10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to

Jamba, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-32552	20-2122262
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File No.)	Identification No.)

6475 Christie Avenue, Suite 150, Emeryville, California 94608

(Address of principal executive offices)

Registrant’s telephone number, including area code: (510) 596-0100

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.    Yes x    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨    No x

The number of shares of common stock of Jamba, Inc. outstanding as of July 29, 2016 was15,254,707.

JAMBA, INC.

QUARTERLY REPORT ON FORM 10-Q

QUARTERLY PERIOD ENDED JUNE 28, 2016

Item		Page
	PART I
	FINANCIAL INFORMATION
1.	UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	3
	CONDENSED CONSOLIDATED BALANCE SHEETS	3
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6
2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	28
4.	CONTROLS AND PROCEDURES	29
	PART II
	OTHER INFORMATION
1.	LEGAL PROCEEDINGS	29
1A.	RISK FACTORS	29
2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	30
3.	DEFAULTS UPON SENIOR SECURITIES	30
4.	MINE SAFETY DISCLOSURES	30
5.	OTHER INFORMATION	30
6.	EXHIBITS	30
	SIGNATURES	32

Exhibits

EX-10.1

EX-31.1

EX-31.2

EX-32.1

EX-32.2

EX-101

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PART I - FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JAMBA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 28,			December 29,
	2016			2015
(Dollars in thousands, except share and per share amounts)
ASSETS
Current Assets:
Cash and cash equivalents	$	15,773		$	19,730
Receivables, net of allowances of $369 and $618		12,259			16,932
Inventories		704			818
Prepaid expenses and other current assets		4,217			6,533
Total current assets		32,953			44,013
Property, fixtures and equipment, net of accumulated depreciation of $37,876 and $36,815		17,775			18,744
Goodwill		1,184			1,184
Trademarks and other intangible assets, net		1,390			1,464
Other long-term assets		3,159			4,211
Total assets	$	56,461		$	69,616
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,812		$	3,815
Accrued compensation and benefits		4,645			3,788
Workers’ compensation and health insurance reserves		344			633
Accrued jambacard liability		25,230			29,306
Accrued expenses		8,237			9,977
Other current liabilities		7,208			8,116
Total current liabilities		47,476			55,635
Deferred rent and other long-term liabilities		7,162			8,990
Total liabilities		54,638			64,625
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.001 par value—30,000,000 shares authorized; 18,112,896 and 15,254,079 shares issued and outstanding at June 28, 2016, respectively, and 17,938,820 and 15,080,003 shares issued and outstanding at December 29, 2015, respectively		18			18
Additional paid-in capital		405,736			403,605
Treasury shares, at cost		(40,009	)		(40,009	)
Accumulated deficit		(363,922	)		(358,623	)
Total stockholders’ equity		1,823			4,991
Total liabilities and stockholders’ equity	$	56,461		$	69,616

See Notes to Condensed Consolidated Financial Statements.

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JAMBA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	13-Week Period Ended						26-Week Period Ended
(Dollars in thousands, except share and per share amounts)	June 28, 2016			June 30, 2015			June 28, 2016			June 30, 2015
Revenue:
Company stores	$	13,874		$	48,360		$	25,827		$	96,088
Franchise and other revenue		7,666			5,766			14,467			10,542
Total revenue		21,540			54,126			40,294			106,630
Costs and operating expenses:
Cost of sales		3,321			11,474			6,283			23,881
Labor		4,668			14,876			8,826			30,964
Occupancy		1,900			6,131			3,936			12,966
Store operating		2,272			8,059			4,634			16,093
Depreciation and amortization		1,674			1,344			3,176			3,217
General and administrative		9,423			8,427			17,033			17,390
Loss (gain) on disposal of assets		188			(4,480	)		297			(5,258	)
Store pre-opening		326			166			650			188
Impairment of long-lived assets		127			295			127			295
Store lease termination and closure costs		(56	)		40			64			62
Other operating, net		245			1,333			516			2,039
Total costs and operating expenses		24,088			47,665			45,542			101,837
(Loss) income from operations		(2,548	)		6,461			(5,248	)		4,793
Other income (expense), net:
Interest income		74			14			145			29
Interest expense		(59	)		(68	)		(118	)		(109	)
Total other income (expense), net		15			(54	)		27			(80	)
(Loss) income before income taxes		(2,533	)		6,407			(5,221	)		4,713
Income tax benefit (expense)		54			(57	)		(78	)		(83	)
Net (loss) income		(2,479	)		6,350			(5,299	)		4,630
Less: Net income attributable to noncontrolling interest		-			21			-			52
Net (loss) income attributable to Jamba, Inc.	$	(2,479	)	$	6,329		$	(5,299	)	$	4,578
Weighted-average shares used in the computation of earnings (loss) per share attributable to Jamba, Inc.
Basic		15,168,348			16,073,667			15,126,192			16,222,276
Diluted		15,168,348			16,573,444			15,126,192			16,723,127
(Loss) earnings per share attributable to Jamba, Inc. common stockholders
Basic	$	(0.16	)	$	0.39		$	(0.35	)	$	0.28
Diluted	$	(0.16	)	$	0.38		$	(0.35	)	$	0.27

See Notes to Condensed Consolidated Financial Statements.

