<PAGE>

                                                                    EXHIBIT 10.2




                            SUBSCRIPTION AGREEMENT

                                By and between

                     BARIATRIX PRODUCTS INTERNATIONAL INC.

                                      and

                              BALANCE BAR COMPANY

                                      and

                                RODERICK EGGER

                                      and

                              3357481 CANADA INC.

                                      and

                                 THOMAS EGGER

                                 May 20, 1999
<PAGE>

                            SUBSCRIPTION AGREEMENT
                            ----------------------


THIS AGREEMENT is made on the 20/th/ day of May, 1999.

BY AND BETWEEN:          BARIATRIX PRODUCTS INTERNATIONAL INC., a corporation
                         duly incorporated according to the laws of Canada,
                         herein acting and represented by Thomas L. Egger, its
                         President and Secretary, duly authorized as he so
                         declares,

                         (herein referred to as the "Corporation")

AND:                     BALANCE BAR COMPANY, a company duly incorporated
                         according to the laws of Delaware, herein acting and
                         represented by Thomas Flahie, its Senior Vice President
                         of Finance and Administration, duly authorized as he so
                         declares,

                         (herein referred to as "Balance Bar")

AND:                     RODERICK EGGER, businessman, of the City of Burlington,
                         State of Vermont,

                         (herein referred to as "Rod")

AND:                     3357481 CANADA INC., a corporation duly incorporated
                         according to the laws of Canada, herein acting and
                         represented by Thomas L. Egger, its President, duly
                         authorized as he so declares,

                         (herein referred to as "3357481")

AND:                     THOMAS L. EGGER, businessman, of the City of Westmount,
                         Province of Quebec,

                         (herein referred to as "Thomas")

                         (Rod, Thomas and 3357481 are sometimes herein
                         collectively referred to as the "Guarantors")


     WHEREAS the authorized capital of the Corporation consists of an unlimited
number of Class "A" Shares, Class "B" Shares, Class "C" Shares, Class "D"
Shares, Class "E" Shares, Class "F" Shares, Class "G" Shares and Class "H"
Shares;
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                                      -2-

     WHEREAS Balance Bar has proposed to make an investment in the amount of
Three million five hundred thousand dollars (US$3,500,000) in the Corporation by
way of purchase from the Corporation of such number of Class "A" Shares of the
Corporation as represents in the aggregate 10% of the issued and outstanding
Class "A" Shares on a fully diluted basis; and

     WHEREAS the Corporation wishes to issue to Balance Bar such number of Class
"A" Shares of the Corporation as represents in the aggregate 10% of the issued
and outstanding Class "A" Shares on a fully diluted basis.

NOW THEREFORE, THIS AGREEMENT WITNESSETH:

1.   DEFINITIONS
     -----------

     The following terms, when used herein, shall have the following meanings:

     "Affiliates" shall have the meaning ascribed thereto in subsection 2(2) of
     the Canada Business Corporations Act;

     "Benefit Plan" shall have the meaning ascribed thereto in section 4.23;

     "Closing" and "Closing Date" shall mean the date hereof;

     "Contracts" shall have the meaning ascribed thereto in section 4.21;

     "Environmental Conditions" shall have the meaning ascribed thereto in
     section 4.41.13;

     "Environmental Laws" shall have the meaning ascribed thereto in section
     4.41.13;

     "Environmental Liabilities" shall have the meaning ascribed thereto in
     section 4.41.13;

     "Environmental Permit" shall have the meaning ascribed thereto in section
     4.41.13;

     "Financial Statements" shall have the meaning ascribed thereto in section
     4.15;

     "Governmental Entity" shall have the meaning ascribed thereto in section
     4.3;

     "Hazardous Substance" shall have the meaning ascribed thereto in section
     4.41.13;

     "Intellectual Property" shall have the meaning ascribed thereto in section
     4.26;

     "Licenses" shall have the meaning ascribed thereto in section 4.14;

     "Losses" shall have the meaning ascribed thereto in section 6.2;

     "Millenium Compliant" shall have the meaning ascribed thereto in section
     4.40;

     "Property" shall have the meaning ascribed thereto in section 4.14;

     "Shareholders" shall have the meaning ascribed thereto in section 4.6;
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                                      -3-

     "Share Issue Price" shall have the meaning ascribed thereto in section 3;

     "Shares" shall have the meaning ascribed thereto in section 2;

     "Subsidiaries" shall have the meaning ascribed thereto in section 4.5;

     "Taxes" or "Tax" shall have the meaning ascribed thereto in section 4.18.1;

     "Tax Returns" and "Tax Return" shall have the meaning ascribed thereto in
     section 4.18.1;

     "Third Party Claim" shall have the meaning ascribed thereto in section 6.3.

2.   SUBSCRIPTION AND ISSUE OF SHARES
     --------------------------------

     Upon and subject to the terms and conditions hereof, Balance Bar hereby
subscribes for, on its own account, and the Corporation agrees to issue to
Balance Bar 1,000 Class "A" Shares of the Corporation (the "Shares").

3.   ISSUE PRICE
     -----------

     The Shares shall be issued for an aggregate issue price of Three million
five hundred thousand dollars (US$3,500,000) (the "Share Issue Price") being
US$3,500 per Class "A" Share, which Share Issue Price shall be payable by way of
a cheque made payable to the Corporation.

     The Share Issue Price was established on the basis of a negotiation between
the Corporation and Balance Bar. In addition, Balance Bar has also been granted
certain additional volume discounts by the Corporation on the purchase of
increased volumes by Balance Bar Company of products manufactured by the
Corporation.

4.   REPRESENTATIONS AND WARRANTIES OF THE CORPORATION AND THE GUARANTORS
     --------------------------------------------------------------------

     The Guarantors and the Corporation hereby represent and warrant, on a
solidary basis as among each of them and hereby waiving the benefit of division
and discussion to and in favour of Balance Bar as follows:

     4.1  Incorporation and Capacity. The Corporation is a corporation duly
          --------------------------
          incorporated under the laws of Canada and is a valid and subsisting
          corporation in good standing under such laws and is in good standing
          as a corporation and is licensed or qualified to transact business in
          each jurisdiction where the nature of its activities makes such
          license or qualification necessary and a list of such jurisdictions is
          hereto annexed as Schedule 4.1. The Corporation has the full corporate
                            ------------
          power and authority to enable it to own, lease or otherwise hold its
          properties and assets and to carry on its business as it is now being
          conducted and to own its property.

     4.2  Authority; No Conflicts. The Corporation has all requisite power and
          -----------------------
          authority to execute and deliver this Agreement and to consummate the
          transactions
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                                      -4-

          contemplated hereby. All acts and other proceedings required to be
          taken by the Corporation to authorize the execution, delivery and
          performance of this Agreement and the consummation of the transactions
          contemplated hereby have been duly and properly taken. This Agreement
          and all other agreements contemplated hereby that have been executed
          by the Corporation have been duly executed and delivered by the
          Corporation and constitute the valid and binding obligation of the
          Corporation enforceable against the Corporation in accordance with its
          terms. All other agreements and instruments contemplated by this
          Agreement to be delivered or executed by the Corporation at Closing
          shall at Closing constitute the valid and binding obligation of the
          Corporation enforceable against the Corporation in accordance with its
          terms.

     4.3  Consents. No consent, license, approval, order or authorization of, or
          --------
          registration, filing or declaration with, any Governmental Entity is
          required to be obtained or made with respect to the Corporation in
          connection with the execution and delivery of this Agreement or the
          consummation of the transactions contemplated hereby, and no consent
          of any other third party is required to be obtained with respect to
          the Corporation in connection with the execution, delivery and
          performance of this Agreement or the consummation of the transactions
          contemplated hereby. As used herein the term "Governmental Entity"
          means any federal, provincial, municipal or other governmental
          department, commission, board, bureau, agency, court or
          instrumentality.

     4.4  No Bankruptcy. There has not been filed any petition or application,
          -------------
          or any proceeding commenced which has not been discharged, by or
          against the Corporation with respect to any assets of the Corporation
          under any law, domestic or foreign, relating to bankruptcy,
          reorganization, fraudulent transfer, compromise, arrangements,
          insolvency, readjustment of debt or creditors' rights, and no
          assignment has been made by the Corporation for the benefit of its
          creditors.

     4.5  Subsidiaries. Except for the subsidiaries set out on Schedule 4.5
          ------------                                         ------------
          hereto (the "Subsidiaries"), the Corporation does not have, directly
          or indirectly, any ownership or other interest in, or control any
          corporation, partnership, joint venture, business association or other
          entity.

     4.6  Authorized and Issued Stock.  The authorized capital stock of the
          ---------------------------
          Corporation consists of an unlimited number of Class "A" Shares, an
          unlimited number of Class "B" Shares, an unlimited number of Class "C"
          Shares, an unlimited number of Class "D" Shares, an unlimited number
          of Class "E" Shares, an unlimited number of Class "F" Shares, an
          unlimited number of Class "G" Shares and an unlimited number of Class
          "H" Shares of which there are issued and outstanding such number of
          shares as are set forth on Schedule 4.6. The Shares represent one-
                                     ------------
          tenth of all of the issued and outstanding Class "A" Shares in the
          capital of the Corporation. All of the Shares are duly authorized and
          validly issued and are outstanding as fully paid and non-assessable.
          None of the Shares has been issued in violation of, and none of the
          Shares is subject to, any pre-emptive or subscription rights and
          except as set forth above, there are no shares in the capital stock or
          other equity securities of the Corporation outstanding. There are no
          outstanding subscriptions, warrants, options, agreements, convertible
          or
<PAGE>

                                      -5-

          exchangeable securities or other commitments pursuant to which the
          Corporation is or may become obligated to issue, sell, purchase,
          return or redeem any shares of capital stock or other securities of
          the Corporation. The sole registered and beneficial owner of all of
          the issued and outstanding shares of the capital stock of the
          Corporation are the shareholders listed on Schedule 4.6 hereto (the
                                                     ------------
          "Shareholders").

     4.7  Title to Shares. Each of the Shareholders owns the shares set forth
          ---------------
          opposite his or its name in Schedule 4.6 above and the Corporation
                                      ------------
          owns all of the shares of each of the Subsidiaries with good and
          marketable title, free and clear of all liens, encumbrances, pledges,
          security interests, options, charges and claims of any nature or kind
          whatsoever.

     4.8  Voting Trust. Save and except for an agreement to be entered into
          ------------
          between the Guarantors, Robert Raich and 3515176 Canada Inc. relating
          to the disposition of the shares of the latter two shareholders (the
          "Share Disposition Agreement") which Share Disposition Agreement is
          more fully described at section 2.2 of the Shareholders' Agreement of
          even date herewith relating to the shares of the Corporation, a copy
          of which shall be provided to Balance Bar prior to its execution, none
          of the shares or other securities of the Corporation is subject to any
          voting trust agreement or other contract, agreement, arrangement,
          commitment or understanding, including any such agreement,
          arrangement, commitment or understanding restricting or otherwise
          relating to the voting, dividend rates or disposition of such shares
          or securities.

     4.9  Rights to Purchase Shares. There is no contract, option or other right
          -------------------------
          of another binding upon or which at any time in the future may become
          binding upon the Corporation to allot or issue any of the unissued
          shares of the Corporation or to create any additional class of shares,
          although the Corporation is in the process of adopting a management
          stock option plan.

    4.10  Actions Respecting Shares. There are no actions, suits, proceedings or
          -------------------------
          claims pending or threatened against or relating to the Corporation or
          with respect to or in any manner affecting the ownership by a
          Shareholder of the shares or which would adversely affect the ability
          of the Corporation to execute and deliver this Agreement and
          consummate the transactions contemplated hereby.

    4.11  Corporate Records. The minute books and share certificate books of the
          -----------------
          Corporation are true and complete and up to date in all material
          respects and accurately reflect all material corporate actions and
          decisions which have been taken by its board of directors and
          shareholders. The Corporation has made available to Balance Bar true
          and complete copies of the charter documents, including the
          certificate of incorporation, as amended to the date hereof, and the
          by-laws, as in effect on the date hereof, of the Corporation.

    4.12  Effect of Agreement. The execution and delivery of this Agreement does
          -------------------
          not and the execution and delivery of every other agreement or
          instrument contemplated by this Agreement to be delivered or executed
          by the Corporation at Closing and the consummation of the transactions
          contemplated hereby or thereby will not (i) conflict with, violate,
          result in a breach of or constitute a default under any
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                                      -6-

          provision of the certificate of incorporation or articles (as amended)
          or by-laws or other organizational documents of the Corporation, (ii)
          violate, conflict with or result in the breach or termination of or
          modification, or otherwise give any other contracting party the right
          to terminate, or constitute a default, with or without notice, the
          lapse of time or both, or cause the acceleration of any obligation,
          under the terms of any agreement or instrument to which the
          Corporation is a party or by which it or any of its properties or
          other assets may be bound, (iii) result in the creation of any lien,
          charge, hypothec or encumbrance upon the properties or other assets of
          the Corporation, (iv) conflict with, violate, result in a breach of or
          constitute a default under any judgment, order, injunction, decree or
          award against, or binding upon, the Corporation or upon any of its
          properties or other assets, (v) violate any law or regulation of any
          jurisdiction relating to the Corporation or its properties, other
          assets or business, or (vi) result in the loss of or require the
          repayment of any government grant, subsidy or tax credit.

    4.13  Compliance with Law. Subject to the provisions of any other
          -------------------
          representation or warranty contained herein which deals, more
          specifically, with any particular law, ordinance or regulation, the
          Corporation is, and all aspects of its business are, conducted in
          compliance with all applicable laws, ordinances and regulations,
          inclusive of those of any administrative boards or agencies or other
          public authorities having jurisdiction, the non-compliance with which
          would have an adverse effect on the Corporation or its operations.

    4.14  Licenses. The Corporation owns or holds all licenses, permits,
          --------
          franchises, approvals, consents, waivers, exemptions, authorizations,
          certificates of occupancy and similar rights and privileges
          ("Licenses"), all unencumbered and subject to no challenge,
          revocation, expiry, modification or termination, which are material or
          necessary to the ownership of its assets or the operation of each and
          every aspect of its business. The execution and consummation of this
          Agreement and the consummation of the transactions contemplated herein
          will not create any right of modification, limitation, termination or
          revocation on the part of a third party granting such Licenses; there
          exists no pending or threatened modification, limitation, revocation
          or termination of any such License. The Licenses are sufficient and
          adequate in all respects to permit the continued lawful conduct by the
          Corporation of its business in the manner now conducted and the
          ownership, occupancy and operation of any immoveable property leased
          by the Corporation (the "Property"), and none of the business
          operations of the Corporation are presently being conducted in a
          manner that violates in any respect any of the terms or conditions
          under which any License was granted. The Licenses have been duly
          obtained, are valid and are in full force and effect and the
          Corporation is not and has not been in violation of any of the
          Licenses, nor has the Corporation received any notice of the
          revocation or limitation of any of the Licenses. Schedule 4.13
                                                           -------------
          contains a list and description of all material licenses.

    4.15  Financial Statements. The Corporation has delivered to Balance Bar the
          --------------------
          audited consolidated financial statements of the Corporation for the
          periods ended August 31, 1998 and August 31, 1997 (hereinafter
          collectively referred to as the "Year-End Financial Statements"); the
          Year-End Financial Statements:
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                                      -7-

          4.15.1  reflect accurately the transactions entered into the books and
                  accounts of the Corporation, as at the dates thereof;

          4.15.2  present fairly the assets, liabilities, retained earnings,
                  profit and loss and financial position of the Corporation as
                  at the dates thereof;

          4.15.3  have been prepared in accordance with Canadian generally
                  accepted accounting principles, consistently applied; and

          4.15.4  except to the extent reflected or reserved against thereon,
                  the Corporation did not have on the dates thereof any
                  liabilities or obligations of any nature, which would be
                  required under Canadian generally accepted accounting
                  principles to be disclosed thereon, whether direct or
                  indirect, accrued, absolute, contingent, unasserted or
                  otherwise, known or unknown, fixed or unfixed, liquidated or
                  unliquidated including, without limitation, federal,
                  provincial, local, municipal or other tax liabilities due or
                  to become due or penalties, assessments or interest charges in
                  respect thereof, or unusual forward or long term commitments
                  or unrealized or anticipated losses from any unfavourable
                  commitments.

          In addition, the Corporation has delivered to Balance Bar the
          internally-prepared unaudited consolidated financial statements for
          the seven months ended March 31, 1999 (the "March Statements"); the
          March Statements:

          4.15.5  reflect accurately, in all material respects, the transactions
                  entered into the books and accounts of the Corporation, as at
                  the date thereof;

          4.15.6  present fairly the assets, liabilities, retained earnings,
                  profit and loss and financial position of the Corporation as
                  at the date thereof;

          4.15.7  have been prepared in a manner consistent with the Year-End
                  Financial Statements.

          The Year-End Financial Statements and the March Statements shall
          hereinafter be collectively referred to as the "Financial Statements".

    4.16  Title to Assets. Except as set forth on Schedule 4.16, the Corporation
          ---------------                         -------------
          or the Subsidiaries owns each of the assets shown or reflected on the
          Financial Statements (except only those assets which have been
          disposed of in the ordinary course of business since the dates
          thereof) and all other assets acquired since the dates thereof with
          good and marketable title, free and clear of all encumbrances,
          including without limitation, mortgages, liens, privileges, security
          interests, claims, charges and easements, restrictive covenants,
          conditional sale agreements, restrictions on transfer, rights of first
          refusal or offer, due and unpaid taxes and other encumbrances on title
          of any sort whatsoever. The Corporation has not received in respect of
          its assets or any of them any notice of conflict with the assertive
          rights of any other party. The assets owned by the Corporation on the
          Closing Date will include all of the assets necessary for
<PAGE>

                                      -8-

          or that are used by the Corporation in the conduct of the
          Corporation's business in the manner in which it has been conducted by
          the Corporation.

    4.17  Legal Proceedings. There are no suits, claims, actions (arbitration or
          -----------------
          legal) or administrative or other proceedings or governmental
          investigations pending or, to the knowledge of the Corporation,
          threatened against the Corporation or any of its officers, directors,
          employees or agents in connection with the activities of the
          Corporation or Affiliates or as to which the Corporation or any of its
          officers, directors, employees, agents or Affiliates may become a
          party or be affected thereby before any court or administrative agency
          or officer, and the Corporation is not aware of any facts or
          circumstances which should, or could, reasonably form the basis for
          any such suits, claims, actions, proceedings and the Corporation is
          not the subject of any investigation or proceedings by any
          governmental authority, and none of the assets of the Corporation nor
          any of its business practices is in any manner, directly or
          indirectly, affected by any judgment, order, writ, or injunction of
          any court or governmental or administrative agency or officer.

    4.18  Tax Returns.
          -----------

          4.18.1  All returns (including, without limitation, income tax,
                  corporation tax, capital tax, transfer business tax, import
                  duties, goods and services tax, value added tax, franchise
                  tax, sales and use tax, unemployment compensation, customs
                  duty, excise tax, severance, property tax, gross receipts tax,
                  profits tax, payroll and withholding tax returns and
                  information returns) and reports of or relating to any
                  federal, provincial, municipal, state, foreign or local tax,
                  assessment or charge of any nature whatsoever (all, together
                  with any penalties, additions to tax, fines and interest
                  thereon or related thereto, herein referred to collectively as
                  "Taxes" or singularly as a "Tax") that are required to be
                  filed (taking into account all extensions) on or before the
                  Closing Date for, by, on behalf of or with respect to the
                  Corporation (all such returns and reports herein referred to
                  collectively as "Tax Returns" or singularly as a "Tax
                  Return"), have been or will be timely filed with the
                  appropriate taxation authority on or before the Closing Date,
                  and all Taxes shown to be due and payable on such Tax Returns
                  or related to such Tax Returns have been or will be timely
                  paid in full prior to the Closing Date;

          4.18.2  all Tax Returns and the information and data contained therein
                  have been or will be properly and accurately compiled and
                  completed in all respects, fairly present or will fairly
                  present in all respects the information purported to be shown
                  therein, and reflect or will reflect all liabilities for Taxes
                  for the periods covered by such Tax Returns;

          4.18.3  save and except for a recently completed federal research and
                  development tax audit, which will result in a re-assessment of
                  approximately $50,000, none of such Tax Returns are now under
                  audit or examination by any taxation or other authority and
                  there are no agreements, waivers or other arrangements
                  providing for an extension of time with respect to the
                  assessment or collection of any Tax or
<PAGE>

                                      -9-

                  deficiency of any nature against the Corporation or with
                  respect to any Tax Return and there are no suits or similar
                  proceedings now pending or, to the knowledge of the
                  Corporation, threatened against the Corporation with respect
                  to any Tax, and there are no matters under discussion with any
                  taxation or other authority relating to any Tax, or any claims
                  for any additional Tax asserted by any such authority.

