MEMBERSHIP INTEREST PURCHASE AGREEMENT

between

NUTRISYSTEM, INC.

(a Delaware corporation),

and

ELIZABETH LUDLOW

the sole member of

SLIM AND TONE, LLC

MEMBERSHIP INTEREST PURCHASE AGREEMENT

INTRODUCTION

This MEMBERSHIP INTEREST PURCHASE AGREEMENT is dated as of December 2, 2004. The parties are NUTRISYSTEM, INC., a Delaware corporation (the Buyer) and ELIZABETH LUDLOW, an individual and a resident of the Commonwealth of Pennsylvania (the Seller). Seller is the sole member and President of SLIM AND TONE, LLC, a Pennsylvania limited liability company (the Company).

BACKGROUND

Seller owns all of the issued and outstanding membership interests (the Shares) of the Company. The Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, the Shares on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the respective covenants, representations and warranties herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Definitions.

For convenience, certain terms used in more than one part of this Agreement are listed in alphabetical order and defined or referred to below (such terms as well as any other terms defined elsewhere in this Agreement shall be equally applicable to both the singular and plural forms of the terms defined).

Action is defined in Section 7.5.

Affiliates means, with respect to a particular party, Persons controlling, controlled by or under common control with that party, as well as any officers, directors and majority-owned entities of that party and of its other Affiliates. For the purposes of the foregoing, ownership, directly or indirectly, of 20% or more of the voting membership interest or other equity interest shall be deemed to constitute control.

Agreement means this Membership Interest Purchase Agreement, including all schedules and exhibits hereto.

Assets means, with respect to the Company as the context may require, all assets, properties, business, goodwill and rights of every kind and description, real and personal, tangible and intangible, wherever situated and whether or not reflected on the Current Balance Sheet.

Balance Sheet Date means September 30, 2004.

Business means the existing and prospective business, operations, facilities and other Assets, financial condition, results of operations, finances, markets, products, competitive position, raw materials and other supplies, customers and customer relations and personnel of the Company.

Business Day means any calendar day which is not a Saturday, Sunday or public holiday under the laws of the Commonwealth of Pennsylvania.

Buyer is defined in the Introduction.

Cap is defined in Section 7.3(d).

CERCLA means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.

Change of Control Event means (i) any sale, lease, exchange, or other transfer of all or substantially all of the assets of the Buyer to any other Person (in one transaction or a series of related transactions), (ii) dissolution or liquidation of the Buyer, or (iii) when any Person, including a group as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the outstanding shares of the Buyers voting securities (based upon voting power).

Charter Documents means an entitys certificate or articles of incorporation or formation, certificate defining the rights and preferences of securities, articles of organization, general or limited partnership agreement, operating agreement, certificate of limited partnership, joint venture agreement or similar document governing the entity.

Claim Notice is defined in Section 7.3(a).

Claim Response is defined in Section 7.3(a).

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC