         

        
          
             

          

          
            10

            
              

            

          

          
             

          

        

         

        3.3           No
Conflicts.  The
execution, delivery and performance by Buyer of this Agreement and each other
Buyer Document does not and will not (a) violate any provision of the Articles
of Incorporation of Buyer, as amended to date, (b) constitute a violation of, or
conflict with or result in any breach or, acceleration of any obligation under,
right of termination under, or default under, any agreement or instrument to
which Buyer is a party of by which it is bound, (c) violate any judgment,
decree, order, statute, rule or regulation applicable to Buyer, (d) require
Buyer to obtain any approval, consent or waiver of, or to make any filing with,
any person or entity (governmental or otherwise) that has not been obtained or
made.  The officers who execute this Agreement and the other Buyer
Documents contemplated hereby on behalf of Buyer have and shall have all
requisite power to do so in the name of and on behalf of Buyer.

         

        3.4          No
Litigation.  

         

        Buyer is
not now involved in nor, to the knowledge of Buyer, is Buyer threatened to be
involved in any litigation or legal or other proceedings which would prevent or
hinder the consummation of the transactions contemplated by this
Agreement.  Buyer is not operating under and is not subject to, any
order, injunction or decree of any federal, state or municipal court or other
governmental agency.

         

        3.5          Brokers.  

         

        Buyer has
not retained, nor is Buyer aware of, any broker or finder or other person who
would have any valid claim against any of the parties to this Agreement for a
commission or brokerage fee in connection with this Agreement or the
transactions contemplated hereby.

         

        3.6          Disclosure.

         

        The
representations, warranties and statements contained in this Agreement and in
the certificates, exhibits, and Schedules delivered by Buyer to Seller pursuant
to this Agreement do not contain any untrue statement of a material fact, and,
when taken together, do not omit to state a material fact required to be stated
therein or necessary in order to make such representations, warranties or
statements not materially misleading in light of the circumstances under which
they were made.

         

        ARTICLE 4

        COVENANTS OF
SELLER.

         

        Seller
covenants and agrees that, from the date hereof until consummation of the
transactions contemplated hereby at the Closing (and thereafter, as specified
below), Seller shall comply with the following provisions.

         

        4.1          Access to
Premises and Records.  Commencing on the
date hereof and thereafter prior to the Closing, Seller (a) shall give Buyer and
its representatives, free access to Seller’s employees and other representatives
(including accountants and other professional
consultants)  and,  (b)  shall give Buyer and its
representatives, free access to the properties, books and records of Seller, the
Business and with respect to the Assets, and (c) will furnish to Buyer and its
representatives such information regarding Seller, the Business and the Assets
as Buyer or its representatives may from time to time reasonably request in
order that Buyer may have full opportunity to make a diligent
investigation.

         

        
          
             

          

          
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        4.2          Continuity
and Maintenance of Operations of the Business.  Except
as to actions which Buyer has been advised and to which Buyer has consented to
in writing, and except as specifically permitted or required by this Agreement,
Seller shall (a) operate the Business in the ordinary course consistent with
past practices, use its commercially reasonable efforts to keep available the
services of the employees who are involved in the operation of the Business, and
use best efforts to preserve any beneficial business relationships with
customers, suppliers and others having business dealings with Seller relating to
the Business, (b) use and operate the Assets in a manner consistent with past
practice and maintain the Assets in good operating condition, ordinary wear and
tear excepted; and (c) refrain from taking or allowing to be taken any action
which would interfere with consummation of the transactions contemplated
hereunder or which would diminish the value of the Assets or the
Business.

         

        4.3          Consents.  Prior
to Closing, Seller shall obtain, as soon as practicable and at their expense,
the consent of all third parties required to transfer the Assets to
Buyer.  Such consents shall be in form and substance reasonably
satisfactory to Buyer.

         

        4.4           Notification
of Certain Matters.  Seller
shall promptly notify Buyer of (i) any fact, event, circumstances or action the
existence or occurrence of which would cause any of Seller’s representations or
warranties under this Agreement, or the disclosures in any Schedules or exhibits
attached hereto, not to be true in any material respect, (or if it had existed
or occurred prior to the date of this Agreement, would have caused the same not
to be true in any material respect); (ii) any failure on Seller’s part to comply
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement;  (iii)
anything which, if not corrected prior to the Closing Date, would prevent Seller
from fulfilling any condition to Closing described in ARTICLE 6 hereof; and
(iv) any planned material changes, including, without limitation, any increase
in customary levels of inventory. Should Buyer proceed to Closing despite the
matters disclosed in such notice, Seller shall not be obligated to indemnify
Buyer therefor.

         

        4.5           No
Solicitation.  Until
the earlier of the Closing and the termination of this Agreement as provided
herein, Seller shall refrain, and Seller shall cause its officers, employees,
stockholders, directors, agents and representatives and all other employees who
perform services with respect to the operation of the Business to refrain, from
soliciting or engaging in any discussions with any person relating to the
possible sale of the Assets or Business (or any material portion thereof) or the
capital stock of Seller or the merger, consolidation or joint venture of Seller
or the Business.  During the period aforesaid, Seller shall promptly
inform Buyer of any inquiries or proposals regarding the same and shall provide
all pertinent documentation related thereto.

         

        4.6           Cooperation.  Seller
shall use its best efforts to take all steps necessary or appropriate in order
to carry out the intent of this Agreement and consummate the transactions
contemplated hereby and shall cooperate with all requests of Buyer and its
counsel in connection with Buyer’s due diligence investigation of the Business
and Assets.

         

        
          
             

          

          
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        ARTICLE 5

        COVENANTS OF
BUYER.

         

        Buyer
covenants and agrees that, from the date hereof until consummation of the
transactions contemplated hereby at the Closing, Buyer shall:

         

        5.1          Cooperation.  Buyer
shall use its reasonable best efforts to take all steps necessary or appropriate
in order to carry out the intent of this Agreement and consummate the
transactions contemplated hereby.

         

        5.2          Notification
of Certain Matters

         

          Buyer
shall promptly notify Seller of (i) any fact, event, circumstances or action the
existence or occurrence of which would cause any of Buyer’s representations or
warranties under this Agreement not to be true in any material respect, (or if
it had existed or occurred prior to the date of this Agreement, would have caused the same
not to be true in any material respect); (ii) any failure on Buyer’s part to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it
under this Agreement, or (iii) anything which, if not corrected prior to the
Closing Date, would prevent Buyer from fulfilling any condition to Closing
described in ARTICLE 7 hereof.

         

        ARTICLE 6

        CONDITIONS PRECEDENT TO
OBLIGATION OF BUYER.

         

        Buyer’s
obligation to consummate the transactions contemplated by this Agreement is
subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, unless otherwise waived by Buyer in writing:

         

        6.1          Accuracy
of Representations and Warranties.  The
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects as of the Closing Date with the same
effect as though made at such time and the representations and warranties of
Seller contained in this Agreement which are qualified by materiality shall be
true and correct in all respects as of the Closing Date with the same effect as
though made at such time.

         

        6.2          Performance
of Agreements and Deliveries.  Seller
shall have performed in all material respects all of its covenants, agreements
and obligations under this Agreement which are to be performed or complied with
by Seller prior to or upon the Closing Date and shall have delivered all
documents and items required to be delivered at or prior to the Closing,
including, without limitation:

         

        (a)           A
certificate, dated the Closing Date, from the President of IH and Nutrition 21
to the effect that the conditions set forth in this ARTICLE 6 have been
satisfied and Seller have performed all covenants which it is obligated to
perform prior to Closing;

         

        
          
             

          

          
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    (b)           A
certificate, dated the Closing Date, from the Secretary of IH and Nutrition 21
as to the good standing of the Seller, and the authority and the incumbency of
all officers executing the Seller Documents on behalf of Seller;

     

    (c)           an
opinion of Folger & Folger, dated the Closing Date, in the form reasonably
acceptable to the Buyer;

     

    (d)           Buyer
and Seller shall have executed a Noncompetition Agreement in a form reasonably
acceptable to Buyer, which shall include a restriction period of four years, and
Buyer shall have been assigned certain non-competition and confidentiality
agreements between the Seller and each of Mark Stenberg and Arnold
Blair;

     

    (e)           A
long form Certificate of Good Standing for each of IH and Nutrition 21 issued by
the state of their formation dated no earlier than 15 days prior to
Closing;

     

    (f)           
An Escrow Agreement in a form acceptable to Buyer providing for the escrow of
$100,000.001  in
respect of any future claim (an “Escrow Claim”) by the holder of Patent
5,843,919 on glucosamine and fish oil combinations (the “ Subject Patent”) that
Buyer is liable to the holder of the Subject Patent because Seller infringed the
Subject Patent prior to the Closing. Each of Buyer and Seller agree to instruct
the escrow agent in writing (with a copy of the other party) to promptly
release: (a) to Buyer all amounts necessary to satisfy Seller’s indemnification
to Buyer in respect of any Escrow Claim; and (b) to Seller all amounts remaining
in escrow after any Escrow Claim (i) has been settled by agreement with the
holder of the Subject Patent, or (ii) has been determined by the final and
non-appealable judgment of a court. The Escrow Agreement shall also direct the
escrow agent to release to Seller all amounts that remain in escrow on the
second anniversary of the Closing. The escrow is not available to fund any other
claim or claims by Buyer against Seller, whether for indemnification under this
Agreement or otherwise. Regardless of any such other claim or claims, amounts
shall be released from escrow as provided above and only as provided above, and
Buyer shall be entitled to proceed against Seller for such other claim or claims
only by separate action as if there were no amounts in escrow;

     

    (g)           An
Assignment and Assumption Agreement in a form acceptable to Buyer and Seller;
and

     

    (h)           Such
other certificates, instruments, actions and deliveries reasonably requested by
Buyer.

     

      
        

      

    

    
      	
              1

            	
              The
      $100,000 escrow is in respect of Escrow Claims under this Agreement as
      well as the asset purchase agreement related to the transaction referenced
      in Sections 6.8 and 7.5 hereof. The total escrow amount is $100,000.00 and
      is to be available with respect to an Escrow Claim arising under either
      such transaction in accordance with this Section 6.2(f) or the like
      section in such other asset purchase agreement. The funds will be held in
      escrow pursuant to a single Escrow
Agreement.

            

    

    
      
         

      

      
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    6.3         
No
Material Adverse Effect.  None
of the Schedules, documents or other information to be furnished by Seller to
Buyer pursuant to this Agreement, shall disclose any fact, circumstance or
matter, or any change in or development in connection with any matter, which
has, or could reasonably be expected to have, a Material Adverse Effect on the
Assets or on the Business; and there shall have been no other changes or
developments affecting either the Assets or the Business since the Base Balance
Sheet Date which have, or could reasonably be expected to have, a Material
Adverse Effect on the Assets or the Business.

     

    6.4         
Asset
Transfer.  Seller
shall have delivered to Buyer the following instruments of transfer and
assignment in accordance with the provisions hereof, transferring to Buyer all
of Seller’s right, title and interest in and to the Assets, free and clear of
all Liens:

     

    (a)           A
Bill of Sale in a form reasonably acceptable to Buyer;

     

    (b)           Assignments
of Intellectual Property in forms reasonably acceptable to Buyer;

     

    (c)           An
Agreement to Assign Internet Domain Names and InterNic addresses in a form
reasonably acceptable to Buyer;

     

    (d)           Patent
licenses under patents owned by Seller in forms reasonably acceptable to Buyer
and a patent sublicense under patent owned by McLeod Discoveries, LLC, in forms
reasonably acceptable to Buyer (the “McLeod License”);

     

    (e)           Seller’s
files and records relating to the Assets;

     

    (f)           
Delivery of an executed Supply Agreement in a form acceptable to the
parties;

     

    (g)           Delivery
of an executed Assignment and Assumption Agreement in a form acceptable to the
parties; and

     

    (h)           Such
other instruments of transfer reasonably requested by Buyer.

     

    6.5          Approval
of Management.  The
Buyer shall have received the approval of the transaction contemplated hereby by
its managing members, and if applicable, its Board of Directors.

     

    6.6          Release
of Liens.  At
or prior to the Closing, Seller shall have obtained and delivered to Buyer
instruments releasing any and all Liens on the Assets.

     

    6.7          Debt
Satisfaction.  All
Debt related to the Assets and Business shall have been satisfied, terminated,
released or extinguished to the extent required by Section 1.6
hereof.

