Document:

<PAGE>

           ----------------------------------------------------------

                                AMENDMENT TO THE

                           MASTER SERVICING AGREEMENT

                                      among

                          PECO ENERGY TRANSITION TRUST,
                             the other Issuers from
                            time to time party hereto

                                       and

                               PECO ENERGY COMPANY

                                    Servicer

                           Dated as of March 25, 1999,
                             as amended and restated
                               as of [           ]

           ----------------------------------------------------------

<PAGE>

                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----
SECTION 1.  Definitions......................................................2

SECTION 2.  Amendment of Existing Agreement..................................2

SECTION 3.  Separate Counterparts............................................2

SECTION 4.  Separate Counterparts............................................2

SECTION 5.  Governing Law....................................................3

SECTION 6.  Limitation of Liability of Trustee. .............................3

                                    AMENDMENT dated as of [ ] to the MASTER
                           SERVICING AGREEMENT dated as of March 25, 1999, as
                           amended and restated as of May 2, 2000 (the "Existing
                           Agreement"), among PECO ENERGY TRANSITION TRUST, a
                           Delaware business trust (the "First Issuer"), the
                           other Issuers from time to time party hereto
                           (together with the First Issuer, the "Issuers"), and
                           PECO ENERGY COMPANY, a Pennsylvania corporation, as
                           the servicer of the Intangible Transition Property
                           (together with each successor to PECO ENERGY COMPANY
                           (in the same capacity) pursuant to Section 5.03 or
                           6.02 of the Existing Agreement, the "Servicer").

                  WHEREAS the First Issuer and the Servicer desire to amend the
Existing Agreement in connection with the issuance by the First Issuer of the
Series [ ] Transition Bonds.

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

                  SECTION 1. Definitions. Capitalized terms used but not defined
in this Amendment shall have the meanings assigned to them in the Existing
Agreement.

<PAGE>

                                                                               2

                  SECTION 2. Amendment of Existing Agreement. The first two
sentences of Section 5.01 of the Existing Agreement are hereby amended to read
in their entirety as follows:

         "The Servicer makes the following representations and warranties as of
         each Transfer Date and as of any other date on which any Issuer issues
         any Series of Transition Bonds, on which the Issuers have relied and
         will rely in acquiring Serviced Intangible Transition Property and
         issuing any Series of Transition Bonds. The representations and
         warranties shall survive the sale of any of the Serviced Intangible
         Transition Property to any Issuer and the pledge thereof to any Bond
         Trustee pursuant to any Indenture and the issuance by any Issuer of any
         Series of Transition Bonds."

                  SECTION 3. Agreement. Except as specifically amended hereby,
the Existing Agreement shall continue in full force and effect in accordance
with the provisions thereof as in existence on the date hereof. On and after the
date hereof, any reference to the Existing Agreement shall mean the Existing
Agreement as amended hereby.

                  SECTION 4. Separate Counterparts. This Amendment may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.

                  SECTION 5. Governing Law. This Amendment shall be construed in
accordance with the laws of the Commonwealth of Pennsylvania, without reference
to its conflict of law provisions, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.

                  SECTION 6. Limitation of Liability of Trustee. Notwithstanding
anything contained herein to the contrary, this Amendment has been countersigned
by First Union Trust Company, National Association, not in its individual
capacity but solely in its capacity as trustee of the First Issuer and in no
event shall First Union Trust Company, National Association, in its individual
capacity have any liability for warranties, covenants, agreements or other
obligations of the First Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the First Issuer. For all purposes of this
Amendment, in the performance of its duties or obligations hereunder or in the
performance of any duties or obligations of the First Issuer hereunder, First
Union Trust Company, National Association, shall be subject to, and entitled to
the benefits of, the applicable terms and provisions of the Formation Documents
relating to the First Issuer.

<PAGE>
                                                                               3

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective officers as of the day and
year first above written.

                                               PECO ENERGY TRANSITION TRUST,

                                               by     First Union Trust Company,
                                                      National Association, not
                                                      in its individual
                                                      capacity but solely as
                                                      Issuer Trustee on behalf
                                                      of PECO Energy Transition
                                                      Trust,

                                                      by _______________________
                                                         Title:

                                               PECO ENERGY COMPANY, Servicer,

                                                      by _______________________
                                                         Title:

Acknowledged, Accepted and
Consented to:

THE BANK OF NEW YORK, not in its
individual capacity but solely
as Bond Trustee on behalf of the
Holders of Transition Bonds
issued by the First Issuer,

    by ______________________________
       Title:<PAGE>   1
           -----------------------------------------------------------

                            ASSET PURCHASE AGREEMENT

                                      among
                           WEIGHCO ENTERPRISES, INC.,
                           WEIGHCO OF NORTHWEST, INC.,
                           WEIGHCO OF SOUTHWEST, INC.,
                       WEIGHT WATCHERS NORTH AMERICA, INC.

                                       and

                       WEIGHT WATCHERS INTERNATIONAL, INC.

                          Dated as of December 11, 2000

           ----------------------------------------------------------
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
1. Definitions
         2. Purchase and Sale of Assets; Assumption of Certain Liabilities
                  2.1. Transfer of Assets
                  2.2. Excluded Assets
                  2.3. Instruments of Conveyance and Transfer
                  2.4. Further Assurances
                  2.5. Assumed Liabilities
         3. Closing; Payment of Purchase Price at Closing
                  3.1. Closing Date
                  3.2. Purchase Price and Payment
                  3.3. Payment of Balance of Closing Payment.
                  3.4. Ownership and Investment of the Escrow Fund; Fees and Expenses of Escrow Agent
                  3.5. Post Closing Adjustment.
                  3.6. Prepaid Coupon Adjustment.
                  3.7. Guaranty; Consent
         4. Representations and Warranties
                  4.1. Representations and Warranties of Sellers.
                           (a) Due Organization; Power; Capacity; Good Standing
                           (b) Authorization and Validity
                           (c) No Governmental Approvals or Notices Required; No Conflict
                           (d) Financial Information; Liabilities
                           (e) Title and Condition of Properties; Absence of Liens
                           (f) List of Properties, Contracts, Permits and Other Data
                           (g) Receivables; Subscriber Information
                           (h) Legal Proceedings
                           (i) Insurance
                           (j) Labor
                           (k) Intellectual Property
                           (l) Government Licenses, Permits and Related Approvals
                           (m) Compliance with Law and Requirements
                           (n) Employee Benefit Programs.
</TABLE>
<PAGE>   3
<TABLE>
<S>                                                                                                             <C>
                           (o) Certain Fees
                           (p) Absence of Certain Changes or Events
                           (q) Offering Memorandum; Disclosure.
                           (r) Environmental Matters
                           (s) Entire Business
                           (t) Tax Matters
                           (u) No Subsidiaries
                           (v) Purchase Price Transfers
                           (w) Prohibited Payments
                           (x) Affiliate Transactions.
                           (y) Compensation of Management Employees
                           (z) Bankruptcy
                           (aa) Qualified S Chapter Subsidiaries
                  4.2. Representations and Warranties of Buyer and WWI
                           (a) Due Organization; Good Standing and Power
                           (b) Authorization and Validity.
                           (c) Governmental Approvals; No Conflict
                           (d) Brokers' Fees
                  4.3. Survival of Representations
         5.       Agreements
                  5.1.  Access to Information
                  5.2.  Conduct of the Business
                  5.3.  Further Actions
                  5.4.  Antitrust Improvements Act
                  5.5.  Notification
                  5.6.  No Inconsistent Action
                  5.7.  No Solicitation
                  5.8.  Delivery of Financial Statements.
                  5.9.  Franchise Agreements
                  5.10. No Solicitation of Employees
                  5.11. Payment of Annual Compensation and Bonuses
                  5.12. Interim Financial Statements
                  5.13. Covenant Not to Compete
                  5.14. Employment Matters
</TABLE>
<PAGE>   4
<TABLE>
<S>                                                                                                             <C>
                  5.15. Leases and Service Contracts
                  5.16. Carolina Acquisition Agreement.
         6.       Conditions Precedent.
                  6.1. Conditions Precedent to Obligations of Parties
                           (a) No Injunction, etc.
                           (b) Antitrust Matters
                  6.2.     Conditions Precedent to Obligations of Buyer
                           (a) Accuracy of Representations and Warranties
                           (b) Performance of Obligations
                           (c) Officer's Certificate
                           (d) Absence of Certain Changes
                           (e) Opinions
                           (f) Escrow Agreement
                           (g) Non-Competition Agreement
                           (h) British Columbia Amendment
                           (i) Review Financials
                           (j) No Litigation
                           (k) Funding
                           (l) Lien Search
                           (m) Consents, etc.
                           (n) Carolina Franchise
                           (o) Release of Liens
                           (p) Actions and Proceedings
                           (q) Closing Deliveries
                  6.3. Conditions Precedent to the Obligations of Sellers
                           (a) Accuracy of Representations and Warranties
                           (b) Performance of Obligations
                           (c) Officer's Certificate
                           (d) Actions and Proceedings
                           (e) Opinions
                           (f) Escrow Agreement
                           (g) Non-Competition Agreement
                           (h) British Columbia Amendment.
                           (i) Closing Deliveries
</TABLE>
<PAGE>   5
<TABLE>
<S>                                                                                                             <C>
                           (j) No Litigation
                           (k) Carolina Franchise
         7.  Employees and Employee Benefits
                  7.1.   Offer of Employment
         8.  Termination
                  8.1.   Termination of Agreement
                  8.2.   No Liabilities in Event of Termination
                  8.3.   Return of Documents
         9.  Indemnification
                  9.1.   Sellers Indemnity
                  9.2.   Buyer and WWI Indemnity
                  9.3.   Procedures for Indemnification
                  9.4.   Additional Agreements
                  9.5.   Limits on Indemnification
         10. Miscellaneous
                  10.1.  Public Announcements
                  10.2.  Expenses
                  10.3.  Transfer Taxes and Recording Expenses
                  10.4.  Notices
                  10.5.  Entire Agreement
                  10.6.  Binding Effect
                  10.7.  Bulk Sales Law
                  10.8.  Assignability
                  10.9.  No Third Party Beneficiaries
                  10.10. Amendment; Waiver
                  10.11. Confidentiality.
                  10.12. Schedules.
                  10.13. Section Headings; Table of Contents
                  10.14. Severability
                  10.15. Counterparts
                  10.16. APPLICABLE LAW; JURISDICTION; VENUE
                  10.17. Further Assurances
                  10.18. Other Franchise Agreements
                  10.19. Time of Essence
</TABLE>
<PAGE>   6
                                    SCHEDULES

<TABLE>
<S>                           <C>
Schedule 1(a)                 -     Franchise Agreements
Schedule 1(b)                 -     Equipment Leases
Schedule 1(c)                 -     Leases
Schedule 1(d)                 -     Service Agreements
Schedule 2.1(b)               -     Transferred Contracts, Agreements and Purchase Commitments
Schedule 2.1(c)               -     Transferred Leases
Schedule 2.2                  -     Excluded Tangible Personal Property
Schedule 2.5(a)               -     Assumed Contracts, Agreements, Leases and Commitments
Schedule 2.5(b)               -     Assumed licenses, permits and franchises
Schedule 3.2                  -     Purchase Price Allocation
Schedule 3.4(b)               -     Allocation of Seller's Ownership of Escrow Fund
Schedule 4.1                  -     Employees with Knowledge
Schedule 4.1(c)               -     Consents, Approvals, etc.
Schedule 4.1(d)               -     Financial Information
Schedule 4.1(f)(i)            -     Contracts, Agreements, Commitments, etc.
Schedule 4.1(f)(ii)           -     Leases
Schedule 4.1(f)(iii)          -     Licenses, Permits and Franchises
Schedule 4.1(f)(iv)           -     Intellectual Property
Schedule 4.1(g)               -     Paid Attendance and Enrollments
Schedule 4.1(h)               -     Legal Actions
Schedule 4.1(i)               -     Insurance
Schedule 4.1(j)               -     Closings, Layoffs, Early Retirement, etc.
Schedule 4.1(k)               -     Defects in Patents, Trademarks and Similar Rights
Schedule 4.1(l)               -     Government Licenses, Permits and Related Approvals
Schedule 4.1(n)               -     Employee Benefit Programs
Schedule 4.1(p)               -     Absence of Certain Changes or Events
Schedule 4.1(q)               -     Recipients of Offering Memorandum
Schedule 4.1(r)               -     Environmental Matters
Schedule 4.1(t)               -     Tax Matters
Schedule 4.1(u)               -     Subsidiaries of Sellers
Schedule 4.1(x)               -     Affiliate Transactions
Schedule 4.1(y)               -     Compensation of Management Employees
Schedule 5.2(d)               -     Modified Subscription Fees, Activity Fees or Rebates
Schedule 5.2(e)               -     Permitted Contracts
Schedule 5.2(g)               -     Permitted Increase in Compensation or Benefits
Schedule 6.2(d)               -     Absence of Certain Changes
</TABLE>
<PAGE>   7
                                    EXHIBITS

Exhibit A   -     Form of Escrow Agreement

Exhibit B   -     Form of Assumption Agreement

Exhibit C   -     Form of Tax Affidavit

Exhibit D   -     Form of Opinion of Law Offices of Alan H. Finegold

Exhibit E   -     Form of Opinion of New York Counsel to the Sellers

Exhibit F   -     Form of Non-Competition Agreement

Exhibit G   -     Form of Opinion of Robert W. Hollweg, Esq.

Exhibit H   -     Form of Opinion of Simpson Thacher & Bartlett

Exhibit I   -     Form of Opinion of Hunton & Williams

Exhibit J   -     Form of British Columbia Amendment

ASSET PURCHASE AGREEMENT, dated as of December 11, 2000, among WEIGHCO
ENTERPRISES, INC., a Delaware corporation ("WEI"), WEIGHCO OF NORTHWEST,
INC., a Delaware corporation ("WNI"), WEIGHCO OF SOUTHWEST, INC., a Delaware
corporation ("WSI", and together with WEI and WNI, each individually a
"Seller" and collectively, the "Sellers"), WEIGHT WATCHERS NORTH AMERICA,
INC., a Delaware corporation ("Buyer"), and Weight Watchers INTERNATIONAL,
iNC., a Virginia corporation ("WWI").

                                   WITNESSETH

WHEREAS, Sellers are each franchisees of WWI, authorized exclusively to conduct
Weight Watchers classes for weight reduction and control ("Classes"), in
franchise areas numbers 30, 37, 47, 55, 58, 62, 66, 78, 86, 105, 110, 121 and
123 (the territories specified therein are collectively referred to herein as
the "Territories"), granted pursuant to the several Franchise Agreements between
WWI and each of the respective Sellers, listed on Schedule 1(a) hereto
(collectively, the "Franchise Agreements"); and Sellers own and operate the
business of conducting Classes in the Territories (the "Franchises");

WHEREAS, Buyer is a wholly-owned subsidiary of WWI;

WHEREAS, upon and subject to the terms and conditions set forth herein, Buyer
desires to buy and Sellers desire to sell the Franchises and other businesses,
operations and substantially all of the assets in connection therewith, except,
however, for the Excluded Assets, and Buyer is willing to assume certain
specified related liabilities and obligations of Sellers, all as hereinafter set
forth; and

WHEREAS, concurrently with the closing of the transactions contemplated pursuant
to this Agreement (the "Closing"), Sellers, Buyer and The Chase Manhattan Bank,
N.A., as escrow agent (the "Escrow Agent"), shall enter into an escrow agreement
(the "Escrow Agreement"), substantially in the form attached hereto as Exhibit
A.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants of
the parties hereto, it is hereby agreed as follows:

1.    Definitions

      The following terms shall have the following respective meanings:

      "Acquired Person" has the meaning ascribed thereto in Section 5.13(a).

      "Acquisition Proposal" means any offer, proposal or indication of interest
      for the acquisition of (including by merger or other business combination)
      (i) any of the capital stock or other securities of any of the Sellers or
      (ii) any of the assets (including the Assets) of the Sellers (other than a
      sale of inventory in the ordinary course of business consistent with past
      practice), in each case, other than in a transaction contemplated by this
      Agreement.

<PAGE>   8

      "Actions" has the meaning ascribed thereto in Section 4.1(h).

      "Affiliate" means a Person, which directly or indirectly, alone or through
      one or more intermediaries, controls, or is controlled by, or is under
      common control with a specified Person.

      "Agreement" means this Agreement among Sellers, Buyer and WWI as
      originally executed and delivered, as the same may be amended or
      supplemented in accordance with the provisions hereof.

      "Antitrust Division" means the Antitrust Division of the United States
      Department of Justice.

      "Antitrust Improvements Act" means the Hart-Scott-Rodino Antitrust
      Improvements Act of 1976, as amended, and the rules and regulations
      promulgated thereunder.

      "Assets" has the meaning ascribed thereto in Section 2.1.

      "Assumed Liabilities" has the meaning ascribed thereto in Section 2.5.

      "Assumption Agreement" has the meaning ascribed thereto in Section 2.5.

      "Basket Amount" has the meaning ascribed thereto in Section 9.5.

      "Benefit Arrangement" has the meaning ascribed thereto in Section 4.1(n).

      "British Columbia Amendment" means the Amendment, dated the Closing Date,
      to the Restated Franchise Agreement, dated April 24, 1992, between WWI and
      the British Columbia Company, as amended and modified, in substantially
      the form set forth in Exhibit J hereto.

      "British Columbia Company" means Weight Watchers of British Columbia,
      Ltd., a British Columbia corporation.

      "Business" means the business of Sellers, including, without limitation,
      the business of conducting Classes in the Territories and the sale of
      products and publications, but excluding the business related to the
      British Columbia Company.

      "Buyer" has the meaning ascribed thereto in the recitals to this
      Agreement.

      "Buyer Escrow Release Amount" has the meaning ascribed thereto in Section
      3.3.

      "Carolina Acquisition Agreement" means the Third Amendment, dated the
      date hereof, to the Management and Option Agreement, dated January 8,
      1992, between WEI and W.W. of North Carolina, Inc., as amended by the
      First Amendment and the Second Amendment thereto.

      "Carolina Franchise" means the Franchise granted by the Carolina
      Franchise Agreement.

      "Carolina Franchise Agreement" means that certain Restated Franchise
      Agreement, dated December 30, 1991, as the same may have been amended or
      supplemented from time to time, between WWI and Weight Watchers of North
      Carolina, Inc. and Catherine H. Aldridge.

      "Cash" means all cash in currency and all cash on deposit and immediately
      available for withdrawal.

      "Cash Equivalents" means certificates of deposit, money market funds,
      Treasury bills and similar instruments, including, without limitation,
      repurchase agreements secured thereby.

      "Classes" has the meaning ascribed thereto in the recitals to this
      Agreement.

      "Closing" has the meaning ascribed thereto in the recitals to this
      Agreement.

      "Closing Date" has the meaning ascribed thereto in Section 3.1.

      "COBRA" has the meaning ascribed thereto in Section 4.1(n).

      "Code" means the Internal Revenue Code of 1986, as amended and as in
      effect from time to time, and any law which shall have been a predecessor
      or shall be a successor thereto.

      "Conclusive Statement" has the meaning ascribed thereto in Section 3.5(c).

      "Confidential Information" has the meaning ascribed thereto in Section
      10.11.

<PAGE>   9

      "Customer Contracts" means all agreements (including Prepaid Coupons) with
      customers of Sellers for attendance at Classes in the Territories in
      effect on the Closing Date, including, without limitation, agreements
      under the At-Work program.

      "Employee Benefit Programs" has the meaning ascribed thereto in Section
      4.1(n).

      "Environmental Laws" has the meaning ascribed thereto in Section 4.1(r).

      "Equipment" means the equipment, furniture, furnishings, fixtures,
      machinery, vehicles, telephones and other tangible personal property of
      Sellers, including, without limitation, the furniture, fixtures and
      equipment used for the conduct of the Classes in the Territories, Weight
      Watchers signs and all keys which Sellers may have to locked doors within
      the premises subject to the Leases.

      "ERISA" has the meaning ascribed thereto in Section 4.1(n).

      "Escrow Agent" has the meaning ascribed thereto in the recitals to this
      Agreement.

      "Escrow Agreement" has the meaning ascribed thereto in the recitals to
      this Agreement.

      "Escrow Fund" has the meaning ascribed thereto in Section 3.2.

      "Excluded Assets" has the meaning ascribed thereto in Section 2.2.

      "Financial Information" has the meaning ascribed thereto in Section
      4.1(d)

      "Franchises" has the meaning ascribed thereto in the recitals to this
      Agreement.

      "Franchise Agreements" has the meaning ascribed thereto in the recitals to
      this Agreement.

      "Franchise Fees" has the meaning ascribed thereto in Section 5.9.

      "FTC" means the Federal Trade Commission.

      "Funded Debt" means any indebtedness of the Sellers, whether or not
      contingent, in respect of (i) obligations with regard to borrowed money
      (including reimbursement obligations) evidenced by bonds, notes,
      debentures or similar instruments or letters of credit (or reimbursement
      agreements in respect thereof) whether or not secured by any of the
      Assets, or bankers' acceptances, (ii) obligations evidenced by bonds,
      debentures, notes or similar instruments, (iii) obligations to pay the
      deferred purchase price of assets or other property (other than accounts
      payable which are incurred in the ordinary course of business consistent
      with past practice), other than Leases which are equipment leases and are
      set forth on Schedule 1(b), (iv) obligations under leases which are
      required to be classified and accounted for as capital leases on financial
      statements prepared in accordance with GAAP, other than Leases which are
      equipment leases and are set forth on Schedule 1(b) and (v) the guarantee
      by any Seller of any indebtedness of any other Person.

      "GAAP" means generally accepted United States accounting principles as of
      the date hereof applied on a consistent basis during the periods involved.

      "Group Health Plan" has the meaning ascribed thereto in Section 4.1(n).

      "Intellectual Property" has the meaning ascribed thereto in Section
      2.1(o).

      "Indemnitee" has the meaning ascribed thereto in Section 9.3(a).

      "Indemnitor" has the meaning ascribed thereto in Section 9.3(a).

      "Leases" means the real estate leases, equipment leases and rental
      agreements listed on Schedule 1(c), including, without limitation, all
      license and other agreements providing for the periodic occupancy of space
      for the conduct of the Classes in the Territories.

      "Letter of Intent" has the meaning ascribed thereto in Section 10.5.

      "Liens" means any lien, mortgage, option, pledge, security interest,
      assignment by way of security, claim, charge, encumbrance or other
      restriction of any kind or nature.

      "Losses" has the meaning ascribed thereto in Section 9.1.

<PAGE>   10

      "Manager" has the meaning ascribed thereto in Section 5.10.

      "Management Employees" has the meaning ascribed thereto in Section 4.1(y).

      "Material Adverse Effect" means any material adverse effect on the
      condition (financial or other), results of operations, assets, properties,
      business or prospects of Sellers or an adverse effect on Sellers' ability
      to perform their obligations hereunder or under any other agreement
      contemplated hereby.

      "Montford Center Litigation" means the action brought in Mecklenburg
      County, North Carolina under the name Weighco Enterprises Inc. f/k/a
      Weighco of Florida, Incorporated v. Catherine H. Aldridge, et al. and
      currently on appeal to the North Carolina Court of Appeals.

      "Neutral Auditor" has the meaning ascribed thereto in Section 3.5(c).

      "Notice of Claim" has the meaning ascribed thereto in Section 9.3(b).

      "Offering Memorandum" means the undated Confidential Offering Memorandum
      prepared by Houlihan, Lokey, Zukin & Howard with respect to Sellers and
      the Business.

      "Other Real Property" has the meaning ascribed thereto in Section 4.1(r).

      "Permitted Liens" has the meaning ascribed thereto in Section 4.1(e).

      "Person" means an individual, a corporation, a limited liability company,
      a partnership, an association, a trust or other entity or organization.

      "Plans" has the meaning ascribed thereto in Section 4.1(n).

      "Prepaid Coupons" means any prepaid coupon or other arrangement with
      customers, including, without limitation, customers under the At-Work
      program, whereby the customer has paid to or for the benefit of any Seller
      in advance for Classes or other services not yet provided to or received
      by such customer prior to the opening of business on the Closing Date or
      for goods not yet provided to or received by such customer prior to the
      opening of business on the Closing Date.

      "Prepaid Coupon Payment Date" has the meaning ascribed thereto in Section
      3.6(b).

      "Prepaid Coupon Statement" has the meaning ascribed thereto in Section
      3.6(a).

      "Prepaid Coupon Liability" has the meaning ascribed thereto in Section
      3.6(a).

      "Proceeding" has the meaning ascribed thereto in Section 10.16.

      "Protected Business" has the meaning ascribed thereto in Section 5.13(a).

      "Purchase Price" has the meaning ascribed thereto in Section 3.2.

      "Receivables" has the meaning ascribed thereto in Section 4.1(g).

      "Representatives" means any stockholder, director, officer, employee,
      advisor, attorney, accountant or other representative or agent of a
      Person.

      "Resolution Period" has the meaning ascribed thereto in Section 3.5(b).

      "Review Financials" has the meaning ascribed thereto in Section 5.8.

      "Schedules" means the schedules furnished by Sellers to Buyer in the form
      attached to this Agreement.

      "Section 3.5 Assumed Assets" has the meaning ascribed thereto in Section
      3.5(a).

      "Section 3.5 Assumed Liabilities" has the meaning ascribed thereto in
      Section 3.5(a).

      "Section 4.1 Employees" has the meaning ascribed thereto in Section 4.1.

      "Section 6 Liens" has the meaning ascribed thereto in Section 6(l).

      "Sellers" has the meaning ascribed thereto in the recitals to this
      Agreement.

      "Service Agreements" means those certain service contracts, maintenance
      contracts and other agreements
<PAGE>   11

      listed in Schedule 1(d).

      "Statement" has the meaning ascribed thereto in Section 3.5(a).

      "Supplies" means all inventory, including, without limitation, cookbooks
      and other books, calendars, food diaries, food companions, food scales,
      measuring devices, calculators, vitamins, weight systems, tapes, binders
      and other materials and all products held for sale to customers, supplies
      of attendance books and other program materials used in the conduct of the
      Classes in the Territories, including, without limitation, stationery,
      forms, labels, directories and promotional materials and supplies of
      office materials used for the Business on the Closing Date.

      "Taxes" has the meaning ascribed thereto in Section 4.1(t).

      "Tax Return" has the meaning ascribed thereto in Section 4.1(t).

      "Territories" has the meaning ascribed thereto in the recitals to this
      Agreement.

      "Third Parties" has the meaning ascribed thereto in Section 5.7.

      "Third Party Claims" has the meaning ascribed thereto in Section 9.3(c).

      "WEI" has the meaning ascribed thereto in the recitals to this Agreement.

      "WNI" has the meaning ascribed thereto in the recitals to this Agreement.

      "WSI" has the meaning ascribed thereto in the recitals to this Agreement.

      "WWI" has the meaning ascribed thereto in the recitals to this Agreement.

2.    Purchase and Sale of Assets; Assumption of Certain Liabilities

1.    Transfer of Assets

                  On the basis of the representations, warranties, covenants
                  and agreements and subject to the satisfaction (or waiver by
                  the party whose obligations hereunder are subject to such
                  satisfaction) of the conditions set forth in this Agreement,
                  on the Closing Date, Sellers shall sell, convey, assign,
                  transfer and deliver to Buyer free and clear of all Liens
                  (other than liens of landlords or lessors under the Leases),
                  and Buyer shall purchase and acquire from Sellers free and
                  clear of all Liens (other than liens of landlords or lessors
                  under the Leases), all of the businesses and substantially all
                  of the assets, rights, properties, claims and contracts of
                  Sellers (other than the Excluded Assets) at the Closing Date
                  of every kind, nature, character and description, tangible and
                  intangible, real, personal or mixed, wherever located,
                  including, without limitation, the following:

                           a.       The Franchises;

                           b.       All the contracts and agreements (including,
                                    without limitation, the Franchise
                                    Agreements, all agreements by customers of
                                    Sellers for attendance at the Classes in the
                                    Territories in effect on the Closing Date,
                                    including but not limited to the Customer
                                    Contracts, Service Agreements, maintenance
                                    agreements, operating agreements, customer
                                    subscription agreements, non-competition
                                    agreements, the indemnification and
                                    non-competition provisions under all
                                    acquisition agreements, marketing agreements
                                    and agreements relating to servicing,
                                    distribution, solicitation, hardware and/or
                                    software, advertising, promotional, lease
                                    and other agreements) and purchase
                                    commitments listed on Schedule 2.1(b);

                           c.       All of the Leases listed on Schedule 2.1(c),
                                    including, without limitation, (i) the
                                    leasehold interests in real property, all
                                    buildings, structures and other improvements
                                    situated thereon, (ii) equipment leases and
                                    (iii) other rental agreements entered into,
                                    or assumed, by Sellers; subject, however, to
                                    the provisions of Section 5.15;

                           d.       All accounts receivable and other
                                    receivables of Sellers in existence on or
                                    prior to the opening of business on the
                                    Closing Date (whether or not billed);

                           e.       All deposits and prepaid expenses as of the
                                    opening of business on the Closing Date
                                    (other than with respect to policies of
                                    insurance);

<PAGE>   12

                           f.       All Equipment, and all warranties and
                                    guarantees, if any, express or implied,
                                    existing for the benefit of Sellers with
                                    respect to the Equipment;

                           g.       All the Supplies;

                           h.       All mailing lists relating to the Business;

                           i.       All management information systems and
                                    software, and customer, subscriber and
                                    vendor lists, catalogs, research material,
                                    technical information, technology,
                                    specifications, designs, drawings,
                                    processes, and quality control data and all
                                    rights respecting software packages and
                                    systems;

                           j.       All sales promotion and selling literature
                                    and promotional and advertising materials,
                                    customer lists and customer information
                                    maintained by Sellers with respect to
                                    customers within the Territories;

                           k.       All books, records and files of Sellers
                                    relating to the operation of the Business;

                           l.       All licenses, permits or franchises issued
                                    by any domestic or foreign governmental
                                    authority or other third party, including,
                                    without limitation, all occupancy permits,
                                    licenses and other permits that Sellers may
                                    have with respect to its properties, and the
                                    premises subject to the Leases, their use,
                                    maintenance and occupancy;

                           m.       All security deposited with third parties
                                    and security bonds and all claims against
                                    other parties (other than claims relating to
                                    the Montford Center Litigation);

                           n.       All goodwill and going concern value;

                           o.       All Sellers' right, title and interest in
                                    and to the following types of property
                                    (including all rights to sue for past
                                    infringement thereof) (collectively, the
                                    "Intellectual Property") relating to the
                                    Business:

         i.       all United States and foreign registered and unregistered
                  trademarks and service marks, trademark and service mark
                  registrations, trademark and service mark applications for
                  registration, trade names and the like (including corporate
                  names), together with the goodwill connected with the use of
                  and symbolized by such marks, names, registrations and
                  applications for registration;

         ii.      all United States and foreign patents, patent applications,
                  and all other patent rights, copyrights, copyright
                  registrations and copyright applications;

         iii.     all information, recorded knowledge, surveys, engineering
                  reports, manuals, catalogues, research data, proprietary
                  information, know-how, trade and business secrets, photos, art
                  work, editorial materials, formats, syndicated market research
                  data, sales data and other similar information and all other
                  intellectual property;

         iv.      all non-governmental licenses, sublicenses, covenants or
                  agreements to which Sellers are a party, which relate in whole
                  or in part to any items of the categories mentioned above in
                  clauses (i) - (iii), including all trademark licenses; and

         v.       all other proprietary rights, trade secrets, ideas or
                  know-how;

(p) All plans, owner's and operator's manuals, user's instruction and warranties
of manufacturers and contractors which Sellers may have with respect to items
used in the Business and the premises and equipment subject to the Leases, their
use, maintenance and operation.

The assets being sold, conveyed, assigned, transferred and delivered to Buyer by
Sellers hereunder are sometimes hereinafter referred to as the "Assets."

2.       Excluded Assets

         It is expressly understood and agreed that the Assets shall not
         include the following (collectively, the "Excluded Assets"):

                           a.       Cash and Cash Equivalents owned or held by
                                    Sellers as of the close of business on the
                                    business day immediately preceding the
                                    Closing Date;

                           b.       The life insurance policies on Catherine H.
                                    Aldridge, Lola A. Bode, Stanley L. Lipman
                                    and Richard J. McSorley and any other
                                    employees or former employees of Sellers and
                                    all other policies of insurance insuring
                                    Sellers;

                           c.       The proceeds to be received by Sellers upon
                                    consummation of the transactions
                                    contemplated hereby;

                           d.       Any federal, state or municipal tax refunds
                                    or overpayments;

                           e.       Any rights under the Montford Center
                                    Litigation;

<PAGE>   13

                           f.       The items of tangible personal property
                                    listed in Schedule 2.2;

                           g.       The corporate names "Weighco Enterprises,
                                    Inc.," "Weighco of Northwest, Inc." and
                                    "Weighco of Southwest, Inc." and any
                                    goodwill associated with such names;

                           h.       The capital stock, including treasury
                                    shares, of Sellers; provided, however, that
                                    the Assets shall include all of the assets
                                    and property of Sellers except as otherwise
                                    specified in this Section 2.2;

                           i.       The books, records and files of Sellers not
                                    related to the conduct of the Business,
                                    including without limitation, income tax and
                                    other tax records;

                           j.       The corporate minute books and stock
                                    transfer books of the Sellers; and

                           k.       Any agreement, contract, arrangement or
                                    transaction to which any Affiliate of any
                                    Seller is a party.

     3. Instruments of Conveyance and Transfer

          On the Closing Date, Sellers shall (a) deliver or cause to be
          delivered to Buyer such deeds, bills of sale, endorsements, consents,
          assignments and other good and sufficient instruments of conveyance
          and assignment all in recordable form, where applicable, as shall be
          effective to vest in Buyer all right, title and interest of Sellers in
          and to the Assets; subject, however, to the provisions of Section 5.15
          and (b) transfer to Buyer originals of all contracts, agreements,
          commitments, books, records, files, certificates, licenses, permits,
          plans and specifications and other data of Sellers, including, without
          limitation, computer tapes and computer-generated records constituting
          part of the Assets. All materials referred to in clause (b) shall be
          delivered to Buyer in the form and order in which Sellers maintained
          such materials.

     4. Further Assurances

          From time to time after the Closing Date, Sellers shall promptly
          execute, acknowledge and deliver, or cause to be executed,
          acknowledged and delivered, such other instruments of conveyance,
          assignment, transfer and delivery and will take or cause to be taken
          such other actions as Buyer may reasonably request in order to more
          effectively sell, convey, assign, transfer and deliver to Buyer any of
          the Assets or to enable Buyer to protect, exercise and enjoy all
          rights and benefits of Sellers with respect thereto and as otherwise
          may be appropriate to carry out the transactions herein contemplated.
          From time to time, at Sellers' request and without further
          consideration, Buyer will execute and deliver or cause to be executed
          and delivered such other instruments and take such other actions as
          Sellers or their counsel may reasonably request to more effectively
          assume, pay, perform and discharge the Assumed Liabilities or to carry
          out the transactions herein contemplated.

     5. Assumed Liabilities

On the basis of the representations, warranties, covenants and agreements and
subject to the satisfaction (or waiver by the party whose obligations hereunder
are subject to such satisfaction) of the conditions set forth in this Agreement,
on the Closing Date, Buyer shall deliver to Sellers an undertaking in the form
attached as Exhibit B (the "Assumption Agreement") pursuant to which Buyer
shall, subject to the provisions of Section 5.15, on and as of the Closing Date,
assume and agree to pay, perform and discharge when due, the following
liabilities and obligations of Sellers (without duplication): (a) Sellers'
obligations under the contracts, agreements, leases and commitments listed in
Schedule 2.5(a), which are assigned by Sellers to Buyer and as to which Buyer
succeeds to the rights of Sellers, but, only to the extent of liabilities and
obligations that arise thereunder after the opening of business on the Closing
Date; (b) Sellers' obligations under the licenses, permits and Franchises listed
in Schedule 2.5(b), but only to the extent of liabilities and obligations that
arise thereunder after the opening of business on the Closing Date; (c)
liabilities and obligations of Sellers arising out of the operation of the
Assets from and after the opening of business on the Closing Date (other than as
a result of any breach by Sellers of their obligations hereunder); (d) the
payment of rent and the performance of other obligations pertaining to the
operations of the Franchises from and after the opening of business on the
Closing Date, (e) obligations incurred after the opening of business on the
Closing Date for the Service Agreements, (f) obligations incurred after the
opening of business on the Closing Date for the employees hired by Buyer;
provided that Buyers shall not be responsible for any "stay" or "retention"
bonuses agreed to be awarded by any Seller or any of their respective Affiliates
to any employee of Sellers and (g) Customer Contracts. Notwithstanding the
foregoing, Buyer is not assuming, nor shall it be deemed to have assumed, any
obligations or liabilities of Sellers to any of the Sellers' respective
stockholders or Affiliates or to any of their employees for any pre-Closing
period or for personal services for any pre-Closing period, for Funded Debt, for
federal, state or municipal income or other taxes or (iv) related to any
previous acquisitions or similar transactions (except, however, for rent and
other post-Closing obligations under Leases and post-Closing obligations under
Service Agreements that were assumed by Sellers in such
<PAGE>   14

acquisitions or similar transactions), (v) any liability or obligation of any
kind or nature, except as expressly provided in the Assumption Agreement or this
Agreement or (vi) any liability or obligation relating to the Excluded Assets.
The liabilities and obligations assumed by Buyer in accordance with clauses (a)
through (g) of this Section 2.5 are sometimes hereinafter referred to as the
"Assumed Liabilities."

3. Closing; Payment of Purchase Price at Closing

     1. Closing Date

          On and subject to the conditions herein set forth, the Closing shall
          take place at the offices of Simpson Thacher & Bartlett, located at
          425 Lexington Avenue, New York, New York 10017, at 10 a.m., New York
          City time, on the third business day following the satisfaction of
          waiver of all conditions set forth herein, or at such other time and
          place as shall be agreed upon by the parties hereto; provided that in
          no event shall the Closing occur prior to January 2, 2001. The day on
          which the Closing actually takes place is herein referred to as the
          "Closing Date." The Closing Date shall be deemed to have occurred as
          of 12:01 a.m. (New York time) on the Closing Date.

     2. Purchase Price and Payment

          In consideration for the Assets, and subject to the terms and
          conditions of this Agreement, Buyer shall on the Closing Date (a)
          assume the Assumed Liabilities as provided in Section 2.5, (b)
          transfer to the order of WEI, on behalf of the Sellers, in immediately
          available funds the amount of $73,800,000 and (c) transfer to the
          Escrow Agent in immediately available funds the amount of $10,000,000
          (the "Escrow Fund") to be held pursuant to the Escrow Agreement (such
          payments collectively the "Purchase Price"), and Sellers on the
          Closing Date will sell, assign and transfer the Assets to Buyer in
          accordance with the provisions of this Agreement. Buyer and Sellers
          agree to allocate the Purchase Price among the Assets in accordance
          with the rules under Section 1060 of the Code and the Treasury
          Regulations promulgated thereunder and in the manner set forth in
          Schedule 3.2. Buyer and Sellers agree to act in accordance with such
          allocations in all Tax Returns, reports or filings, including IRS Form
          8594. Unless otherwise required by applicable law, neither Buyer nor
          Sellers shall, after filing IRS Form 8594, revoke or amend IRS Form
          8594 without the prior written consent of the other.

     3. Payment of Balance of Closing Payment.

          In accordance with and subject to the terms of the Escrow Agreement,
          (a) nine months following the Closing Date, the Escrow Agent will
          release to (i) Buyer funds from the Escrow Fund equaling the amounts
          owed but not yet paid to Buyer (x) pursuant to Sections 3.5 and 3.6 of
          this Agreement or (y) as a result of any indemnification obligation
          pursuant to Section 9 of this Agreement (collectively, the "Buyer
          Escrow Release Amount") and (ii) WEI, on behalf of the Sellers, an
          amount equal to $5,000,000 minus the Buyer Escrow Release Amount and
          (b) eighteen months following the Closing Date, the Escrow Agent will
          release to (i) Buyer funds equaling the amounts owed but not yet paid
          to Buyer (x) pursuant to Sections 3.5 and 3.6 of this Agreement or (y)
          as a result of any indemnification obligation pursuant to Section 9 of
          this Agreement and (ii) WEI, on behalf of the Sellers, all amounts
          remaining in the Escrow Fund after payment of funds to Buyer pursuant
          to Section 3.3(b)(i).

     4. Ownership and Investment of the Escrow Fund; Fees and Expenses of Escrow
     Agent

          The Escrow Agent shall retain the Escrow Fund subject to the terms and
          conditions hereof and of the Escrow Agreement, and shall be empowered
          and directed, upon receipt of written instructions signed by WEI, on
          behalf of the Sellers, to invest said sum in such investments as WEI,
          on behalf of Sellers, shall direct, provided that such investments
          shall be limited to those described in Schedule I of the Escrow
          Agreement. The Escrow Agent shall further be authorized to sell or
          redeem any or all of such investments and to reinvest the proceeds of
          such sales or redemptions in accordance with the provisions of the
          Escrow Agreement. The Escrow Agent shall further be authorized to sell
          or redeem any or all of such investments without further instructions
          as may be necessary from time to time to pay in cash any amount to be
          paid pursuant to the provisions hereof of or the Escrow Agreement. All
          amounts and investments (other than bearer instruments) comprising the
          Escrow Fund shall be registered and held in the name of the Escrow
          Agent, as escrow agent for Buyer and Sellers.

          It is understood that Sellers are the owners of the Escrow Fund in the
          proportionate interests set forth in Schedule 3.4(b), including all
          interest and distributions thereon and investments thereof. The Escrow
          Fund shall be increased from time to time by any and all interest
          accrued and paid thereon (after payment of expenses incurred in
          connection with the investment,
<PAGE>   15

          reinvestment or sale thereof) pursuant to the Escrow Agreement. For
          purposes of all Tax laws, all items of asset, liability, income, gain,
          loss, expense, deduction, credit and other items of the Escrow Fund
          shall be allocated to Sellers in the proportionate interests set forth
          in Schedule 3.4(b). The Escrow Agent, after consultation with WEI, on
          behalf of the Sellers, and at the direction of WEI, on behalf of the
          Sellers, shall file with the appropriate taxing authority such Tax
          Returns or other materials and send to Sellers such materials, as may
          be required by any applicable taxing jurisdiction with respect to any
          funds held by it hereunder. Any expense in connection with such Tax
          Returns or other materials shall be borne by the Sellers.

          All fees and expenses of the Escrow Agent in connection with the
          administration of the Escrow Fund shall be borne by the Sellers.

5.    Post Closing Adjustment.

                    a.   Within 120 calendar days after the Closing Date, Buyer
                         shall prepare and deliver to Sellers (i) a statement
                         (the "Statement") setting forth (x) the accounts
                         receivable, deposits and prepaid expenses constituting
                         part of the Assets (the "Section 3.5 Assumed Assets")
                         and (y) the amount of the obligations and liabilities
                         of Sellers assumed by Buyer as of the opening of
                         business on the Closing Date, except, however, for
                         obligations for rent and other charges under the Leases
                         not accrued as of the opening of business on the
                         Closing Date and obligations under the Service
                         Agreements not accrued as of the opening of business on
                         the Closing Date (collectively, the "Section 3.5
                         Assumed Liabilities") and (ii) the workpapers of Buyer
                         used in the preparation of the Statement. The Statement
                         shall be prepared in accordance with GAAP.

                    b.   After receipt of the Statement, Sellers will have
                         thirty (30) calendar days to review the Statement
                         together with the workpapers used in its preparation.
                         Buyer shall provide Sellers with access to the relevant
                         books and records and employees of Buyer to the extent
                         required to review the Statement. Unless Sellers
                         deliver written notice to the Buyer setting forth the
                         specific items disputed by Sellers, on or prior to the
                         thirtieth calendar day after their receipt of the
                         Statement, Sellers will be deemed to have accepted and
                         agreed to the Statement and such agreement will be
                         final and binding. Any such notice of disagreement
                         shall specify the basis of such objection, including
                         identifying any alleged miscalculation or alleged
                         uncounted or improperly included items, and Sellers
                         shall be deemed to have agreed with all other items and
                         amounts contained in the Statement. If Sellers so
                         notify Buyer of its objections to the Statement, Buyer
                         and the Sellers will, within thirty (30) calendar days
                         following delivery of the notice of disagreement (the
                         "Resolution Period"), use their reasonable best efforts
                         to reach agreement on the disputed items. Any
                         resolution by Buyer and Sellers during the Resolution
                         Period as to any disputed amounts will be final,
                         binding and conclusive.

                    c.   If Buyer and Sellers do not resolve all disputed items
                         by the end of the Resolution Period or any mutually
                         agreed extension thereof, then all items remaining in
                         dispute will be submitted within thirty (30) calendar
                         days after the expiration of the Resolution Period to
                         Ernst & Young LLP, or such other independent accounting
                         firm mutually acceptable to Buyer and Sellers (the
                         "Neutral Auditor"). The Neutral Auditor shall act as an
                         arbitrator to determine only those items remaining in
                         dispute. All fees and expenses relating to the work, if
                         any, to be performed by the Neutral Auditor will be
                         borne equally by Buyer, on the one hand, and Sellers,
                         on the other hand. The Neutral Auditor will deliver to
                         Buyer and Sellers a written determination (such
                         determination to include a work sheet setting forth all
                         material calculations used in arriving at such
                         determination and to be based solely on information
                         provided to the Neutral Auditor by the Sellers and
                         Buyer) of the disputed items within thirty 30 calendar
                         days of receipt of the disputed items, which
                         determination, in the absence of manifest error, will
                         be final, binding and conclusive. The final, binding
                         and conclusive Statement, which is agreed upon by Buyer
                         and Sellers or is delivered by the Neutral Auditor in
                         accordance with this Section 3.5(c), will be the
                         "Conclusive Statement." In the event that either
<PAGE>   16

                         Buyer or Sellers fail to submit their respective
                         statement regarding any items remaining in dispute
                         within the time determined by the Neutral Auditor,
                         then the Neutral Auditor shall render a decision
                         based solely on the evidence timely submitted to the
                         Neutral Auditor by Buyer and Sellers.

                    d.   If the amount of Section 3.5 Assumed Liabilities
                         exceeds the amount of Section 3.5 Assumed Assets as
                         shown on the Conclusive Statement, then the Sellers
                         shall pay Buyer, as an adjustment to the Purchase
                         Price, an amount equal to the difference between the
                         amount of Section 3.5 Assumed Liabilities and the
                         amount of Section 3.5 Assumed Assets. If the amount of
                         Section 3.5 Assumed Assets exceeds the amount of
                         Section 3.5 Assumed Liabilities, then Buyer shall pay
                         WEI, on behalf of the Sellers, as an adjustment to the
                         Purchase Price, an amount equal to the difference
                         between the amount of Section 3.5 Assumed Assets and
                         the amount of Section 3.5 Assumed Liabilities. If the
                         amount of Section 3.5 Assumed Liabilities equals the
                         amount of Section 3.5 Assumed Assets, no payment shall
                         be required and no adjustment shall be made to the
                         Purchase Price. All payments to be made pursuant to
                         this Section 3.5(d) will be made on the tenth business
                         day following the date on which the Conclusive
                         Statement is determined by wire transfer (to an account
                         previously designated in writing by the receiving
                         party) of immediately available funds. Any payment
                         required to be made pursuant to this Section 3.5(d), if
                         made following the date which shall be 120 calendar
                         days after the Closing Date, shall bear interest
                         accrued from the date 120 days after the Closing Date
                         through the date of payment at a rate of interest equal
                         to 13% per annum and the amount of interest shall be
                         added to the amount to be paid pursuant to this Section
                         3.5(d).

       6. Prepaid Coupon Adjustment.

              Sellers are responsible for all Prepaid Coupons issued or sold
              prior to the Closing Date and redeemed after the commencement of
              business on the Closing Date. As soon as reasonably practicable
              after the end of each month after the Closing Date, Buyer shall
              prepare and deliver to Sellers a statement (the "Prepaid Coupon
              Statement") setting forth a summary of the amount payable
              hereunder with respect to such Prepaid Coupons (the "Prepaid
              Coupon Liabilities"), together with the Prepaid Coupons redeemed
              during such month.

              After receipt of the Prepaid Coupon Statement, Sellers shall pay
              to Buyer, as an adjustment to the Purchase Price, no later than
              the tenth business day following the date on which the Prepaid
              Coupon Statement is delivered (the "Prepaid Coupon Payment Date")
              an amount equal to the Prepaid Coupon Liabilities by wire transfer
              (to an account previously designated in writing by the Buyer) of
              immediately available funds. Any payment required to be made
              pursuant to this Section 3.6 and not so paid shall bear interest
              from the tenth business day after the Prepaid Coupon Payment Date
              through the date of payment at a rate of interest equal to 13% per
              annum, and the amount of interest shall be added to the amount to
              be paid pursuant to this Section 3.6.

              The amount of the Prepaid Coupon Liabilities shall be the excess
              of the amount received by Sellers from the sale of the Prepaid
              Coupons redeemed after the commencement of business on the Closing
              Date, less any and all royalties paid or payable by Sellers to WWI
              with respect to the sale of such Prepaid Coupons.

       7. Guaranty; Consent

WWI does hereby guarantee the performance of each of the obligations (financial
or otherwise) of the Buyer under this Agreement, including, without limitation,
the obligations of Buyer under Section 3.2 hereof. WWI, by its execution and
delivery of this Agreement, does hereby consent to, and approve, the assignment
of the Franchises, including without limitation, the Carolina Franchise, by
Sellers hereunder in accordance with the provisions of the Franchise Agreements
and waives the compliance by Sellers and Buyer with any and all requirements
under the Franchise Agreements with respect to such assignments, except as
otherwise specifically provided in this Agreement.

4. Representations and Warranties

          1. Representations and Warranties of Sellers.

          Sellers jointly and severally represent and warrant to Buyer as
          follows (provided that, with respect to Sellers, if any representation
          or warranty is made hereunder to the "best
<PAGE>   17

          knowledge" of Sellers or any similar phrase, such knowledge shall be
          limited to information obtained by an examination of Sellers'
          managerial employees specified on Schedule 4.1 (the "Section 4.1
          Employees") and records and any public record pertinent to the
          relevant representation or warranty):

     a. Due Organization; Power; Capacity; Good Standing

          Each of the Sellers is a corporation duly organized, validly existing
          and in good standing under the laws of its jurisdiction of
          organization and has the requisite corporate power and authority to
          own, lease and operate its properties and assets and to conduct its
          business as now conducted by it. Each of the Sellers has all requisite
          corporate and other power and authority to enter into this Agreement
          and any other agreement contemplated hereby and to perform its
          obligations hereunder and thereunder. Each Seller is duly authorized,
          qualified or licensed to do business as a foreign corporation, and is
          in good standing, in each of the jurisdictions in which its right,
          title or interest in or to any of the assets held by it, or the
          conduct of its business, requires such authorization, qualification or
          licensing, except where the failure to so qualify or to be in good
          standing would not, individually or in the aggregate, have a Material
          Adverse Effect.

     b. Authorization and Validity

          Each Seller has all requisite power and authority to execute, deliver
          and perform their respective obligations under this Agreement and any
          other agreement contemplated hereby and to consummate the transactions
          contemplated hereby and thereby. The execution, delivery and
          performance by each Seller of this Agreement and any other agreement
          contemplated hereby and the consummation by it of the transactions
          contemplated hereby and thereby have been duly authorized by the
          stockholders and by the Board of Directors of each Seller. No other
          corporate or stockholder action is necessary for the authorization,
          execution, delivery and performance by any Seller of this Agreement
          and any other agreements contemplated hereby and the consummation by
          Sellers of the transactions contemplated hereby or thereby. This
          Agreement has been duly executed and delivered by each of the Sellers
          and constitutes a valid and legally binding obligation of each of the
          Sellers, enforceable against them in accordance with its terms, except
          as enforceability may be limited by bankruptcy, insolvency,
          reorganization, moratorium and other similar laws relating to or
          affecting creditors' rights generally, by general equitable principles
          (regardless of whether such enforceability is considered in a
          proceeding in equity or at law) or by an implied covenant of good
          faith and fair dealing.

     c. No Governmental Approvals or Notices Required; No Conflict

          Except as set forth in Schedule 4.1(c), the execution, delivery and
          performance of this Agreement and any other agreements contemplated
          hereby by each Seller and the consummation by each Seller of the
          transactions contemplated hereby and thereby will (i) not conflict
          with or violate (with or without the giving of notice or the lapse of
          time or both), or require any consent, registration, declaration,
          approval, filing or notice under, any provision of any law, statute,
          ordinance, rule or regulation, court or administrative order, writ,
          judgment or decree of any court or any public governmental or
          regulatory body, agency or authority having jurisdiction over any of
          the Sellers or any of their assets (including the Assets) or
          properties, except for such conflicts or violations the occurrence of
          which, and such consents, approvals, filings or notices the failure of
          which to obtain or make, would not, individually or in the aggregate,
          have a Material Adverse Effect, and (ii) not (with or without the
          giving of notice or the lapse of time or both) (x) violate or conflict
          with, or result in the breach, suspension or termination of any
          provision of, or constitute a default under, or require any consent,
          approval or notice under, or result in the acceleration of the
          performance of the obligations of Sellers under, or give rise to any
          right of termination, purchase, amendment or any other right under,
          increase the liability of any party under or (y) result in the
          creation of any Lien upon all or any portion of the properties, assets
          (including the Assets) or business of Sellers pursuant to, the charter
          or by-laws or any provision of the organizational documents of any
          Seller, or any indenture, mortgage, deed of trust, lease, agreement,
          contract or instrument to which any Seller is a party or by which any
          of the Sellers or any of their properties, assets (including the
          Assets) or business is bound, except for such violations, conflicts,
          breaches, suspensions, terminations, defaults, accelerations or Liens
          which, individually or in the aggregate, would not have a Material
          Adverse Effect.

<PAGE>   18

          d. Financial Information; Liabilities

               The consolidated balance sheets of Sellers as at December 26,
               1998 and December 25, 1999 and for the period from December 26,
               1999 to September 30, 2000 and the related consolidated
               statements of income and retained earnings and consolidated
               statements of cash flows for the fiscal years and nine month
               period ended on such dates, copies of which are attached hereto
               in Schedule 4.1(d), are complete and correct and present fairly
               the consolidated financial condition of Sellers as at such dates,
               and the consolidated results of their operations for the fiscal
               years and nine month period then ended. Except as set forth in
               Schedule 4.1(d), all such financial statements, including the
               related schedules and notes thereto, have been prepared in
               accordance with GAAP. Except as set forth in Schedule 4.1(d),
               none of the Sellers had, at the date of the most recent balance
               sheet referred to above, any material contingent obligation,
               contingent liability or liability for taxes, or any long-term
               lease or unusual forward or long-term commitment not reflected
               therein or in a footnote thereto that would have been required to
               be reflected in or reserved against on a balance sheet (or the
               notes thereto) for the Sellers prepared in accordance with GAAP.
               All such financial statements, including the related schedules
               and notes thereto, are sometimes hereinafter referred to as the
               "Financial Information."

                    i. Except to the extent set forth in the financial
                    statements for the nine month period ending September 30,
                    2000 included in the Financial Information or set forth in
                    Schedule 4.1(d) or incurred since September 30, 2000 in the
                    ordinary course of Sellers' business consistent with past
                    practice, none of the Sellers have any material liabilities
                    or material obligations (absolute, accrued, contingent or
                    otherwise), whether due or to become due.

          e. Title and Condition of Properties; Absence of Liens

               Except for Uniform Commercial Code security interests held by PNC
               Bank, National Association and WWGWS, Inc. which shall be
               released upon the Closing and liens of landlords or lessors under
               the Leases, Sellers have, and Buyer on the Closing Date will
               receive, good and marketable title to all the Assets, free and
               clear of all Liens, except for such imperfections of title,
               easements, pledges, charges and encumbrances, if any, as do not
               in the aggregate materially detract from the value or materially
               interfere with the present use of the Assets or otherwise
               materially impair or interfere with Sellers' business ("Permitted
               Liens"). Sellers do not, directly or indirectly, own any real
               property, other than leasehold rights and leasehold improvements
               under certain of the Leases.

                    i. Sellers have no knowledge of any material defect in the
                    normal operating condition and repair of the Equipment. The
                    Supplies are good and merchantable in all material respects,
                    except for ordinary wear and tear.

                    ii. The Assets constitute all of the assets used in the
                    Business as currently conducted and as conducted since
                    January 1, 1998, except with respect to assets relating to
                    Franchises acquired by any of the Sellers after such date
                    and with respect thereto, since the date of the acquisition
                    of such assets.

          f. List of Properties, Contracts, Permits and Other Data

               The following Schedules set forth certain information with
               respect to the Assets and Sellers on the date of this Agreement:

                    i.   Schedule 4.1(f)(i) contains a complete and correct list
                    of all oral and written contracts, agreements, commitments,
                    licenses, sublicenses or other binding arrangements
                    (including, without limitation, the Franchise Agreements,
                    all agreements by customers of Sellers for attendance at the
                    Classes in the Territories in effect on the Closing Date
                    (including but not limited to the Customer Contracts),
                    Service Agreements, maintenance, operating, customer
                    subscription, non-competition, acquisition, marketing and
                    servicing, distribution, solicitation, hardware and/or
                    software, advertising, promotional, lease and other
                    agreements) to which Sellers are a party or by which any of
                    their respective assets or properties is bound;

                    ii.  Schedule 4.1(f)(ii) contains a complete and correct
                    list of all (A) leases under which any of the Sellers is a
                    lessee and all license and other agreements providing for
                    the periodic occupancy of space for the conduct of Classes
                    in the Territories and (B) all other leases under which any
                    of the Sellers is a lessee. The applicable Seller holds a
                    valid leasehold or subleasehold interest in each such lease
                    subject to only (A) any and all underlying mortgages, deeds
                    of trust, leases, grants of term or other estates in or
                    interests affecting the landlord's or fee
<PAGE>   19

                    owner's interest in the applicable portion of such property
                    which are superior to the interests of such Seller as
                    lessee, (B) any encumbrances of title to the leased real
                    property other than those granted by, authorized by or
                    attributable to acts or omissions of any Seller, (C) all
                    applicable building and zoning ordinances and (D) liens
                    securing taxes, assessments, governmental charges or levies,
                    or the claims of contractors, material men, carriers,
                    landlords, warehousemen, workmen, repairmen, customers,
                    employees and similar persons which are not yet due and
                    payable or are being contested in good faith.

               iii. Schedule 4.1(f)(iii) contains a complete and correct list of
                    all licenses, permits and franchises issued by governmental
                    authorities or other third parties; and

               iv.  Schedule 4.1(f)(iv) contains a complete and correct list of
                    all Intellectual Property owned or licensed by any Seller.

               True and complete copies of all documents (including all
               amendments thereto and waivers in respect thereof) referred to in
               the foregoing Schedules 4.1(f)(i), (ii), (iii) and (iv) have been
               delivered to Buyer. To the best knowledge of Sellers, all rights,
               licenses, permits, leases, registrations, applications,
               contracts, agreements, commitments and other arrangements
               referred to in such Schedules are in full force and effect and
               are valid and enforceable in accordance with their respective
               terms, except where the failure to be in full force and effect
               and valid and enforceable would not, either individually or in
               the aggregate, have a Material Adverse Effect. Except for the
               failure to obtain consent to, or approval of, the assignment or
               other transfer of certain of the Leases and Service Contracts
               assigned by third parties to Sellers, Sellers are not (and to the
               best knowledge of Sellers, each other party thereto is not) in
               breach or default in the performance of any obligation
               thereunder, and, to the best knowledge of Sellers, no event has
               occurred or has failed to occur whereby, with or without the
               giving of notice or the lapse of time or both, a default or
               breach will be deemed to have occurred thereunder or any of the
               other parties thereto have been or will be released therefrom or
               will be entitled to refuse to perform thereunder, except for such
               breaches, defaults and events which, individually or in the
               aggregate, would not have a Material Adverse Effect. None of the
               Sellers has delivered or received notice of termination of any
               right, license, permit, lease, registration, contract, agreement
               or other arrangement referred to in such Schedules.

          g. Receivables; Subscriber Information

               The accounts receivable and other receivables (collectively,
               "Receivables") of Sellers arose from bona fide transactions in
               the ordinary course of business and are, to the best knowledge of
               Sellers, current and fully collectible. No counterclaims or
               offsetting claims with respect to presently outstanding
               Receivables are pending or, to the best knowledge of Sellers,
               threatened.

               i.   The number of paid attendance and enrollments of Weight
                    Watchers Classes in each of the Territories for each
                    fiscal month commencing on December 27, 1998 or, with
                    respect to Franchises acquired by Sellers after such
                    date, for each fiscal month commencing after the date
                    of the acquisition of such Franchise by Sellers,
                    whichever is later, through September 30, 2000 are
                    listed on Schedule 4.1(g).

          h. Legal Proceedings

               Except for the Montford Center Litigation or as set forth on
               Schedule 4.1(h), there is no claim, cause of action, allegation,
               suit, litigation, proceeding, arbitration or investigation
               (collectively, "Actions") to which any Seller is a party pending
               or, to the best knowledge of Sellers, threatened against any of
               them or relating to the assets (including the Assets) or the
               business of Sellers or the transactions contemplated by this
               Agreement which would be likely, individually or in the
               aggregate, to result in a Material Adverse Effect or which seeks
               to prevent, restrain, enjoin, delay or interfere with the
               consummation of any of the transactions contemplated hereby. None
               of Sellers is in violation of any term of any judgment, writ,
               decree, injunction or order entered by any court or governmental
               authority and outstanding against any Seller or with respect to
               any of their respective assets (including the Assets) or
               properties which violation would be likely to have, individually
               or in the aggregate, a Material Adverse Effect. To the best
               knowledge of Sellers, there are no facts that could provide a
               basis for any successful prosecution of any such Action. There is
               no order, decree, injunction or judgment pending or in effect
               against any of the Sellers which would be likely to prevent,
               materially interfere with or materially delay the consummation of
               the transactions contemplated hereby or, individually or in the
               aggregate, would be likely to have a Material Adverse Effect.

<PAGE>   20

          i. Insurance

               Each Seller maintains insurance on its properties and assets
               (including the Assets) and with respect to its employees and
               representatives and business which, in the reasonable judgment of
               Sellers, is provided by financially sound and reputable insurers
               and which covers risks customarily insured by businesses similar
               to the business of Sellers. Schedule 4.1(i) is a list of Sellers'
               insurance maintained on their respective properties and assets
               (including the Assets). All such policies are in full force and
               effect, all premiums due thereon have been paid, and Sellers have
               complied with the provisions of all such policies.

          j. Labor

               (i) Each Seller is in compliance in all material respects with
               all applicable laws relating to employment practices, terms and
               conditions of employment and wages and hours; (ii) there are no
               controversies pending or, to the best knowledge of Sellers,
               threatened between any Seller and its employees, prospective
               employees, former employees or labor unions or other collective
               bargaining representatives representing their employees; (iii) no
               unfair labor practice complaints have been filed against any
               Seller, and no Seller has received any notice or communication
               reflecting an intention or a threat to file any such complaint;
               (iv) there is no labor strike, dispute, slow-down or stoppage
               pending or, to the best knowledge of Sellers, threatened against
               any Seller; (v) no representation petition is pending with the
               National Labor Relations Board (or any other labor relations
               board) in respect of any of Sellers' business; (vi) each Seller
               has paid in full to all of its employees all wages, salaries,
               commissions, bonuses, benefits and other compensation due to such
               employees except for severance payments and bonuses which Sellers
               may pay to certain employees in anticipation of, or upon, the
               consummation of the transactions contemplated hereby; (vii)
               except as set forth in Schedule 4.1(j), none of the Sellers has
               closed any facility, effectuated any layoffs of employees or
               implemented any early retirement, separation or window program
               within the past three years, nor has any Seller planned or
               announced any such action or program for the future; (viii) no
               promises of benefit improvements under the Employee Benefit
               Programs have been made by any Seller or any Affiliate thereof to
               any current or former employee of any Seller; and (ix) each
               Seller is in compliance with its respective obligations pursuant
               to the Worker Adjustment and Retraining Notification Act of 1988,
               and all other notification and bargaining obligations arising
               under any collective bargaining agreement, statute or otherwise.

          k. Intellectual Property

               Except as set forth in Schedule 4.1(k), Sellers have, and will
               transfer to Buyer on the Closing Date, good and marketable title
               to all the Intellectual Property, free and clear of all Liens. No
               claims have been asserted within the past five years or are
               currently in dispute to the effect that the use of the
               Intellectual Property by Sellers infringes on any intellectual
               property of any other Person in any material respect. To the best
               knowledge of Sellers, the use of all other material Intellectual
               Property by Sellers does not infringe on the rights of any
               Person. Except as set forth in Schedule 4.1(k), Sellers own all
               material Intellectual Property used in Sellers' business as
               presently conducted. Except as set forth in Schedule 4.1(k), no
               material part of the business of the conduct of the Classes in
               the Territories depends on any Intellectual Property except for
               the trademark licenses under the Franchise Agreements.

          l. Government Licenses, Permits and Related Approvals

               Except as set forth in Schedule 4.1(l), each Seller has all
               licenses, permits, consents, approvals, authorizations,
               qualifications and orders of governmental authorities required
               for the conduct of its business as presently conducted, except
               where the failure to have such licenses, permits, consents,
               approvals, authorizations, qualifications and orders would not be
               likely, individually or in the aggregate, to have a Material
               Adverse Effect.

          m. Compliance with Law and Requirements

               Each Seller is conducting and has conducted for the applicable
               period (as specified below) its business in compliance with all
               applicable laws, statutes, ordinances, rules, regulations,
               decrees, judgments, writs, injunctions, or orders, rights of
               concession, licenses, know-how or other proprietary rights of
               others, the failure to comply with which would, individually or
               in the aggregate, be likely to have a Material Adverse
<PAGE>   21

         Effect. For the purposes of this Section 4.1(m), the applicable period
         in the case of WEI shall be the period of three years prior to the date
         hereof and in the case of each of the other of the Sellers shall be the
         period from the commencement of business thereof.

    n.   Employee Benefit Programs.

             i.  Schedule 4.1(n) identifies each "employee benefit plan" as such
                 term is defined in Section 3(3) of the Employee Retirement
                 Income Security Act of 1974, as amended ("ERISA"), that is
                 covered by ERISA and that is maintained, or otherwise
                 contributed to by Sellers or any Affiliates of Sellers for the
                 benefit of the current or former employees or directors of
                 Sellers (a "Plan" and, collectively, the "Plans"), copies of
                 which have been delivered to Buyer (together with (A) the most
                 recent Annual Report on Form 5500 required to be filed by
                 Sellers and (B) the most recent actuarial valuation reports, in
                 connection with any Plan);

             ii. Schedule 4.1(n) identifies each plan or arrangement not subject
                 to ERISA maintained or otherwise contributed to by Sellers for
                 the benefit of employees of Sellers and providing for deferred
                 compensation, bonuses, stock options, employee insurance
                 coverage or any similar compensation arrangement (a "Benefit
                 Arrangement"; such Benefit Arrangements, together with the
                 Plans, are referred to herein collectively as the "Employee
                 Benefit Programs"), true and correct copies of which have been
                 delivered to Buyer.

             iii. Each Employee Benefit Program has been maintained and
                 administered at all times substantially in compliance with its
                 terms and with all applicable laws, rules and regulations,
                 including, without limitation, ERISA and the Code;

             iv. No "prohibited transaction" (as such term is used in Section
                 406 of ERISA or Section 4975 of the Code) has occurred with
                 respect to any Plan which could have a Material Adverse Effect;

             v.  Sellers do not sponsor, contribute to, participate in or have
                 any other obligations or liabilities (whether or not
                 contingent) which remain unsatisfied or are pending with
                 respect to any employee pension benefit plan (within the
                 meaning of Section 3(2) of ERISA) that is subject to Title IV
                 of ERISA or Section 302 of ERISA.

             vi. Sellers have not at any time contributed to or participated in
                 any pension plan which is a "multiemployer plan," as defined in
                 Section 3(37) of ERISA;

             vii. No material litigation or administrative or other proceedings
                 involving the Employee Benefit Programs have occurred, are
                 pending or, to the best knowledge of Sellers, are threatened;

             viii. Except as set forth in Schedule 4.1(n), there are no other
                   employment agreements, contracts or understandings with any
                   employee of Sellers;

             ix. There are no collective bargaining agreements which Sellers or
                 their Affiliates have entered into on behalf of any employees
                 of Sellers, nor, to the best knowledge of Sellers, are there
                 any ongoing efforts to organize any union representation; and

             x.  Except as set forth on Schedule 4.1(n), with respect to any
                 Plan that is an employee welfare benefit plan (within the
                 meaning of Section 3(1) of ERISA), (1) no such Plan is funded
                 through a "welfare benefits fund", as such term is defined in
                 Section 419(e) of the Code, (2) each such Plan that is a group
                 health plan ("Group Health Plan"), as such term is defined in
                 Section 4980B(g)(2) of the Code, complies with the applicable
                 requirements of Section 4980B(f) of the Code ("COBRA") and (3)
                 no such Plan (other than as required by COBRA) provides any
                 post-employment welfare benefits for former employees
                 (including retirees), either currently or at any time
                 hereafter.

         o.       Certain Fees

                  With the exception of the engagement of and the fees and
                  expenses payable to Houlihan Lokey Zukin & Howard (which will
                  be paid by Sellers), none of the Sellers nor any of their
                  officers, directors or employees or Affiliates has employed
                  any broker or finder or incurred any other liability for any
                  brokerage fees, commissions or finders' fees in connection
                  with the transactions contemplated hereby.

         p.       Absence of Certain Changes or Events

                  Except as set forth in Schedule 4.1(p), since December 26,
                  1999 there has not been (i) any material adverse change in the
                  Assets or in the condition (financial or other), results of
                  operations, prospects or business of Sellers, (ii) any
                  material damage, destruction or loss relating to the business
                  or assets (including the Assets) of Sellers, whether or not
                  insured, (iii) any liability created or incurred which Buyer
                  will assume under the Assumption Agreement other than
                  liabilities created or incurred in the
<PAGE>   22
                  ordinary course of business and in amounts not unusual in
                  respect of the ordinary course of business consistent with
                  past practice, (iv) any Lien created on any Asset, (v) except
                  in the ordinary course of business, any increase in, or
                  commitment or plan adopted to increase, the wages, salaries,
                  compensation, pension or other benefits or payments to
                  employees, (vi) any material capital expenditures or
                  commitment to make any such expenditures with respect to the
                  Assets or as to which Buyer will become obligated after the
                  Closing pursuant to the Assumption Agreement, (vii) any
                  condemnation proceedings commenced with respect to any Asset
                  or any notice received by Sellers as to the proposed
                  commencement of any such proceedings, (viii) any rights of
                  substantial value knowingly waived with respect to the Assets
                  or the Business, (ix) any sale or transfer of any Assets other
                  than dispositions of obsolete property in the ordinary course
                  of business consistent with past practice or (x) any action
                  performed, taken, agreed to or permitted of the type described
                  in Section 5.2(a) through (p). Since December 25, 1999, except
                  as set forth in Schedule 4.1(p), other than acts relating to
                  the transactions contemplated by this Agreement, the business
                  of each Seller has been conducted only in the ordinary course
                  consistent with past practice.

         q.       Offering Memorandum; Disclosure.