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JAMBA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	26-Week Period Ended
(Dollars in thousands)	June 28, 2016			June 30, 2015
Cash flows used in operating activities:
Net (loss) income	$	(5,299	)	$	4,630
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		3,176			3,217
Store closure costs and gain on disposals		410			(6,140	)
Jambacard breakage income		(1,645	)		(1,996	)
Gain on contingent consideration		-			(156	)
Gain on sale of investment in joint venture		-			(662	)
Stock-based compensation		1,698			2,626
Bad debt and purchase obligation reserves		-			1,009
Deferred rent		(820	)		(631	)
Loss on investment		26			204
Changes in operating assets and liabilities:
Receivables		4,673			(779	)
Inventories		114			(80	)
Prepaid expenses and other current assets		2,315			(408	)
Other long-term assets		1,026			(55	)
Accounts payable		(2,558	)		(2,842	)
Accrued compensation and benefits		857			(1,340	)
Workers’ compensation and health insurance reserves		(289	)		443
Accrued jambacard liability		(2,431	)		(4,757	)
Accrued expenses		(1,738	)		1,551
Other current liabilities		(909	)		623
Other long-term liabilities		(976	)		299
Net cash used in operating activities		(2,370	)		(5,244	)
Cash flows (used in) provided by investing activities:
Capital expenditures		(2,018	)		(2,102	)
Proceeds from disposal of assets		-			12,191
Net cash (used in) provided by investing activities		(2,018	)		10,089
Cash flows provided by (used in) financing activities:
Payment on capital lease obligations		(2	)		-
Payments for treasury shares		-			(9,823	)
Proceeds pursuant to stock issuance		433			1,222
Payments to noncontrolling interest		-			(52	)
Proceeds from sale to noncontrolling interest		-			(24	)
Net cash provided by (used in) financing activities		431			(8,677	)
Net decrease in cash and cash equivalents		(3,957	)		(3,832	)
Cash and cash equivalents at beginning of period		19,730			17,750
Cash and cash equivalents at end of period	$	15,773		$	13,918
Supplemental cash flow information:
Cash paid for interest	$	12		$	20
Cash paid for income taxes	$	10		$	-
Noncash investing and financing activities:
Property, fixtures and equipment in accounts payable	$	555		$	387

See Notes to Condensed Consolidated Financial Statements.

5

JAMBA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. DESCRIPTION OF BUSINESS

Business

Jamba, Inc. consummated its initial public offering in July 2005. On March 10, 2006, Jamba, Inc. entered into an Agreement and Plan of Merger with Jamba Juice Company (the “Merger Agreement”). On November 29, 2006 (the “Merger Date”), Jamba, Inc. consummated the merger with Jamba Juice Company (the “Merger”) whereby Jamba Juice Company, which first began operations in 1990, became its wholly owned subsidiary.

Jamba, Inc. through its wholly-owned subsidiary, Jamba Juice Company, is a healthy, active lifestyle brand with a robust expanding global business driven by a portfolio of franchised and company-owned Jamba Juice^® stores and licensed JambaGO^® and Jamba Juice Express™ formats. The Jamba^® brand includes innovative product platforms and both licensed and company driven consumer packaged goods. The Company is a leading restaurant retailer of “better-for-you” specialty food and beverage offerings which include great tasting, whole fruit smoothies, fresh squeezed juices and juice blends, Energy Bowls™, and a variety of food items including, hot oatmeal, breakfast wraps, Artisan Flatbreads™, baked goods, and snacks. Jamba Juice Company continues to expand the Jamba brand by direct selling of consumer packaged goods (“CPG”) products, and by licensing its trademarks for CPG products sold through retail channels such as grocery stores, warehouse clubs, and convenience stores. The Company’s headquarters are located in Emeryville, California and will be relocated to Frisco, Texas by the end of fiscal 2016.

As of June 28, 2016, there were 885 Jamba Juice stores globally, consisting of 68 Company-owned and operated stores (“Company Stores”), 751 franchisee-owned and operated stores (“Franchise Stores”) in the United States, and 66 Franchise Stores in international locations (“International Stores”). The JambaGO^® business consists of approximately 2,000 licensed units located across the United States. JambaGO^® units are typically installed in K-12 schools, colleges, universities, Target Cafes, as well as other captive venues.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and consolidation 

 The accompanying unaudited condensed consolidated financial statements of Jamba, Inc. have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q. The December 29, 2015 Condensed Consolidated Balance Sheets was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The results of the 13-week or 26-week periods ended June 28, 2016 are not necessarily indicative of the results of operations to be expected for the entire fiscal year.

The condensed consolidated financial statements include the accounts of the Company and its direct or indirect subsidiary, Jamba Juice Company. The accounts of Jamba Juice Southern California, LLC (“JJSC”) are included through April 28, 2015, when the Company sold its 88% interest in JJSC to the holder of JJSC’s noncontrolling interest. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications were made to the Company’s prior financial statements to conform to current year presentation. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 29, 2015.

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Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

Comprehensive Income

Comprehensive income is defined as the change in equity during a period from transactions and other events, excluding changes resulting from investments from owners and distributions to owners. The Company currently has no components of comprehensive income other than net income, therefore no separate statement of comprehensive income is presented.

Earnings (Loss) Per Share

Earnings (loss) per share is computed in accordance with Accounting Standards Codification (“ASC”) 260, Earnings per Share. Basic earnings (loss) per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted-average number of common shares and potentially dilutive securities, which includes preferred stock outstanding, outstanding warrants and outstanding options and restricted stock awards granted under the Company’s stock option plans.

Anti-dilutive common stock equivalents totaling 2.0 million and 1.9 million were excluded from the calculation of diluted weighted-average shares outstanding for the 13-week and 26-week periods ended June 28, 2016, respectively.  Anti-dilutive common stock equivalents totaling 2.3 million and 1.9 million were excluded from the calculation of diluted weighted-average shares outstanding for the 13-week and 26-week periods ended June 30, 2015, respectively. 

Fair Value Measurement

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1: Quoted prices are available in active markets for identical assets or liabilities.

Level 2: Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable.

Level 3: Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions that market participants would use in pricing.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued amended guidance on revenue from contracts with customers which amended the existing accounting standards for revenue recognition. Accounting Standards Update (“ASU”) 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective date to fiscal years beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of the fiscal year beginning after December 15, 2016 (including interim reporting periods within those periods). The amendment guidance may be applied retrospectively to each prior period presented with the option to apply practical expedients or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently assessing the impact this ASU will have on its Consolidated Financial Statements and related disclosure.