     

    6.8          Completion
of Other Transaction.  Buyer
and Nutrition 21 shall have completed a separate transaction related to the
business of Nutrition 21 that sells finished and packaged end-products to
retailers for ultimate sale to end users without further fabrication or
packaging

    
      
         

      

      
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    6.9          Transition
Plan.  Buyer and Seller shall enter into a Transitional
Services Agreement in a form reasonably acceptable to the parties  to
facilitate the transfer of the Business and the Assets to Buyer, including
agreed terms as to the transition of Seller’s customers, invoicing, Assumed
Liabilities and accounts receivable.

     

    ARTICLE
7

    CONDITIONS PRECEDENT TO
OBLIGATION OF SELLER.

     

    The
obligation of Seller to consummate the transactions contemplated by this
Agreement is subject to the satisfaction, on or prior to the Closing Date, of
the following conditions, unless waived by Seller in writing:

     

    7.1          Accuracy
of Representations and Warranties.  The
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects at the Closing Date with the same
effect as though made at such time, and the representations and warranties of
Buyer contained in this Agreement which are qualified by materiality shall be
true and correct in all respects as of the Closing Date with the same effect as
though made at such time.

     

    7.2          Performance
of Agreement and Deliveries.  Buyer
shall have performed in all material respects all of its covenants, agreements
and obligations under this Agreement to be performed or complied with by Buyer
prior to or upon the Closing Date and shall have delivered all documents and
items required to be delivered at or prior to the Closing, including, without
limitation:

     

    (a)           The
tendering of the Purchase Price pursuant to Section 1.5 hereof
pending satisfaction of all the conditions set forth in ARTICLE 6
hereof;

     

    (b)           A
certificate, dated the Closing Date, from a managing member or the President of
Buyer to the effect that the conditions set forth in this ARTICLE 7 have been
satisfied and Buyer has performed all covenants which it is obligated to perform
prior to Closing;

     

    (c)           A
certificate, dated the Closing Date, from a managing member or from Buyer’s
Secretary as to the authority and the incumbency of all those executing the
Buyer Documents on behalf of Buyer; and

     

    (d)           A
Certificate of Good Standing for Buyer issued by the Secretary of State of the
State of Delaware dated no earlier than ten days prior to Closing.

     

    (e)           An
opinion of Genovese Joblove & Battista, P.A., dated the Closing Date, in a
form reasonably acceptable to the Seller;

     

    (f)           
Delivery of an executed Transitional Services Agreement in a form acceptable to
the parties to facilitate the transfer of the Business and the Assets to Buyer,
including agreed terms as to the transition of Seller’s customers, invoicing,
Assumed Liabilities and accounts receivable;

    
      
         

      

      
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    (g)           Delivery
of an executed Supply Agreement in a form acceptable to the
parties;

     

    (h)           Delivery
of an executed Assignment and Assumption Agreement in a form acceptable to the
parties; and

     

     (i)           
Such other instruments of transfer reasonably requested by Seller.

     

    7.3          Minimum
Purchase Price

     

    The
Purchase Price as adjusted shall not be less than $ 2.2 million.

     

    7.4          Fairness
Opinion

     

    Seller
shall have received a fairness opinion that the Purchase Price is fair and
reasonable.

     

    7.5          Completion
of Other Transaction.  Buyer and Nutrition 21 shall have completed a
separate transaction related to the business of Nutrition 21 that sells finished
and packaged end-products to retailers for ultimate sale to end users without
further fabrication or packaging

     

    ARTICLE
8

    TERMINATION.

     

    8.1          Events of
Termination.  This
Agreement and the transactions contemplated by this Agreement may be terminated
at any time prior to the Closing:

     

    (a)          By
the mutual written consent of Buyer and Seller.

     

    (b)          By
Seller, if it is not in breach or default hereunder and any of the following
occurs and, in Seller’s reasonable assessment, results in a material impairment
of Buyer’s ability to close as contemplated hereunder;

     

    (1)           if
any representation or warranty of Buyer made herein is untrue in any material
respect (and, if the false nature of the representation or warranty was
unintentional, such breach is not cured within ten (10) days of Buyer’s receipt
of a notice from Seller that such breach exists or has occurred);

     

    (2)           if
Buyer shall have defaulted in any material respect in the performance of any
material obligation under this Agreement and such breach is not cured within ten
(10) days of Buyer’s receipt of a notice from Seller that such default exists or
has occurred; and

     

    (3)           if
the conditions to Seller’s obligations to consummate the Closing as set forth in
ARTICLE 7
hereof cannot reasonably be satisfied or performed on or before the Closing Date
(unless such failure of satisfaction, non-compliance or non-performance is the
result, directly or indirectly, of any action or failure to act on the part of
Seller).

    
      
         

      

      
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    (c)          By
Buyer, if it is not in breach or default hereunder and any of the following
occurs and, in Buyer’s reasonable assessment, results in a material impairment
of Seller’s ability to close as contemplated hereunder:

     

    (1)           if
any representation or warranty of Seller made herein is untrue in any material
respect (and, if the false nature of the representation or warranty was
unintentional, such breach is not cured within ten (10) days of Seller’s receipt
of a notice from Buyer that such breach exists or has occurred);

     

    (2)           if
Seller shall have defaulted in any material respect in the performance of any
material obligation under this Agreement and such breach is not cured within ten
(10) days of Seller’s receipt of a notice from Buyer that such default exists or
has occurred; or

     

    (3)           if
the conditions to Buyer’s obligations to consummate the Closing as set forth in
ARTICLE 6
hereof cannot reasonably be satisfied or performed on or before the Closing Date
(unless such failure of satisfaction, non-compliance or non-performance is the
result directly or indirectly of any action or failure to act on the part of
Buyer).

     

    8.2          Manner of
Exercise.  In
the event of the termination of this Agreement by either Buyer or Seller
pursuant to Section
8.1 hereof, notice thereof shall forthwith be given to the other party in
accordance with the provisions set forth in ARTICLE 11 hereof and
this Agreement shall terminate and the transactions contemplated hereunder shall
be abandoned without further action by Buyer or Seller, except as otherwise
expressly provided herein.

     

    8.3          Termination
by Seller Seller may terminate this Agreement by notice to Buyer if
Seller receives a proposal from a third party to acquire the Business on terms
and conditions which are more favorable to Seller than the transaction
contemplated by this Agreement. If this Agreement is terminated as provided in
this Section, Seller shall within 30 days thereafter pay to Buyer a $75,000
termination fee.

     

    ARTICLE
9

    POST-CLOSING COVENANTS;
SURVIVAL.

     

    9.1          Use of
Trade Names.  After
the Closing, neither Seller, nor any person controlling, controlled by or under
common control with Seller, will for any reason, directly or indirectly, for
itself or any other person, (a) use the Marks (or any other name which is a
variation thereof or otherwise confusingly similar therewith) or any other names
which are currently used by Seller in conjunction with the Business, or (b) use
or disclose any trade secrets, confidential information, know-how, proprietary
information or other Intellectual Property of Seller transferred pursuant to
this Agreement.

    
      
         

      

      
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    9.2          Post-Closing
Transitional Matters.  Following
the Closing, without any compensation or further consideration payable by Buyer,
Seller shall respond positively to inquiries of customers and suppliers
regarding the transaction contemplated hereby.

     

    9.3          Survival.  All
representations, warranties, covenants, agreements and indemnities contained in
this Agreement, or in any Schedule, exhibit, certificate, agreement, document or
statement delivered pursuant hereto shall be deemed to have been relied upon by
the parties and shall survive the Closing for a period of two (2) years except
that (i)  the representations and warranties of Seller with respect to
Taxes shall survive Closing until the expiration of the applicable tax statutes
of limitation plus a period of sixty (60) days; and (ii) in the case of all
representations and warranties made by Seller herein with respect to title
(including, without limitation, those set forth in Sections 2.7 and 2.18(b)
shall survive Closing for a period consistent with the applicable statute of
limitations relating to any claims which may arise from such representations and
warranties.

     

    9.4          Seller’s
Obligations.  Following
Closing, Seller shall make full and timely payment when due of all amounts that
are not Assumed Liabilities, and satisfaction of all other obligations that are
not Assumed Liabilities, including, without limitation, the Excluded
Liabilities, owed by Seller to third parties, which obligations affect the
Assets or the Business and are not subject to a good faith dispute.

     

    9.5          Confidential
Information and Cooperation.  Seller acknowledges that all
confidential information relating to Buyer and the Business, including without
limitation (a) trade secrets and intellectual property, (b) information
concerning services and products and the development, manufacturing, marketing,
distribution and pricing of services and products, (c) information concerning
customers, customer lists and suppliers and (d) credit and financial
data  and (d) all of the Assets (as defined herein) (collectively, the
“Proprietary Information”), are valuable, special and unique assets of the
Buyer, access to and knowledge of which have been gained by
Seller.  Seller further agree that all Proprietary Information shall
be considered confidential information and that from and after the date
hereof, except
as required by law, Seller will (x) not disclose, at any time, any of such
Proprietary Information to any person or entity for any reason or purpose
whatsoever, (y) not make use of any Proprietary Information for Seller’s own
purposes or for the benefit of any person other than Buyer, and (z) from and
after the Closing, Seller will surrender immediately to Buyer all Proprietary
Information existing in tangible form (whether in print, photos, audio or video
tape, computer disk or memory, or otherwise) which is in the possession or
control of Seller.

     

    9.6          Buyer
Cooperation as to Sales
Data.          (a) Not
later than 60 days after the end of each Accounting Period, Buyer will provide a
Net Sales Report to Seller for such Accounting Period for Products sold by Buyer
Entities that are Eligible Products.  Buyer shall from time to time at
the request of Stockholders give to Stockholders and their representatives
access to the records of Buyer relating to the Reports. The obligations of
Nutrition 21 to pay amounts to Stockholders under the Merger Agreement are
Excluded Liabilities within the meaning of this Agreement. Seller shall
immediately notify Buyer when the Nutrition 21 Section 5 Obligation has been
terminated. The following definitions shall apply to defined terms contained in
this Section 9.6 that are not otherwise defined herein:

    
      
         

      

      
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    The
“Merger Agreement” means an Amended and Restated Merger Agreement dated as of
August 25, 2006 by and among Nutrition 21, Inc., Arnold Blair, Mark Stenberg and
certain other parties

     

    The
“Stockholders” means Arnold Blair and Mark Stenberg.

     

    “Net
Sales” means gross sales less allowances, returns, volume discounts, pricing
discounts, guaranteed returns, freight, taxes, returns, cash discounts, and
other sales deductions. Except as aforesaid, Net Sales are computed on an
accrual basis in accordance with GAAP.

     

    “Eligible
Products” means any products that are sold under the Iceland Health trademark or
that contain fish oil or omega 3.

     

    “Buyer
Entities” means Buyer or its affiliates and its direct or indirect assignees,
licensees or sublicensees.

     

    An
“Accounting Period” means each of the successive three-month periods (i)
beginning from August to 27 through November 26, from November 27 through
February 26, from February 27 through May 26, and from May 27 through August 26
and so on, through and including the three-month period in which Seller’s
obligations to make certain reports and payments under Section 5 of the Merger
Agreement shall have terminated by its terms (the “Nutrition 21 Section 5
Obligation”).

     

    A “Net
Sales Report” for an Accounting Period means a reasonably detailed report by
Buyer’s VP of Finance on the volume of Net Sales during such Period. No Net
Sales Report shall contain pricing information or the identity of
customers.

     

    (b)           Buyer
shall furnish to Seller such reports as are necessary for Seller to fulfill its
requirements as licensee under the McLeod License; such reports shall be issued
by Buyer to Seller within 45 days after the beginning of each calendar quarter
commencing with the second calendar quarter of 2010. Buyer shall have no
financial obligations related to the McLeod License.

    
      
         

      

      
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    ARTICLE
10

    INDEMNIFICATION.