    4.19  Tax Liabilities.
          ---------------

          4.19.1  The Corporation does not have any liability, obligation or
                  commitment for the payment of Taxes, except those as are
                  disclosed in the Financial Statements or such Taxes not yet
                  due as have arisen since the date of the most recent of the
                  Financial Statements in the usual and ordinary course of
                  business and for which adequate provision in the accounts of
                  the Corporation has been made, and the Corporation is not in
                  arrears with respect to any required withholdings or
                  instalment payments of any Tax of any kind. Save and except as
                  set forth in section 4.18.3 neither Revenue Canada Taxation
                  nor any other taxing authority is now asserting or threatening
                  to assert any deficiency or claim for additional Taxes against
                  the Corporation and there are no disputes as to any Taxes
                  payable by the Corporation nor as to any matter which would
                  have the effect of reducing any tax-loss carry forward that
                  may be available to the Corporation. Save and except as set
                  forth in section 4.18.3 there are no actions, suits,
                  proceedings, investigations or claims now threatened or
                  pending against the Corporation in respect of Taxes nor are
                  there any matters under discussion with any governmental
                  authority with respect to Taxes asserted by any such
                  authority;

          4.19.2  the inventories of the Corporation have been valued for tax
                  purposes at the lower of cost or net realizable value;

          4.19.3  the paid up capital of the Corporation for income tax purposes
                  equals its paid up capital under corporate law;

          4.19.4  to the best of the knowledge of the Corporation, any interest
                  paid, payable or otherwise accruing on any interest-bearing
                  debt of the Corporation is deductible (and to the extent that
                  such debt exists on Closing will continue to be deductible) in
                  computing its income under the Income Tax Act (Canada);

          4.19.5  save and except as set forth on Schedule 4.19.5 in respect of
                                                           ------
                  the period subsequent to August 31, 1995 only, the Corporation
                  has not made any election under Section 85 of the Income Tax
                  Act (Canada) with respect to the acquisition or disposition of
                  any property;

          4.19.6  the Corporation has not made any election under Sub-section
                  83(2) of the Income Tax Act (Canada) with respect to payment
                  out of a capital dividend account;
<PAGE>

                                     -10-

         4.19.7   save and except for a lease of premises with Patrick Egger for
                  an amount of $1,200 per month, the Corporation has not
                  acquired or had the use of any property from a person with
                  whom it was not dealing at arm's length;

         4.19.8   save and except as set forth on Schedule 4.19.8 in respect of
                                                  ---------------
                  the period subsequent to August 31, 1995 only, the Corporation
                  has not disposed of anything to a person with whom it was not
                  dealing at arm's length for proceeds less than the fair market
                  value thereof;

         4.19.9   the Corporation has not discontinued carrying on any business
                  in respect of which any non-capital losses were incurred;

         4.19.10  the Corporation has made all elections required to be made
                  under the Income Tax Act (Canada) in connection with any
                  distributions and all such elections were true and correct and
                  in prescribed form and were made within the prescribed time
                  periods;

         4.19.11  since its date of incorporation, the Corporation has been a
                  "Canadian-controlled private corporation" within the meaning
                  of the Income Tax Act (Canada);

         4.19.12  save and except as set forth on Schedule 4.19.12 in respect of
                                                           -------
                  the period subsequent to August 31, 1995 only, the Corporation
                  is not, nor has previously been at any time, associated with
                  any other Canadian-controlled private corporation (within the
                  meaning of the Income Tax Act (Canada), and the Corporation
                  has not filed with the Minister of National Revenue any
                  agreement or form under Section 125(3) of the Income Tax Act
                  (Canada) and the Corporation is not carrying on and has never
                  carried on business as a member of any partnership;

         4.19.13  neither the Corporation nor its directors, officers or
                  employees are aware of any contingent Tax liabilities or any
                  grounds which would prompt a re-assessment, including
                  aggressive treatment of income and expenses in filing earlier
                  Tax returns;

         4.19.14  control of the Corporation has not been acquired by a person
                  or persons since its date of incorporation (for purposes of
                  this section, ("control" is to be given the meaning found in
                  Sections 186, 251 and 256 of the Income Tax Act (Canada));

         4.19.15  there are no amounts outstanding and unpaid for which the
                  Corporation has previously claimed a deduction under the
                  Income Tax Act (Canada);

         4.19.16  there are no circumstances existing which could result in the
                  application to the Corporation of either Section 78 or Section
                  80 of the Income Tax Act (Canada);
<PAGE>

                                     -11-

         4.19.17  the Corporation has not claimed and will not claim any reserve
                  under any one or more of subparagraph 40(1)(a)(iii) or
                  subparagraphs 20(1)(m) or 20(1)(n) of the Income Tax Act
                  (Canada) if any such amount could be included in the
                  Corporation's income for a period ending after Closing;

         4.19.18  the financial statements and schedules attached to the
                  corporate income tax returns as filed by the Corporation for
                  each of its taxation years reflect and disclose all
                  transactions to which the Corporation was or is a party as
                  required by the Income Tax Act (Canada) and the regulations
                  made thereunder or other applicable revenue laws and all of
                  the transactions to which the Corporation was or is a party
                  are reflected or disclosed in these financial statements and
                  schedules and these statements and schedules have been duly
                  and accurately completed as required by these acts and
                  regulations;

         4.19.19  subject to section 4.18.3, the Corporation is not and will not
                  become liable for any invalid, late or excess designations
                  under the Share Purchase Tax Credit Provisions or the
                  Scientific Research and Experimental Development Tax Credit
                  Provisions of the Income Tax Act (Canada) or for unpaid taxes
                  under Part VII or Part VIII of the Income Tax Act (Canada);

         4.19.20  the Corporation has no net capital losses as of the date of
                  the most recent of the Financial Statements and no
                  transactions since that date will result in any net capital
                  loss;

         4.19.21  the Corporation is a registrant for the purposes of the Goods
                  and Services Tax provided for under the Excise Tax Act and its
                  registration number is 100397694 RT;

         4.19.22  the Corporation is a registrant for the purposes of the goods
                  and services tax provided for under the Quebec Sales Tax Act
                  and its registration number is 1001346900 TQ 0001;

         4.19.23  the Corporation has paid all Taxes, if any, imposed by the
                  Quebec Sales Tax Act and the Retail Sales Tax Act (Ontario)
                  and the applicable legislation of each other province of
                  Canada on the acquisition of its tangible personal property
                  and none of its tangible personal property or moveable
                  property has been transferred in a transaction contemplated
                  under the provisions of Section 20.7 of the Quebec Sales Tax
                  Act and any regulations made thereunder or Section 18 of
                  Regulation 904 to the Retail Sales Tax Act (Ontario), or any
                  predecessor thereof or the analogous provisions of the sales
                  tax legislation of any other province;

         4.19.24  the Corporation has not made or been a party to any election
                  under Sections 156(1), 227(1) or 273(1) of the Excise Tax Act
                  of Canada or under the equivalent provisions of the Quebec
                  Sales Tax Act;
<PAGE>

                                     -12-

         4.19.25  the "Accounts Receivable - Trade" shown on the Financial
                  Statements are net of an allowance for doubtful accounts which
                  is the aggregate of amounts individually calculated and
                  recorded as reserves on particular accounts receivable;

         4.19.26  the preceding representations and warranties in this Section
                  4.19 which refer to the Income Tax Act (Canada) are true and
                  correct with respect to the same or equivalent provisions, if
                  any, of the Quebec Taxation Act or any other provincial
                  taxation legislation;

   4.20  Insurance. All policies of fire, liability or other forms of insurance
         ---------
         held by the Corporation are valid, outstanding and in full force and
         effect, as to which premiums have been paid currently, and are in such
         amounts and provide insurance against such losses and risks as are
         adequate and consistent with the requirements of its business as
         currently conducted and are sufficient for compliance with all
         requirements of law and all agreements to which the Corporation is a
         party and will not in any way be affected by or terminated or lapsed by
         reason of the consummation of the transactions contemplated by this
         Agreement. The Corporation is not in default under any provision of any
         such policy of insurance and has not received notice of cancellation or
         non-renewal of any such insurance and no misstatement or
         misrepresentation has been made by the Corporation in any application
         for any policy of insurance. There is no claim by the Corporation
         pending under any of such policies as to which coverage has been
         questioned, denied or disputed by the underwriters or carriers of such
         policies. The Corporation has not received any notice from or on behalf
         of any insurance carrier issuing such policies that insurance rates
         will hereafter be substantially increased, that there will hereafter be
         a cancellation, a change in the type of coverage provided, or an
         increase in a deductible (or an increase in premiums in order to
         maintain an existing deductible) or non-renewal of existing policies,
         or that alteration of any equipment or any improvements to real estate
         occupied by or leased to or by the Corporation, the purchase of any
         additional equipment, or the modification of any of the methods of
         doing business of the Corporation, will be required or suggested. The
         Corporation has no knowledge of any state of facts, or of the
         occurrence of any event, which the Corporation knows or has reason to
         believe might reasonably (i) form the basis for any claim against the
         Corporation not fully covered by insurance or for any liability on
         account of any express or implied warranty or tortious omission or
         commission, or (ii) result in a material increase in insurance premiums
         of the Corporation. The Corporation has not been refused any insurance
         with respect to its assets or operations, nor has its coverage been
         limited by any insurance carrier to which it has applied for any such
         insurance or with which it has carried insurance during the last five
         (5) years.