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In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance on management’s responsibility to evaluate whether there is substantial doubt about the ability to continue as a going concern and to provide related disclosures. This guidance will be effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. The Company does not expect the adoption of this guidance to have a significant impact on its Consolidated Financial Statements and related disclosure.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. ASU 2015-11 applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost method and requires measurement of that inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance will be effective for the Company beginning fiscal year 2017, with early adoption permitted. The Company does not expect the adoption of this guidance to have a significant impact on its Consolidated Financial Statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The guidance will be effective for the Company beginning fiscal year 2018. The Company does not expect the adoption of this guidance to have a significant impact on its Consolidated Financial Statements and related disclosure.

In February 2016, the FASB issued ASU 2016-02, Leases, which will require lessees to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. The guidance will be effective for the Company beginning fiscal year 2019, with early adoption permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently assessing the impact the adoption of this ASU will have on its Consolidated Financial Statements and related disclosure.

 In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products. The new guidance creates an exception under ASC 405-20, Liabilities-Extinguishments of Liabilities, to derecognize financial liabilities related to certain prepaid stored-value products using a revenue-like breakage model. The guidance will be effective for the Company beginning fiscal year 2018, with early adoption permitted. This guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently assessing what impact, if any, the adoption of this ASU will have on its Consolidated Financial Statements and related disclosure.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance will be effective for the Company beginning fiscal year 2017, with early application permitted. The Company is currently assessing the impact the adoption of this ASU will have on its Consolidated Financial Statements and related disclosure.

3. ASSETS HELD FOR SALE

In November 2014, the Company announced plans to transition to an asset light model through the refranchising of Company stores. In connection with that planned transition, 99 Company Stores and one unopened company store met the criteria as assets held for sale as of December 30, 2014. During fiscal 2015, an additional 125 stores met the criteria to be classified as assets held for sale increasing the total to 224 stores of which 176 stores were refranchised from assets held for sale. The 48 remaining stores were reclassified out of assets held for sale back to their original asset group based on management’s decision to retain the stores. As of June 28, 2016 and December 29, 2015 there are no stores in assets held for sale and $0 is reflected as held for sale in the accompanying Condensed Consolidated Balance Sheets.

Gain or loss on the disposal of assets held for sale is recorded within gain on disposal of assets in the condensed consolidated statement of operations. The Company recognized a loss on disposal of assets of $0.2 million and $0.3 million during the 13-week and 26-week periods ended June 28, 2016, respectively.

The Company sold 49 stores and 53 stores for a total price of $11.3 million and $13.7 million in the 13-week and 26-week periods ended June 30, 2015, respectively. The Company recorded a gain of $4.5 million and $5.3 million from the disposal of assets held for sale primarily relating to refranchising during the 13-week and 26-week periods ended June 30, 2015, respectively. 

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4. FAIR VALUE MEASUREMENT

Financial Assets and Liabilities

The following instruments are not measured at fair value on the Company’s consolidated balance sheets but require disclosure of their fair values: cash and cash equivalents, accounts receivables, notes receivable and accounts payable. The estimated fair value of such instruments, excluding notes receivable, approximates their carrying value as reported on the consolidated balance sheets due to the short-term nature. The estimated fair value of notes receivable approximates its carrying value due to the interest rates aligning with market rates. The fair value of such financial instruments is determined using the income approach based on the present value of estimated future cash flows. The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1.

Non-financial Assets and Liabilities

The Company’s non-financial assets and liabilities primarily consist of long-lived assets, trademarks and other intangibles, and are reported at carrying value. They are not required to be measured at fair value on a recurring basis. The Company evaluates long-lived assets for impairment when facts and circumstances indicate that their carrying values may not be recoverable. Trademarks and other intangibles are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

As a result of the quarterly impairment reviews, the Company recognized total losses of $0.1 million and $0.3 million were recognized for the 26-week periods ended June 28, 2016 and June 30, 2015, respectively, included in impairment of long-lived assets.  The losses in fiscal year 2016 relate to impairment of fixed assets of an individual store.

5. CREDIT AGREEMENT

On February 14, 2012, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association (the “Lender”) which, as amended on November 1, 2012, July 22, 2013, November 4, 2013, December 30, 2014, and December 29, 2015 (as amended, the “Credit Agreement”), makes available to the Company a revolving line of credit in the amount of $10.0 million. The outstanding balance under the Credit Agreement bears interest at a LIBOR Market Index Rate based upon the rate for one month U.S. dollar deposits, plus 2.50% per annum. Under the terms of the Credit Agreement, the Company is required to either maintain minimum cash or consolidated EBITDA levels, minimum levels of tangible net worth and a minimum fixed charge coverage ratio. The credit facility is subject to customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company with respect to liens, indebtedness, guaranties, investments, distributions, mergers and acquisitions and dispositions of assets. The credit facility is evidenced by a revolving note made by the Company in favor of the Lender, is guaranteed by the Company and is secured by substantially all of its assets including the assets of its subsidiaries and a pledge of stock of its subsidiaries. In addition, the Credit Agreement replaced restricted cash requirements established in prior periods, as the line of credit also collateralizes the Company’s outstanding letters of credit of $0.4 million as of June 28, 2016.

During the 13-week period ended June 28, 2016, there were no borrowings under the Credit Agreement. To acquire the credit facility, the Company incurred upfront fees which are being amortized over the term of the Credit Agreement. As of June 28, 2016 and December 29, 2015, the unamortized commitment fee amount was not material. As of June 28, 2016, the Company was not in compliance with all the financial covenants to the Credit Agreement, which will restrict any future borrowings. Subsequent to the quarter end, the Credit Agreement expired on July 22, 2016, with no amounts drawn on the credit facility since its inception. After the expiration of the Credit Agreement, the Company subsequently collateralized the existing letters of credit with a restricted cash collateral account.