                  Neither this Agreement, the information set forth in Schedule
                  4.1(q) nor any other document and instrument to be executed
                  and delivered by Sellers pursuant hereto, contains or will
                  contain any untrue statement of a material fact or omits or
                  will omit to state a material fact necessary to make the
                  statements contained herein and therein, in light of the
                  circumstances under which they were made, not misleading.
                  There is no fact which Sellers have not disclosed to Buyer in
                  writing and of which any Section 4.1 Employees is aware which
                  has had or would reasonably be expected to have a Material
                  Adverse Effect. Schedule 4.1(q) sets forth a true and complete
                  list of all Persons who received the Offering Memorandum from
                  any of the Sellers or their respective Affiliates or
                  Representatives.

         r.       Environmental Matters

                  Except as set forth in Schedule 4.1(r), none of the Sellers
                  has in the past materially violated or is now in material
                  violation of any federal, state or local law, code, statute,
                  common law, ordinance, rule, regulation, order, decree or
                  guideline relating in any manner to contamination, pollution,
                  or protection of human health or the environment
                  ("Environmental Laws") in connection with the ownership or
                  operation of any of its assets (including the Assets) and the
                  conduct of the Business. None of the Sellers has received any
                  written notice from any governmental authority, and does not
                  have knowledge of any governmental inquiry, with respect to
                  any actual or alleged violation of any Environmental Laws with
                  respect to any of its assets (including the Assets) or the
                  Business and there is not pending or, to the best knowledge of
                  Sellers, threatened any suit, claim, proceeding or
                  investigation against Sellers relating to any violation or
                  threatened violation of any Environmental Law. There has been
                  no storage, disposal or treatment of solid wastes or hazardous
                  wastes on, under or at any real property currently or formerly
                  owned by Sellers or, to the best knowledge of Sellers, any
                  other real property ("Other Real Property") currently or
                  formerly leased or otherwise used by Sellers. There has been
                  no release, including any spill, discharge, leak, emission,
                  injection, escape or dumping of any kind, from operations of
                  Sellers or, to the best knowledge of Sellers, otherwise, onto
                  any real property currently or formerly used by Sellers or
                  into the environment surrounding any such real property, of
                  any hazardous substances, other than those releases
                  permissible under applicable regulations, laws or statutes or
                  allowable under applicable permits. Except as set forth in
                  Schedule 4.1(r), none of the Sellers nor, to the best
                  knowledge of Sellers, any other person has discovered any
                  occurrence or condition on any real property adjoining or in
                  the vicinity of any real property that could cause such real
                  property or any part thereof to be subject to any restrictions
                  on the ownership, occupancy, transferability or use of such
                  real property under any Environmental Law. None of the Sellers
                  has contractually assumed any liabilities or obligations under
                  any Environmental Law other than as a result of its status as
                  a lessee under the Leases. As used in this Section 4.1(r), the
                  terms "storage", "treatment", "disposal", "solid wastes" and
                  "hazardous wastes" shall have the meanings set forth under the
                  Resource Conservation and Recovery Act, 42 U.S.C.A. Section
                  6901 et seq.; and the terms "release" and "hazardous
                  substance" shall have the meanings set forth under the
                  Comprehensive Environmental Response, Compensation and
                  Liability Act, 42 U.S.C.A. Section 9601 et seq. For purposes
                  of this Section 4.1(r) only, "best knowledge of Sellers" shall
                  not require the conduct of any environmental or engineering
                  study of properties nor the examination of public records
                  normally
<PAGE>   23

examined in such studies.

                  s.       Entire Business

                           On the Closing Date, Sellers will transfer to Buyer
                           all of the assets used by Sellers in and necessary
                           for the conduct by Buyer of the Business, except for
                           the Excluded Assets.

                  t.       Tax Matters

                           For purposes of this Agreement, (i) "Taxes" shall
                           mean all United States federal, state, provincial,
                           local and foreign income, profits, franchise, gross
                           receipts, payroll, sales, employment, use, property,
                           excise, value added, estimated, stamp, alternative or
                           add-on minimum, environmental, withholding and any
                           other taxes, duties or assessments, together with all
                           interest, penalties and additions imposed with
                           respect to such amounts; and (ii) "Tax Return" shall
                           mean any return, declaration, report, claim for
                           refund or information return or statement relating to
                           Taxes, including any schedule or attachment thereto,
                           and including any amendment thereof. None of the
                           Assets is (A) subject to section 168(f)(8) of the
                           Internal Revenue Code of 1954 or (B) tax-exempt use
                           property within the meaning of Section 168(h)(1) of
                           the Code. Except as provided under Section 10.3
                           hereof, all Tax Returns required to be filed by
                           Sellers (or their respective predecessors) on or
                           before the Closing Date have been or shall be timely
                           filed and all such Tax Returns were true, correct and
                           complete in all material respects. All Taxes with
                           respect to any of the Assets which are due or which
                           may be claimed to be due (whether or not shown to be
                           due on any Tax Return) have been or shall be paid or
                           accrued within the prescribed period or any extension
                           thereof. There are no tax liens upon any of the
                           Assets except for Liens for current Taxes not yet due
                           and payable. Except as set forth in Schedule 4.1(t)
                           and except as disclosed in the Financial Information,
                           none of the Sellers (or any of their respective
                           predecessors) is a party to or has received any
                           notice with respect to any proposed or pending action
                           by any governmental authority for assessment or
                           collection of Taxes with respect to any of the
                           Assets, or is party to any dispute or threatened
                           dispute relating to Taxes with respect to any of the
                           Assets in which action or dispute an adverse
                           determination could have a Material Adverse Effect
                           and no such claim for assessment or collection of
                           Taxes with respect to any of the Assets has been made
                           upon Sellers. No Seller is a "foreign person" within
                           the meaning of section 1445 of the Code and Sellers
                           will furnish Buyer with an affidavit that satisfies
                           the requirements of section 1445(b)(2) of the Code,
                           in the form attached as Exhibit C.

                  u.       No Subsidiaries

                           Except as set forth on Schedule 4.1(u), each of the
                           Sellers does not directly or indirectly own or
                           control any capital stock of or other interests or
                           investments in any other individual, corporation
                           (including any non-profit corporation), general or
                           limited partnership, limited liability company, joint
                           venture, estate, trust, or other entity or
                           governmental body nor do Sellers have any obligation
                           or right to acquire any such interest or investment.

                  v.       Purchase Price Transfers

                           After the Closing and upon any transfer of the
                           Purchase Price following the Closing, Sellers will
                           not (i) be insolvent; (i) have unreasonably small
                           capital with which to engage in their respective
                           businesses; or (iii) have incurred or plan to incur
                           debts beyond their respective ability to pay as they
                           become absolute and matured.

                  w.       Prohibited Payments

                           No Seller nor any of their respective officers,
                           directors, employees, agents or Affiliates has
                           offered, paid, or agreed to pay to any Person,
                           including any government official, or solicited,
                           received or agreed to receive from any such Person,
                           directly or indirectly, any money or anything of
                           value for the purpose of or with the intent of
                           obtaining or maintaining the business of Sellers or
                           otherwise affecting the business, assets, financial
                           condition or operations of Sellers in any manner
                           which is unlawful.

                  x.       Affiliate Transactions.

                           Except for employment, consulting and management
                           service agreements with respect to which Buyer will
                           not assume any liabilities, Schedule 4.1(x) lists all
                           contracts,
<PAGE>   24

                           arrangements or other transactions (i) between or
                           among any Seller or any of its Affiliates, on the one
                           hand, and any officers or employees of any Sellers,
                           on the other hand, or (ii) which Buyer will assume or
                           become liable with respect to and any Seller or any
                           of their respective Affiliates will be a party to
                           such contract, agreement, arrangement or transaction.

                  y.       Compensation of Management Employees

                           Set forth on Schedule 4.1(y) is a true and complete
                           listing of (1) the annual compensation, including
                           bonuses, for each executive officer and senior
                           manager (collectively, the "Management Employees") of
                           each Seller for the past three years and (2) the
                           proposed annual compensation, including bonuses, for
                           the current fiscal year, including, without
                           limitation, any "stay" or "retention" bonus payable
                           to any Management Employee in connection with the
                           transactions contemplated hereby. No Seller has
                           agreed to pay any of its employees any "stay" or
                           "retention" bonus in connection with the transactions
                           contemplated hereby.

                  z.       Bankruptcy

                           Sellers have not filed any voluntary petitions in
                           bankruptcy or insolvency or any petitions for
                           reorganization under any bankruptcy or similar law;
                           no involuntary petition in bankruptcy has been filed
                           against any Seller; no receiver has been appointed
                           for all or any part of the property of Sellers; and
                           no court has granted Sellers relief in bankruptcy or
                           insolvency or approved a petition seeking
                           reorganization or approving a receiver, trustee or
                           liquidator of all or any part of the property of
                           Sellers.

                  aa.      Qualified S Chapter Subsidiaries

                  WEI has made a valid election to treat WNI and WSI as
                  "qualified S chapter subsidiaries" under section 1361(a)(3) of
                  the Code.

         2.       Representations and Warranties of Buyer and WWI

                  Each of Buyer and WWI represents and warrants to each Seller
                  as follows:

                  a.       Due Organization; Good Standing and Power

                           Each of Buyer and WWI is a corporation duly
                           organized, validly existing and in good standing
                           under the laws of the jurisdiction of its
                           organization. Each of Buyer and WWI has all requisite
                           corporate and other power and authority to enter into
                           this Agreement and any other agreement contemplated
                           hereby and to perform its obligations hereunder and
                           thereunder.

                  b.       Authorization and Validity.

                           Each of Buyer and WWI has all requisite power and
                           authority to execute, deliver and perform its
                           obligations under this Agreement and any other
                           agreement contemplated hereby and to consummate the
                           transactions contemplated hereby and thereby. The
                           execution, delivery and performance by each of Buyer
                           and WWI of this Agreement and any other agreements
                           contemplated hereby and the consummation by each of
                           Buyer and WWI of the transactions contemplated hereby
                           and thereby have been duly authorized by its Board of
                           Directors. No other corporate or stockholder action
                           is necessary for the authorization, execution,
                           delivery and performance by Buyer or WWI of this
                           Agreement and any other agreement contemplated hereby
                           and the consummation by Buyer and WWI of the
                           transactions contemplated hereby or thereby. This
                           Agreement has been duly executed and delivered by
                           each of Buyer and WWI and constitutes a valid and
                           legally binding obligation of each of Buyer and WWI,
                           enforceable against Buyer and WWI in accordance with
                           its terms, except as enforceability may be limited by
                           bankruptcy, insolvency, reorganization, moratorium
                           and other similar laws relating to or affecting
                           creditors' rights generally, by general equitable
                           principles (regardless of whether such enforceability
                           is considered in a proceeding in equity or at law) or
                           by an implied covenant of good faith and fair
                           dealing.

                  c.       Governmental Approvals; No Conflict

                           The execution, delivery and performance of this
                           Agreement and any other agreements contemplated
                           hereby by each of Buyer and WWI and the consummation
                           by each of

<PAGE>   25
                           Buyer and WWI of the transactions contemplated hereby
                           and thereby (i) will not conflict with or violate
                           (with or without the giving of notice or the lapse of
                           time or both), or require any consent, registration,
                           declaration, approval, filing or notice under any
                           provision of any law, statute, ordinance, rule or
                           regulation, court or administrative order, writ,
                           judgment or decree of any court or any public
                           governmental or regulatory body, agency or authority
                           having jurisdiction over Buyer, WWI or their
                           respective assets or properties, except for the
                           requirements of the Antitrust Improvements Act and
                           except for such conflicts or violations the
                           occurrence of which, and such consents, approvals,
                           filings or notices the failure of which to obtain or
                           make, would not, individually or in the aggregate,
                           have a material adverse effect on Buyer's or WWI's
                           ability to perform its obligations hereunder, and
                           (ii) will not (with or without the giving of notice
                           or the lapse of time or both) (x) violate or conflict
                           with, or result in the breach, suspension or
                           termination of any provision of, or constitute a
                           default under, or require any consent, approval or
                           notice under, or result in the acceleration of the
                           performance of the obligations of Buyer or WWI,
                           under, or give rise to any right of termination,
                           purchase, amendment or any other right under,
                           increase the liability of any party under or (y)
                           result in the creation of any Lien upon all or any
                           portion of the properties, assets or business of
                           Buyer or WWI pursuant to, the charter or by-laws or
                           any provision of the organizational documents of
                           Buyer or WWI, or any indenture, mortgage, deed of
                           trust, lease, agreement, contract or instrument to
                           which Buyer or WWI is a party or by which Buyer or
                           WWI or any of their respective assets or properties
                           is bound, except for such violations, conflicts,
                           breaches, suspensions, terminations, defaults,
                           accelerations or Liens which would not, individually
                           or in the aggregate, have a material adverse effect
                           on Buyer's or WWI's ability to perform its
                           obligations hereunder.

                  d.       Brokers' Fees

                           Neither Buyer, WWI nor any of their respective
                           officers, directors or employees, on behalf of Buyer
                           or WWI, has employed any broker or finder or incurred
                           any other liability for any brokerage fees,
                           commissions or finders' fees in connection with the
                           transactions contemplated hereby.

             3.  Survival of Representations

The representations, warranties, covenants and agreements contained in this
Agreement, and in any agreements, certificates or other instruments delivered
pursuant to this Agreement, shall survive the Closing and shall remain in full
force and effect for the period specified in Section 9.4 hereof, regardless of
any investigations made by or on behalf of any party, but subject to all express
limitations and other provisions contained in this Agreement. No investigation
by or knowledge of any party shall relieve any other party hereto in any manner
with respect to its obligations under the representations, warranties, covenants
and agreements made by such other party hereunder or in any agreement,
certificate or other document delivered pursuant to this Agreement.

5.       Agreements

             1.  Access to Information

                Prior to Closing, Sellers agree to (a) give or cause to be given
                to Buyer and its Representatives and potential financing sources
                full and free access to Richard J. McSorley and such access to
                the offices, employees, properties, Assets, contracts, books,
                accountants, workpapers and records and all other documents and
                data relating to the Assets as Buyer may from time to time
                reasonably request, provided, however, in the case of access to
                personnel, access to such personnel shall require the prior
                consent of Richard J. McSorley (such consent not to be
                unreasonably withheld or delayed) and (b) furnish or cause to be
                furnished to Buyer such financial and operating data and other
                information with respect to the Business and properties and
                assets (including the Assets) of Sellers, as Buyer may from time
                to time reasonably request. After Closing, Buyer agrees to
                provide Sellers with reasonable access to information contained
                in the files and records of Sellers transferred to Buyer at
                Closing to the extent necessary for Sellers to prepare tax
                returns and other government mandated filings and to prosecute,
                or defend against, any claims.