   4.21  Contracts. Schedule 4.21 annexed hereto is a true and complete list and
         ---------  -------------
         description as at the date hereof of all written or oral contracts,
         agreements, arrangements or commitments to which the Corporation is a
         party or by which it or its assets are bound (collectively the
         "Contracts") and a list of those customers with which the Corporation
         has entered into manufacturing agreements, provided that Schedule 4.21
                                                                  -------------
         does not describe (but all of which are included within the term
         "Contracts") (i) Contracts which are otherwise disclosed on other
         Schedules
<PAGE>

                                     -13-

         to this Agreement or which have a value of less than Fifty Thousand
         Dollars ($50,000), (ii) Contracts which are terminable without penalty
         on notice from the Corporation of thirty (30) days or less, or (iii)
         Contracts for the supply of materials used in the manufacture of the
         Company's products having a term which is less than six (6) months, or
         (iv) customer Contracts or purchase orders which, in each case, have
         been entered into in the ordinary course of business, and have a term
         of less than six (6) months; except as set forth on Schedule 4.21, the
                                                             -------------
         Corporation and each of the other parties thereto has performed all
         obligations to be performed under all Contracts, and neither the
         Corporation nor, to the knowledge of the Corporation, any other party
         thereto is in default under any provision of such Contracts (except for
         any defaults which would not have an adverse effect on the Corporation
         or its operations), and no event has occurred which constitutes, or
         which with the passage of time or the giving of notice or both will
         constitute, a default under any provision thereof; except as set forth
         in Schedule 4.21, no consent of any party to any Contract is required
            -------------
         for the consummation of the transactions contemplated by this
         Agreement, nor will the consummation of the transactions contemplated
         by this Agreement violate any Contract or constitute a default under,
         or occasion or result in the acceleration of any term of payment or in
         any change in any rate of interest payable pursuant to any such
         Contract or result in or give rise to a right to amend or modify the
         terms thereof. The copies of each of the Contracts delivered by the
         Corporation to Balance Bar represent the full and complete text thereof
         and have not been amended or modified, nor have any provisions thereof
         or rights of any party thereto been waived.

   4.22  Employment Matters. The Corporation does not have any employment,
         ------------------
         consulting or severance contract, arrangement or understanding (either
         written or oral) with any executive of the Corporation except such
         contracts as are listed on Schedule 4.22. The Corporation has made all
                                    -------------
         deductions required by law to be made for wages and salaries, which
         deductions are consistent with past practices and in accordance with
         generally accepted accounting principles and has either remitted same
         to the respective legally constituted authorities entitled to receive
         payment of same or has provided for same in its accounts. Hours worked
         by, and payments made to, employees of the Corporation have not been in
         violation of any applicable laws, rules or regulations dealing with
         such matters and all severance payments due to any employee have been
         paid or accrued as a liability on the books of the Corporation. The
         salaries and bonuses of all officers and employees of the Corporation
         are paid by the Corporation.

   4.23  Benefit Plans. Except as disclosed on Schedule 4.23 annexed hereto, the
         -------------                         -------------
         Corporation does not have in effect and has not announced or publicly
         proposed to have in effect any bonus, deferred compensation, pension,
         profit sharing, retirement, severance, stock option, group insurance,
         death benefit, welfare or other employee benefit plan, arrangement or
         policy whether formal or informal, for the benefit of any of its
         employees or former employees (each a "Benefit Plan"). Schedule 4.23
                                                                -------------
         contains an accurate and complete description of, and sets forth the
         annual amount payable pursuant to, each of the Benefit Plans therein
         described and the Financial Statements reflect in the aggregate an
         accrual of all amounts accrued but unpaid under all such Benefit Plans
         as of the dates thereof. The Corporation does not have any commitment,
         whether formal
<PAGE>

                                     -14-

         or informal, and whether legally binding or not, to create any
         additional such Benefit Plan. Each of such Benefit Plans disclosed on
         Schedule 4.23 is in effect and the Corporation is in compliance with
         -------------
         all laws, rules and regulations applicable thereto. All Benefit Plans
         disclosed on Schedule 4.23 have been duly registered where required by,
                      -------------
         and are in good standing under, all applicable legislation and the
         Corporation has fulfilled its funding obligations under all such plans
         and no past service funding liabilities exist thereunder. With respect
         to each current Benefit Plan or plan under which benefits may be due
         to, or liabilities may exist in respect of, current or former
         employees, the Corporation has delivered to Balance Bar accurate and
         complete copies of (i) all currently applicable plan texts and
         agreements; (ii) all summary plan descriptions and material employee
         communications; (iii) the most recent annual report; (iv) the most
         recent annual and periodic accounting of plan assets; (v) the most
         recent actuarial valuation. Each Benefit Plan has been administered
         materially in accordance with its terms. All material reports, returns
         and similar documents with respect to the Benefit Plans required to be
         filed with any Governmental Entity or distributed to any Benefit Plan
         participant had been duly and timely filed or distributed. There are no
         pending investigations by any Governmental Entity, termination
         proceedings or other claims (except claims for benefits payable in the
         normal operation of the Benefit Plans), suits or proceedings against or
         involving any Benefit Plan or asserting any rights or claims to
         benefits under any Benefit Plan that could give rise to any liability.

   4.24  Unions and Labour Practices. Except as set forth on Schedule 4.24, no
         ---------------------------                         -------------
         trade union, counsel of trade unions, employee bargaining agency or
         affiliated bargaining agent:

         4.24.1  holds bargaining rights with respect to any of the
                 Corporation's employees by way of certification, interim
                 certification, voluntary recognition, designation or successor
                 rights;

         4.24.2  has applied to be certified as the bargaining agent of any of
                 the Corporation's employees; or

         4.24.3  has applied to have the Corporation declared a related employer
                 pursuant to the provisions of applicable law.

         There is no unfair labour practice charge or complaint with respect to
         employees of the Corporation pending before any agency or board, there
         is no labour strike, picketing, slow down or work stoppage or lock out
         actually pending or threatened against or affecting the Corporation or
         any of its operations, and the Corporation has not experienced any
         strike, slowdown or work stoppage, lock out or other collective labour
         action by or with respect to its employees, there are no charges with
         respect to or relating to the Corporation before any commission, agency
         or body responsible for the prevention of unlawful employment
         practices, the Corporation has no notice from any federal, provincial,
         local or other agency responsible for the enforcement of labour or
         employment laws of an intention to conduct an investigation of the
         Corporation or any of its business or employment practices and no such
         investigation is in progress, and the Corporation is in compliance with
         all applicable laws relating to employment and employment
<PAGE>

                                     -15-

         practices, wages, hours and terms and conditions of employment with
         respect to employees, including part-time employees (if any).

   4.25  Employee Indebtedness. Except as disclosed in the Financial Statements
         ---------------------
         no director, former director, officer, former officer, shareholder or
         employee of the Corporation or any person not dealing at arm's length
         within the meaning of the Income Tax Act (Canada) with any such person
         is indebted to the Corporation;

   4.26  Intellectual Property. Schedule 4.26 annexed hereto is a complete and
         ---------------------  -------------
         accurate list of all registered trade marks, trade names, patents,
         copyrights, service marks, applications therefor and other industrial
         and intellectual property (collectively "Intellectual Property") owned
         by the Corporation or necessary to the conduct of the business of the
         Corporation as presently conducted and which schedule sets forth, where
         appropriate, an identification of each such item of Intellectual
         Property, the date of any registration thereof or application therefor
         and the serial or registration number thereof; the Corporation has the
         right to use all such Intellectual Property and the consummation of the
         transactions contemplated herein will not adversely affect the right of
         the Corporation to use such Intellectual Property; the Corporation is
         the registered and beneficial owner of all such Intellectual Property
         with good and marketable title, subject to the security interests set
         forth in Schedule 4.26 and, except as set forth on Schedule 4.26,
                  -------------                             -------------
         subject to no pending challenge, revocation, expiry or termination; the
         Corporation is not required to pay royalties, fees or other
         consideration to any other person with respect to the use of such
         Intellectual Property or in connection with the conduct of its business
         or otherwise and the operation of the business of the Corporation does
         not violate, breach or infringe any patents, copyrights, trade names,
         trade marks or licenses held by others in Canada or the United States
         of America and the Corporation has no knowledge of any alleged breach
         or violation thereof. All of the Intellectual Property listed on
         Schedule 4.26 as registered or filed has been duly registered or filed
         -------------
         in the appropriate governmental office or with the appropriate
         governmental entity, to the extent that any such registration is
         required by law and the Corporation has paid all fees due prior to the
         Closing Date that are necessary to obtain or maintain in force any of
         the Intellectual Property. No event has occurred during the
         registration or filing of, or during any other proceeding relating to,
         the Intellectual Property that would make invalid or unenforceable, or
         negate the right to issuance or use of, any of the Intellectual
         Property. Except as set forth on Schedule 4.26, there are no
                                          -------------
         infringements or threats of infringements by the Corporation or any
         asserted or unasserted claims of third parties against the Corporation
         of infringements or misappropriation of any of the Intellectual
         Property nor are there any asserted claims by the Corporation
         contesting or challenging the right, title or interest of any other
         person in any of the Intellectual Property. There are no outstanding
         threatened or actual claims asserted against the Corporation alleging
         the infringement or misappropriation by the Corporation of any
         intellectual property. The use of the Intellectual Property by the
         Corporation has not infringed upon the rights of any other party and
         the Corporation has not received any notice of the revocation,
         withdrawal, expiration, abandonment or breach of any right to use the
         Intellectual Property.
<PAGE>

                                     -16-

   4.27  Guarantees. Save and except as disclosed on Schedule 4.27, the
         ----------                                  -------------
         Corporation does not have any outstanding contracts or commitments
         guaranteeing the payment of or the performance of the obligations of
         others, and the Corporation has not entered into any deficiency
         agreements, or issued any comfort letters, or otherwise granted any
         financial assistance to any person, firm, corporation or other entity.

   4.28  Non-Arm's Length Relationship. None of the Corporation nor any party
         -----------------------------
         with whom the Corporation does not act at arm's length (as such term is
         defined in the Income Tax Act (Canada)) owns any property or assets,
         tangible or intangible, which are used by the Corporation in connection
         with the conduct of its business except pursuant to arrangements which
         form part of the Contracts.