     

    10.1        Indemnification
by Seller.  Seller
hereby agrees to indemnify, defend and hold harmless Buyer, its affiliates and
its and their respective directors, officers, stockholders, partners, members,
employees, and agents (individually, a “Buyer Indemnified Party” and
collectively, “Buyer Indemnified Parties”), against and in respect of all
losses, liabilities, obligations, damages, deficiencies, actions, suits,
proceedings, demands, assessments, orders, judgments, costs and expenses
(including the reasonable fees, disbursement and expenses of attorneys and
consultants) of any kind or nature whatsoever, but net of the proceeds from any
insurance policies or other third party reimbursement for such loss, to the
extent sustained, suffered or incurred by or made against any Buyer Indemnified
Party, to the extent based upon, arising out of or in connection
with:  (i) any breach of any representation or warranty made by Seller
in this Agreement or in any Schedule, exhibit, certificate, agreement or other
instrument delivered pursuant to this Agreement; (ii) any breach of any covenant
or agreement made by Seller in this Agreement or in any Schedule, exhibit,
certificate, financial statement, agreement or other instrument delivered by or
binding upon Seller pursuant to this Agreement; (iii) any claim made by any
person or entity to the extent the same arises out of or relates to the
operation of the Assets or the Business and in connection with or on the basis
of events, acts, omissions, conditions or any other state of facts occurring on
or existing before the Closing Date (other than events, acts, omissions,
conditions or any other state of facts with respect to which Buyer has
specifically agreed to be responsible and has been provided specific written
notice by way of a Schedule attached hereto; (iv) any claim which arises in
connection with any liability or obligation of Seller that is not an Assumed
Liability; (v) any of the Excluded Liabilities; and (vi) the sales of inventory
by Seller and its affiliate, Iceland Health, LLC, to the customer identified as
NIN1000, as set forth on Exhibit 10.1 hereto. The sum of all
amounts  paid by Seller to Buyer pursuant to this Section 10.1 shall
not exceed $1.0 million.

     

    10.2        Indemnification
by Buyer.  Buyer
agrees to indemnify, defend and hold harmless, Seller and its officers,
directors, stockholders, employees and agents (individually, a “Seller
Indemnified Party” and collectively, “Seller Indemnified Parties”) at all times
against and in respect of all losses, liabilities, obligations, damages,
deficiencies, actions, suits, proceedings, demands, assessments, orders,
judgments, costs and expenses (including the reasonable fees, disbursements and
expenses of attorneys and consultants), of any kind or nature whatsoever, to the
extent sustained, suffered or incurred by or made against any Seller Indemnified
Party, to the extent based upon, arising out of or in connection
with:  (i) any breach of any representation or warranty made by Buyer
in this Agreement or in any Schedule, exhibit, certificate, agreement or other
instrument delivered pursuant to this Agreement; (ii) any breach of any covenant
or agreement made by Buyer in this Agreement or in any Schedule, exhibit,
certificate, agreement or other instrument delivered by or binding upon Buyer
pursuant to this Agreement; and (iii) any claim made against Seller to the
extent the same relates to, results from or arises out of Buyer’s operation of
the Assets or the Business from and after the Closing Date except as may
otherwise expressly be made the obligation of Seller pursuant to this
Agreement.

     

    10.3       
Indemnification Claims. All indemnification claims must be made in writing prior
to the second anniversary of the Closing Date, and shall otherwise
expire.  No indemnification shall be payable to a Buyer Indemnified
Party or a Seller Indemnified Party, under Section 10.1 or Section 10.2,
respectively, with respect to any claim unless and until the total of all claims
for indemnification against the Buyer or the Seller, as the case may be, shall
exceed $25,000 in the aggregate, at which time all claims arising pursuant to
Section 10.1 or 10.2, as the case may be, shall be payable.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    10.4       Procedure
for Indemnification.  The following shall apply with respect to all
Claims by an indemnitee for indemnification (“Claims”) pursuant to this Article
10:

     

    a.           The
indemnitee shall give the indemnitor prompt notice (the “Indemnification
Notice”) of any Claim or potential liability, or of the commencement by any
third party of any action or proceeding, with respect to which such indemnitee
seeks indemnification; provided, however, that the failure of the indemnitee to
give the Indemnification Notice to the indemnitor with respect to any Claim
shall not impair any of the rights or benefits of such indemnitee, except to the
extent that such failure materially and adversely affects the ability of the
indemnitor to defend such Claim or increases the amount of such
liability.  The Indemnification Notice shall describe the Claim in
reasonable detail.

     

    b.           The
indemnitor shall have the right to control the defense of any Claim at its own
expense and by its own counsel.  The indemnitee shall have the right
to participate therein, and shall have the right to employ its own counsel which
shall be at its sole expense unless the indemnitee shall reasonably conclude,
based upon an opinion of its counsel, that (i) there is a conflict of interest
between the indemnitor and the indemnitee in the conduct of the defense of such
Claim or (ii) there are specific defenses available to the indemnitee which are
different from or additional to those available to the indemnitor which may
create a conflict of interest such that it would be inappropriate for counsel to
the indemnitor to represent the indemnitee, in which event, the indemnitor shall
pay the reasonable fees and disbursements of counsel to each of the indemnitor
and the indemnitee; provided, however, that the indemnitor shall not be
responsible for the fees of more than one counsel for all
indemnitees.

     

    c.           Notwithstanding
the foregoing, neither the indemnitor nor the indemnitee may settle or
compromise any Claim (provided, however, that either Indemnitor may do so if the
sole relief payable to a third party in respect of such Claim is monetary
damages that are paid in full by the Party settling or compromising such claim,
the settlement includes as an unconditional term thereof the release by the
claimant or the plaintiff if the indemnitee and its Affiliates from all
liability in respect of such claim and the settlement shall not require an
admission of liability and shall otherwise be confidential) over the objection
of the other; provided, however, that consent to settlement or compromise shall
not be unreasonably withheld.

     

    d.           The
indemnitee shall cooperate at the expense of the indemnitor in the defense of
any Claim and shall make available to the indemnitor any personnel or any books,
records or other documents within its control that are reasonably necessary or
appropriate for such defense, subject to the receipt of appropriate
confidentiality agreements.

     

    10.5       Survival.
If any claim for indemnification has been previously asserted by a party to this
Agreement and is still pending at the expiration of survival period set forth
herein, such claim shall continue to be subject to the indemnification
provisions of this Agreement until resolved.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    ARTICLE
11

    NOTICES.

     

    All
notices and other communications required to be given hereunder, or which may be
given pursuant or relative to the provisions hereof, shall be in writing and
shall be deemed to have been given when delivered by hand or by an overnight
courier service, or mailed, postage prepaid, by first class United States mail,
certified return receipt requested, or transmitted by facsimile (with
transmission acknowledgment received, provided written notice delivered by any
of the other means of delivery specified in this ARTICLE 11 follows
such facsimile), as follows:

    

    
      
        	
                If
      to Buyer:

              	
                Nature’s
      Products, Inc.

              
	 
      	
                1301
      Sawgrass Corporate Parkway

              
	 
      	
                Sunrise,
      Florida 33323-2813

              
	 
      	
                Facsimile:
      (954) 233-1664

              
	 
      	
                Attention:  Jose
      Minski, President

              
	 
      	 
      
	 
      	
                With
      a copy to:

              
	 
      	 
      
	 
      	
                Mark
      S. Feluren

              
	 
      	
                Genovese
      Joblove & Battista, P.A.200 E. Broward Boulevard, Suite
      1110

              
	 
      	
                Fort
      Lauderdale, FL 33301

              
	 
      	
                Facsimile:
      (954) 453-8010

              
	 
      	 
      
	
                If
      to Seller:

              	
                Chief
      Executive Officer

              
	 
      	
                Nutrition
      21, Inc.

              
	 
      	
                4
      Manhattanville Road

              
	 
      	
                Purchase,
      NY 10577

              
	 
      	 
      
	 
      	
                With
      a copy to

              
	 
      	
                Oscar
      Folger, Esquire

              
	 
      	
                Folger
      & Folger

              
	 
      	
                521
      Fifth Avenue, 24th
      floor

              
	 
      	
                New
      York New York 10175

              
	 
      	
                Facsimile
      212-697-7833

              

      

    

    

    ARTICLE
12

    OTHER AND MISCELLANEOUS
PROVISIONS.

     

    12.1        Assignability;
Binding Effect; No Third-Party Beneficiaries.  This
Agreement shall not be assignable by Buyer or Seller except with the written
consent of the other, except that Buyer may assign its rights hereunder to an
affiliated entity of Buyer.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.  No parties other than Buyer and Seller shall
have any rights by virtue of this Agreement.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    12.2        Headings.  The
subject headings used in this Agreement are included for purposes of convenience
only and shall not affect the construction or interpretation of any of its
provisions.

     

    12.3        Amendments;
Waivers.  This
Agreement may not be amended or modified, nor may compliance with any condition
or covenant set forth herein be waived, except by a writing duly and validly
executed by Buyer and Seller or, in the case of a waiver, the party waiving
compliance.  No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or privilege, or
any single or partial exercise of any such right, power or privilege, preclude
any further exercise thereof or the exercise of any other such right, power or
privilege.

     

    12.4        Entire
Agreement.  This
Agreement, together with the Schedules and exhibits hereto and all other
documents explicitly contemplated hereunder, constitute the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
and cancels any and all prior or contemporaneous arrangements, understandings
and agreements between them relating to the subject matter hereof.

     

    12.5        Severability.  In
the event that any provision or any portion of any provision of this Agreement
shall be held to be void or unenforceable, then the remaining provisions of the
Agreement (and the remaining portion of any provisions held to be void or
unenforceable in part only) shall continue in full force and
effect.

     

    12.6        Governing
Law.  This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Florida without regard to conflicts of laws principles. Each party
hereto agrees that it shall bring any action or proceeding in respect of any
claim arising out of or related to this Agreement or the transactions contained
in or contemplated by this Agreement, whether in tort or contract or at law or
in equity, exclusively in Broward County, Florida for actions and proceedings
instituted by Seller and in Westchester County, New York for actions and
proceedings instituted by Buyer (the "Chosen Courts") and (a) irrevocably
submits to the exclusive jurisdiction of the Chosen Courts; (b) waives any
objection to laying venue in any such action or proceeding in the Chosen Courts;
and (c) waives any objection that the Chosen Courts are an inconvenient forum or
do not have jurisdiction over any party hereto.

     

    12.7        Counterparts.  This
Agreement may be executed in two counterparts, each of which shall be deemed an
original and all of which shall constitute the same instrument.

     

    12.8        Expenses.  Each
party shall pay its own expenses incident to the negotiation, preparation and
performance of this Agreement and the transactions contemplated hereby,
including all fees and expenses of its counsel and accountants for all
activities of such counsel and accountants undertaken pursuant to this
Agreement, whether or not the transactions contemplated hereby are consummated.
The Seller shall be responsible for the fees of its broker, Natures Equity,
LLC.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    12.9        Recitals
and Introductory Paragraph.  The
recitals and introductory paragraph contained on the first page hereof are
hereby incorporated herein and made a part hereof.

     

    In Witness
Whereof, Seller and Buyer have caused this Asset Purchase Agreement to be
executed on the date first above written.

    

    
      
        
          
            	
                    BUYER:

                  	 
      	
                    SELLER:

                  
	 
      	 
      	 
      
	
                    Nature’s  Products,
      Inc.

                  	 
      	
                    Nutrition
      21, Inc.

                  
	 	 	 
	
                    By:

                  	
                      

                  	 
      	
                    By:

                  	
                      

                  
	
                    Name:

                  	
                      

                  	 
      	
                    Name:

                  	
                    Michael
      Zeher, Chief Executive
Officer

                  

          

        

      

    

    
      
         

      

      
        25Exhibit
10.02

       

      Asset
Purchase Agreement

       

      This
Asset Purchase Agreement (the “Agreement”) is made as of the 29th day of
December 2009, by and among Iceland Health, LLC, a New York limited liability
company, (“IH”) and Nutrition 21, Inc., a New York corporation, (“Nutrition 21”)
( collectively referred to herein as the “Sellers”)) and Iceland Health,
Inc.,  a Florida corporation (“Buyer”).

       

      Whereas,
Sellers conduct a “consumer business” which sells finished and packaged
nutritional supplement end-products directly to end users by direct response
under the name Iceland Health (the “Business”);

       

      WHEREAS,
Nutrition 21 also conducts (i) a business that sells raw materials,
formulations, compounds, blends, and bulk and other materials, whether or not
encapsulated, to third party non-end users to be further fabricated, blended or
packaged for ultimate sale to end users with or without prescriptions; and (ii)
a business that sells finished and packaged end-products to retailers for
ultimate sale to end users without further fabrication or packaging, neither of
which businesses are included in the Business; and

       

      WHEREAS,
subject to the terms and conditions hereof, Sellers desire to sell, transfer and
assign to Buyer, and Buyer desires to purchase from Sellers, certain of the
properties, rights and assets used or held for use in connection with the
Business.