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6. SHARE-BASED COMPENSATION

On May 17, 2016, at its 2016 Annual Meeting of Stockholders, the Company’s stockholders, upon the recommendation of the Board of Directors, approved an additional 900,000 shares of common stock to be offered or issued under the Company’s 2013 Equity Incentive Plan.

Stock Options — A summary of stock option activity under the Plans as of June 28, 2016, and changes during the 26-week period then ended are presented below (shares in thousands):

						Weighted-Average
	Number of			Weighted-Average		Contractual Term		Aggregate
Options	Shares			Exercise Price		Remaining (years)		Intrinsic Value
Balance at December 29, 2015		1,530		$	12.42		5.76	$	3,960
Granted		282			13.41
Exercised		(111	)		3.89
Canceled		(194	)		15.25
Balance at June 28, 2016		1,507		$	12.87		6.12	$	1,400
Vested and expected to vest—June 28, 2016		1,358		$	12.78		5.82	$	1,400
Exercisable—June 28, 2016		625		$	11.71		2.23	$	1,400

During the 13-week and 26-week periods ended June 28, 2016, stock options of 132,000 and 282,000 were granted under the 2013 Equity Incentive Plan at a weighted average grant date fair value of $4.73 and $4.74, respectively. The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	26-Week Period Ended
	June 28, 2016
Risk-free interest rate		1.36	%
Expected term (in years)		5.19
Expected volatility		44.3	%
Expected dividend yield		0	%

No options were granted during the 13-week period ended June 30, 2015. During the 26-week period ended June 30, 2015, stock options of 1.0 million were granted under the 2013 Equity Incentive Plan at a weighted-average grant date fair value of $6.04.  

Restricted Stock — Information regarding activities during the 26-week period ended June 28, 2016 for outstanding restricted stock units (RSUs) granted under the 2013 Equity Incentive Plan is as follows (shares in thousands):

				Weighted-Average
	Number of			Grant Date
RSUs	Shares			Fair Value
Non-vested at December 29, 2015		190		$	14.09
Granted		474			3.76
Vested		(58	)		14.51
Forfeited		(25	)		13.96
Non-vested at June 28, 2016		581		$	5.63

During the 13-week and 26-week periods ended June 28, 2016, RSUs of 473,500 were granted under the 2013 Equity Incentive Plan at a weighted average grant date fair value of $3.76.The grant date fair value is primarily driven by achieving the growth rate targets of the market-based restricted stock units. During the 26-week period ended June 30, 2015, RSUs of 35,000 shares were granted under the 2013 Equity Incentive Plan at a weighted average grant date fair value of $15.86.

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Performance Stock — No performance stock units were granted or vested during the 13-week or 26-week periods ended June 28, 2016 or June 30, 2015. During the 26-week period ended June 28, 2016, PSUs of 1,300 were issued and PSUs of 1,300 were canceled.During the 26-week period ended June 30, 2015, PSUs of 22,800 were canceled.

Share-based compensation expense, which is included in general and administrative expenses, was $0.9 million and $1.7 million for the 13-week and 26-week periods ended June 28, 2016 and $1.5 million and $2.6 million for the 13-week and 26-week periods ended June 30, 2015, respectively. At June 28, 2016, unvested share-based compensation for stock options and restricted stock awards, net of forfeitures, totaled $4.9 million. This expense will be recognized over the remaining weighted average vesting period of approximately 2 years.

In January 2016, in connection with the hiring of the Company’s new Chief Executive Officer, the Company agreed to grant equity awards which included an award of 350,000 market-based restricted stock units vesting upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30% over a three-year period, 50,000 “premium-priced” stock options with an exercise price determined based on a 15% compound annual stock price growth rate over three years, and 150,000 stock options granted at 100% of fair market value on the grant date. The 150,000 stock options granted at 100% of fair market value on the grant date were granted in March 2016 and the 50,000 “premium-priced” stock options were granted in April 2016. The 350,000 market-based restricted stock units were granted in May 2016.

During the 13-week period ended June 28, 2016, in connection with employee hiring, the Company agreed to grant inducement awards which included an award of 85,000 market-based restricted stock units vesting upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30%, 75,000 stock options granted at 100% of fair market value on the grant date, and 6,000 time-based restricted stock units. These equity awards vest over a three-year period.

7. STOCK REPURCHASES

On October 29, 2014, the Company’s Board of Directors authorized the repurchase of up to $25.0 million of shares of common stock over an 18-month period (the "2014 Stock Repurchase Program"). The Company’s Board of Directors authorized an increase to the Stock Repurchase Program of $15.0 million to a total of $40.0 million in May 2015 and an additional $5.0 million to a total of $45.0 million in September 2015, which expired on May 4, 2016. During the 13-week and 26-week periods ended June 28, 2016, the Company did not repurchase shares. Shares repurchased under the Stock Repurchase Program are considered treasury stock until retired. The Company's total shares of common stock repurchased since inception through June 28, 2016 was 2.9 million, at an average price per share of $13.99.

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8. OTHER OPERATING, NET

For the 13-week periods ended June 28, 2016 and June 30, 2015, the components of other operating, net were as follows (in thousands):

	13-Week Period Ended						26-Week Period Ended
	June 28, 2016			June 30, 2015			June 28, 2016			June 30, 2015
Jambacard breakage income	$	(940	)	$	(974	)	$	(1,645	)	$	(1,996	)
Jambacard expense		224			128			384			238
CPG and JambaGO® direct expense		518			633			1,151			1,243
Franchise discount expense		120			165			313			439
Franchise sublease (income) expense		(36	)		125			(297	)		84
Franchise other expense		287			197			359			533
Bad debt		-			785			-			798
International expense		158			206			324			359
Loss on investments		-			-			26			204
Other (income) expense		(86	)		68			(99	)		137
Total other operating, net	$	245		$	1,333		$	516		$	2,039

9. COMMITMENTS AND CONTINGENCIES

The Company is a defendant in litigation arising in the normal course of business. Although there can be no assurance as to the ultimate disposition of these matters, it is the opinion of the Company’s management, based upon the information available at this time, that the expected outcome of these matters, individually or in the aggregate, will not have a material adverse effect on the results of operations, liquidity or financial condition of the Company.