             2.  Conduct of the Business

                 Sellers jointly and severally agree that, except as required by
                 this Agreement or otherwise consented to in writing by Buyer,
                 during the period commencing on September 30, 2000 and ending
                 on the Closing Date, Sellers shall:

                        a.      operate the Business only in the ordinary course
                                of business
<PAGE>   26
                                consistent with past practice and, to the extent
                                consistent with such operation, use its
                                reasonable best efforts to preserve its present
                                business organization intact, keep available the
                                services of its present employees (other than
                                Lola A. Bode and Stanley L. Lipman) and preserve
                                its goodwill and present business relationships,
                                including its relationships with its members
                                participating in its Classes;

                        b.      maintain their books, accounts and records
                                relating to their business in the ordinary
                                course of business consistent with past
                                practice, comply with and perform in all
                                material respects all laws and contractual and
                                other obligations applicable to them or their
                                business;

                        c.      maintain in full force and effect adequate
                                insurance with respect to the Assets and their
                                employees covering risks customarily insured by
                                similar businesses;

                        d.      not increase, reduce or otherwise modify
                                membership fees, activity fees or rebates except
                                as set forth in Schedule 5.2(d);

                        e.      not enter into any contract, agreement or other
                                commitment or series of related contracts,
                                agreements or commitments which is not
                                terminable by the parties upon thirty (30) days
                                notice or less or which involves aggregate
                                consideration in excess of $20,000 except as set
                                forth in Schedule 5.2(e)

                        f.      not (i) sell, dispose of or abandon any of the
                                Assets, other than in the ordinary course of
                                business consistent with past practice, or (ii)
                                enter into, amend, change, waive or otherwise
                                modify any contract, agreement, lease, license
                                or other document which constitutes part of the
                                Assets;

                        g.      not (i) permit or allow any of its properties
                                and assets (including the Assets) to become
                                subject to any Liens, except for Permitted Liens
                                and other liens existing on the date hereof,
                                (ii) waive any claims or rights relating to the
                                Assets, (iii) except as set forth in Schedule
                                5.2(g) or with respect to Richard J. McSorley,
                                grant any increase in the compensation or
                                benefits of its employees (including any such
                                increase pursuant to any deferred compensation,
                                severance, bonus, pension, profit-sharing or
                                other plan or commitment), (iv) establish, enter
                                into or adopt any employment agreement or
                                collective bargaining agreement or other
                                Employee Benefits Programs or, except as set
                                forth in Schedule 5.2(g), modify or terminate
                                any Employee Benefits Programs, or (v) enter
                                into any agreements giving rise to trade and
                                barter obligations on the part of Sellers;

                        h.      provide Buyer with reasonable notice prior to
                                any Seller (i) declaring, setting aside or
                                paying any dividends on, or making any other
                                distributions in respect of, any of its capital
                                stock or (ii) purchasing, redeeming or otherwise
                                acquiring any shares of capital stock of Sellers
                                or any other securities thereof or any rights,
                                warrants or options to acquire any such shares
                                or other securities;

                        i.      provide Buyer with reasonable notice prior to
                                any amendment by any Seller of its charter,
                                by-laws or other organizational documents;

                        j.      provide Buyer with reasonable notice prior to
                                any Seller acquiring or agreeing to acquire,
                                merging or consolidating with, or purchasing a
                                substantial portion of the stock or assets of,
                                or entering into any similar transaction with
                                any business or any corporation, partnership,
                                joint venture, association or other business
                                organization or division thereof;

                        k.      provide Buyer with reasonable notice prior to
                                any Seller adopting a plan of complete or
                                partial liquidation or resolutions providing for
                                or authorizing such a liquidation or a
                                dissolution, merger, consolidation,
                                restructuring, recapitalization or
                                reorganization;

                        l.      provide Buyer with reasonable notice prior to
                                any Seller changing any financial reporting
                                policy or accounting principle;

                        m.      not settle or compromise any litigation (whether
                                or not commenced prior to the date of this
                                Agreement) on any terms except for (i) a
                                settlement of the Montford Center Litigation
                                pursuant to the provisions of the Carolina
                                Acquisition Agreement and (ii) a settlement
                                which only provides for a release of the claim
                                and the payment of money, if any, and does not
                                otherwise adversely affect the Business;
                                provided that Sellers shall provide Buyer with
                                reasonable prior notice of any such settlement
                                or compromise;
<PAGE>   27

                        n.      not write down the value of any inventory or any
                                other asset or sell any amount of its inventory
                                except in the ordinary course of business
                                consistent with past practice; and

                        o.      not enter into any transaction that may
                                reasonably be expected to render any Seller
                                insolvent; and

                        p.      not authorize any of, or commit or agree to take
                                any of, the foregoing actions set forth in
                                clauses (a) through (g) and (m) through (o)
                                above.

3.      Further Actions

        Subject to the terms and conditions hereof, including, without
        limitation, Section 5.15 hereof, Sellers and Buyer agree to use their
        reasonable best efforts to promptly take, or cause to be promptly taken,
        all action and to do, or cause to be done, all things necessary, proper
        or advisable to consummate and make effective the transactions
        contemplated by this Agreement, including using its reasonable best
        efforts (without commencement of litigation or the assumption of any
        material obligation): (i) to obtain at the earliest practicable date
        prior to the Closing Date (pursuant to instruments reasonably
        satisfactory to Buyer in form and substance) all licenses, permits,
        consents, approvals, authorizations, qualifications and orders of
        governmental authorities and parties to contracts, licenses or
        agreements with Sellers or its Affiliates as are necessary for the
        consummation of the transactions contemplated hereby; (ii) to effect all
        necessary registrations and filings; (iii) to furnish to each other such
        information and assistance as reasonably may be requested in connection
        with the foregoing; (iv) to assist Buyer in obtaining prior to the
        Closing Date all governmental licenses, permits, consents, approvals,
        authorizations, qualifications and orders as are necessary in order to
        enable Buyer to conduct the Business of Sellers in the ordinary course
        as of and from the opening of business on the Closing Date; (v) upon
        request, to assist Buyer in obtaining prior to the Closing Date
        sufficient financing to fund the Purchase Price, including, without
        limitation, assisting in preparing materials for, providing access to
        materials and personnel and attending meetings with potential financing
        sources; (vi) upon request, to assist WEI in the acquisition on or prior
        to the Closing Date, of the Carolina Franchise from W.W. of North
        Carolina, Inc., a North Carolina corporation formerly known as Weight
        Watchers of North Carolina, Inc., including, without limitation,
        assisting in preparing materials for, providing access to materials and
        personnel and attending meetings with representatives of W.W. of North
        Carolina, Inc.; provided, however that nothing contained in items (v) or
        (vi) of this Section 5.3 shall be interpreted or construed to require
        that Sellers provide any financial support, or make any concession, to
        Buyer or Buyer provide any financial support, or make any concession to
        Sellers in connection with such financing or such acquisition and (vii)
        with respect to Sellers, to complete the acquisition of the Carolina
        Franchise pursuant to the provisions of the Carolina Acquisition
        Agreement.

4.       Antitrust Improvements Act

        Sellers shall timely and promptly make all filings, which may be
        required by it in connection with the consummation of the transactions
        contemplated hereby under the Antitrust Improvements Act. Sellers shall
        furnish to Buyer such information and assistance as Buyer may reasonably
        request in connection with Buyers preparation of any necessary filings
        or submissions by it to any governmental agency, including, without
        limitation, any filings necessary under the provisions of the Antitrust
        Improvements Act. Sellers shall provide Buyer with copies of all
        correspondence, filings or communications (or memoranda setting forth
        the substance thereof) between Sellers or its representatives, on the
        one hand, and the FTC, the Antitrust Division and their staffs, on the
        other hand, with respect to this Agreement and the transactions
        contemplated hereby. Buyer shall timely and promptly make all filings
        that may be required by it in connection with the consummation of the
        transactions contemplated hereby under the Antitrust Improvements Act.
        Buyer shall furnish to Sellers such information and assistance as
        Sellers may reasonably request in connection with Sellers preparation of
        any necessary filings or submissions by it to any governmental agency,
        including, without limitation, any filings necessary under the
        provisions of the Antitrust Improvements Act. Buyer shall provide
        Sellers with copies of all correspondence, filings or communications (or
        memoranda setting forth the substance thereof) between Buyer or its
        representatives, on the one hand, and the FTC, the Antitrust Division
        and their staffs, on the other hand, with respect to this Agreement and
        the transactions contemplated hereby. WWI and Buyer shall be responsible
        for the payment of all filing fees in connection with the Antitrust
        Improvements Act.

5.       Notification

        Sellers shall notify Buyer and keep it advised of (i) any litigation or
        administrative proceeding pending or, to the best knowledge of Sellers,
        threatened against Sellers which
<PAGE>   28
        could, if adversely determined, have a Material Adverse Effect; (ii) any
        material damage or destruction of any of the Assets; and (iii) any
        material adverse change in the condition (financial or other), results
        of operations, assets, business or prospects of the Business. Sellers
        shall promptly notify Buyer in writing of the occurrence of any event
        that would result in the failure of a condition specified in Sections
        6.1 or 6.2, and Buyer shall promptly notify Sellers in writing of the
        occurrence of any event that would result in the failure of a condition
        specified in Section 6.1 or 6.3.

6.      No Inconsistent Action

        Subject to Sections 8.1 and 8.2, the parties hereto shall not take any
        action inconsistent with their obligations under this Agreement or which
        could materially hinder or delay the consummation of the transactions
        contemplated by this Agreement. None of the parties hereto shall take or
        omit to take any action that could result in any of their respective
        representations and warranties not being true and correct on the Closing
        Date.

7.      No Solicitation

        From and after the date of this Agreement, until the earlier of the
        Closing or 180 days after the termination of this Agreement pursuant to
        Section 8.1, Sellers shall not, and shall not permit any of their
        respective Affiliates or Representatives, to, directly or indirectly (i)
        solicit, initiate or encourage the submission of any inquiries,
        indications of interest, proposals or offers from any Person, other than
        Buyer (collectively, "Third Parties"), concerning any Acquisition
        Proposal, (ii) participate in any discussions or negotiations regarding,
        or enter into any agreements or understandings (whether or not in
        writing) relating to, any of the foregoing with, or provide any
        information concerning any Seller or the Assets to any Third Parties
        other than in the ordinary course of business or other than as required
        by applicable law or (iii) otherwise cooperate in any way with, or
        assist or participate in, facilitate or encourage, any effort or attempt
        by any Third Party to do or seek any of the foregoing, provided,
        however, that nothing contained herein shall be interpreted or construed
        to require that Sellers retrieve or recall any copy of the Offering
        Memorandum previously distributed to any Person or to take any other
        action with respect to the Offering Memorandum. As soon as is
        practicable after this Agreement has been executed, Sellers will use
        their reasonable best efforts to cause the destruction or return of all
        non-public, confidential or proprietary information concerning the
        Assets provided to potential purchasers of any Seller or the Assets,
        other than the Offering Memorandum. Sellers will immediately notify the
        Buyer after the receipt by it or any of its Representatives of any
        inquiry, indication of interest, proposal or offer with respect to an
        Acquisition Proposal by any Third Party and promptly deliver to Buyer
        written documentation reflecting the material economic terms thereof.
        Each Seller agrees that it and its Representatives shall immediately
        cease and cause to be terminated any activities, discussions or
        negotiations with any parties conducted heretofore with respect to any
        Acquisition Proposal. Notwithstanding the foregoing, in the event of the
        termination of this Agreement pursuant to Section 8.1 solely as a result
        of the failure to satisfy the condition set forth in Section 6.2(k), the
        period of one hundred eighty (180) days set forth in the first sentence
        of this Section 8.1 shall be reduced to thirty (30) days.

8.      Delivery of Financial Statements.

        Sellers will use its best efforts to cooperate with the preparation of
        the review financial statements of Sellers consisting of review
        consolidated balance sheets of Sellers for the period from December 26,
        1999 to September 30, 2000 and the related review consolidated
        statements of income and retained earnings and consolidated statements
        of cash flows for the nine month period ended on such date, reviewed by
        PricewaterhouseCoopers, and prepared in accordance with GAAP ("Review
        Financials"). WWI and Buyer shall bear all cost and expense of the
        preparation of the Review Financials.

9.      Franchise Agreements

        Each of the Sellers hereby agrees to pay WWI when due all amounts,
        fees and payments accrued or owing under the Franchise Agreements
        ("Franchise Fees") as of the close of business on the business day prior
        to the Closing Date by wire transfer (to an account previously
        designated in writing by WWI) of immediately available funds. Any
        payment required to be made pursuant to this Section 5.9 and not so paid
        shall bear interest from the tenth business day after the date on which
        such payment shall be due through the date of payment at a rate of
        interest equal to 13% per annum, and the amount of interest shall be
        added to the amount to be paid pursuant to this Section 5.9.

10.     No Solicitation of Employees
<PAGE>   29

        Sellers shall not, and shall cause their respective Affiliates not to,
        within a period of three years after the Closing Date, directly or
        indirectly, solicit or hire any person who is a senior managerial
        employee of any of the Sellers as of the date hereof or on the Closing
        Date (each a "Manager"); provided that the foregoing shall not prohibit
        Sellers or any of their respective Affiliates from hiring any Manager
        whose employment has been terminated by the Buyer.

11.     Payment of Annual Compensation and Bonuses

        On the date of the next regularly scheduled payroll date immediately
        following the Closing Date and in no event later than 15 business days
        following the Closing Date, Sellers shall pay all annual compensation,
        including bonuses, payable to any Management Employee or any other
        employee of any Seller and any severance payments or bonuses which
        Sellers may pay to certain employees in anticipation of, or upon the
        consummation of, the transactions contemplated hereby.

12.     Interim Financial Statements

        Within 21 calendar days of the end of the month, beginning with
        November 30, 2000, until the Closing Date Sellers shall deliver to Buyer
        interim financial statements for the month then ended presenting the
        consolidated financial condition of Sellers as at such dates, and the
        consolidated results of their operations.

13.     Covenant Not to Compete

        (a) The Sellers shall not engage in the Protected Business for a
        period of four (4) years after the Closing Date; provided, however, that
        nothing herein shall preclude Sellers from (i) acquiring or operating
        the British Columbia Company, or any successor to the business and
        assets thereof, (ii) acquiring or operating any other Franchises in
        Canada or (iii) acquiring an equity interest in, any person (an
        "Acquired Person") which, together with its subsidiaries, derives 10% or
        less but not more than $1.0 million of its consolidated revenues from
        the Protected Business and continuing the business operations of such
        Acquired Person. Each of Buyer and WWI only intend to limit Sellers or
        its subsidiaries current or future business activities as expressly set
        forth in this Section 5.13 but not otherwise. For purposes of this
        Section 5.13, the term "Protected Business" means the weight loss and
        weight control industry, including, without limitation, the provision of
        classes for weight reduction and control and the sale of related
        products and publications.

        (b) The parties agree that the terms of the covenant contained in this
        Section 5.13 are fair and reasonable in light of Buyers and WWIs plans
        for the Protected Business and are necessary to accomplish the full
        transfer of the goodwill and other intangible assets contemplated
        hereby. If, as a result of a dispute between the parties as to this
        covenant, a court refuses to enforce this covenant not to compete for
        any reason, the parties shall request such court to reform this covenant
        (for purposes of application only in the jurisdiction in which such
        dispute arises) to the extent necessary to permit its enforcement.

14.     Employment Matters

        In the event that Buyer intends to engage the services of any
        employees of Sellers from and after the Closing, including without
        limitation Richard J. McSorley, no later than five (5) business days
        prior to the Closing, Buyer shall submit to Sellers a list of such
        employees whom Buyer intends to engage; and Buyer shall have the right
        to solicit the employment of such employees under such wages, hours and
        working conditions as Buyer shall determine, from and after, and
        effective upon, the Closing. Nothing construed in this Agreement,
        nevertheless, shall be interpreted or construed to impose upon Sellers,
        or any of them, any obligations for such wages, hours and working
        conditions, including without limitation vacation pay or other benefits,
        provided by Buyer from and after the Closing regardless of whether, for
        the purposes thereof, any such employees shall be credited with service
        prior to the Closing.

15.     Leases and Service Contracts

        (a) Except as set forth in Section 5.15(b), Buyer hereby agrees to
        assume and agrees to pay, perform and discharge Sellers' obligations
        under the contracts, agreements, leases and commitments listed in
        Schedule 2.5(a), which are assigned by Sellers to Buyer and as to which
        Buyer succeeds to the rights of Sellers, but, only to the extent of
        liabilities and obligations that arise thereunder after the opening of
        business on the Closing Date.
<PAGE>   30

        (b) To the extent that any consent or approval is not obtained with
        respect to any contract, lease, license or agreement as contemplated
        herein and the failure to obtain such consent or approval is not a
        result of the default by Buyer thereunder (except if such default
        results from a violation of the transfer and assignment provisions
        contained therein as a result of the transactions contemplated hereby),
        this Agreement shall not constitute an assignment or an attempted
        assignment thereof. In each such case, Sellers agree to cooperate with
        Buyer in any reasonable arrangement designed to (i) provide for Buyer
        the benefits under any such contract, lease, license or agreement,
        including enforcement at the cost and for the account of Buyer of any
        and all rights of Sellers against the other party or otherwise and (ii)
        insure performance by Buyer of Sellers' obligations thereunder to the
        extent Buyer receives such benefits. If and to the extent that such
        arrangement cannot be made, Buyer shall not have any obligation with
        respect to any such contract, lease, license or agreement.

        (c) WWI and Buyer hereby agree to bear all expenses in connection with
        seeking the consent or approval to the assignment of any contract,
        agreement, lease or commitment listed in Schedule 2.5(a) from any Seller
        to Buyer.

16.     Carolina Acquisition Agreement.

Each Seller hereby agrees that it will not amend the Carolina Acquisition
Agreement without the prior written consent of WWI and Buyer.

6.      Conditions Precedent.

             1.  Conditions Precedent to Obligations of Parties

                The respective obligations of the parties hereto to consummate
                the transactions contemplated by this Agreement shall be subject
                to the satisfaction at or prior to the Closing Date of the
                following conditions:

                        a.      No Injunction, etc.

                                No preliminary or permanent injunction or other
                                order issued by any federal or state court of
                                competent jurisdiction in the United States or
                                by any United States federal or state
                                governmental or regulatory body nor any statute,
                                rule, regulation or executive order promulgated
                                or enacted by any United States federal or state
                                governmental authority which restrains, enjoins
                                or otherwise prohibits any of the transactions
                                contemplated hereby shall be in effect.

                        b.      Antitrust Matters

                                Any filings required to be made by WWI and
                                Buyer and Sellers under the Antitrust
                                Improvements Act shall have been made, and the
                                specified waiting periods thereunder (and any
                                extensions thereof) shall have expired or been
                                terminated without the receipt of any objections
                                from the appropriate governmental agency.

             2.  Conditions Precedent to Obligations of Buyer

                The obligations of Buyer and WWI to consummate the transactions
                contemplated by this Agreement are subject to the satisfaction
                (or waiver by Buyer and WWI) at or prior to the Closing Date of
                each of the following conditions:

                        a.      Accuracy of Representations and Warranties

                                All representations and warranties of Sellers
                                contained herein or in any certificate,
                                instrument or other document delivered to Buyer
                                or WWI pursuant hereto shall be true and correct
                                on and as of the date of this Agreement and the
                                Closing Date, with the same force and effect as
                                though such representations and warranties had
                                been made on and as of the Closing Date, except
                                to the extent that any such representation and
                                warranty is made as of a specified date, in
                                which case such representation and warranty
                                shall have been true and correct as of such
                                date.

