STOCKHOLDERS' AGREEMENT



            This Stockholders' Agreement (this "Agreement"), is made as of

December 20, 2002, by and among HJM Holdings, LLC, a Delaware limited liability

company (the "LLC"), NewSpring Ventures, L.P., a Delaware limited partnership

("NSV"), and such other parties as may from time to time join in this Agreement

with the written consent of the LLC and NSV and the other parties hereto, if

any, by executing a joinder substantially similar to Exhibit A (each of NSV and

such other parties that execute a joinder hereto, collectively, the "Other

Investors," and, collectively with the LLC and NSV, the "Stockholders").



                                   Background



            Each of the Stockholders has purchased shares of the common stock of

Nutri/System, Inc, a Delaware corporation (the "Company"), pursuant to the

Purchase Agreements (the "Common Stock");



            The Stockholders desire to provide for certain rights and

obligations in respect of, among other things, the voting of the shares of

Common Stock which each of them currently own or control; and



            The execution and delivery of this Agreement by the LLC and the

Other Investors that are signatories to this Agreement as of the date hereof is

a pre-condition and material inducement for each of them to purchase the shares

of Common Stock purchased by them.



            NOW, THEREFORE, in consideration of the representations, warranties,

covenants and agreements set forth herein and for other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, the

parties hereto hereby agree as follows:



            1. Definitions. For convenience and brevity, certain terms used in

this Agreement are defined immediately below instead of when first used in this

Agreement. Each defined term used in this Agreement has been identified by

capitalizing the first letter in such term.



            "Board" means the board of directors of the Company.



            "Change of Control Transaction" means any of the following: (a) a

merger, consolidation, exchange or other business combination or transaction

involving the Company if all of the stockholders of the Company immediately

prior to the effective date of such merger, consolidation, exchange or other

business combination or transaction collectively have, as a result of such

transaction, ownership of voting securities representing less than 50% of the

total voting power of the surviving corporation following such merger,

consolidation, exchange or other business combination or transaction; (b) a sale

or other direct or indirect disposition of all or substantially all the assets

of the Company; or (c) a liquidation or dissolution of the Company.



            "Common Stock" is defined in the Background section.



            "Company" is defined in the Background section.



            "Company Matter" means a matter, other than a Special Company Matter

or one set forth in Section 2.1, that requires the approval of the stockholders

of the Company.

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CUSIP No. 67069D 10 8                  13D                   Page 11 of 11 Pages







            "Company Matter Authorization" means a writing substantially in the

form of Exhibit B, indicating the direction of voting that the Other Investors

desire to take with respect to the shares of Common Stock that it owns or

controls.



            "Company Matter Majority" means the direction of voting prescribed

by more than 50% of the aggregate Voting Rights of the Other Investors and each

member of the LLC as set forth on the LLC Voting Certificate and any Company

Matter Authorizations properly submitted pursuant to this Agreement or the

Operating Agreement, as appropriate.



            "Liquidity Transaction" means a permitted sale by the LLC (or its

members upon the distribution of such shares) and the Other Investors prior to

the termination of this Agreement where the following conditions have been

satisfied: (a) such permitted sale shall only pertain to and cover shares of

Common Stock registered under the Securities Act of 1933; (b) as to the LLC, all

of the shares of Common Stock that are to be subject to its proportionate right

of sale may be sold directly by the LLC, distributed to its members as freely

tradable shares or some combination thereof; and (c) no stockholder (or member

of the LLC in the event of a distribution of shares by the LLC to its members)

shall be obligated to sell its, his or her shares of Common Stock in, or as a

result of, the Liquidity Transaction.



            "LLC" means HJM Holdings, LLC, a Delaware limited liability company.



            "LLC Special Matter Voting Certificate" is defined in Section

2.3(b).



            "LLC Voting Certificate" is defined in Section 2.2(b).



            "Notice Trigger" means (a) the receipt by the LLC of a written

notice from the Company or a stockholder of the Company of a meeting (annual,

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