10. RELATED-PARTY TRANSACTIONS

During the 26-week period ending June 28, 2016, the Company received $0.1 million from Country Pure Foods related to vendor supply chain management fees and approximately $0.2 million from Sodexo related to licensing fees for Jamba units operated by Sodexo. One Jamba Juice Director is on the Board of Directors for Country Pure Foods and another Jamba Juice Director is an executive with Sodexo.

11. SUBSEQUENT EVENTS

On July 6, 2016 the Company entered into a development agreement with a franchisee for the development of 20 Jamba Juice stores within the state of Michigan over the next eight years. The agreement includes a $0.2 million development fee to be received in the third quarter of fiscal year 2016.

On July 8, 2016, the Company entered into an agreement with the state of Texas to receive economic development grants of up to $0.8 million. These grants are contingent upon the Company fulfilling new full-time job and occupancy requirements in Texas from 2017 through 2024.

On July 22, 2016, the Company’s Credit Facility with Wells Fargo expired. Since the inception of the line of credit, the Company did not borrow on the facility and utilized it primarily for collateral against letters of credit. The existing letters of credit balance of $0.4 million will be collateralized by cash.

On August 4, 2016 the Company announced that its Board of Directors has approved the terms of a share repurchase plan. Pursuant to the program, the Company is authorized to repurchase up to $20 million of its common stock subject to available cash resources over the next two year period.  Under the program, the Company may repurchase shares on the open market, through privately negotiated transactions or otherwise, at times, in amounts and at prices considered appropriate by the Company.  The number of shares to be purchased and the timing of any purchases are subject to various factors, including the price of the Company’s common stock, the Company’s capital position, the amount of retained earnings of the Company, general market conditions and other economic factors and corporate and regulatory requirements, and may be modified, suspended or terminated at any time.

On August 5, 2016, the Company appointed Ms. Marie Perry as Executive Vice President, Chief Financial and Administrative Officer of the Company succeeding Ms. Karen Luey as Chief Financial and Administrative Officer of the Company.  The Company’s wholly-owned subsidiary Jamba Juice Company previously entered into an employment agreement with Ms. Perry dated May 2, 2016 described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2016 and filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q.  Jamba Juice Company also entered into a Transition Services Agreement dated August 3, 2016 with Ms. Luey.  See Item 5 of Part II for additional details.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis in conjunction with our financial statements and related notes included elsewhere in this report. Except for historical information, the discussion in this report contains certain forward-looking statements that involve risks and uncertainties. We have based these forward-looking statements on our current expectations and assumptions about future events. In some cases, you can identify forward-looking statements by terminology, such as “may,” “should,” “could,” “predict,” “potential,” “continue,” “expect,” “anticipate,” “future,” “intend,” “plan,” “believe,” “estimate,” “forecast” and similar expressions (or the negative of such expressions). Forward-looking statements include, but are not limited to, statements concerning projected new store openings, revenue growth rates, and capital expenditures. Forward-looking statements are based on our beliefs as well as assumptions based on information currently available to us, including financial and operational information, the volatility of our stock price, and current competitive conditions. As a result, these statements are subject to various risks and uncertainties. For a discussion of material risks and uncertainties that the Company faces, see the discussion titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2015.

JAMBA, INC. OVERVIEW

Jamba, Inc. through its wholly-owned subsidiary, Jamba Juice Company, is a healthy, active lifestyle brand with a robust global business driven by a portfolio of franchised and company-owned Jamba Juice^® stores and licensed JambaGO^® and Jamba Juice Express™ formats. The Jamba^® brand includes innovative product platforms and both licensed and company driven consumer packaged goods. We are a leading restaurant retailer of “better-for-you” specialty beverage and food offerings which include great tasting, whole fruit smoothies, fresh squeezed juices and juice blends, Energy Bowls™, and a variety of food items including, hot oatmeal, breakfast wraps, sandwiches, Artisan Flatbreads™, baked goods, and snacks. Jamba Juice Company continues to expand the Jamba brand by direct selling of CPG products, and by licensing its trademarks for CPG products sold through retail channels such as grocery stores, warehouse clubs, and convenience stores.

Jamba, Inc. was incorporated in January 2005, and went public through an initial public offering later that year. In November 2006, the Company completed its acquisition of Jamba Juice Company, which first began operations in 1990. As of June 28, 2016, there were 885 Jamba Juice stores globally, consisting of 68 Company Stores, 751 Franchise Stores in the United States, and 66 International Stores.

All references to store counts, including data for new store openings, are reported net of related store closures, unless otherwise noted.

EXECUTIVE OVERVIEW

Key Overall Strategies      

During the second quarter we announced the planned relocation of the Jamba Support Center from Emeryville, California to Frisco, Texas, currently scheduled to occur at the end of the fiscal year. The move will provide several advantages to Jamba, including lower overhead costs, access to a strong pool of restaurant talent, and a more central location to our franchisees as we continue to build markets in the eastern U.S.. The move and recent transition in leadership provide a clear opportunity to reset the organization with unwavering focus on our five key strategies:

· Build an Iconic Brand

· Establish a Customer and Store-Centric Operating Environment

· Drive Sales and Transactions through Innovation

· Improve Store Profitability through Simplification

· Expand Our Global Footprint

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2016 Second Quarter Financial Summary

· Total revenue for the quarter decreased 60.2% to $21.5 million from $54.1 million for the prior year, primarily due to the reduction in the number of Company Stores as part of the Company’s refranchising strategy.