                        b.      Performance of Obligations

                                Sellers shall have performed and complied with
                                all obligations and agreements, and complied
                                with all covenants and conditions, contained in
                                this Agreement to be performed or complied with
                                by them prior to or at the Closing Date.

                        c.      Officer's Certificate
<PAGE>   31
                                Buyer and WWI shall have received a
                                certificate, dated the Closing Date, of the
                                President of each Seller certifying that the
                                conditions specified in clauses (a) and (b)
                                above have been fulfilled.

                        d.      Absence of Certain Changes

                                Except as set forth in Schedule 6.2(d), since
                                September 30, 2000, there shall not have been
                                any material adverse change in the condition
                                (financial or other), results of operations,
                                assets, Business or prospects of the Business.

                        e.      Opinions

                                Buyer and WWI shall have received (i) an
                                opinion dated the Closing Date from the Law
                                Offices of Alan H. Finegold, counsel to Sellers,
                                in substantially the form attached as Exhibit D
                                and (ii) an opinion dated the Closing Date from
                                special New York counsel to Sellers reasonably
                                satisfactory to WWI and Buyer, in substantially
                                the form attached as Exhibit E.

                        f.      Escrow Agreement

                                Sellers and the Escrow Agent shall each have
                                delivered an executed counterpart to the Escrow
                                Agreement, substantially in the form of Exhibit
                                A hereto.

                        g.      Non-Competition Agreement

                                D. Grant Peacock shall have delivered an
                                executed counterpart to the Non-Competition
                                Agreement, substantially in the form of Exhibit
                                F hereto.

                        h.      British Columbia Amendment

                                WEI shall have caused the British Columbia
                                Company to deliver an executed counterpart to
                                the British Columbia Amendment, substantially in
                                the form of Exhibit J hereto.

                        i.      Review Financials

                                Buyer shall have received the Review
                                Financials in form and substance satisfactory to
                                Buyer.

                        j.      No Litigation

                                No litigation or proceeding shall have been
                                commenced or threatened by any Person (other
                                than WWI or the Buyer or any of their
                                Affiliates) for the purpose of enjoining or
                                otherwise preventing the consummation of any of
                                the transactions contemplated hereby or which
                                could have a Material Adverse Effect.

                        k.      Funding

                                Buyer shall have received sufficient financing
                                to fund the Purchase Price on terms and
                                conditions satisfactory to Buyer.

                        l.      Lien Search

                                Buyer and WWI shall have received satisfactory
                                results of Lien searches with respect to the
                                Assets reflecting no Liens on the Assets other
                                than the security interests of PNC Bank,
                                National Association, WWGWS, Inc. and landlords
                                or lessors under the Leases (collectively, the
                                "Section 6 Liens").

                        m.      Consents, etc.

                                All licenses, permits, consents, approvals,
                                authorizations and orders of governmental
                                authorities and other third parties (other than
                                with respect to Leases and Service Contracts)
                                necessary for the consummation of the
                                transactions contemplated hereby shall have been
                                obtained.

                        n.      Carolina Franchise
<PAGE>   32
                                    WEI shall have completed the acquisition
                                    of the Carolina Franchise in accordance with
                                    the provisions of the Carolina Acquisition
                                    Agreement.

                           o.       Release of Liens

                                    The Assets shall have been released from
                                    and shall be free and clear of all Liens,
                                    including, without limitation, all Section 6
                                    Liens, except, however, for the liens of
                                    landlords or lessors under the Leases.

                           p.       Actions and Proceedings

                                    All corporate actions, proceedings,
                                    instruments and documents of Sellers and
                                    their Affiliates required to carry out the
                                    transactions contemplated by this Agreement
                                    or incidental thereto and all other related
                                    legal matters shall be reasonably
                                    satisfactory to Robert W. Hollweg, General
                                    Counsel of Buyer and WWI, and Simpson
                                    Thacher & Bartlett, counsel for Buyer and
                                    WWI, and such counsel shall have been
                                    furnished with such certified copies of such
                                    corporate actions and proceedings and such
                                    other instruments and documents as it shall
                                    have reasonably requested, including,
                                    without limitation, incumbency certificates
                                    from the Secretary of each Seller and
                                    certified copies of the resolutions of the
                                    Board of Directors of each Seller and
                                    evidence of the stockholders of each Seller
                                    authorizing and approving this Agreement and
                                    the transactions contemplated hereby.

                           q.       Closing Deliveries

                                    Sellers shall have delivered to Buyer and
                                    WWI all deliveries to be made to them
                                    pursuant to Section 2.3.

                  3.       Conditions Precedent to the Obligations of Sellers

                           The obligations of Sellers to consummate the
                           transactions contemplated by this Agreement are
                           subject to the satisfaction (or waiver by Sellers) at
                           or prior to the Closing Date of each of the following
                           conditions:

                           a.       Accuracy of Representations and Warranties

                                    All representations and warranties of
                                    Buyer and WWI contained herein or in any
                                    certificate, instrument or other document
                                    delivered to Sellers pursuant hereto shall
                                    be true and correct on and as of the date of
                                    this Agreement and the Closing Date, with
                                    the same force and effect as though such
                                    representations and warranties had been made
                                    on and as of the Closing Date, except to the
                                    extent that any such representation and
                                    warranty is made as of a specified date, in
                                    which case such representation and warranty
                                    shall have been true and correct as of such
                                    date.

                           b.       Performance of Obligations

                                    Each of Buyer and WWI shall have performed
                                    and complied with all obligations and
                                    agreements, and complied with all covenants
                                    and conditions, contained in this Agreement
                                    to be performed or complied with by it prior
                                    to or at the Closing Date.

                           c.       Officer's Certificate

                                    Sellers shall have received a certificate,
                                    dated the Closing Date, of the President or
                                    any Vice President of Buyer and the
                                    President or any Vice President of WWI
                                    certifying that the conditions specified in
                                    paragraphs (a) and (b) above have been
                                    fulfilled.

                           d.       Actions and Proceedings

                                    All corporate actions, proceedings,
                                    instruments and documents of Buyer and WWI
                                    required to carry out the transactions
                                    contemplated by this Agreement or incidental
                                    thereto and all other related legal matters
                                    shall be reasonably satisfactory to Law
                                    Offices of Alan H. Finegold, counsel for
                                    Sellers, and such counsel shall have been
                                    furnished with such certified copies of such
                                    corporate actions and proceedings and such
                                    other instruments and documents as it shall
                                    have reasonably requested.

                           e.       Opinions

                                    Sellers shall have received (i) an opinion
                                    dated the Closing Date from Robert W.
<PAGE>   33
                                    Hollweg, General Counsel of WWI and Buyer,
                                    in substantially the form attached as
                                    Exhibit G, (ii) an opinion dated the Closing
                                    Date from Simpson Thacher & Bartlett,
                                    counsel to WWI and Buyer, in substantially
                                    the form attached as Exhibit H and (iii) an
                                    opinion dated the Closing Date from Hunton &
                                    Williams, special Virginia counsel to WWI,
                                    in substantially the form attached as
                                    Exhibit I.

                           f.       Escrow Agreement

                                    Buyer and the Escrow Agent shall each have
                                    delivered an executed counterpart to the
                                    Escrow Agreement, substantially in the form
                                    of Exhibit A hereto.

                           g.       Non-Competition Agreement

                                    WWI shall have delivered an executed
                                    counterpart to the Non-Competition
                                    Agreement, substantially in the form of
                                    Exhibit E hereto.

                           h.       British Columbia Amendment.

                                    WWI shall have delivered an executed
                                    counterpart to the British Columbia
                                    Amendment, substantially in the form of
                                    Exhibit J hereto.

                           i.       Closing Deliveries

                                    Each of Buyer and WWI shall have delivered
                                    to Sellers all deliveries to be made
                                    pursuant to Section 2.5.

                           j.       No Litigation

                                    No litigation or proceeding shall have been
                                    commenced or threatened by any Person (other
                                    than Sellers or an of their Affiliates) for
                                    the purpose of enjoining or otherwise
                                    preventing the consummation of any of the
                                    transactions contemplated hereby.

                           k.       Carolina Franchise

         WEI shall have completed the acquisition of the Carolina Franchise in
         accordance with provisions of the Carolina Acquisition Agreement so
         long as the failure to complete the acquisition of the Carolina
         Franchise is not a result of a violation of or breach by any Seller of
         the Carolina Acquisition Agreement.

7.       Employees and Employee Benefits

         1.       Offer of Employment

                  Buyer shall not be required to offer employment to any
                  employee employed by Sellers. Sellers shall indemnify and hold
                  harmless Buyer against any loss as a result of any claim by
                  any employees of Sellers (or, following the Closing Date,
                  employees of Buyer) or any one or more of them on account of
                  such terms of wages, hours, working conditions or other
                  benefits, including but not limited to vacation benefits and
                  severance, under which such employees have been employed by
                  Sellers or any claim for notification or otherwise under the
                  Worker Adjustment and Retraining Notification Act; provided,
                  however that nothing contained herein shall be interpreted or
                  construed to impose any liability or obligation on Sellers for
                  any wages or other compensation or benefits, including without
                  limitation, vacation benefits provided or granted by Buyer to
                  any such employee, including, without limitation, Robert J.
                  McSorley, hired by Buyer and employed thereby at any time from
                  and after the Closing.

8.       Termination

         1.       Termination of Agreement

                  This Agreement may be terminated and the transactions
                  contemplated herein abandoned (a) by mutual written consent of
                  Buyer, WWI and Sellers, (b) by Buyer and WWI, if there has
                  been a material breach of Sellers' covenants and agreements
                  hereunder or if the conditions contained in Section 6.2 cannot
                  be fulfilled on or before April 30, 2001, (c) by Sellers, if
                  there has been a material breach of WWI's or Buyers' covenants
                  and agreements hereunder or if the conditions contained in
                  Section 6.3 cannot be fulfilled on or before April 30, 2001,
                  (d) by any party by notice to the other parties in the event
                  that the Closing Date shall not have occurred on or before
                  April 30, 2001; provided, however, that if the Closing shall
                  not have occurred, on or before April 30, 2001 due to the act
                  or failure of one of the parties, that party may not, and if
                  such party is one of the Sellers, none of the Sellers may, or
                  if such party is Buyer or WWI, neither Buyer nor WWI may,
                  terminate the Agreement, or (e) by any party upon the
                  occurrence of any of the adverse events described in Section
                  6.1(a) which has become a nonappealable final order, decree or
                  judgment.
<PAGE>   34
         2.       No Liabilities in Event of Termination

                  In the event of any termination of this Agreement pursuant to
                  Section 8.1, written notice thereof shall forthwith be given
                  to the other parties specifying the provision hereof pursuant
                  to which such termination is made, and this Agreement shall
                  forthwith become void and of no further force and effect, and
                  no party hereto shall have any liability to the other parties
                  or their respective Affiliates, directors, officers or
                  employees, except for the obligations set forth in Sections
                  5.7, 10.1, 10.2, 10.3, 10.4, 10.5, 10.11 and 10.16 and this
                  Section 8.2 hereof, which shall survive such termination;
                  provided nothing in this Section 8.2. shall relieve any party
                  from any liability for any breach of such party's covenants or
                  agreements contained in this Agreement prior to such
                  termination or, to the extent of reimbursement of the other
                  party's expenses, for any breach of such party's
                  representations and warranties under this Agreement.

         3.       Return of Documents

         In the event of the termination of this Agreement pursuant to this
         Section 8, Buyer and WWI agree, upon request of Sellers, to return or
         destroy all documents of Sellers containing Confidential Information
         that have been previously provided to Buyer and WWI.

9.       Indemnification

         1.       Sellers Indemnity

                  Sellers jointly and severally agree to indemnify, defend and
                  hold Buyer, WWI and their respective Affiliates harmless
                  against and in respect of (i) all obligations and liabilities
                  of Sellers or any of their Affiliates, whether accrued,
                  absolute, fixed, contingent or otherwise, not expressly
                  assumed by Buyer pursuant to the Assumption Agreement; (ii)
                  any claim, cost, loss, liability, charge, action, suit,
                  proceeding, deficiency, damage and expense, interest, award,
                  judgment and penalty (including, without limitation,
                  reasonable legal costs and expenses) (collectively, "Losses")
                  imposed on, incurred, sustained or suffered by Buyer, WWI or
                  any of their respective Affiliates arising out of or as a
                  result of (A) any misrepresentation or breach of warranty by
                  Sellers or (B) a breach by Sellers of any covenant or other
                  agreement contained herein; (iii) liabilities for sales, use,
                  income and other taxes arising at any time out of the
                  operation of the business of Sellers and their Affiliates
                  prior to the opening of business on the Closing Date and not
                  provided for in Section 10.3 hereof; (iv) any claim, cost,
                  loss, liability or damage incurred or sustained by Buyer, WWI
                  or their respective Affiliates as a result of the operation of
                  the business of Sellers and their Affiliates prior to the
                  opening of business on the Closing Date and (v) all reasonable
                  costs and expenses (including reasonable attorneys' fees and
                  disbursements) incurred by Buyer, WWI or their respective
                  Affiliates in connection with any action, suit, proceeding,
                  demand, assessment or judgment incident to any of the matters
                  indemnified against in this Section 9.1; provided, however
                  that Sellers shall have no liability or obligation for
                  consequential or punitive damages other than any such damages
                  awarded to any person who is not a party hereto or is not an
                  Affiliate of a party hereto.

         2.       Buyer and WWI Indemnity

                  Buyer and WWI jointly and severally agree to indemnify, defend
                  and hold Sellers and their respective Affiliates harmless
                  against and in respect of (i) all obligations and liabilities
                  of Sellers or any of their Affiliates, whether accrued,
                  absolute, fixed, contingent or otherwise, expressly assumed by
                  Buyer pursuant to the Assumption Agreement; (ii) any Losses
                  imposed on, incurred, sustained or suffered by Sellers or any
                  of their respective Affiliates arising out of or as a result
                  of (A) any misrepresentation or breach of warranty by WWI or
                  Buyer, or (B) a breach by WWI or Buyer of any covenant or
                  other agreement contained herein; (iii) liabilities for sales,
                  use, income and other taxes arising at any time out of the
                  operation of the business of Buyer and its Affiliates
                  following the opening of business on the Closing Date and not
                  provided for in Section 10.3 hereof; (iv) any claim, costs,
                  loss, liability or damage incurred or sustained by Sellers or
                  their respective Affiliates as a result of the operation of
                  the business of Buyer and its Affiliates following the opening
                  of business on the Closing Date; and (v) all reasonable costs
                  and expenses (including reasonable attorneys' fees and
                  disbursements) incurred by Sellers or their Affiliates in
                  connection with any action, suit, proceeding, demand,
                  assessment or judgment incident to any of the matters
                  indemnified against in this Section 9.2; provided however,
                  that neither Buyer nor WEI shall have any liability or
                  obligation for consequential or punitive damages other than
                  any such damages awarded to any person who is not a party
                  hereto or is not an Affiliate of a party hereto.

         3.       Procedures for Indemnification
<PAGE>   35
                  For the purposes of this Section 9.3, the term "Indemnitee"
                  shall refer to the Person indemnified, or entitled, or
                  claiming to be entitled to be indemnified, pursuant to the
                  provisions of Section 9.1 or 9.2, as the case may be; and the
                  term "Indemnitor" shall refer to the Person having the
                  obligation to indemnify pursuant to such provisions.

                           a.       An Indemnitee shall give written notice (a
                                    "Notice of Claim") to the Indemnitor
                                    (including a Third Party Claim, as
                                    hereinafter defined) which an Indemnitee has
                                    determined has given or could reasonably be
                                    expected to give rise to a right of
                                    indemnification under this Agreement. No
                                    failure to give such Notice of Claim shall
                                    affect the indemnification obligations of
                                    the Indemnitor hereunder, except to the
                                    extent the Indemnitor can demonstrate such
                                    failure materially prejudiced such
                                    Indemnitor's ability to successfully defend
                                    the matter giving rise to the claim. The
                                    Notice of Claim shall state the nature of
                                    the claim, the amount of the Loss, if known
                                    and the method of computation thereof, all
                                    with reasonable particularity and containing
                                    a reference to the provisions of the
                                    Agreement in respect of which such right of
                                    indemnification is claimed or arises.