       

      Now
therefore, in consideration of the mutual covenants and agreement herein
contained, the parties hereto agree as follow:

       

      ARTICLE
1

      PURCHASE AND SALE OF
ASSETS.

       

      1.1          Sale of
Assets.  Upon
the terms and subject to the conditions set forth in this Agreement, and the
performance by the parties hereto of their respective obligations hereunder,
Sellers agrees to sell, assign, transfer and deliver to Buyer, free and clear of
all Liens, and Buyer agrees to purchase from Sellers, all of Sellers’ right,
title and interest in and to all assets of the Business wherever located,
including the following rights, interests, properties and assets, but subject to
the exclusions hereinafter expressly set forth:

       

      (a)           All
inventory owned by Sellers as of the Closing Date relating to the Business and
listed as “Included Inventory” in the Working Capital Adjustment Schedule that
is Exhibit 1.5 attached hereto, and inclusive of all components, packaging
materials and bulk utilized in the production of the Business, but exclusive, of
Inventory listed in Exhibit 1.5 as “Excluded Inventory” (the inventory being
sold hereunder being collectively referred to as the
“Inventory”);;

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      (b)           All
accounts receivable exclusive, however, of
accounts receivable listed on the Working Capital Adjustment Schedule that is an
attachment to Exhibit 1.5 attached hereto(“Excluded Receivables”); the
receivables being sold hereunder being collectively referred to as the
“Receivables”);

       

      (bb) The contracts of Sellers with
third parties that are listed on Schedule 1.1(bb) attached hereto (the “Assigned
Contracts”);

       

      (c)           All
Intellectual Property (as defined below) owned or utilized by Sellers in the
operation of the Business, all as set forth on Schedule 1.1(c) attached
hereto.  For purposes hereof, the term “Intellectual Property”
includes:  (i) the names “ Iceland Health,” “Diabetes Essentials,” and
“Prescriptix,” all trade names and all trade logos, slogans, Internet domain
names, registered and unregistered trademarks and service marks and applications
(collectively “Marks”); (ii) all copyrights in both published and unpublished
works, including, without limitation, all compilations, databases and computer
programs, sales and marketing materials,  and all copyright
registrations and applications (collectively, “Copyrights”); (iii) a patent
license in the form of Exhibit 6.4(d) (the “Patent License”) in respect of
certain patents and patent applications owned by Sellers (collectively,
“Patents”), it being understood that certain other Patents used in the Business
that are not owned by Sellers shall also be licensed to Buyer as provided
elsewhere herein; (iv) all know-how, trade secrets, formulae, products under
development, confidential or proprietary information, customer and supplier
lists of the Business, (collectively, “Trade
Secrets”); (v) all Internet web-sites and addresses (“IP Addresses”), all domain
name registrations and reservations, web-site content and underlying software
(collectively, “Websites”); and (vi) all goodwill, franchises, licenses,
permits, consents, approvals, technical information, and claims of infringement
against third parties (the “Rights”);

       

      (d)           All
of the goodwill of Sellers in, and the going concern value of, the Business, and
all of the business assets associated therewith, including customer and supplier
lists, sales and marketing materials including, without limitation, all
commercials, film and statistical marketing reports and results, catalogs,
proprietary information, and trade secrets related to the Business(Exhibit
1.1(d) contains a list of marketing materials of the Business that are not owned
by the Sellers);

       

      (e)           All
of the equipment used in the operation of the Business, including, without
limitation, the items listed on Exhibit 1.1(e);

       

      (f)           All
of the Sellers’ revenue producing contracts related to the Business, including,
without limitation, those listed on Exhibit 1.1 (f); and

       

      (g)           The
telephone and facsimile numbers, e-mail addresses, restrictive covenants,
licenses, computer software, customer lists, manufacturer, vendor and supplier
lists, operating guides and manuals, financial and accounting records, creative
materials, advertising and marketing  materials and data, promotional
materials, studies, reports, correspondence and other similar documents and
records.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      The
assets, properties and business of Sellers being sold to and purchased by Buyer
under and as identified in this Section 1.1 are referred to
herein collectively as the “Assets.”

       

      1.2          Excluded
Assets.  In
addition to the Excluded Inventory and the Excluded Receivables, there shall
also be excluded from the Assets and retained by Sellers (i) to the extent in
existence on the Closing Date, cash, cash equivalents, (ii) barter agreements
with Active International and Icon International, Inc.; (iii) deposits related
to credit card processing; and (iv) all patents. All assets that are excluded
from the Assets are collectively referred to as “Excluded Assets”).

       

      1.3         Liabilities;
Excluded Liabilities; Employees.

       

      (a)           Assumption
of Liabilities.  The Buyer shall assume (i) the Sellers’ trade
accounts payable for the Business as of the Closing, specifically
excluding  payables which are subject to litigation against the
Seller, (ii) present and future obligations of Sellers under the Assigned
Contracts, (iii) and any existing or future claims by retailers for returns and
allowances, charge backs, "unsalables" and promotional allowances, or equivalent
deductions or charges however called,  whether known on unknown
and (iv) any future product liability claims in respect of any
Product  sold by Buyer after Closing excluding sale of Sellers’
existing Inventory sold and delivered to Buyer hereunder (collectively “Assumed
Liabilities”). Other than the Assumed Liabilities, Buyer does not and shall not
accept or assume, and shall have no liability or responsibility for or with
respect to any liability or obligation of the Sellers (“Excluded
Liabilities.”).  The term Excluded Liabilities means, except for the
Assumed Liabilities, (i) any and all liabilities or obligations arising out of
Sellers’ ownership of the Assets or Sellers’ operation of the Business; and (ii)
any and all other obligations and liabilities of Sellers of any nature
whatsoever at any time existing, arising or asserted, whether, known, unknown,
fixed, contingent or otherwise, including, without limitation, for vacation pay,
sick pay and holiday pay with respect to the Employees (as defined below),
patent claims against Sellers related to the sale by Sellers of any
product  that is a combination of glucosamine and fish oil, and for
any obligations, “earn-out” or notes of Sellers associated with the Sellers’
acquisition of the Business.

       

      (b)          Excluded
Liabilities.  It is expressly
understood that, notwithstanding anything herein to the contrary, Buyer shall
not assume, pay or be liable for any of the Excluded Liabilities, all of which
shall be retained, and remain the responsibility and obligation of
Sellers.

       

      (c)          Employees,
Wages and Benefits.

       

      Buyer
shall have no obligation to offer employment to any persons who, as of the
Closing Date, are employed in the operation of the Business or otherwise by
Sellers.  Buyer shall not be obligated under and hereby specifically
disclaims any assumption of any liability with respect to any employee benefit
plan policy, plant closing obligation, practice or agreement including but not
limited to group health, post-retirement medical or life insurance benefits,
severance benefits, qualified retirement plans, non-qualified plans to which
Sellers are parties or under which any of Sellers’ employees or former employees
is covered, all of which are included in Excluded Liabilities.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      1.4          The
Closing.  The
transactions contemplated by this Agreement shall take place at a closing (the
“Closing”) to be held at 2:00 p.m. a.m., local time, at the offices of Buyer’s
counsel, on December 29, 2009 (the “Closing Date”) or at such other time as
shall be agreed by Sellers and Buyer.

       

      1.5          Purchase
Price  In
consideration of the sale by the Sellers to Buyer of the Assets, and subject to
the satisfaction of the terms and conditions contained herein, Buyer shall pay
Sellers $2,200,000, plus or minus any adjustment to be made at Closing in
accordance with Exhibit 1.5 hereto (the “Purchase Price”), which Purchase Price
is payable by wire transfer on the Closing Date.

       

      1.6          Debt
Satisfaction.  With
respect to the following matters (the “Debt”), on or before the
Closing:

       

      (a)           Except
for the Assumed Liabilities, all secured and unsecured liabilities and
obligations of Sellers affecting the Assets or the Business shall have been
fully satisfied, paid and extinguished by Sellers and Sellers shall have
provided to Buyer satisfactory evidence thereof (with the exception of the
“earn-out” or notes of Sellers associated with the Sellers’ acquisition of the
Business, trade payables that are the subject of litigation or good faith
dispute, and other liabilities and obligations not to exceed
$25,000);

       

      (b)           Sellers
shall have fully satisfied all Taxes accrued and due and payable by Sellers that
affect the Assets or the Business;

       

      (c)           Sellers
shall have provided to Buyer satisfactory evidence that any and all Liens
affecting the Assets and Business have been released, terminated and
extinguished on or before the Closing Date. No advertising obligation shall be
due in connection with the telephone numbers or web addresses of the
Business.

       

      1.7          Purchase
Price Allocation.  The
Buyer and Sellers agree that the Buyer shall supply to the Sellers the
allocation of the Purchase Price within 30 days of Closing.  Such
allocation shall be binding upon Buyer and Sellers for all
purposes.  Buyer and Sellers each further agree to file their Federal
income tax returns and other tax returns reflecting such allocation, Form 8594
and any other reports required by Section 1060 of the Code.

       

      1.8          Further
Assurances.  Sellers
from time to time after the Closing at the request of Buyer and without further
consideration, shall execute and deliver further instruments of transfer and
assignment and take such other action as Buyer may reasonably require to more
effectively transfer and assign to, and vest in, Buyer the Assets free and clear
of all Liens (as defined hereinafter).

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      1.9          Sales and
Transfer Taxes.  All
sales, transfer, use, recordation, documentary, stamp, excise taxes, personal
property taxes, fees and duties, (including any real estate transfer taxes)
under applicable law incurred in connection with this Agreement or the
transactions contemplated thereby will be borne and paid by Sellers, and Sellers
shall promptly reimburse Buyer for the payment of any such tax, fee or duty
which Buyer is required to make under applicable law.

       

      1.10 Access to Original
Records.

       

      After the
Closing, at reasonable times and on reasonable notice, Sellers shall have access
to the books and records pertaining to operations of the Business prior to the
Closing, and Buyer shall retain such books and records, for a period of three
years after the Closing, and prior to disposing of such records shall offer to
deliver them to Sellers.

       

      1.11 Matters Relating to
Excluded Receivables

       

      Sellers
agree that until the 180th day
after the Closing they will not contact any obligor to collect an Excluded
Receivable, and Buyer shall forward to Sellers all payments received thereon.
Should Buyer generate any new receivables after the Closing from any obligor,
payments from that obligor shall be applied to receivables from that obligor
based on the indication of the obligor on or accompanying the
payment.

       

      ARTICLE
2

      REPRESENTATIONS AND
WARRANTIES OF SELLERS

       

      In order
to induce Buyer to enter into this Agreement, Sellers, jointly and severally,
hereby make the following representations and warranties to Buyer subject to
exceptions that are fully disclosed on schedules attached hereto (collectively,
the “Schedules”).  For the purposes of this Agreement, a “Material
Adverse Effect” means an unfavorable or harmful effect upon the assets,
properties, business prospects, condition (financial or other) or results of
operations of the Business which is material in magnitude, nature or other
respects.

       

      2.1          Organization;
Subsidiaries.  Sellers  are
duly qualified to do business in the State of New York.  Sellers have
the full power and authority, corporate or otherwise, to own or lease its
properties and to conduct their businesses in the manner and in the places where
such properties are owned or leased or such businesses are currently conducted
or proposed to be conducted. Sellers do not own any equitable or ownership
interest in any other business.  Sellers are not required to be
authorized to do business in any State other than New York, Ohio, Maine, Indiana
and Pennsylvania, except to the extent that the failure to qualify will not
materially affect Sellers or the Business.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      2.2          Required
Action.  All
actions and proceedings necessary to be taken by or on the part of Sellers in
connection with the transactions contemplated by this Agreement have been, or by
the Closing will have been, duly and validly taken, and this Agreement and each
other agreement, document and instrument to be executed and delivered by or on
behalf of Sellers pursuant to, or as contemplated by, this Agreement
(collectively, the “Seller Document(s)”) has been, or by the Closing will have
been, duly and validly authorized, executed and delivered by Sellers and no
other action on the part of Sellers is required in connection
therewith.  Sellers have full right, authority, power and capacity to
execute and deliver this Agreement and each other Seller Document and to carry
out the transactions contemplated hereby and thereby.  This Agreement
and each other Seller Document constitutes, or when executed and delivered will
constitute, the legal, valid and binding obligation of Sellers enforceable in
accordance with its respective terms.