   4.29  Governmental Filings. The execution, delivery and performance of this
         --------------------
         Agreement by the Corporation and the consummation of the transactions
         contemplated herein does not require any authorizations, consents or
         approvals of, or filings, registrations, qualifications or recordings
         with, any governmental, regulatory or other authority.

   4.30  Accounts and Records. The Corporation has maintained and shall continue
         --------------------
         to maintain books of account and financial records which are true and
         complete in all material respects, fairly reflecting all matters
         required by generally accepted accounting principles to be entered into
         books of account and such books of account and financial records have
         been maintained and shall continue to be maintained in accordance with
         generally accepted accounting principles consistently applied.

   4.31  Conflicts and Interests in Competitors. No officer, director, employee
         -----------------------
         or shareholder of the Corporation, nor any member of the family of any
         of them or any corporation, partnership or trust in which any of them,
         or in which any member of the family of any of them, has a substantial
         interest, directly or indirectly, or of which any of them or any member
         of his family is an officer, director, partner or trustee, is now, nor
         has been during the last thirty-six (36) months, directly or indirectly
         (i) a party to any contract, agreement or other arrangement with the
         Corporation providing for employment, the supply of services, products,
         merchandise or supplies, the rental of immoveable or moveable property,
         or otherwise requiring payments from or to the Corporation, or (ii) the
         holder of any interest, direct or indirect, in, or is a director,
         officer or employee of, or consultant to, or in any way controls or
         directs the management of, any entity which is a competitor, potential
         competitor, supplier or customer of the Corporation or the business of
         which is in any way related to the business of the Corporation, or
         (iii) the holder of any interest, direct or indirect, in any assets of
         the Corporation or any assets which are used by the Corporation in or
         in connection with the business conducted by the Corporation, the whole
         except as disclosed on Schedule 4.31 annexed hereto.
                                -------------

   4.32  Transactions with Directors, Officers, Shareholders and Affiliates.
         ------------------------------------------------------------------
         Except as disclosed in Schedule 4.32, there have been no transactions,
                                -------------
         agreements or arrangements relating to or affecting the Corporation or
         its business involving (i) any affiliate of the Corporation, (ii) any
         director, officer, shareholder of the
<PAGE>

                                     -17-

         Corporation, or of any affiliate of the Corporation, or (iii) any
         member of the immediate family of any individual described in clause
         (ii) above.

   4.33  Accounts Receivable. All the accounts receivable as shown on the books
         -------------------
         of the Corporation on the date hereof are actual and bona fide
         receivables resulting from the ordinary and usual conduct of the
         business of the Corporation, and the reserve for bad debts established
         in the most recent of the Financial Statements has been established in
         accordance with generally accepted accounting principles and the past
         experience of the Corporation.

   4.34  Inventories.  The value of inventories as reflected in the Financial
         -----------
         Statements has been determined at the lower of cost (as determined on a
         first in, first out basis) or net realizable value and on a basis
         consistent with prior years.

   4.35  Moveable Property. The machinery and equipment, rolling stock and other
         -----------------
         tangible moveable property owned or used by the Corporation are in
         reasonably good operating condition, ordinary wear and tear excepted,
         subject to normal repairs in the ordinary course of business, and are
         suitable for the uses made thereof by the Corporation in the conduct of
         its business.

   4.36  Plants and Structures. The plants and structures owned, occupied or
         ---------------------
         used by the Corporation in its business are in satisfactory operating
         condition and repair for the businesses now being conducted therein and
         conform with all applicable ordinances, regulations and laws relating
         to their ownership, occupation and use. In December of 1998, the
         Corporation purchased the land described in Schedule 4.36 in order to
                                                     -------------
         expand operations and is in the process of completing negotiations with
         a general contractor for the erection of a building thereon for a cost
         currently estimated at approximately $9,500,000.

   4.37  Warranties and Product Liability. The Corporation does not provide
         --------------------------------
         written warranties with respect to its products, and represents only
         that its products are prepared in accordance with good manufacturing
         practice for products suitable for human consumption and that same
         comply with (U.S.) FDA requirements or (Canadian) HPB requirements, as
         the case may be . During the past five (5) year period, there has been
         no change in the policies of the Corporation relative to warranties or
         returns. There is no action, suit, inquiry, proceeding or investigation
         by or before any court or governmental or other regulatory or
         administrative agency or commission pending or, to the best knowledge
         of the Corporation, threatened against or involving the Corporation
         relating to any product alleged to have been manufactured or sold by
         the Corporation and alleged to have been defective, or improperly
         designed or manufactured, and the Corporation does not know or has any
         reason to know of any basis for any such action, proceeding or
         investigation.

   4.38  No Power of Attorney. The Corporation has not given to any person,
         --------------------
         firm, corporation or other entity any power of attorney, whether
         limited or general, which is now or will be in effect, except powers of
         attorney (in customary form) given to customs brokers.
<PAGE>

                                     -18-

   4.39  Suppliers and Customers. To the knowledge of the Corporation, the
         -----------------------
         relationships of the Corporation with each of the suppliers and
         customers of the Corporation are good commercial working relationships
         and no supplier or customer of the Corporation has cancelled or
         otherwise terminated, or threatened in writing to cancel or otherwise
         terminate, its relationship with the Corporation, or has during the
         last twelve (12) months decreased materially, or threatened to decrease
         or limit materially, its services, supplies or materials to the
         Corporation. The Corporation has no reason to believe that the
         consummation of the transactions contemplated hereunder by Balance Bar
         will adversely affect the relationship of the Corporation with any such
         supplier or customer, save and except for the fact that many of the
         customers of the Corporation are competitors of Balance Bar.

   4.40  Y2K. Schedule 4.40 summarizes the program of testing and evaluation
         ---  -------------
         which has been undertaken by the Corporation of the information systems
         hardware and the information systems software used by Corporation in
         order to determine the extent to which the information systems hardware
         and the information systems software is Millennium Compliant (as
         hereinafter defined) and includes a summary of all information systems
         hardware and information systems software in respect of which a
         decision has been made to upgrade or replace further to the results of
         such program of testing and evaluation and actions taken or to be taken
         or implemented and the disclosure provided by certain of the
         Corporation's suppliers in order to cause the information systems
         hardware and the information systems software to be Millennium
         Complaint. For purposes hereof the term "Millennium Compliant" means
         the ability of a system to provide all of the following functions:

         4.40.1  to date information before, during and after January 1, 2000,
                 including but not limited to accepting date input, providing
                 date output and calculating and storing information involving
                 dates or portions of dates in a way that resolves the ambiguity
                 as to century; and

         4.40.2  to function accurately and without interruption, before, during
                 and after January 1, 2000, without any change in operations or
                 change in input or output procedures associated with the advent
                 of the new century or with leap years.

         The Corporation has not experienced and has no reason to believe that
         it will experience material revenue losses as a result of its own
         information systems hardware or information systems software not being
         Millennium Compliant.

   4.41  Environmental Matters. Except as may be indicated by the Phase I
         ---------------------
         environmental reports annexed hereto as Schedule 4.42, the Corporation
                                                 -------------
         is in compliance with, and has not violated, all Environmental Laws,
         the non-compliance with which would have an adverse effect on the
         Corporation or its operations, and all judgments, injunctions, notices
         or demand letters issued pursuant thereto.

         Without restriction as to the generality of the foregoing, each of the
         Corporation and any person or entity whose liability for Environmental
         Liabilities the Corporation has or may have retained or assumed either
         contractually or by
<PAGE>

                                     -19-

         operation of law, including, without limitation, employees and
         consultants of the Corporation:

         4.41.1  Has not caused or allowed the generation, use, treatment,
                 storage, or disposal of any Hazardous Substance at, or
                 transportation from, any site or facility owned, leased or
                 operated by the Corporation except in accordance with all
                 applicable Environmental Laws;

         4.41.2  Has not caused or allowed the release of any Hazardous
                 Substance onto, at, near or from any site or facility owned,
                 leased or operated by the Corporation;

         4.41.3  Is not required to secure any Environmental Permits in order to
                 conduct its business and operations;

         4.41.4  Has not received any notice requiring it to obtain any
                 Environmental Permit;

         4.41.5  Has not received, nor has there been issued to or against the
                 Corporation, any claim, notice, citation, summons or order, and
                 no investigation or review is pending or, to the Corporation's
                 actual knowledge, threatened by any authority with respect to:

                 4.41.5.1  any alleged violation by the Corporation of any
                           Environmental Law;

                 4.41.5.2  any alleged failure by the Corporation to hold any
                           Environmental Permit; or

                 4.41.5.3  any alleged violation by the Corporation to comply
                           with any such Environmental Permit.