· Company Store comparable sales increased 5.7% for the quarter and Franchise Store comparable sales increased 4.0% for the quarter compared to the prior year. System-wide comparable sales (includes both Company and Franchise Stores) increased 4.2% for the quarter. System-wide and Franchise Store comparable store sales are non-GAAP financial measures and represent the change in year-over-year sales, for stores opened for at least one full fiscal year.

· Net (loss) income attributable to Jamba, Inc. was $(2.5) million compared to $6.3 million for the prior year primarily due to expenses related to non-recurring transition costs in 2016. Included in the 2015 results were $4.5 million related to gains recognized from refranchising.

· General and administrative expenses for the 13-weeks ended June 28, 2016 increased 11.8% to $9.4 million compared with $8.4 million for the prior year period, primarily due to expenses related to non-recurring transition costs in 2016 of $3.8 million.

· Total Company-owned stores at the end of the second quarter of 2016 was 68, compared to 206 at the end of the second quarter of 2015.

· At June 28, 2016, there were 68 Company Stores and 817 Franchise Stores, of which 751 are located domestically and 66 are located internationally.

Fiscal 2016 Second Quarter Business Highlights

Build an Iconic Brand

During the second quarter, our brand-building efforts included the introduction of innovative smoothie, juice and bowl options that have been well received by our guests. Limited time only products featuring refreshing tropical flavors and seasonal fruit are two of the platforms we leveraged in order to drive customers into our stores. We also amplified our local marketing efforts, focusing on both established and emerging markets with strong activation with local schools, businesses and community groups. We improved our consumer messaging through our “Make it Real” campaign that reminds and educates guests that our products are hand-crafted and made from real fruits, vegetables, and other good stuff. Also in the second quarter, we gave consumers more reasons to celebrate Cinco de Mayo and the Summer Solstice with promotional offers designed to drive traffic.

We continued to maintain our heritage as a strong supporter of the communities we serve. Through our corporate social responsibility initiatives under the banner of “Team Up For a Healthy Whirl’d”, we increased our focus in local markets on fundraising, hiring, local sponsorships and supporting youth sports. In partnership with DonorsChoose.org, we provided funding for school athletic equipment in several Jamba markets, and we ran our annual garden grant program through our association with KidsGardening.

To further enhance the customer experience in our stores, we expanded programs with strategic partners in the digital and social media space, including Spendgo, Fishbowl, Google, and others. Membership in our Jamba Insider Rewards (“JIR”) program continues to add to the more than three million existing loyalty members.

Establish a Customer and Store-Centric Operating Environment

During the second quarter, we continued our transition toward becoming a top tier franchisor by improving our support to our stores and to our customers. During our 2016 Franchise Leadership Conference held in March, we emphasized that focus with all of our partners and team members and reinforce our commitment to a store-centric operating philosophy. In addition to our great-tasting products, we have an ongoing mission to provide customers with an enhanced in-store experience. Also, in the second quarter, we successfully executed an update to the Jamba Juice mobile application (“app”) that was launched in the second half of 2015. Among the new options, Jamba guests now have access to regionalized menus and can customize smoothies, juices and bowls as part of their enhanced order ahead experience.

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Driving Sales and Transactions through Innovation

Our commitment to the ongoing development of better-for-you beverage and food options for consumers continues to drive traffic into our stores with the introduction in the second quarter of our new, refreshing “Island Getaway Smoothies”, Gotta Guava™ Smoothie and tropical Sunburst™ Smoothie. We also introduced our line of Protein Smoothies in our California stores to satisfy customers’ needs for replenishment after workouts and for meal replacements and Strawberry Fruit Refresher juice for healthy summer refreshment. Protein Smoothies will launch in all remaining stores in August.

Jamba continues to be the number one smoothie brand in the country. In addition, our made-to-order, fresh fruit and vegetable juice platform is now available in over 550 locations, making Jamba the leading retailer of fresh-squeezed, made-to-order juices. This platform is comprised of made-to-order juices and smoothies blended with fresh, whole fruits and vegetables like kale, apples, cucumbers, ginger and chia seeds. We have also expanded our line of made-to-order bowls to include a Pitaya Energy offering, which are now available in stores nationwide. Jamba Energy Bowls, served in convenient portable servings, are a nutritious blend of real, whole fruit and soymilk or fresh Greek yogurt, topped with an assortment of dry toppings and fresh fruits.

Our product development will continue to be guided by our commitment to providing consumers with fresh, nutritional ingredients, great-tasting beverages and food, at affordable prices. We are confident that our pipeline of new product remains strong for the remainder of 2016 and beyond. We expect our new products will continue to drive new and existing customers into our stores and will help franchise profitability through increased transactions. Our on-trend, better-for-you positioning continues to make Jamba a leading healthy lifestyle brand.

Improve Store Profitability through Simplification

With the completion of our move to a franchise business model, we are highly focused on improving franchisee profitability and 4-wall store margins. During the second quarter of 2016, we continued to operationalize several key initiatives that were launched in 2015, which make a significant positive impact on costs of goods and labor. Continuous improvements in speed of service are helping to offset minimum wage increases to help manage labor costs and improve customer satisfaction. Our supply chain optimization efforts have significantly aided in offsetting the inflationary impact of commodity price increases.

In addition, during the second quarter of 2016, we continued with the rollout of our new and improved BlendTec blenders. The new blender technology improves the quality of our finished products, improves the speed of service and reduces the noise levels within our stores. This rollout will continue across the system for the balance of 2016.