       

      2.3          No
Conflicts.  The
execution, delivery and performance by Sellers of this Agreement and each other
Seller Document does not and will not (i) violate any provision of the
respective Certificate of Incorporation or Certificate of Organization, as
amended to date, or the bylaws, regulations or any agreement among shareholders
or company action of IH or Nutrition 21, (ii) constitute a violation of, or
conflict with or result in any breach of, acceleration of any obligation under,
right of termination under, or default under, any agreement or instrument to
which IH or Nutrition 21 is a party or by which they  or the Assets
are bound, (iii) violate any judgment, decree, order, statute, rule or
regulation applicable to Sellers, or the Assets, (iv) require
Sellers  to obtain any approval, consent or waiver of, or to make any
filing with, any person or entity (governmental or otherwise) that has not been
obtained or made, or (v) result in the creation or imposition of any and all
mortgages, pledges, security interests, claims, charges, liens, assessments,
restrictions on or conditions to transfer or assignment and encumbrances or
restrictions of any kind whatsoever (individually, a “Lien” and collectively,
“Liens”) on any of the Assets.  The signatories who execute this
Agreement and the other Seller Documents contemplated hereby on behalf of
Sellers have and shall have all requisite power to do so in the name of and on
behalf of Sellers.

       

      2.4          Taxes.  Sellers
have properly filed all federal, state and local tax returns and estimates
required to be filed by the Sellers for any and all federal, state, foreign, or
local income, property, sales, use ad valorem, license, business, excise,
franchise, employment, withholding, worker’s compensation or other taxes, fees
or assessments (together with interest additions and penalties) (the
“Taxes”).  All Taxes which are due and payable by the Sellers, or
which will become due and payable by the Sellers prior to or after the Closing
Date, have been, or will be, paid in full in a timely manner.  No
issues have been raised in writing by, and are currently pending with, any
taxing authority in connection with any such returns.  Sellers have
never been part of an “affiliated group” or a party to an allocation or sharing
agreement for Tax purposes.

       

      2.5          Compliance
with Laws.  Sellers
have operated the Business, and presently Sellers’ operation of the Business is,
in compliance in all material respects with, and Sellers are responsible for no
act or omission which reasonably could be expected to result in material
liability under, any and all applicable statutes, ordinances, orders, rules and
regulations promulgated by any federal, state, municipal or other governmental
authority (collectively, “Laws”), and Sellers have not received notices of
violations or alleged violations of any such Laws.  Sellers have not
received any information to indicate that any of its policies or practices are
being audited or investigated by any government.  Sellers are not
bound by any order, decree or judgment or similar administrative government
arrangement which may have a Material Adverse Effect.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      2.6          Contracts.  Schedule 2.6 attached hereto
contains a true, correct and complete list of all  leases, contracts,
agreements and arrangements, whether oral or written, (the “Contracts”) (and a
description of each oral Contract, if any), and Sellers have provided Buyer with
true and complete copies of all written Contracts related to the
Business.  Neither the Sellers nor, to the knowledge of the
Sellers,  any other party is in default or in arrears in performance
under any Contract, nor does any condition exist that with notice or lapse of
time or both would constitute such a default, and no waiver or indulgence has
been granted by any party under any Contract.  Sellers have not
received notice of, and Sellers have no knowledge of, any fact which would
result in a termination, repudiation or breach of any
Contract.  Sellers have not entered into any other agreement or
arrangement with any other party with respect to the sale, transfer or any other
disposition of the Business or the Assets, in whole or in
part.  Sellers are not subject to or bound by any agreement which may
have a Material Adverse Effect.

       

      2.7          Title.  Sellers
have good and marketable title to all of the Assets free and clear of all
Liens.  Except for the Excluded Assets, the Assets include all of the
assets and properties (i) held for use by Sellers to conduct the Business as
presently conducted; (ii) necessary for Buyer to operate the Business in the
same manner as such business is currently operated by Seller; and all data
related to the Business that is housed with or serviced by a third party
vendor.  All of the tangible Assets have been well maintained and are
in good condition, and comply in all material respects with applicable laws,
ordinances and regulations. Sellers warrant to Buyer that, at the time of
Closing, all Assets shall be free and clear of all any charge, claim, community
or other marital property interest, condition, equitable interest, lien, option,
pledge, security interest, mortgage, right of way, easement, encroachment,
building or use restriction, servitude, conditional sales agreement, right of
first option, right of first refusal or similar restriction, encumbrance or
right of third parties, whether voluntarily or by operation of law, and
includes, without limitation, any agreement to give any of the foregoing in the
future, and any contingent sale or other title retention agreement or lease in
the nature thereof.

       

      2.8          No
Litigation.  Sellers
are not involved in nor, to the knowledge of Sellers, are Sellers threatened to
be involved in any litigation or legal or other proceedings related to or
affecting the Business or any Asset or which would prevent or hinder the
consummation of the transactions contemplated by this
Agreement.  Sellers have not been operating the Business under, and
the Business is not subject to, any order, injunction or decree of any federal,
state or municipal court or other governmental agency.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      2.9          Employee;
Labor Matters.  Sellers
are not delinquent in payment to any of their employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed for
them to the date hereof or amounts required to be reimbursed to such
employees.  Neither the termination of the employment of any of said
employees, nor the consummation of the transactions contemplated hereby will
result in any liability to any of said employees for any bonus, accrued sick,
vacation or holiday severance or other compensation payments.  There
are no charges of employment discrimination or unfair labor practices threatened
against or involving Sellers.  No collective bargaining agreement
exists and no question concerning representation exists, respecting any group of
employees of Sellers.

       

      2.10          Financial
Statements.  Included
in Schedule
2.10
attached hereto are copies of the: (1) unaudited balance sheet of Sellers as of
September 30, 2009 (the “Base Balance Sheet”), (2) the unaudited statement of
income and expense and statement of retained earnings of Sellers for the period
July 1 to September 30, 2009, (3) the audited Comparative Balance Sheet of
Sellers as of June 30 of 2007 and 2008, (collectively the “Financial
Statements”).  The Financial Statements have been prepared in
accordance with GAAP and Sellers’ historical accounting practices during the
periods covered thereby, and present fairly and accurately the financial
condition of the Business, as combined with the business described in clause
(ii) of the second Whereas clause at the head of this Agreement, at the dates of
said balance sheets and the results of operations of the Business as so combined
for the periods covered by such Statements of Income and
Expenses.   Sellers had no liabilities or obligations of any kind
with respect to the Business, whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), that are
not disclosed and adequately reserved against on the Base Balance Sheet, except that the
representation as to  any future claims by retailers for returns and
allowances, charge backs, "unsalables" and promotional allowances, or equivalent
deductions or charges however called related to the sale of Products by Sellers,
is made only to the knowledge of Sellers.

       

      2.11          Business
Since the Base Balance Sheet Date.  Since
the Base Balance Sheet Date, there has been no material adverse change, material
obligation in liability incurred by Sellers or with respect to the Business or
the Assets, operations or financial condition of the Business; and the Business
has been conducted in the ordinary course of business and in substantially the
same manner as it was conducted before the date of the Base Balance
Sheet.

       

      2.12   
      Approvals;
Consents.  No
approval, consent, authorization permit, license or exemption from or filing
with any government agency or any person or entity not a party to this Agreement
is required to be obtained or made by Sellers in connection with the execution
and delivery of this Agreement and the Seller Documents and the consummation of
the transactions contemplated hereby and thereby.

       

      2.13          Customers
and Suppliers; Warranties.  Sellers’
relations with their customers and suppliers are good and there are not pending
or, to Sellers’ knowledge, threatened claims or controversies with any customer
or suppliers that are material to the Assets or the Business or reasonably can
be deemed to pose a risk of resulting in a Material Adverse
Effect.  The products of the Business have the warranties listed on
Schedule 2.13 hereto. Also set forth on Schedule 2.13 hereto is, to the best
knowledge of Sellers, a list of existing or future claims by retailers for
returns and allowances, charge backs, "unsalables" and promotional allowances,
or equivalent deductions or charges of any nature.

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      2.14      
Inventory.
The Inventory is merchantable and fit for the purpose for which it was procured
or manufactured and none of which is damaged, or defective. No material supplier
of the Sellers has indicated any intention to not continue its business
relations with Sellers or Buyer as a result of the transaction contemplated
hereby or otherwise.

       

      2.15        Brokers.  Other
than Nature’s Equity, LLC, Sellers  have not retained, nor are Sellers
aware of, any broker or finder or other person who would have any valid claim
against any of the parties to this Agreement for a commission or brokerage fee
in connection with this Agreement or the transactions contemplated hereby. The
fee of Nature’s Equity is the sole responsibility of the Sellers.

       

      2.16        Intellectual
Property.

       

      (a)           Identity of Intellectual
Property. Schedule 1.1(c) attached
hereto sets forth all Intellectual Property of Sellers which is or has been
utilized in the operation of the Business.

       

      (b)           Title to Intellectual
Property.  Sellers have exclusive ownership of, and have good,
valid and marketable title or interest as a licensee in and to, all of the
Intellectual Property, free and clear of any Liens, and have the right to use,
license, transfer, distribute and bring infringement actions with respect to all
of the Intellectual Property without payment to any third
party.  Sellers have not licensed or granted any rights in the
Intellectual Property and Sellers’ rights in all of such Intellectual Property
are freely transferable.  There are no claims or demands pending or,
to the knowledge of Sellers, threatened by any other person pertaining to any of
such Intellectual Property and no proceedings have been instituted or are
pending or, to the knowledge of Sellers, threatened against Sellers and/or their
officers, employees and consultants which challenge the validity and
enforceability of Sellers’ rights in respect of the Intellectual
Property.  The use of the Intellectual Property in the Business has
not infringed and currently does not infringe (and, following Closing, Buyer
will be able to continue to use the Intellectual Property in the same manner as
heretofore used by Sellers without infringing) on the proprietary rights of any
third party, and Sellers have not received any notice or allegation of
infringement.  The Patents, Marks and Copyrights are currently in
compliance with formal legal requirements (including without limitations payment
of filing, examination and maintenance fees and proofs of working or use), are
valid and enforceable, and are not subject to any maintenance fees, taxes or
actions falling due within ninety (90) days after the Closing
Date.  In each case where a Patent, Mark or Copyright is held by
Sellers by assignment, the assignment has been duly recorded with the
appropriate governmental authority and all other jurisdictions of
registration.  No Patent has been or is now involved in any
interference, reissue, re-examination or opposition proceeding.  There
is no potentially interfering Patent of any third party.  Any products
made, used or sold under the Patents have been marked with the proper patent
notice.  No Mark has been or is now involved in any opposition,
invalidation or cancellation proceeding and, to the knowledge of Sellers, no
such actions are threatened with respect to any of the Marks.  All
products and materials containing a Mark bear the proper notice where permitted
by law.  All copies of works encompassed by the Copyrights have been
marked with the proper copyright notice.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      2.17          Absence
of Certain Business Practices.   Neither
Sellers nor any present officer, employee or agent of Sellers nor any other
person or entity acting on their behalf, including to the best knowledge of the
Sellers any past officer of the Sellers, has, directly or indirectly, during the
ownership of the Business or Assets given or agreed to give any gift or similar
benefit to any customer, supplier, governmental employee or other Person who is
or may be in a position to help or hinder the Business (or assist Sellers in
connection with any actual or proposed transaction relating to the Business)
which (a) if not given in the past, might have had a material and adverse effect
on the assets, business or operations of the Sellers as reflected in the
Financial Statements, or (b) if not continued in the future, might materially
and adversely affect the Sellers’ assets, business, operations or prospects or
which might subject Sellers  to suit or penalty in any private or
governmental litigation or proceedings.

       

      2.18          Disclosure   The
representations, warranties and statements contained in this Agreement and in
the certificates, exhibits, and Schedules delivered by Sellers to Buyer pursuant
to this Agreement do not contain any untrue statement of a material fact, and,
when taken together, do not omit to state a material fact required to be stated
therein or necessary in order to make such representations, warranties or
statements not materially misleading in light of the circumstances under which
they were made.  There are no facts known to Sellers about the
Business or Assets which presently or would in the future have a Material
Adverse Effect which have not been specifically disclosed herein or in a
Schedule furnished.

       

      ARTICLE
3

      REPRESENTATIONS AND
WARRANTIES OF BUYER.

       

      As a
material inducement to Sellers entering into this Agreement, Buyer hereby
represents and warrants to Sellers as follows:

       

      3.1          Organization.  Buyer
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware.  Buyer has all
requisite power and authority to conduct its business as it is now conducted and
to own, lease and operate its properties and assets.