         4.41.6  Has not received any request for information, notice of claim,
                 demand or other notification that it is or may be potentially
                 responsible with respect to any investigation or clean-up of
                 any threatened or actual release of any Hazardous Substance and
                 has not received inquiry or notice nor does it have any reason
                 to suspect or believe it will receive inquiry or notice of any
                 actual or potential proceedings, claims, lawsuits or losses
                 related to or arising under any Environmental Laws;

         4.41.7  Does not own, operate or lease and did not at any previous time
                 own, operate or lease any real property, improvements or
                 related assets which have been subject to the lease of any
                 Hazardous Substance;

         4.41.8  Does not own, operate or lease and did not at any previous time
                 own, operate or lease any real or immoveable property,
                 improvements or related assets wherein PCB's, asbestos or urea
                 formaldehyde insulation is or has been present whether above
                 ground, underground or within any structure thereon or
                 contained in any equipment owned,
<PAGE>

                                     -20-

                 operated or leased by the Corporation; nor are there any
                 underground storage tanks, active or abandoned, at any property
                 now or previously owned, operated or leased by the Corporation;

         4.41.9  Is not currently operating or required to be operating under
                 any compliance order, schedule, decree or agreement, any
                 consent decree, order or agreement and/or corrective action
                 decree, order or agreement issued or entered into under any
                 federal, provincial, state or municipal statute, regulation or
                 ordinance regarding the environment and/or health or safety in
                 the work place;

        4.41.10  Has not transported any Hazardous Substance or arranged for the
                 transportation of any such substance to any location which is
                 not listed and duly authorized pursuant to the Environmental
                 Laws or which is the subject of federal, provincial, state or
                 municipal enforcement actions or other investigations which may
                 lead to claims against the Corporation for clean-up cost,
                 remedial work, damages to natural resources or for personal
                 injury claims under any applicable Environmental Law and all
                 Hazardous Substances transported by or on behalf of the
                 Corporation have been transported in compliance with all
                 applicable laws, and no Hazardous Substance has been released,
                 spilled, leaked, discharged, disposed of, pumped, poured,
                 ignited, emptied, injected, leached, dumped or allowed to
                 escape at, under or from any property now or formerly owned,
                 operated or leased by the Corporation;

        4.41.11  Is in compliance with all applicable limitations, restrictions,
                 conditions, standards, prohibitions, requirements and
                 obligations established under Environmental Laws, the non-
                 compliance with which would have an adverse effect on the
                 Corporation or its operations, and is not subject to any
                 Environmental Liabilities;

        4.41.12  Except as set forth in Schedule 4.41, has not conducted or
                                        -------------
                 caused to be conducted any environmental audit of any property
                 operated, leased or owned by it, nor is it aware of any such
                 environmental audit conducted by any third party (including,
                 without restriction, any lender or potential purchaser) unless
                 in each such case a copy of every report, memorandum or summary
                 prepared with respect to such environmental audit has been
                 delivered to Balance Bar;

        4.41.13  Has not failed to report to the proper authorities the
                 occurrence of each event which is required to be so reported by
                 the Environmental Laws, and has provided Balance Bar with true
                 and complete copies of all such reports and all correspondence
                 relating thereto.

        For the purposes hereof:

        The expression "Environmental Laws" includes any federal, provincial,
        state or municipal law, by-law, rule, regulation, decree, code,
        guideline, standard, order or ordinance of the United States or Canada
        relating to the environment including
<PAGE>

                                     -21-

          those relating to (i) the control of any potential pollutant or the
          protection of the air, water or land, (ii) solid, gaseous or liquid
          waste generation, handling, treatment, storage, disposal or
          transportation, and (iii) exposure to hazardous, toxic or other
          substances considered to be harmful, or (iv) the release of any
          Hazardous Substance (as defined below) into the environment;

          The expression "Environmental Conditions" includes any pollution,
          contamination, degradation, damage or injury caused by, related to, or
          arising from or in connection with the generation, use, ownership,
          possession, handling, treatment, storage, transportation, disposal,
          discharge, release or emission of any pollutant, contaminant, or toxic
          or hazardous substance, material, or waste, including mixtures thereof
          with other materials, and any toxic, flammable, or hazardous building
          materials, including, but not limited to, asbestos and urea
          formaldehyde foam insulation;

          The expression "Environmental Permit" includes any permit, license,
          approval or other authorization with respect to the Corporation or its
          operations or businesses under any applicable law, regulation or other
          requirement of Canada or the United States or of any province, state,
          municipality or other subdivision thereof relating to the control of
          any pollutant or protection of health or the environment, including
          laws, regulations or other requirements relating to emissions,
          discharges, releases or threatened releases of pollutants,
          contaminants or hazardous or toxic materials or wastes into ambient
          air, surface water, groundwater or land, or otherwise relating to the
          manufacture, processing, distribution, use, treatment, storage,
          disposal, transport, or handling of chemical substances, pollutants,
          contaminants or hazardous or toxic materials or wastes;

          The expression "Environmental Liabilities" includes any and all
          liabilities, responsibilities, claims, suits, losses, costs (including
          remedial, removal, response, abatement, clean-up, investigative and/or
          monitoring costs and any other related costs and expenses), other
          causes of action now recognized, damages, settlements, expenses,
          charges, assessments, liens, penalties, fines, pre-judgment and post-
          judgment interest, legal fees and costs of court which are incurred
          by, asserted against, or imposed upon the Corporation or Balance Bar
          arising out of or in connection with the Corporation or its business
          operations pursuant to any agreement, order, notice of responsibility,
          directive (including directives and requirements embodied in
          Environmental Laws), injunction, judgment or similar document
          (including settlements) issued by a court of competent jurisdiction or
          any federal, state, or local governmental entity or agency, or
          pursuant to any claim by a governmental agency or any person for
          personal injury, property damage, damage to natural resources,
          remediation, or payment or reimbursement of response costs incurred or
          expended by said governmental agency or person pursuant to common law
          or statute, arising out of or in connection with: (i) any violation of
          or non-compliance with Environmental Laws (including but not limited
          to failure to procure or violation of Environmental Permits), and (ii)
          any actual or alleged Environmental Condition (regardless of when
          discovered) existing on the Closing Date or exposure thereto.

          The expression "Hazardous Substance" includes any substance, waste,
          solid, liquid or gaseous matter, petroleum or petroleum derived
          substance,
<PAGE>

                                     -22-

          micro-organism, sound, vibration, ray, heat, odour, radiation, energy
          vector, plasma, organic or inorganic matter, whether animate or
          inanimate, transient reaction intermediate or any combination of the
          above deemed hazardous, hazardous waste, solid waste, toxic or
          pollutant, a deleterious substance, a contaminant or source of
          pollution or contamination under any Environmental Law, or by any
          federal, provincial, state or municipal government, governmental
          agency, minister, deputy-minister, governor-in-council, lieutenant
          governor-in-council, or any tribunal or board.

    4.42  No Violation.  The Corporation has no legal obligation (absolute or
          ------------
          contingent) to, is not a party to and is not affected by any
          arrangement with, any other person or entity to sell the Shares or any
          other shares in the capital of the Corporation or securities issued by
          it or to sell any of the properties or assets, immoveable, moveable or
          mixed, or any interest therein, of the Corporation (other than sales
          in the ordinary course of business) or to enter into any agreement
          with respect to the foregoing. The execution, delivery and performance
          of this Agreement by the Corporation and the consummation of the
          transactions contemplated hereby will not violate or result in a
          breach of any agreement in principle, letter of intent or other
          agreement entered into by the Corporation in connection with any
          proposed acquisition of the Shares or any other shares in the capital
          of the Corporation or securities issued by it or the assets of the
          Corporation or violate any other rights of any third party with
          respect to any proposed acquisition of the Shares or the assets of the
          Corporation.

    4.43  Absence of Certain Changes or Events. From August 31, 1998 until the
          ------------------------------------
          date hereof, the Corporation has:

          4.43.1  (a) conducted its business in the manner in which such
                  business has heretofore been conducted; (b) except as
                  otherwise disclosed herein, not incurred any liability or
                  obligation whatsoever, secured or unsecured, direct or
                  indirect, other than current liabilities for accounts payable
                  in the ordinary and usual course of its business, none of
                  which is material, or as otherwise disclosed in this
                  Agreement; (c) except as otherwise disclosed herein, not
                  entered into any contracts or agreements whatsoever, other
                  than in the ordinary and usual conduct and course of its
                  business; and (d) not amended nor terminated nor suffered the
                  amendment nor termination of, nor given nor received any
                  notice of any proposed amendment or termination of, any
                  Contract;

          4.43.2  without limiting the generality of Section 4.43.1, and except
                  as otherwise disclosed herein, not sold, leased, mortgaged or
                  otherwise encumbered or disposed of any of its assets, except
                  in the ordinary and usual conduct and course of its business;

          4.43.3  without limiting the generality of Section 4.43.1, not
                  amalgamated, merged or consolidated, nor entered into any
                  agreement to amalgamate, merge or consolidate, with any
                  person, nor purchased or agreed to purchase all or
                  substantially all of the assets of any person, nor purchased
                  or agreed to purchase, nor leased or agreed to lease, nor
                  acquired or agreed to acquire, any additional assets except as
<PAGE>

                                     -23-

                  mentioned in section 4.36 and Schedule 4.36, except leases of
                                                -------------
                  equipment and purchases of materials and supplies for use in
                  the ordinary and usual conduct and course of its business;

         4.43.4   save and except for the articles of amendment annexed hereto
                  as Schedule 4.43.4 adopted in order to effect a 90:1 stock
                     ---------------
                  split and create Class "H" shares and convert the Class "E"
                  shares into Class "H" shares, made no changes in its charter,
                  by-laws, other than with respect to the Corporation's
                  registered office and number of directors and the repeal of a
                  by-law respecting special majority, or capital structure, nor
                  issued or sold and not agreed to issue or sell any of its
                  capital stock or other corporate securities;

         4.43.5   except for the payment of dividends of $42,145 on the Class
                  "D" shares and the redemption of 100,000 Class "D" shares of
                  the Corporation, not declared, authorized, paid or made any
                  dividend or other distribution to any shareholder; nor paid or
                  agreed to pay any salaries, management fees, royalties,
                  bonuses or any other payments to any shareholders or any
                  persons not acting at arm's length with the Corporation other
                  than in the ordinary course of business; nor purchased or
                  otherwise acquired any of its shares or agreed to take any
                  such action;

         4.43.6   without limiting the generality of Section 4.43.1, not
                  cancelled or released any debts or claims except, in each
                  case, in the ordinary and usual conduct and course of
                  business;

         4.43.7   not suffered any extraordinary loss or knowingly waived any
                  right of substantial value;

         4.43.8   not suffered any damage, destruction or loss, whether or not
                  covered by insurance, which may materially and adversely
                  affect its property or business;

         4.43.9   not suffered any material adverse changes, financial or
                  otherwise, in its business, financial condition or Properties
                  or any occurrences or circumstances which might reasonably be
                  expected to result in a material adverse change thereto;

         4.43.10  not incurred any obligations or expenses out of the ordinary
                  course of business or effected any material changes in the
                  management or operation of its business;

         4.43.11  not increased the wages, salary or basis of remuneration of
                  any employee of the Corporation, nor paid any bonus or similar
                  payment, other than in the ordinary course of business and,
                  with respect to the executives of the Corporation, other than
                  as set forth on Schedule 4.22 annexed hereto;
                                  -------------
<PAGE>

                                     -24-

          4.43.12  not changed any of its accounting methods, principles,
                   practices or policies;

          4.43.13  without limiting the generality of Section 4.43.1, not
                   materially changed any of its business policies, including,
                   without limitation, advertising, marketing, pricing,
                   purchasing, personnel, sales, returns, budget or product
                   acquisition policies.