                           b.       The obligations and liabilities of an
                                    Indemnitor under this Article 9 with respect
                                    to Losses arising from claims of any third
                                    party that are subject to the
                                    indemnification provisions provided for in
                                    this Section 9 ("Third Party Claims") shall
                                    be governed by and contingent upon the
                                    following additional terms and conditions:
                                    The Indemnitee at the time it gives a Notice
                                    of Claim to the Indemnitor of the Third
                                    Party Claim shall advise the Indemnitor that
                                    Indemnitor shall be permitted, at its
                                    option, to assume and control the defense of
                                    such Third Party Claim at its expense and
                                    through counsel of its choice if it gives
                                    written notice of its intention to do so to
                                    the Indemnitee within twenty (20) days of
                                    its receipt of the Notice of Claim. In the
                                    event the Indemnitor exercises its right to
                                    undertake the defense against any such Third
                                    Party Claim as provided above, the
                                    Indemnitee shall cooperate with the
                                    Indemnitor in such defense and make
                                    available to the Indemnitor all witnesses,
                                    pertinent records, materials and information
                                    in its possession or under its control
                                    relating thereto as is reasonably required
                                    by the Indemnitor, and the Indemnitee may
                                    participate by its own counsel and at its
                                    own expense in defense of such Third Party
                                    Claim; provided, however, that if the
                                    defendants in any Action shall include both
                                    the Indemnitee and the Indemnitor and such
                                    Indemnitee shall have reasonably concluded
                                    in good faith that counsel selected by the
                                    Indemnitor has a conflict of interest
                                    because of the availability of different or
                                    additional defenses to such Indemnitee, such
                                    Indemnitee shall have the right to select
                                    separate counsel to participate in the
                                    defense of such Action on its behalf, at the
                                    expense of the Indemnitor; provided,
                                    further, that such Indemnitor shall not, in
                                    connection with any one such action or
                                    separate but substantially similar or
                                    related actions, be liable for the
                                    reasonable fees and expenses of more than
                                    one separate firm of attorneys (in addition
                                    to any local counsel). Notwithstanding the
                                    foregoing, the Indemnitee, during the period
                                    the Indemnitor is determining whether to
                                    elect to assume the defense of a matter
                                    covered by this Section 9.3, may take such
                                    reasonable actions as it deems necessary to
                                    preserve any and all rights with respect to
                                    the matter, without such actions being
                                    construed as a waiver of the Indemnitee's
                                    rights to defense and indemnification
                                    pursuant to this Agreement. Similarly, in
                                    the event the Indemnitee is, directly or
                                    indirectly, conducting the defense against
                                    any such Third Party Claim, the Indemnitor
                                    shall cooperate with the Indemnitee in such
                                    defense and make available to it all such
                                    witnesses, records, materials and
                                    information in its possession or under its
                                    control relating thereto as is reasonably
                                    required by the Indemnitee and the
                                    Indemnitor may participate by its own
                                    counsel and at its own expense in the
                                    defense of such Third Party Action. Except
                                    for the settlement of a Third Party Claim
                                    which involves the payment of money only, no
                                    Third Party Claim may be settled or judgment
                                    entered by consent by the Indemnitor without
                                    the written consent of the Indemnitee, which
                                    consent shall not be unreasonably withheld
                                    or delayed. No Third Party Claim may be
                                    settled or
<PAGE>   36
                                    judgment entered by consent by the
                                    Indemnitee without the written consent of
                                    the Indemnitor, which consent shall not be
                                    unreasonably withheld or delayed.

         4.       Additional Agreements

                  The indemnities provided in this Article 9 shall survive the
                  Closing, except that: (i) Sellers shall not be liable for any
                  indemnification claim hereunder with respect to a
                  misrepresentation or a breach of any warranty contained in (1)
                  Section 4.1(n), unless notice of such claim shall have been
                  delivered in accordance with this Section 9 on or before the
                  third anniversary of the Closing Date, (2) Section 4.1(t),
                  unless notice of such claim shall have been delivered in
                  accordance with this Section 9 on or before the expiration of
                  the longest statute of limitations applicable to claims
                  against Sellers by any relevant taxing authority and (3) any
                  provision of Section 4.1 (other than Section 4.1(n) and (t)),
                  unless notice of such claim shall have been delivered in
                  accordance with this Section 9 within eighteen months of the
                  Closing Date; and (ii) Buyer shall not be liable for any
                  indemnification claim hereunder with respect to a
                  misrepresentation or a breach of any warranty contained in
                  Section 4.2, unless notice of such claim shall have been
                  delivered in accordance with this Article 9 within eighteen
                  months of the Closing Date.

                           a.       The parties agree that any indemnification
                                    payments made pursuant to this Agreement
                                    shall be treated for tax purposes as an
                                    adjustment to the Purchase Price, unless
                                    otherwise required by applicable law.

                           b.       Any party receiving notice of any claim by
                                    any taxing authority that such party owes or
                                    may in the future owe Taxes shall, if the
                                    claim to which such notice relates could, if
                                    resolved against such party, reasonably be
                                    expected to have adverse consequences for
                                    other parties to this Agreement, notify all
                                    other parties of such notice. Any party may,
                                    at its own expense, be entitled to
                                    participate as an observer in the
                                    proceedings with respect to any such claim.

         5.       Limits on Indemnification

                  Notwithstanding the provisions of Section 9.1(ii)(A),
                  Sellers shall have no obligation to indemnify WWI or Buyer or
                  any of their respective Affiliates pursuant to Section
                  9.1(ii)(A) except to the extent that the indemnification
                  obligations thereunder shall exceed Two Hundred Twelve
                  Thousand Five Hundred Dollars ($212,500) (the "Basket Amount")
                  in the aggregate; provided if Seller indemnification
                  obligations pursuant to Section 9.1(ii)(A) exceed the Basket
                  Amount, WWI, Buyer and their respective Affiliates shall be
                  entitled to receive indemnification with respect to the entire
                  amount of such Losses, subject to the provisions of the next
                  sentence. Furthermore, the aggregate indemnification
                  obligations of Sellers pursuant to Section 9.1(ii)(A) shall
                  not exceed Twenty-Five Million Dollars ($25,000,000);
                  provided, however, that any indemnification claim by Buyer
                  with respect to a misrepresentation or breach of any
                  representation or warranty by any Seller contained in Sections
                  4.1(d) or (e) shall not be subject to the limitation of
                  Twenty-Five Million Dollars ($25,000,000) set forth in this
                  Section 9.5. The aggregate indemnification obligations of WWI
                  and Buyer pursuant to Section 9.2(ii)(A) shall not exceed
                  Twenty-Five Million Dollars ($25,000,000).

10.      Miscellaneous

         1.       Public Announcements

                  All public announcements relating to this Agreement or the
                  transactions contemplated hereby shall be made at such time
                  and in such manner as the parties hereto shall mutually agree,
                  except that nothing in this Agreement shall prevent a party
                  hereto from making any disclosure in connection with the
                  transactions contemplated by this Agreement to the extent
                  required by law provided that prior notice of such disclosure
                  is given to the other parties.

         2.       Expenses

                  Unless otherwise specified in this Agreement, whether or not
                  the transactions contemplated by this Agreement are completed,
                  each of the parties hereto shall pay the fees and expenses
                  incurred by it in connection with the negotiation,
                  preparation, execution and performance of this Agreement,
                  including, without limitation, attorneys' and accountants'
                  fees. The foregoing shall not affect the legal right, if any,
                  that any party hereto may have to recover expenses from any
                  other party that breaches its obligations hereunder.

         3.       Transfer Taxes and Recording Expenses

                  Buyer shall assume and pay and shall indemnify Sellers
                  against all sales, motor vehicle or transfer taxes and
                  recording expenses, if any, required to be paid in connection
                  with the transfer of the Assets (including any interest charge
                  or penalty with respect thereto) up to an
<PAGE>   37
                  amount not to exceed $50,000. If any such sales, motor vehicle
                  or transfer taxes and recording expenses required to be paid
                  in connection with the transfer of the Assets exceeds $50,000,
                  the payment of such taxes and expenses shall be equally borne
                  by Sellers, on the one hand, and Buyer, on the other hand. The
                  parties shall cooperate in providing each other appropriate
                  resale exemption certificates and other appropriate tax
                  documentation.

         4.       Notices

                  All notices, requests, demands and other communications which
                  are required or may be given under this Agreement shall be in
                  writing and shall be deemed to have been duly given if
                  delivered personally or telecopied or mailed, first class
                  mail, postage prepaid, return receipt requested, as follows:

                  If to Sellers:

                  Weighco Enterprises, Inc.

                  25 East Court Street

                  Suite 301

                  Greenville, South Carolina 29601

                  Telephone No. (864) 250-4440

                  Telecopy No. (864) 250-4413

                  Attention: Mr. D. Grant Peacock

                  with a copy to:

                  Law Offices of Alan Finegold

                  Six PPG Place, Suite 1150

                  Pittsburgh, Pennsylvania 15222-5406

                  Telephone No. (412) 471-2548

                  Telecopy No. (412) 562-1613

                  Attention: Alan H. Finegold, Esq.

                  If to WWI or Buyer:

                  Weight Watchers International, Inc.

                  175 Crossways Park West

                  Woodbury, New York 11797-2055

                  Telephone No. (516) 390-1754

                  Telecopy No. (516) 390-1795

                  Attention: Robert W. Hollweg

                  with a copy to:

                  The Invus Group, Ltd.

                  135 East 57th Street

                  New York, New York 10022

                  Telephone No.: (212) 371-1717

                  Telecopy No.: (212) 371-1829
<PAGE>   38
                  Attention: Raymond Debbane

                  with a copy to:

                  Simpson Thacher & Bartlett

                  425 Lexington Avenue

                  New York, New York 10017

                  Telephone No. (212) 455-2000

                  Telecopy No. (212) 455-2502

                  Attention: Robert Spatt, Esq.

                  or to such other address or to the attention of such other
                  person as any party shall have specified by notice in writing
                  to the other parties; provided that notice to WEI shall
                  constitute notice to each of the other Sellers. All such
                  notices, requests, demands and communications shall be deemed
                  to have been received on the date of personal delivery or on
                  the third business day after the mailing thereof.

         5.       Entire Agreement

                  This Agreement (including the Exhibits and Schedules hereto)
                  and the agreements specifically referred to herein or
                  delivered pursuant hereto constitute the entire agreement
                  between the parties hereto with respect to the subject matter
                  hereof and supersedes all prior agreements and understandings,
                  oral and written, between the parties hereto with respect to
                  the subject matter hereof, including, without limitation, the
                  letter agreement, dated September 29, 2000 (the "Letter of
                  Intent"), among Sellers and WWI; provided nothing in this
                  Section 10.5 shall relieve any party from any liability for
                  any breach of such party's covenants or agreements contained
                  in the Letter of Intent prior to such termination.

         6.       Binding Effect

                  This Agreement shall inure to the benefit of and be binding
                  upon the parties hereto and their respective successors and
                  assigns.

         7.       Bulk Sales Law

                  The parties agree to waive compliance with the provisions of
                  the bulk sales law of any jurisdiction. Sellers agree to
                  indemnify and hold harmless Buyer from and against any and all
                  liabilities that may be asserted by third parties against
                  Buyer as a result of such noncompliance; provided, however,
                  that nothing contained in this Section 10.7 shall be
                  interpreted or construed to relieve Buyer of any liability or
                  responsibility for any Assumed Liability or to provide for
                  indemnification against any Assumed Liability.

         8.       Assignability

                  This Agreement shall not be assignable, in whole or in part,
                  by any party hereto without the prior written consent of the
                  other parties hereto; provided that without the consent of
                  Sellers Buyer may assign any or all its rights, interests and
                  obligations hereunder to any of its Affiliates and to a lender
                  in connection with the financing of all or any portion of the
                  Purchase Price.

         9.       No Third Party Beneficiaries

                  Nothing herein expressed or implied shall confer upon any of
                  the employees of Sellers, Buyer, WWI or any of their
                  Affiliates, any rights or remedies, including, without
                  limitation, any right to employment, or continued employment
                  for any specified period, of any nature or kind under or by
                  reason of the Agreement. Nothing in this Agreement, expressed
                  or implied, is intended to confer on any Person other than the
                  parties hereto or their respective successors and assigns, any
                  rights, remedies, obligations or liabilities under or by
                  reason of this Agreement.

         10.      Amendment; Waiver
<PAGE>   39
                  This Agreement may be amended, supplemented or otherwise
                  modified only by a written instrument executed by the parties
                  hereto. No waiver by any party of any of the provisions hereof
                  shall be effective unless explicitly set forth in writing and
                  executed by the party so waiving. Except as provided in the
                  preceding sentence, no action taken pursuant to this
                  Agreement, including without limitation, any investigation by
                  or on behalf of any party, shall be deemed to constitute a
                  waiver by the party taking such action of compliance with any
                  representations, warranties, covenants or agreements contained
                  herein, or in any documents delivered or to be delivered
                  pursuant to this Agreement or in connection with the Closing
                  hereunder. The waiver by any party hereto of a breach of any
                  provision of this Agreement shall not operate or be construed
                  as a waiver of any subsequent breach.

         11.      Confidentiality.

                  (a) Except as and to the extent required by law or otherwise
                  permitted pursuant to the Franchise Agreements, Buyer and WWI
                  agree not to disclose or use, and will direct their
                  Representatives not to disclose or use, at any time prior to
                  the Closing Date to the detriment of Sellers any Confidential
                  Information with respect to Sellers furnished or to be
                  furnished by Sellers or any of their respective
                  Representatives to Buyer, WWI or their Representatives at any
                  time or in any manner other than in connection with the
                  evaluation by Buyer or WWI of the transactions contemplated
                  pursuant to this Agreement. For the purposes hereof,
                  "Confidential Information" means any information about Sellers
                  stamped "confidential" or identified in writing as such to
                  Buyer and WWI by Sellers promptly following its disclosure,
                  unless such data or information (a) is already known to Buyer
                  or WWI or their Representatives or to others not bound by any
                  duty of confidentiality or such information is publicly
                  available through no fault of Buyer, WWI or their
                  Representatives, (b) the use of such information is necessary
                  or appropriate in making any filing or obtaining any consent
                  or approval required for the consummation of the transactions
                  contemplated pursuant to this Agreement or (c) the furnishing
                  or use of such information is required by or necessary or
                  appropriate in connection with legal proceedings.

                  (b) Except as and to the extent required by law, Sellers agree
                  not to disclose or use, and will direct its Representatives
                  not to disclose or use, at any time on or after the Closing
                  Date any confidential information with respect to the Assets
                  or any other aspect of the Business of Sellers. For the
                  purposes hereof, "confidential information" shall not include
                  any data or information (a) publicly available through no
                  fault of any Seller or its Representatives, or (b) the
                  furnishing or use of such information is required by or
                  necessary or appropriate in connection with legal proceedings
                  or required by law.

         12.      Schedules.

                  Any item disclosed in the Schedules attached hereto, under any
                  specific Schedule number hereof, shall be deemed to have been
                  disclosed only for purposes of such Schedule. Disclosure of
                  any fact or item in any Schedule hereto shall not necessarily
                  mean that such fact or item is material.

         13.      Section Headings; Table of Contents

                  The section headings contained in this Agreement and the Table
                  of Contents to this Agreement are for reference purposes only
                  and shall not affect the meaning or interpretation of this
                  Agreement.

         14.      Severability

                  If any provision of this Agreement shall be declared by any
                  court of competent jurisdiction to be illegal, void or
                  unenforceable, all other provisions of this Agreement shall
                  not be affected and shall remain in full force and effect.

         15.      Counterparts

                  This Agreement may be executed in any number of counterparts,
                  each of which shall be deemed to be an original and all of
                  which together shall be deemed to be one and the same
                  instrument.

         16.      APPLICABLE LAW; JURISDICTION; VENUE

                  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
                  INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
                  YORK. WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDING RELATING
<PAGE>   40
                  TO THIS AGREEMENT OR TO THE TRANSACTIONS CONTEMPLATED HEREBY
                  ("PROCEEDINGS"), EACH PARTY IRREVOCABLY (I) SUBMITS TO THE
                  EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
                  AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
                  MANHATTAN IN NEW YORK CITY; AND (II) WAIVES ANY OBJECTION
                  WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY
                  PROCEEDINGS BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT
                  SUCH PROCEEDINGS HAVE BEEN BROUGHT IN AN INCONVENIENT FORUM
                  AND FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH
                  PROCEEDINGS, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER
                  SUCH PARTY.

         17.      Further Assurances

                  Each of the parties hereto agrees that, from and after the
                  Closing, upon the reasonable request of any other party hereto
                  and without further consideration, such party will promptly
                  execute, acknowledge and deliver to such other party such
                  documents and further assurances and will take such other
                  actions (without cost to such party) as such other party may
                  reasonably request in order to carry out the purpose and
                  intention of this Agreement.

         18.      Other Franchise Agreements

                  Except as otherwise provided in Section 3.7, no provision of
                  this Agreement shall amend or waive any provision of any
                  franchise agreement relating to the Weight Watchers business
                  between WWI, on the one hand, and any Seller or any of their
                  respective Affiliates, on the other hand, including, without
                  limitation, WWI's right of first refusal with respect to any
                  such franchise.

         19.      Time of Essence

                  Time shall be of the essence with respect to the transactions
                  contemplated by this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.

                                        WEIGHT WATCHERS INTERNATIONAL, INC.

                                             By: /S/ Linda Huett
                                                -------------------
                                             Name:   Linda Huett
                                             Title:  President

                                        WEIGHT WATCHERS NORTH AMERICA, INC.

                                             By: /S/ Linda Huett
                                                -------------------
                                             Name:   Linda Huett
                                             Title:  President

                                        WEIGHCO ENTERPRISES, INC.

                                             By: /S/ D. Grant Peacock
                                                ---------------------------
                                             Name:   D. Grant Peacock
                                             Title:  Chairman

                                        WEIGHCO OF SOUTHWEST, INC.

                                             By: /S/ D. Grant Peacock
                                                ---------------------------
                                             Name:   D. Grant Peacock
                                             Title:  Chairman

                                        WEIGHCO OF NORTHWEST, INC.

                                             By: /S/ D. Grant Peacock
                                                ---------------------------
                                             Name:   D. Grant Peacock
                                             Title:  Chairman
<PAGE>   41
                                  SCHEDULES TO

                            ASSET PURCHASE AGREEMENT

                                  Schedule 3.2

                            Purchase Price Allocation

The portion of the Purchase Price allocated to inventories and supplies will be
the Book Value thereof as of the Closing.

The portion of Purchase Price allocated to furniture, fixtures and equipment
will be one hundred fifty percent (150%) of the Book Value thereof, net of
depreciation, as of the Closing.

The portion of the Purchase Price allocated to leasehold improvements will be
twenty-five percent (25%) of the Book Value thereof, net of depreciation, as of
the Closing.

The portion of the Purchase Price allocated to the remainder of the Assets,
including real estate leases, the trade names, the Franchises and goodwill will
be the remainder of such consideration or purchase price.

For purposes of this Schedule 3.2, "Book Value" consists of the amount shown on
the books and records of account of Sellers maintained in accordance with GAAP.

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