Expand Our Global Footprint

As of June 28, 2016, there were 885 Jamba Juice^® stores globally, represented by 68 Company Stores and 751 Franchise Stores, of which 43 were Jamba Juice Express™ in the United States, and 66 International Stores. The system is comprised of approximately 92% Franchise and International Store locations and 8% Company Store locations. As of June 28, 2016, we had approximately 2,000 JambaGO^® units in operation nationwide.

In July 2016 we celebrated the grand opening of the Jamba Juice Innovation Bar at our newly remodeled Pasadena, CA location. The one-of-a-kind concept store will feature innovative beverage and food offerings unique to the space and serve as a learning lab where we can create and test new beverage and food concepts.

A primary growth driver of our enterprise will be global new unit development. During the quarter, we opened 10 U.S. locations, including one co-branded pilot location with Bruegger’s and one Jamba Juice Express™ unit. At the end of the second quarter of 2016, we had international master development agreements with partners in Indonesia, Thailand, South Korea, the Philippines, Mexico and the countries of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates). During the second quarter, we opened two new locations in the U.A.E. and South Korea. We expect that our new international franchisees in Indonesia and Thailand will open stores before the end of fiscal 2016.

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In July 2016 we entered into a development agreement with an industry franchising leader to develop 20 locations in the greater Detroit market. The agreement includes an accelerated growth plan over the first three years of the eight year agreement.

Our shift to an asset-light business model means the Jamba system is now comprised of greater than 90% franchise-locations, up from 70% in 2014 following the completion of our refranchising initiatives in 2015. This transition in our core business model will continue to facilitate a more streamlined cost structure enabling faster execution and an enhanced focus on our franchisees and our growth initiatives.

Support Center Relocation

On May 4, 2016, we announced the relocation of our corporate headquarters from Emeryville, California to Frisco, Texas, a suburb of Dallas. We expect to complete the relocation in the next six months. The move is intended to, among other things, reduce costs, attract and retain talent and provide a more central location for our market expansion plans. In connection with this relocation, we expect to incur charges of approximately $7.8 million, associated with personnel relocation, employee attrition, retention, severance and replacement, office relocation and other costs. These charges are expected to be incurred from the second quarter of fiscal year 2016 through the first quarter of 2017.

On July 19, 2016, we announced the hiring of our Chief Marketing Officer, Rachel Phillips-Luther who will start in August 2016. With the hire of Rachel Phillips-Luther, our Executive Team will be fully in place for our relocation to Frisco, Texas.

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RESULTS OF OPERATIONS — 13-WEEK PERIOD ENDED JUNE 28, 2016 AS COMPARED TO 13-WEEK PERIOD ENDED JUNE 30, 2015 (UNAUDITED)

	13-Week Period Ended June 28, 2016			% (1)			13-Week Period Ended June 30, 2015			% (1)
Revenue:
Company stores	$	13,874			64.4	%	$	48,360			89.3	%
Franchise and other revenue		7,666			35.6	%		5,766			10.7	%
Total revenue		21,540			100.0	%		54,126			100.0	%
Costs and operating expenses:
Cost of sales		3,321			23.9	%		11,474			23.7	%
Labor		4,668			33.6	%		14,876			30.8	%
Occupancy		1,900			13.7	%		6,131			12.7	%
Store operating		2,272			16.4	%		8,059			16.7	%
Depreciation and amortization		1,674			7.8	%		1,344			2.5	%
General and administrative		9,423			43.7	%		8,427			15.6	%
Loss (gain) on disposal of assets		188			0.9	%		(4,480	)		(8.3	)%
Store pre-opening		326			1.5	%		166			0.3	%
Impairment of long-lived assets		127			0.6	%		295			0.5	%
Store lease termination and closure costs		(56	)		(0.3	)%		40			0.1	%
Other operating, net		245			1.1	%		1,333			2.5	%
Total costs and operating expenses		24,088			111.8	%		47,665			88.1	%
(Loss) income from operations		(2,548	)		(11.8	)%		6,461			11.9	%
Other income (expense), net:
Interest income		74			0.3	%		14			0.0	%
Interest expense		(59	)		(0.2	)%		(68	)		(0.1	)%
Total other income (expense), net		15			0.1	%		(54	)		(0.1	)%
(Loss) income before income taxes		(2,533	)		(11.8	)%		6,407			11.8	%
Income tax benefit (expense)		54			0.3	%		(57	)		(0.1	)%
Net (loss) income		(2,479	)		(11.5	)%		6,350			11.7	%
Less: Net income attributable to noncontrolling interest		-			0.0	%		21			0.0	%
Net (loss) income attributable to Jamba, Inc.	$	(2,479	)		(11.5	)%	$	6,329			11.7	%

⁽¹⁾ Cost of sales, labor, occupancy and store operating percentages are calculated using Company Stores revenue. All other line items are calculated using total revenue.

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Revenue

(in thousands)

	13-Week Period Ended June 28, 2016		% of Total Revenue			13-Week Period Ended June 30, 2015		% of Total Revenue
Revenue:
Company stores	$	13,874		64.4	%	$	48,360		89.3	%
Franchise and other revenue		7,666		35.6	%		5,766		10.7	%
Total revenue	$	21,540		100.0	%	$	54,126		100.0	%

Total revenue is comprised of revenue from Company Stores, royalties and fees from Franchise Stores in the U.S. and from International Stores, income from JambaGO^® locations, license income from sales of Jamba-branded CPG products and direct sales of CPG products. Total revenue for the 13-week period ended June 28, 2016 was $21.5 million, a decrease of $32.6 million, or 60.2%, compared to $54.1 million for the 13-week period ended June 30, 2015. The decrease in total revenue was primarily due to a decrease in Company Stores for the quarter compared to the prior year. For the quarter ended June 28, 2016 we had 68 Company Stores compared to 206 in the prior year.