    4.44  No Material Adverse Change.  Since August 31, 1998, there has been no
          --------------------------
          material adverse change in the assets, Properties, business,
          prospects, operations or condition (financial or otherwise) of the
          Corporation, and the Corporation does not know of any such change
          which is threatened, nor has there been any damage, destruction or
          loss materially adversely affecting any of the assets, Properties,
          business, prospects, operations or condition (financial or otherwise)
          of the Corporation, whether or not covered by insurance.

    4.45  No Materially Adverse Undisclosed Facts. There is no fact known to the
          ---------------------------------------
          Corporation which has not previously been disclosed in writing to
          Balance Bar which materially adversely affects the Corporation or its
          assets, Properties, business, prospects, operation or condition
          (financial or otherwise), or which should be disclosed to Balance Bar
          in order to make any of the warranties and representations herein not
          misleading and no state of facts is known to the Corporation, which
          materially adversely affects the Corporation or would operate to
          prevent the Corporation from continuing to carry on its business in
          the manner in which carried on at the date hereof. All documents and
          other papers delivered by or on behalf of the Corporation to Balance
          Bar in connection with this Agreement and the transactions
          contemplated hereby are true, complete and authentic. No
          representation or warranty of the Corporation contained in this
          Agreement, and no statement of information contained in any schedule
          annexed hereto or in any certificate or other document required to be
          furnished to Balance Bar pursuant hereto or in connection with the
          transactions contemplated hereby contains any untrue statement of
          material fact or omits to state a material fact necessary to make the
          statements herein not false or misleading.

    4.46  All Representations and Warranties applicable to Subsidiaries.  All
          -------------------------------------------------------------
          representations and warranties made in this Article 4 apply to each of
          the Subsidiaries or shall apply to each of the Subsidiaries and
          whenever and wherever the word Corporation is used in this Article 4,
          it shall include the word Subsidiaries except where the context
          otherwise clearly requires.

5.  REPRESENTATIONS AND WARRANTIES OF BALANCE BAR
    ---------------------------------------------

    Balance Bar hereby represents and warrants to and in favour of the
Corporation as follows:

    5.1   Incorporation and Capacity. Balance Bar is a corporation duly
          --------------------------
          incorporated under the laws of Delaware and is a valid and subsisting
          corporation in good standing under such laws and under the laws of
          each jurisdiction in which it carries on

<PAGE>

                                     -25-

         business and Balance Bar has the corporate power and authority to
         consummate the transactions contemplated hereby.

    5.2  Authorization. Balance Bar has all requisite power and authority to
         -------------
         execute and deliver this Agreement and to consummate the transactions
         contemplated hereby. All acts and other proceedings required to be
         taken by Balance Bar to authorize the execution, delivery and
         performance of this Agreement and the consummation of the transactions
         contemplated hereby have been duly and properly taken. This Agreement
         and all other agreements contemplated hereby that have been executed by
         Balance Bar have been duly executed and delivered by Balance Bar and
         constitute the valid and binding obligation of Balance Bar enforceable
         against Balance Bar in accordance with its terms. All other agreements
         and instruments contemplated by this Agreement to be delivered or
         executed by Balance Bar at Closing shall at Closing constitute the
         valid and binding obligation of Balance Bar enforceable against Balance
         Bar in accordance with its terms.

    5.3  Effect of Agreement.  The execution, delivery and performance of this
         -------------------
         Agreement and the consummation of the transactions contemplated by this
         Agreement will not (a) violate or result in a breach of or default (or
         event which, upon notice or lapse of time, would constitute a default)
         or acceleration under the articles or by-laws of Balance Bar or any
         instrument or agreement to which Balance Bar is a party or is bound, or
         (b) violate any judgment, order, injunction, decree or award against,
         or binding upon Balance Bar or upon the property or business of Balance
         Bar.

    5.4  Consents. No consent, license, approval, order or authorization of or
         --------
         registration, filing or declaration with, any Governmental Entity is
         required to be obtained or made with respect to Balance Bar in
         connection with the execution and delivery of this Agreement or the
         consummation of the transaction contemplated hereby, and no consent of
         any other third party is required to be obtained with respect to
         Balance Bar in connection with the execution, delivery and performance
         of this Agreement or the consummation of the transactions contemplated
         hereby.

    5.5  Compliance with law. Balance Bar is, and all aspects of its business
         -------------------
         are, conducted in compliance with all applicable laws, ordinances and
         regulations, inclusive of those of any administrative boards or
         agencies or other public authorities having jurisdiction, the non-
         compliance with which would have a material adverse affect on Balance
         Bar or its operations.

    5.6  Legal proceedings. There are no suits, claims, actions (arbitration or
         -----------------
         legal) or administrative or other proceedings or governmental
         investigations pending or, to the knowledge of Balance Bar, threatened
         against Balance Bar or any of its officers, directors, employees,
         agents or Affiliates in connection with the activities of Balance Bar
         or Affiliates or as to which Balance Bar or any of its officers,
         directors, employees, agents or Affiliates may become a party or be
         affected thereby before any court or administrative agency or officer,
         and Balance Bar is not aware of any facts or circumstances which
         should, or could, reasonably form the basis for any such suits, claims,
         actions, proceedings and Balance Bar is not the subject of any
         investigation or proceedings by any governmental authority,
<PAGE>

                                     -26-

         and none of the assets of Balance Bar nor any of its business practices
         is in any manner, directly or indirectly, affected by any judgement,
         order, writ or injunction of any court or governmental or
         administrative agency or officer.

    5.7  Governmental filings. The execution, delivery and performance of this
         --------------------
         Agreement by Balance Bar and the consummation of the transactions
         contemplated herein does not require any authorizations, consents or
         approvals of, or filings, registrations, qualifications or recordings
         with, any governmental, regulatory or other authority except as
         required by the United States Securities and Exchange Commission.

6.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNITY
    --------------------------------------------------------

    6.1  All of the representations, warranties, covenants and agreements made
         by the Corporation and the Guarantors in this Agreement or pursuant
         hereto shall be continuing and shall survive the execution hereof and
         the Closing and any investigation made at any time by or on behalf of
         Balance Bar. All statements of the Corporation and the Guarantors
         contained herein or in any certificate, schedule, list, exhibit,
         document or other writing required to be delivered pursuant hereto or
         in connection with the transactions contemplated hereby shall be deemed
         representations and warranties of the Corporation and the Guarantors
         made in this Agreement or pursuant hereto.

    6.2  The Corporation and the Guarantors shall indemnify Balance Bar and the
         officers, directors and representatives of Balance Bar and save Balance
         Bar harmless from and against any and all claims, demands, losses,
         liabilities, damages, causes of action, proceedings, judgments,
         recoveries, deficiencies, costs and expenses (including, without
         limitation, interest, penalties and reasonable attorneys' fees and
         disbursements and amounts paid in settlement) (hereinafter some times
         referred to collectively as "Losses") suffered or sustained by Balance
         Bar or by the Corporation resulting from, arising out of or relating
         to:

         6.2.1  any breach or falsity of any of the representations or
                warranties of the Corporation set forth herein or any failure of
                the Corporation to duly perform, observe or fulfil any term,
                provision, covenant or agreement contained herein or in any
                agreement delivered pursuant to this Agreement to be performed
                or observed by the Corporation, or from any misrepresentation in
                or omission from any certificate, schedule or other document
                provided to Balance Bar by the Corporation pursuant to this
                Agreement;

         6.2.2  any claims, demands, suits, proceedings or actions by any third
                party containing allegations which, if true, would constitute a
                misrepresentation, breach of warranty or failure to fulfil a
                covenant or obligation on the part of the Corporation under this
                Agreement;

         6.2.3  any claims, demands or causes of action of any kind or nature by
                any third party arising from the issuance of the Shares
                contemplated hereby;
<PAGE>

                                     -27-

         6.2.4  any claims, demands or causes of action of any kind or nature by
                any third party arising from the conduct of the business of the
                Corporation prior to the Closing Date which are not reflected on
                the Financial Statements.

    6.3  Obligations of indemnification shall be satisfied within fifteen (15)
         days after written notice thereof from Balance Bar to the Corporation.
         The amount of any payment to Balance Bar in respect of any Losses shall
         be of sufficient amount to make Balance Bar whole, including, without
         limitation or duplication, an amount sufficient to make up any
         diminution in the value of the Shares held by Balance Bar resulting
         from the payment by the Corporation of such indemnification payment.
         Upon obtaining knowledge thereof, Balance Bar shall promptly notify the
         Corporation in writing of any claim or demand which Balance Bar has
         determined has given or could give rise to a right of indemnity under
         this Agreement. The failure by Balance Bar to give such notice shall
         not relieve the Corporation from any liability it shall otherwise have
         pursuant to this Agreement except to the extent the Corporation is
         actually prejudiced by such failure of notice. If such claim or demand
         relates to a claim or demand asserted by a third party against Balance
         Bar ("Third Party Claim"), the Corporation shall have the right to
         defend the same at its own cost and expense with counsel of its own
         selection, provided that: (i) Balance Bar shall at all times have the
         right to fully participate in the defence at its own expense; (ii) the
         Third Party Claim does not seek any injunctive or other relief other
         than monetary damages against Balance Bar; (iii) the Corporation
         unconditionally acknowledges in writing its obligation to indemnify and
         hold Balance Bar harmless with respect to the Third Party Claim; and
         (iv) counsel chosen by the Corporation is satisfactory to Balance Bar,
         acting reasonably. If the Third Party Claim is asserted against the
         Corporation, then the Corporation alone shall defend same.