       

      3.2          Required
Actions.  All
actions and proceedings necessary to be taken by or on the part of Buyer in
connection with the transactions contemplated by this Agreement have been duly
and validly taken, and this Agreement and each other agreement, document and
instrument to be executed and delivered by or on behalf of Buyer pursuant to, or
as contemplated by, this Agreement (collectively, the “Buyer Documents”) has
been, or by the Closing Date will have been, duly and validly authorized,
executed and delivered by Buyer.  Buyer has full right, authority,
power and capacity to execute and deliver this Agreement and each other Buyer
Document and to carry out the transactions contemplated hereby and
thereby.  This Agreement and each other Buyer Document constitutes, or
when executed and delivered will constitute, the legal, valid and binding
obligation of Buyer enforceable in accordance with its respective
terms.

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

       

      3.3          No
Conflicts.  The
execution, delivery and performance by Buyer of this Agreement and each other
Buyer Document does not and will not (a) violate any provision of the Articles
of Incorporation of Buyer, as amended to date, (b) constitute a violation of, or
conflict with or result in any breach or, acceleration of any obligation under,
right of termination under, or default under, any agreement or instrument to
which Buyer is a party of by which it is bound, (c) violate any judgment,
decree, order, statute, rule or regulation applicable to Buyer, (d) require
Buyer to obtain any approval, consent or waiver of, or to make any filing with,
any person or entity (governmental or otherwise) that has not been obtained or
made.  The officers who execute this Agreement and the other Buyer
Documents contemplated hereby on behalf of Buyer have and shall have all
requisite power to do so in the name of and on behalf of Buyer.

       

      3.4          No
Litigation.

       

        Buyer
is not now involved in nor, to the knowledge of Buyer, is Buyer threatened to be
involved in any litigation or legal or other proceedings which would prevent or
hinder the consummation of the transactions contemplated by this
Agreement.  Buyer is not operating under and is not subject to, any
order, injunction or decree of any federal, state or municipal court or other
governmental agency.

       

      3.5          Brokers.

       

        Buyer
has not retained, nor is Buyer aware of, any broker or finder or other person
who would have any valid claim against any of the parties to this Agreement for
a commission or brokerage fee in connection with this Agreement or the
transactions contemplated hereby.

       

      3.6          Disclosure.

       

      The
representations, warranties and statements contained in this Agreement and in
the certificates, exhibits, and Schedules delivered by Buyer to Sellers pursuant
to this Agreement do not contain any untrue statement of a material fact, and,
when taken together, do not omit to state a material fact required to be stated
therein or necessary in order to make such representations, warranties or
statements not materially misleading in light of the circumstances under which
they were made.

       

      ARTICLE
4

      COVENANTS OF
SELLERS.

       

      Sellers
covenant and agree that, from the date hereof until consummation of the
transactions contemplated hereby at the Closing (and thereafter, as specified
below), Sellers shall comply with the following provisions.

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      4.1          Access to
Premises and Records.  Commencing on the
date hereof and thereafter prior to the Closing, Sellers (a) shall give Buyer
and its representatives, free access to Sellers’ employees and other
representatives (including accountants and other professional
consultants)  and,  (b)  shall give Buyer and its
representatives, free access to the properties, books and records of Sellers,
the Business and with respect to the Assets, and (c) will furnish to Buyer and
its representatives such information regarding Sellers, the Business and the
Assets as Buyer or its representatives may from time to time reasonably request
in order that Buyer may have full opportunity to make a diligent
investigation.

       

      4.2          Continuity
and Maintenance of Operations of the Business.  Except
as to actions which Buyer has been advised and to which Buyer has consented to
in writing, and except as specifically permitted or required by this Agreement,
Sellers shall (a) operate the Business in the ordinary course consistent with
past practices, use its commercially reasonable efforts to keep available the
services of the employees who are involved in the operation of the Business, and
use best efforts to preserve any beneficial business relationships with
customers, suppliers and others having business dealings with Sellers relating
to the Business, (b) use and operate the Assets in a manner consistent with past
practice and maintain the Assets in good operating condition, ordinary wear and
tear excepted; and (c) refrain from taking or allowing to be taken any action
which would interfere with consummation of the transactions contemplated
hereunder or which would diminish the value of the Assets or the
Business.

       

      4.3          Consents.  Prior
to Closing, Sellers shall obtain, as soon as practicable and at their expense,
the consent of all third parties required to transfer the Assets to
Buyer.  Such consents shall be in form and substance reasonably
satisfactory to Buyer.

       

      4.4          Notification
of Certain Matters.  Sellers
shall promptly notify Buyer of (i) any fact, event, circumstances or action the
existence or occurrence of which would cause any of Sellers’ representations or
warranties under this Agreement, or the disclosures in any Schedules or exhibits
attached hereto, not to be true in any material respect, (or if it had existed
or occurred prior to the date of this Agreement, would have caused the same not
to be true in any material respect); (ii) any failure on Sellers’ part to comply
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement;  (iii)
anything which, if not corrected prior to the Closing Date, would prevent
Sellers from fulfilling any condition to Closing described in ARTICLE 6 hereof; and
(iv) any planned material changes, including, without limitation, any increase
in customary levels of inventory. Should Buyer proceed to Closing despite the
matters disclosed in such notice, Sellers shall not be obligated to indemnify
Buyer therefor.

       

      4.5          No
Solicitation.  Until
the earlier of the Closing and the termination of this Agreement as provided
herein, Sellers shall refrain, and Sellers shall cause its officers, employees,
stockholders, directors, agents and representatives and all other employees who
perform services with respect to the operation of the Business to refrain, from
soliciting or engaging in any discussions with any person relating to the
possible sale of the Assets or Business (or any material portion thereof) or the
capital stock of Sellers or the merger, consolidation or joint venture of
Sellers or the Business.  During the period aforesaid, Sellers shall
promptly inform Buyer of any inquiries or proposals regarding the same and shall
provide all pertinent documentation related thereto.

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      4.6          Cooperation.  Sellers
shall use their best efforts to take all steps necessary or appropriate in order
to carry out the intent of this Agreement and consummate the transactions
contemplated hereby and shall cooperate with all requests of Buyer and its
counsel in connection with Buyer’s due diligence investigation of the Business
and Assets.

       

      ARTICLE
5

      COVENANTS OF
BUYER.

       

      Buyer
covenants and agrees that, from the date hereof until consummation of the
transactions contemplated hereby at the Closing, Buyer shall:

       

      5.1          Cooperation.  Buyer
shall use its reasonable best efforts to take all steps necessary or appropriate
in order to carry out the intent of this Agreement and consummate the
transactions contemplated hereby.

       

      5.2          Notification
of Certain Matters

       

        Buyer
shall promptly notify Sellers of (i) any fact, event, circumstances or action
the existence or occurrence of which would cause any of Buyer’s representations
or warranties under this Agreement not to be true in any material respect, (or
if it had existed or occurred prior to the date of this Agreement, would have caused the same
not to be true in any material respect); (ii) any failure on Buyer’s part to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it
under this Agreement, or (iii) anything which, if not corrected prior to the
Closing Date, would prevent Buyer from fulfilling any condition to Closing
described in ARTICLE 7 hereof.

       

      ARTICLE
6

      CONDITIONS PRECEDENT TO
OBLIGATION OF BUYER.

       

      Buyer’s
obligation to consummate the transactions contemplated by this Agreement is
subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, unless otherwise waived by Buyer in writing:

       

      6.1          Accuracy
of Representations and Warranties.  The
representations and warranties of Sellers contained in this Agreement shall be
true and correct in all material respects as of the Closing Date with the same
effect as though made at such time and the representations and warranties of
Sellers contained in this Agreement which are qualified by materiality shall be
true and correct in all respects as of the Closing Date with the same effect as
though made at such time.

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

    

     

    6.2          Performance
of Agreements and Deliveries.  Sellers
shall have performed in all material respects all of its covenants, agreements
and obligations under this Agreement which are to be performed or complied with
by Sellers prior to or upon the Closing Date and shall have delivered all
documents and items required to be delivered at or prior to the Closing,
including, without limitation:

     

    (a)           A
certificate, dated the Closing Date, from the President of IH and Nutrition 21
to the effect that the conditions set forth in this ARTICLE 6 have been
satisfied and Sellers have performed all covenants which it is obligated to
perform prior to Closing;

     

    (b)           A
certificate, dated the Closing Date, from the Secretary of IH and Nutrition 21
as to the good standing of the Sellers, and the authority and the incumbency of
all officers executing the Seller Documents on behalf of Seller;

     

    (c)           an
opinion of Folger & Folger, dated the Closing Date, in the form reasonably
acceptable to the Buyer;

     

    (d)           Buyer
and Sellers shall have executed a Noncompetition Agreement in a form reasonably
acceptable to Buyer, which shall include a restriction period of four years ,
and Buyer shall have been assigned certain non-competition and confidentiality
agreements between the Sellers and each of Mark Stenberg and Arnold
Blair;

     

    (e)           A
long form Certificate of Good Standing for each of IH and Nutrition 21 issued by
the state of their formation dated no earlier than 15 days prior to
Closing;

     

    (f)           An
Escrow Agreement in a form acceptable to Buyer providing for the escrow of
$100,000.001  in respect of
any future claim (an “Escrow Claim”) by the holder of Patent 5,843,919 on
glucosamine and fish oil combinations (the “ Subject Patent”) that Buyer is
liable to the holder of the Subject Patent because Sellers infringed the Subject
Patent prior to the Closing. Each of Buyer and Sellers agree to instruct the
escrow agent in writing (with a copy of the other party) to promptly release:
(a) to Buyer all amounts necessary to satisfy Sellers’ indemnification to Buyer
in respect of any Escrow Claim; and (b) to Sellers all amounts remaining in
escrow after any Escrow Claim (i) has been settled by agreement with the holder
of the Subject Patent, or (ii) has been determined by the final and
non-appealable judgment of a court. The Escrow Agreement shall also direct the
escrow agent to release to Sellers all amounts that remain in escrow on the
second anniversary of the Closing. The escrow is not available to fund any other
claim or claims by Buyer against Sellers, whether for indemnification under this
Agreement or otherwise. Regardless of any such other claim or claims, amounts
shall be released from escrow as provided above and only as provided above, and
Buyer shall be entitled to proceed against Sellers for such other claim or
claims only by separate action as if there were no amounts in
escrow;

    

      

    

      
      
        
          
            	
                    
                      
                        
                                
                                  
                                    
                                      
                                  1

                                

                              

                            

                          

                        

                      

                    

                  	
                    The
      $100,000 escrow is in respect of Escrow Claims under this Agreement as
      well as the asset purchase agreement related to the transaction referenced
      in Sections 6.8 and 7.5 hereof. The total escrow amount is $100,000.00 and
      is to be available with respect to an Escrow Claim arising under either
      such transaction in accordance with this Section 6.2(f) or the like
      section in such other asset purchase agreement. The funds will be held in
      escrow pursuant to a single Escrow
Agreement.

                  

          

        

      

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (g)           An
Assignment and Assumption Agreement in a form acceptable to Buyer and Sellers;
and

     

    (h)           Such
other certificates, instruments, actions and deliveries reasonably requested by
Buyer.

     

    6.3          No
Material Adverse Effect.  None
of the Schedules, documents or other information to be furnished by Sellers to
Buyer pursuant to this Agreement, shall disclose any fact, circumstance or
matter, or any change in or development in connection with any matter, which
has, or could reasonably be expected to have, a Material Adverse Effect on the
Assets or on the Business; and there shall have been no other changes or
developments affecting either the Assets or the Business since the Base Balance
Sheet Date which have, or could reasonably be expected to have, a Material
Adverse Effect on the Assets or the Business.

     

    6.4          Asset
Transfer.  Sellers
shall have delivered to Buyer the following instruments of transfer and
assignment in accordance with the provisions hereof, transferring to Buyer all
of Sellers’ right, title and interest in and to the Assets, free and clear of
all Liens:

     

    (a)           A
Bill of Sale in a form reasonably acceptable to Buyer;

     

    (b)           Assignments
of Intellectual Property in forms reasonably acceptable to Buyer;

     

    (c)           An
Agreement to Assign Internet Domain Names and InterNic addresses in a form
reasonably acceptable to Buyer;

     

    (d)           Patent
licenses under patents owned by Sellers in forms reasonably acceptable to Buyer
and a patent sublicense under patent owned by McLeod Discoveries, LLC, in forms
reasonably acceptable to Buyer (the “McLeod License”);

     

    (e)           Sellers’
files and records relating to the Assets;

     

    (f)           Delivery
of an executed Supply Agreement in a form acceptable to the
parties;

     

    (g)           Delivery
of an executed Assignment and Assumption Agreement in a form acceptable to the
parties; and

     

    (h)           Such
other instruments of transfer reasonably requested by Buyer.