    6.4  If the Corporation is not entitled to defend a Third Party Claim
         against Balance Bar, or shall, within a reasonable time after notice of
         a Third Party Claim, fail to defend a Third Party Claim against Balance
         Bar, Balance Bar shall have the right, but not the obligation, to
         undertake the defence of and to compromise or settle the Third Party
         Claim against Balance Bar at the risk and expense of the Corporation,
         provided that it is determined that the Corporation was obliged to
         indemnify and hold harmless Balance Bar with respect to such Third
         Party Claim. In the event that the Corporation does defend a Third
         Party Claim against Balance Bar, it will not be permitted to control
         the settlement of the claim, unless (i) the terms of the settlement
         require only the payment of money and do not require Balance Bar to
         admit any wrongdoing or take or refrain from taking any action; (ii)
         the full amount of the settlement is paid by the Corporation; and (iii)
         Balance Bar receives, as part of the settlement, a legally binding and
         enforceable unconditional satisfaction or release, which is in form and
         substance reasonably satisfactory to Balance Bar, providing that the
         Third Party Claim and any claimed liability of Balance Bar with respect
         to the claim is being fully satisfied because of the settlement and
         that Balance Bar is being released from any and all obligations or
         liabilities it may have with respect to the Third Party Claim.

    6.5  Balance Bar shall only be entitled to make a claim or demand under this
         Section 6 if the aggregate Losses exceeds, or after giving effect to
         the claim or
<PAGE>

                                     -28-

         demand in question, would exceed $500,000, whereupon Balance Bar shall
         be entitled to make a claim or demand based solely upon Losses in
         excess of the amount of $500,000.

    6.6  For purposes of determining the losses suffered or incurred as a result
         of a breach or falsity of the representations and warranties set forth
         in Section 4.18 or 4.19 hereof, if an assessment or reassessment with
         respect to the fiscal years of the Corporation ending on or before the
         Closing Date results in an increase in the income or taxable income for
         a fiscal year of the Corporation ending on or before the Closing Date,
         but results in a reduction in the income or taxable income of the
         Corporation for fiscal years ending after the Closing Date, the amount
         which the Corporation shall be liable to pay with respect to such
         assessment or reassessment for the period ending on or before the
         Closing Date shall be reduced by the amount of the reduction in taxes,
         if any, resulting from such reduction in income or taxable income for
         the period ending after the Closing Date. Furthermore, if the effect of
         an assessment or reassessment with respect to fiscal periods of the
         Corporation ending on or before the Closing Date is to entitle the
         Corporation to a refund of taxes paid for another year prior to the
         Closing Date then the amount which the Corporation shall be liable to
         pay with respect to such assessment or reassessment shall be reduced by
         the aggregate of the taxes refunded and ten percent (10%) of the net
         after tax amount retained by the Corporation in respect of the interest
         paid by the appropriate governmental authority with respect to such
         refund. If a refund can only be obtained by filing an amended tax
         return, then Balance Bar shall agree to allow the Corporation to file
         such amended tax return.

    6.7  The determination as to whether Balance Bar shall make any claim or
         demand made under this Agreement shall be determined at the sole
         discretion of Balance Bar. Any such demand or claim shall be based on
         the losses actually suffered or incurred by the claiming party on a
         dollar for dollar basis without resort to any multiple upon which the
         Share Issue Price may have been determined. For greater certainty,
         should Balance Bar seek indemnification based on a decline in value of
         the Corporation, the determination of its losses shall reflect that
         Balance Bar holds a ten percent (10%) equity interest in the
         Corporation, such that a one dollar decline in value of the Corporation
         shall not amount to more than a ten cent loss to Balance Bar.

    6.8  Notwithstanding any other provision of this Agreement, all of the
         representations and warranties made herein by the Corporation or
         Balance Bar shall survive the execution and delivery of this Agreement
         until the third (3/rd/) anniversary of the Closing Date, whereas all
         the representations and warranties made herein by the Guarantors shall
         only survive the execution and delivery of this Agreement until the
         second (2/nd/) anniversary of the Closing Date, except for any claim or
         demand based on intentional misrepresentation or fraud, which shall
         survive in perpetuity.

    6.9  The provisions of this Section 6 shall apply mutatis mutandis to any
         claim of the Corporation against Balance Bar.
<PAGE>

                                     -29-

7.  SOLIDARY OBLIGATIONS
    --------------------

    Each and all of the covenants, obligations and agreements of both the
Corporation and the Guarantors made in this Agreement shall be a solidary
obligation as amongst the Corporation and the Guarantors, subject to the time
limitations set forth in Section 6.8, each of them hereby waiving the benefits
of division and discussion.

8.  EXAMINATION
    -----------

    It is expressly provided that all inspections, investigations, reviews or
feasibility studies undertaken by Balance Bar or its agents shall not serve to
diminish the liability of the Corporation occasioned by the Corporation's breach
of any representations and warranties made by the Corporation pursuant to the
provisions of this Agreement, or otherwise prevent Balance Bar from enforcing
the obligations of the Corporation pursuant to this Agreement, it being
understood and agreed that Balance Bar's subscription for the Shares pursuant to
this Agreement shall be in reliance upon such representations and warranties.

9.  NOTICES
    -------

    Any notice or other communication permitted or required to be given
hereunder by one party to the other shall be in writing and shall be delivered
by hand or by courier service or by telecopier to the party entitled or required
to receive the same, as follows:

    IF TO THE CORPORATION:        1600, 46/th/ Avenue
                                  Lachine, Quebec
                                  H8T 3J9
                                  Attention: Thomas Egger

    Copy to:                      Spiegel Sohmer
                                  Place Ville Marie
                                  Suite 1203
                                  Montreal, Quebec
                                  H3B 2G2
                                  Attention: Janice Naymark

    IF TO BALANCE BAR:            1015 Mark Avenue
                                  Carpinteria, CA
                                  93013
                                  Attention: Thomas Flahie

    Copy to:                      Goodman Phillips & Vineberg
                                  1501 McGill College
                                  26/th/ Floor
                                  Montreal, Quebec
                                  H3B 3N9
                                  Attention: Hillel W. Rosen
<PAGE>

                                     -30-

    IF TO RODERICK EGGER:         c/o Bariatrix Products International Inc.
                                  1600, 46/th/ Avenue
                                  Lachine, Quebec
                                  H8T 3J9

    Copy to:                      Spiegel Sohmer
                                  Place Ville Marie
                                  Suite 1203
                                  Montreal, Quebec
                                  H3B 2G2
                                  Attention: Janice Naymark

    IF TO 3357481 CANADA INC.:    c/o Bariatrix Products International Inc.
                                  1600, 46/th/ Avenue
                                  Lachine, Quebec
                                  H8T 3J9

    Copy to:                      Spiegel Sohmer
                                  Place Ville Marie
                                  Suite 1203
                                  Montreal, Quebec
                                  H3B 2G2
                                  Attention: Janice Naymark

    IF TO THOMAS EGGER:           c/o Bariatrix Products International Inc.
                                  1600, 46/th/ Avenue
                                  Lachine, Quebec
                                  H8T 3J9
<PAGE>

                                     -31-


     Copy to:                     Spiegel Sohmer
                                  Place Ville Marie
                                  Suite 1203
                                  Montreal, Quebec
                                  H3B 2G2
                                  Attention: Janice Naymark

     Notice delivered as aforesaid shall be deemed received on the date of
actual delivery thereof. Each party may change its address by notice delivered
in like manner. Notices and other communications may be signed by any officer of
any party hereto or by their respective legal counsel.

10.  INTEGRATED CONTRACT, WAIVER AND MODIFICATION
     --------------------------------------------

     This Agreement (including the schedules hereto and the other documents and
certificates delivered pursuant to the terms hereof) represents the complete and
entire understanding and agreement between the parties hereto with regard to all
matters involved in this transaction and supersedes any and all prior
agreements, whether written or oral.  No agreements or provisions, unless
incorporated herein, shall be binding on either party hereto.  This Agreement
may not be modified or amended nor may any covenant, agreement, condition,
requirement, provision, warranty or obligation contained herein be waived,
except in writing signed by both parties or, in the event that such
modification, amendment or waiver is for the benefit of one of the parties
hereto and to the detriment of the other, then the same must be in writing
signed by the party to whose detriment the modification, amendment or waiver
enures.

11.  GOVERNING LAW
     -------------

     This Agreement shall be construed in accordance with and governed by the
laws of the Province of Quebec and the laws of Canada applicable therein.

12.  BINDING EFFECT
     --------------

     This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, personal representatives,
successors and assigns.

13.  DESCRIPTIVE HEADINGS
     --------------------

     The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

14.  ENFORCEABILITY OF PROVISIONS
     ----------------------------

     If any provisions of this Agreement or the application thereof to any
person or circumstance shall be invalid or unenforceable, then the remaining
provisions of this Agreement or the application of such provisions to persons or
circumstances other than those as to whom or which it is held invalid or
unenforceable, shall not be affected thereby, and every provision hereof shall
be valid and enforceable to the fullest extent permitted by law.
<PAGE>

                                     -32-

15.  PLURAL, SINGULAR, GENDER
     ------------------------

     When the context in which the words are used in this Agreement indicates
that such is the intent, words in the singular number shall include the plural
and vice-versa.  References to any gender shall include any other gender as may
be applicable under the circumstances.

     The terms "herein", "hereof", "hereunder", and other words of similar
import mean and refer to this Agreement as a whole and not merely as to the
specific paragraph or clause in which the respective word appears, unless
expressly so stated.

16.  PUBLICITY
     ---------

     None of the Corporation nor Balance Bar shall make or issue, or cause to be
made or issued, any announcement or written statement concerning this Agreement
or the transactions contemplated hereby for dissemination to the general public
without the prior consent of the other party.  This provision shall not apply,
however, to any announcement or written statement required to be made by law or
the regulations of any federal or provincial governmental agency or any stock
exchange, except that the party required to make such announcement shall consult
with the other party concerning the timing and content of such announcement
before such announcement is made.

17.  CURRENCY
     --------

     All references to currency in this Agreement are to Canadian dollars.

     IN WITNESS WHEREOF the parties hereto have executed this Agreement on the
date first above stated.



                              BARIATRIX PRODUCTS INTERNATIONAL INC.


                              Per:      /s/ Roderick Egger
                                     ------------------------------


                              BALANCE BAR COMPANY


                              Per:      /s/ Thomas J. Flahie
                                     ------------------------------


                                   /s/ Roderick Egger
                              -------------------------------------
                              RODERICK EGGER


                              3357481 CANADA INC.


                              Per:      /s/ Thomas Egger
                                     ------------------------------


                                   /s/ Thomas Egger
                              -------------------------------------
                              THOMAS EGGER