     

    6.5          Approval
of Management.  The
Buyer shall have received the approval of the transaction contemplated hereby by
its managing members, and if applicable, its Board of
Directors.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    6.6          Release
of Liens.  At
or prior to the Closing, Sellers shall have obtained and delivered to Buyer
instruments releasing any and all Liens on the Assets.

     

    6.7          Debt
Satisfaction.  All
Debt related to the Assets and Business shall have been satisfied, terminated,
released or extinguished to the extent required by Section 1.6
hereof.

     

    6.8          Completion
of Other Transaction..  Buyer
and Nutrition 21 shall have completed a separate transaction related to the
business of Nutrition 21 that sells finished and packaged end-products to
retailers for ultimate sale to end users without further fabrication or
packaging

     

    6.9          Transition
Plan.  Buyer and Sellers shall enter into a Transitional
Services Agreement in a form reasonably acceptable to the parties  to
facilitate the transfer of the Business and the Assets to Buyer, including
agreed terms as to the transition of Sellers’ customers, invoicing, Assumed
Liabilities and accounts receivable.

     

    ARTICLE
7

    CONDITIONS PRECEDENT TO
OBLIGATION OF SELLERS.

     

    The
obligation of Sellers to consummate the transactions contemplated by this
Agreement is subject to the satisfaction, on or prior to the Closing Date, of
the following conditions, unless waived by Sellers in writing:

     

    7.1          Accuracy
of Representations and Warranties.  The
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects at the Closing Date with the same
effect as though made at such time, and the representations and warranties of
Buyer contained in this Agreement which are qualified by materiality shall be
true and correct in all respects as of the Closing Date with the same effect as
though made at such time.

     

    7.2          Performance
of Agreement and Deliveries.  Buyer
shall have performed in all material respects all of its covenants, agreements
and obligations under this Agreement to be performed or complied with by Buyer
prior to or upon the Closing Date and shall have delivered all documents and
items required to be delivered at or prior to the Closing, including, without
limitation:

     

    (a)           The
tendering of the Purchase Price pursuant to Section 1.5 hereof pending
satisfaction of all the conditions set forth in ARTICLE 6
hereof;

     

    (b)           A
certificate, dated the Closing Date, from an officer of Buyer to the effect that
the conditions set forth in this ARTICLE 7 have been
satisfied and Buyer has performed all covenants which it is obligated to perform
prior to Closing;

     

    (c)           A
certificate, dated the Closing Date, from an officer or from Buyer’s Secretary
as to the authority and the incumbency of all those executing the Buyer
Documents on behalf of Buyer; and

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (d)           A
Certificate of Good Standing for Buyer issued by the Secretary of State of the
State of Florida dated no earlier than ten days prior to Closing.

     

    (e)           An
opinion of Genovese Joblove & Battista, P.A., dated the Closing Date, in a
form reasonably acceptable to the Sellers;

     

    (f)           Delivery
of an executed Transitional Services Agreement in a form acceptable to the
parties to facilitate the transfer of the Business and the Assets to Buyer,
including agreed terms as to the transition of Sellers’ customers, invoicing,
Assumed Liabilities and accounts receivable;

     

    (g)           Delivery
of an executed Supply Agreement in a form acceptable to the
parties;

     

    (h)           Delivery
of an executed Assignment and Assumption Agreement in a form acceptable to the
parties; and

     

     (i)           Such
other instruments of transfer reasonably requested by Sellers.

     

    7.3          Minimum
Purchase Price

     

    The
Purchase Price as adjusted shall not be less than $ 2.2 million.

     

    7.4          Fairness
Opinion

     

    Sellers
shall have received a fairness opinion that the Purchase Price is fair and
reasonable.

     

    7.5          Completion
of Other Transaction.  Buyer and Nutrition 21 shall have completed a
separate transaction related to the business of Nutrition 21 that sells finished
and packaged end-products to retailers for ultimate sale to end users without
further fabrication or packaging

     

    ARTICLE
8

    TERMINATION.

     

    8.1          Events of
Termination.  This
Agreement and the transactions contemplated by this Agreement may be terminated
at any time prior to the Closing:

     

    (a)           By
the mutual written consent of Buyer and Sellers.

     

    (b)          By
Sellers, if they are not in breach or default hereunder and any of the following
occurs and, in Sellers’ reasonable assessment, results in a material impairment
of Buyer’s ability to close as contemplated hereunder;

     

    (1)           if
any representation or warranty of Buyer made herein is untrue in any material
respect (and, if the false nature of the representation or warranty was
unintentional, such breach is not cured within ten (10) days of Buyer’s receipt
of a notice from Sellers that such breach exists or has
occurred);

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (2)           if
Buyer shall have defaulted in any material respect in the performance of any
material obligation under this Agreement and such breach is not cured within ten
(10) days of Buyer’s receipt of a notice from Sellers that such default exists
or has occurred; and

     

    (3)           if
the conditions to Sellers’ obligations to consummate the Closing as set forth in
ARTICLE 7
hereof cannot reasonably be satisfied or performed on or before the Closing Date
(unless such failure of satisfaction, non-compliance or non-performance is the
result, directly or indirectly, of any action or failure to act on the part of
Seller).

     

    (c)           By
Buyer, if it is not in breach or default hereunder and any of the following
occurs and, in Buyer’s reasonable assessment, results in a material impairment
of Sellers’ ability to close as contemplated hereunder:

     

    (1)           if
any representation or warranty of Sellers made herein is untrue in any material
respect (and, if the false nature of the representation or warranty was
unintentional, such breach is not cured within ten (10) days of Sellers’ receipt
of a notice from Buyer that such breach exists or has occurred);

     

    (2)           if
Sellers shall have defaulted in any material respect in the performance of any
material obligation under this Agreement and such breach is not cured within ten
(10) days of Sellers’ receipt of a notice from Buyer that such default exists or
has occurred; or

     

    (3)           if
the conditions to Buyer’s obligations to consummate the Closing as set forth in
ARTICLE 6
hereof cannot reasonably be satisfied or performed on or before the Closing Date
(unless such failure of satisfaction, non-compliance or non-performance is the
result directly or indirectly of any action or failure to act on the part of
Buyer).

     

    8.2          Manner of
Exercise.  In
the event of the termination of this Agreement by either Buyer or Sellers
pursuant to Section
8.1
hereof, notice thereof shall forthwith be given to the other party in accordance
with the provisions set forth in ARTICLE 11 hereof and
this Agreement shall terminate and the transactions contemplated hereunder shall
be abandoned without further action by Buyer or Sellers, except as otherwise
expressly provided herein.

     

    8.3          Termination
by Sellers Sellers may terminate this Agreement by notice to Buyer if
Sellers receives a proposal from a third party to acquire the Business on terms
and conditions which are more favorable to Sellers than the transaction
contemplated by this Agreement. If this Agreement is terminated as provided in
this Section, Sellers shall within 30 days thereafter pay to Buyer a $75,000
termination fee.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    ARTICLE
9

    POST-CLOSING COVENANTS;
SURVIVAL.

     

    9.1          Use of
Trade Names.  After
the Closing, neither Sellers, nor any person controlling, controlled by or under
common control with Sellers, will for any reason, directly or indirectly, for
itself or any other person, (a) use the Marks (or any other name which is a
variation thereof or otherwise confusingly similar therewith) or any other names
which are currently used by Sellers in conjunction with the Business, or (b) use
or disclose any trade secrets, confidential information, know-how, proprietary
information or other Intellectual Property of Sellers transferred pursuant to
this Agreement. Within five days of the Closing Date, IH shall (a) amend its
governing documents and take all other actions necessary to change its name to
one sufficiently dissimilar to IH's present name, in Buyer's judgment, to avoid
confusion and (b) take all actions reasonably requested by Buyer, if any, to
enable Buyer to change its name to IH’s present name or a name similar to IH’s
present name.

     

    9.2          Post-Closing
Transitional Matters.  Following
the Closing, without any compensation or further consideration payable by Buyer,
Sellers shall respond positively to inquiries of customers and suppliers
regarding the transaction contemplated hereby.

     

    9.3          Survival.  All
representations, warranties, covenants, agreements and indemnities contained in
this Agreement, or in any Schedule, exhibit, certificate, agreement, document or
statement delivered pursuant hereto shall be deemed to have been relied upon by
the parties and shall survive the Closing for a period of two (2) years except
that (i)  the representations and warranties of Sellers with respect to
Taxes shall survive Closing until the expiration of the applicable tax statutes
of limitation plus a period of sixty (60) days; and (ii) in the case of all
representations and warranties made by Sellers herein with respect to title
(including, without limitation, those set forth in Sections 2.7 and 2.18(b)
shall survive Closing for a period consistent with the applicable statute of
limitations relating to any claims which may arise from such representations and
warranties.

     

    9.4          Sellers’
Obligations.  Following
Closing, Sellers shall make full and timely payment when due of all amounts that
are not Assumed Liabilities, and satisfaction of all other obligations that are
not Assumed Liabilities, including, without limitation, the Excluded
Liabilities, owed by Sellers to third parties, which obligations affect the
Assets or the Business and are not subject to a good faith dispute.

     

    9.5          Confidential
Information and Cooperation.  Sellers acknowledge that all
confidential information relating to Buyer and the Business, including without
limitation (a) trade secrets and intellectual property, (b) information
concerning services and products and the development, manufacturing, marketing,
distribution and pricing of services and products, (c) information concerning
customers, customer lists and suppliers and (d) credit and financial
data  and (d) all of the Assets (as defined herein) (collectively, the
“Proprietary Information”), are valuable, special and unique assets of the
Buyer, access to and knowledge of which have been gained by
Sellers.  Sellers further agree that all Proprietary Information shall
be considered confidential information and that from and after the date
hereof, except
as required by law, Sellers will (x) not disclose, at any time, any of such
Proprietary Information to any person or entity for any reason or purpose
whatsoever, (y) not make use of any Proprietary Information for Sellers’ own
purposes or for the benefit of any person other than Buyer, and (z) from and
after the Closing, Sellers will surrender immediately to Buyer all Proprietary
Information existing in tangible form (whether in print, photos, audio or video
tape, computer disk or memory, or otherwise) which is in the possession or
control of Sellers.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    9.6          Buyer
Cooperation as to Sales Data. (a) Not later than 60 days after the end of
each Accounting Period, Buyer will provide a Net Sales Report to Sellers for
such Accounting Period for Products sold by Buyer Entities that are Eligible
Products.  Buyer shall from time to time at the request of
Stockholders give to Stockholders and their representatives access to the
records of Buyer relating to the Reports. The obligations of Nutrition 21 to pay
amounts to Stockholders under the Merger Agreement are Excluded Liabilities
within the meaning of this Agreement. Sellers shall immediately notify Buyer
when the Nutrition 21 Section 5 Obligation has been terminated. The following
definitions shall apply to defined terms contained in this Section 9.6 that are
not otherwise defined herein:

     

    The
“Merger Agreement” means an Amended and Restated Merger Agreement dated as of
August 25, 2006 by and among Nutrition 21, Inc., Arnold Blair, Mark Stenberg and
certain other parties

     

    The
“Stockholders” means Arnold Blair and Mark Stenberg.

     

    “Net
Sales” means gross sales less allowances, returns, volume discounts, pricing
discounts, guaranteed returns, freight, taxes, returns, cash discounts, and
other sales deductions. Except as aforesaid, Net Sales are computed on an
accrual basis in accordance with GAAP.

     

    “Eligible
Products” means any products that are sold under the Iceland Health trademark or
that contain fish oil or omega 3.

     

    “Buyer
Entities” means Buyer or its affiliates and its direct or indirect assignees,
licensees or sublicensees.

     

    An
“Accounting Period” means each of the successive three-month periods (i)
beginning from August to 27 through November 26, from November 27 through
February 26, from February 27 through May 26, and from May 27 through August 26
and so on, through and including the three-month period in which Sellers’
obligations to make certain reports and payments under Section 5 of the Merger
Agreement shall have terminated by its terms (the “Nutrition 21 Section 5
Obligation”).

     

    A “Net
Sales Report” for an Accounting Period means a reasonably detailed report by
Buyer’s VP of Finance on the volume of Net Sales during such Period. No Net
Sales Report shall contain pricing information or the identity of
customers.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    (b)           Buyer
shall furnish to Nutrition 21 such reports as are necessary for Nutrition 21 to
fulfill its requirements as licensee under the McLeod License; such reports
shall be issued by Buyer to Nutrition 21 within 45 days after the beginning of
each calendar quarter commencing with the second calendar quarter of 2010. Buyer
shall have no financial obligations related to the McLeod License.

     

    ARTICLE
10

    INDEMNIFICATION.

     

    10.1        Indemnification
by Sellers.  Sellers,
jointly and severally, hereby agree to indemnify, defend and hold harmless
Buyer, its affiliates and its and their respective directors, officers,
stockholders, partners, members, employees, and agents (individually, a “Buyer
Indemnified Party” and collectively, “Buyer Indemnified Parties”), against and
in respect of all losses, liabilities, obligations, damages, deficiencies,
actions, suits, proceedings, demands, assessments, orders, judgments, costs and
expenses (including the reasonable fees, disbursement and expenses of attorneys
and consultants) of any kind or nature whatsoever, but net of the proceeds from
any insurance policies or other third party reimbursement for such loss, to the
extent sustained, suffered or incurred by or made against any Buyer Indemnified
Party, to the extent based upon, arising out of or in connection
with:  (i) any breach of any representation or warranty made by
Sellers in this Agreement or in any Schedule, exhibit, certificate, agreement or
other instrument delivered pursuant to this Agreement; (ii) any breach of any
covenant or agreement made by Sellers in this Agreement or in any Schedule,
exhibit, certificate, financial statement, agreement or other instrument
delivered by or binding upon Sellers pursuant to this Agreement; (iii) any claim
made by any person or entity to the extent the same arises out of or relates to
the operation of the Assets or the Business and in connection with or on the
basis of events, acts, omissions, conditions or any other state of facts
occurring on or existing before the Closing Date (other than events, acts,
omissions, conditions or any other state of facts with respect to which Buyer
has specifically agreed to be responsible and has been provided specific written
notice by way of a Schedule attached hereto; (iv) any claim which arises in
connection with any liability or obligation of Sellers that is not an Assumed
Liability; (v) any of the Excluded Liabilities; and (vi) the sales of inventory
by Sellers to the customer identified as NIN1000, as set forth on Exhibit 10.1
hereto. The sum of all amounts  paid by Sellers to Buyer pursuant to
this Section 10.1 shall not exceed $2.2 million.

     

    10.2        Indemnification
by Buyer.  Buyer
agrees to indemnify, defend and hold harmless, Sellers and their officers,
directors, stockholders, employees and agents (individually, a “Seller
Indemnified Party” and collectively, “Seller Indemnified Parties”) at all times
against and in respect of all losses, liabilities, obligations, damages,
deficiencies, actions, suits, proceedings, demands, assessments, orders,
judgments, costs and expenses (including the reasonable fees, disbursements and
expenses of attorneys and consultants), of any kind or nature whatsoever, to the
extent sustained, suffered or incurred by or made against any Seller Indemnified
Party, to the extent based upon, arising out of or in connection
with:  (i) any breach of any representation or warranty made by Buyer
in this Agreement or in any Schedule, exhibit, certificate, agreement or other
instrument delivered pursuant to this Agreement; (ii) any breach of any covenant
or agreement made by Buyer in this Agreement or in any Schedule, exhibit,
certificate, agreement or other instrument delivered by or binding upon Buyer
pursuant to this Agreement; and (iii) any claim made against Sellers to the
extent the same relates to, results from or arises out of Buyer’s operation of
the Assets or the Business from and after the Closing Date except as may
otherwise expressly be made the obligation of Sellers pursuant to this
Agreement.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    10.3        Indemnification
Claims. All indemnification claims must be made in writing prior to the second
anniversary of the Closing Date, and shall otherwise expire.  No
indemnification shall be payable to a Buyer Indemnified Party or a Seller
Indemnified Party, under Section 10.1 or Section 10.2, respectively, with
respect to any claim unless and until the total of all claims for
indemnification against the Buyer or the Sellers, as the case may be, shall
exceed $25,000 in the aggregate, at which time all claims arising pursuant to
Section 10.1 or 10.2, as the case may be, shall be payable.

     

    10.4       
Procedure for Indemnification.  The following shall apply with respect
to all Claims by an indemnitee for indemnification (“Claims”) pursuant to this
Article 10:

     

    a.            The
indemnitee shall give the indemnitor prompt notice (the “Indemnification
Notice”) of any Claim or potential liability, or of the commencement by any
third party of any action or proceeding, with respect to which such indemnitee
seeks indemnification; provided, however, that the failure of the indemnitee to
give the Indemnification Notice to the indemnitor with respect to any Claim
shall not impair any of the rights or benefits of such indemnitee, except to the
extent that such failure materially and adversely affects the ability of the
indemnitor to defend such Claim or increases the amount of such
liability.  The Indemnification Notice shall describe the Claim in
reasonable detail.

     

    b.           
The indemnitor shall have the right to control the defense of any Claim at its
own expense and by its own counsel.  The indemnitee shall have the
right to participate therein, and shall have the right to employ its own counsel
which shall be at its sole expense unless the indemnitee shall reasonably
conclude, based upon an opinion of its counsel, that (i) there is a conflict of
interest between the indemnitor and the indemnitee in the conduct of the defense
of such Claim or (ii) there are specific defenses available to the indemnitee
which are different from or additional to those available to the indemnitor
which may create a conflict of interest such that it would be inappropriate for
counsel to the indemnitor to represent the indemnitee, in which event, the
indemnitor shall pay the reasonable fees and disbursements of counsel to each of
the indemnitor and the indemnitee; provided, however, that the indemnitor shall
not be responsible for the fees of more than one counsel for all
indemnitees.

     

    c.           
Notwithstanding the foregoing, neither the indemnitor nor the indemnitee may
settle or compromise any Claim (provided, however, that either Indemnitor may do
so if the sole relief payable to a third party in respect of such Claim is
monetary damages that are paid in full by the Party settling or compromising
such claim, the settlement includes as an unconditional term thereof the release
by the claimant or the plaintiff if the indemnitee and its Affiliates from all
liability in respect of such claim and the settlement shall not require an
admission of liability and shall otherwise be confidential) over the objection
of the other; provided, however, that consent to settlement or compromise shall
not be unreasonably withheld.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    d.          
  The indemnitee shall cooperate at the expense of the indemnitor in
the defense of any Claim and shall make available to the indemnitor any
personnel or any books, records or other documents within its control that are
reasonably necessary or appropriate for such defense, subject to the receipt of
appropriate confidentiality agreements.

     

    10.5        Survival.
If any claim for indemnification has been previously asserted by a party to this
Agreement and is still pending at the expiration of the survival period set
forth herein, such claim shall continue to be subject to the indemnification
provisions of this Agreement until resolved.

     

    ARTICLE
11

    NOTICES.

     

    All
notices and other communications required to be given hereunder, or which may be
given pursuant or relative to the provisions hereof, shall be in writing and
shall be deemed to have been given when delivered by hand or by an overnight
courier service, or mailed, postage prepaid, by first class United States mail,
certified return receipt requested, or transmitted by facsimile (with
transmission acknowledgment received, provided written notice delivered by any
of the other means of delivery specified in this ARTICLE 11 follows
such facsimile), as follows:

    

    
      	
               
      

            	
              If
      to Buyer:

            	
              Iceland
      Health, Inc.

            

    

    
      	
               
      

            	
              1301
      Sawgrass Corporate Parkway

            

    

    
      	
               
      

            	
              Sunrise,
      Florida 33323-2813

            

    

    
      	
               
      

            	
              Facsimile:
      (954) 233-1664

            

    

    Attention:  Jose
Minski, President

    

    With
a copy to:

    

    Mark S.
Feluren

    Genovese
Joblove & Battista, P.A.

    200 E.
Broward Boulevard, Suite 1110

    Fort
Lauderdale, FL 33301

    Facsimile:
(954) 453-8010

    

    
      	
               
      

            	
              If
      to Sellers:

            	
              Chief
      Executive Officer

            

    

    
      	
               
      

            	
              Nutrition
      21, Inc.

            

    

    4
Manhattanville Road

    Purchase,
NY 10577

    

    With a
copy to

    Oscar
Folger, Esquire

    Folger
& Folger

    521 Fifth
Avenue, 24th
floor

    New York
New York 10175

    Facsimile
212-697-7833

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    

    ARTICLE
12

    OTHER AND MISCELLANEOUS
PROVISIONS.

     

    12.1        Assignability;
Binding Effect; No Third-Party Beneficiaries.  This
Agreement shall not be assignable by Buyer or Sellers except with the written
consent of the other, except that Buyer may assign its rights hereunder to an
affiliated entity of Buyer.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.  No parties other than Buyer and Sellers shall
have any rights by virtue of this Agreement.

     

    12.2        Headings.  The
subject headings used in this Agreement are included for purposes of convenience
only and shall not affect the construction or interpretation of any of its
provisions.

     

    12.3        Amendments;
Waivers.  This
Agreement may not be amended or modified, nor may compliance with any condition
or covenant set forth herein be waived, except by a writing duly and validly
executed by Buyer and Sellers or, in the case of a waiver, the party waiving
compliance.  No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or privilege, or
any single or partial exercise of any such right, power or privilege, preclude
any further exercise thereof or the exercise of any other such right, power or
privilege.

     

    12.4        Entire
Agreement.  This
Agreement, together with the Schedules and exhibits hereto and all other
documents explicitly contemplated hereunder, constitute the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
and cancels any and all prior or contemporaneous arrangements, understandings
and agreements between them relating to the subject matter hereof.

     

    12.5        Severability.  In
the event that any provision or any portion of any provision of this Agreement
shall be held to be void or unenforceable, then the remaining provisions of the
Agreement (and the remaining portion of any provisions held to be void or
unenforceable in part only) shall continue in full force and
effect.

     

    12.6        Governing
Law.  This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Florida without regard to conflicts of laws principles. Each party
hereto agrees that it shall bring any action or proceeding in respect of any
claim arising out of or related to this Agreement or the transactions contained
in or contemplated by this Agreement, whether in tort or contract or at law or
in equity, exclusively in Broward County, Florida for actions and proceedings
instituted by Sellers and in Westchester County, New York for actions and
proceedings instituted by Buyer (the "Chosen Courts") and (a) irrevocably
submits to the exclusive jurisdiction of the Chosen Courts; (b) waives any
objection to laying venue in any such action or proceeding in the Chosen Courts;
and (c) waives any objection that the Chosen Courts are an inconvenient forum or
do not have jurisdiction over any party hereto.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    12.7        Counterparts.  This
Agreement may be executed in two counterparts, each of which shall be deemed an
original and all of which shall constitute the same instrument.

     

    12.8        Expenses.  Each
party shall pay its own expenses incident to the negotiation, preparation and
performance of this Agreement and the transactions contemplated hereby,
including all fees and expenses of its counsel and accountants for all
activities of such counsel and accountants undertaken pursuant to this
Agreement, whether or not the transactions contemplated hereby are consummated.
The Sellers shall be responsible for the fees of their broker, Natures Equity,
LLC.

     

    12.9        Recitals
and Introductory Paragraph.  The
recitals and introductory paragraph contained on the first page hereof are
hereby incorporated herein and made a part hereof.

     

    In Witness
Whereof, Sellers and Buyer have caused this Asset Purchase Agreement to
be executed on the date first above written.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        BUYER:

                                      	 	
                                        SELLER:

                                      
	 
      	 
      	 	 
      	 
      
	
                                        Iceland
      Health, Inc.

                                      	 	
                                        Nutrition
      21, Inc.

                                      
	 
      	 
      	 	 
      	 
      
	
                                        By:

                                      	 
      	 	
                                        By:

                                      	 
      
	
                                        Name: 

                                      	 
      	 	
                                        Name: 

                                      	
                                        Michael
      Zeher, Chief Executive Officer

                                      
	 
      	 
      	 	 
      	 
      
	 
      	 
      	 	
                                        Iceland
      Health, LLC

                                      
	 
      	 
      	 	 
      	 
      
	 
      	 
      	 	
                                        By:

                                      	 
      
	 
      	 
      	 	 
      	 
      
	 
      	 
      	 	
                                        Name:

                                      	  
      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        25

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