Company Store revenue

Company Store revenue for the 13-week period ended June 28, 2016 was $13.9 million, a decrease of $34.5 million or 71.3%, compared to Company Store revenue of $48.4 million for the 13-week period ended June 30, 2015. The decrease in Company Store revenue was primarily due to a decrease in the number of Company Stores primarily as a result of our refranchising activities, partially offset by an increase in Company Store comparable sales as illustrated by the following table:

	Company Store Decrease in Revenue
	(in thousands)
Second Quarter 2016 vs. Second Quarter 2015:
Company Stores comparable sales increase	$	738
Reduction in number of Company Stores, net		(35,224	)
Total change in Company Store revenue	$	(34,486	)

Company Store comparable sales increased $0.7 million for the 13-week period ended June 28, 2016, or 5.7%, attributable to an increase of 4.3% in average check and an increase in transaction count of 1.4% as compared to the same period in the prior year. Company Store comparable sales represents the change in year-over-year sales for all Company Stores opened for at least a full fiscal year. As of June 28, 2016, 98.5% of our Company Stores had been open for at least one full year.

Franchise and other revenue

Franchise and other revenue was $7.7 million, an increase of $1.9 million or 33.0% for the 13-week period ended June 28, 2016 compared to $5.8 million for the 13-week period ended June 30, 2015. The increase was primarily due to the increase in royalties associated with the net increase in the number of Franchise and International Stores in addition to the Franchise Store comparable store sales increase of 4.0%.

The aggregate number of Franchise and International Stores as of June 28, 2016 and June 30, 2015 was 817 and 669, respectively.

Cost of Sales

Cost of sales is mostly comprised of fruit, dairy, and other products used to make smoothies and juices, paper products, and delivery fees at Company Stores. As a percentage of Company Store revenue, cost of sales slightly increased to 23.9% for the 13-week period ended June 28, 2016, compared to 23.7% for the 13-week period ended June 30, 2015. The increase in cost of sales as a percentage of Company Store revenue was primarily due to higher product mix shift related to the expanded bowl menu (approximately 0.9%) offset by a decrease related to price increases taken in 2015 (0.7%). Cost of sales for the 13-week period ended June 28, 2016 was $3.3 million, a decrease of $8.2 million, or 71.1%, compared to $11.5 million for the 13-week period ended June 30, 2015, primarily related to the lower Company Store base as a result of refranchising initiatives.

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Labor

Labor costs are comprised of store management salaries and bonuses, hourly team member payroll, training costs and other associated fringe benefits. As a percentage of Company Store revenue, labor costs were 33.6% for the 13-week period ended June 28, 2016 compared to 30.8% for the 13-week period ended June 30, 2015. The increase was primarily attributable to an increase in California wage rate effective January 1, 2016 (approximately 1.7%) along with a shift in the store portfolio mix, resulting from refranchising activities, to Chicago stores with a higher labor percentage driven by lower sales volume (approximately 0.5%), and higher compensation incentive payout and fringe benefits (approximately 1.9%). This increase was partially offset by improved efficiencies in California stores, primarily driven by leverage on increased same-store sales (approximately 1.3%). Labor costs for the 13-week period ended June 28, 2016 were $4.7 million, a decrease of $10.2 million, or 68.6%, compared to $14.9 million for the 13-week period ended June 30, 2015, which is primarily due to the decrease in number of Company Stores as a result of our refranchising activities.

Occupancy

Occupancy costs include both fixed and variable portions of rent, common area maintenance charges, property taxes, licenses and property insurance for all Company Store locations. As a percentage of Company Store revenue, occupancy costs increased to 13.7% for the 13-week period ended June 28, 2016, compared to 12.7% for the 13-week period ended June 30, 2015. The increase in occupancy costs as a percentage of Company Store revenue was primarily due to the refranchising of Company Stores that carried a lower rent as a percentage of Company Store revenue. Occupancy costs for the 13-week period ended June 28, 2016 were $1.9 million, a decrease of $4.2 million, or 69.0%, compared to $6.1 million for the 13-week period ended June 30, 2015, which is primarily due to the decrease in number of Company Stores as a result of our refranchising activities.

Store Operating

Store operating expenses consist primarily of various store-level costs such as utilities, marketing, repairs and maintenance, credit card fees and other store operating expenses. As a percentage of Company Store revenue, total store operating expenses decreased to 16.4% for the 13-week period ended June 28, 2016, compared to 16.7% for the 13-week period ended June 30, 2015. The decrease in total store operating expenses as a percentage of Company Store revenue was primarily due to lower local store marketing costs as a result of timing differences (approximately 0.5%), lower donations (approximately 0.3%) and lower utilities (approximately 0.2%) partially offset by increased credit card usage and bank charges (approximately 0.7%). Store operating expenses for the 13-week period ended June 28, 2016 were $2.3 million, a decrease of $5.8 million or 71.8%, compared to $8.1 million for the 13-week period ended June 30, 2015.

Depreciation and Amortization

Depreciation and amortization expenses include the depreciation of fixed assets and the amortization of intangible assets. As a percentage of total revenue, depreciation and amortization increased to 7.8% for the 13-week period ended June 28, 2016, compared to 2.5% for the 13-week period ended June 30, 2015. The increase in depreciation and amortization as a percentage of total revenue was primarily due to the discontinuation of depreciation relating to stores in assets held for sale prior to their refranchising in the prior year and an increase in depreciation relating to capitalized information technology corporate programs and JambaGO^® equipment in the current year. Depreciation and amortization for the 13-week period ended June 28, 2016 was $1.7 million, an increase of $0.3 million, or 24.6%, compared to $1.3 million for the 13-week period ended June 30, 2015.

General and Administrative

General and administrative (G&A) expenses include costs associated with our corporate headquarters (in Emeryville, CA & Frisco, TX), field supervision, performance related incentives, outside and contract services, accounting and legal fees, travel and travel-related expenses, share-based compensation and other G&A expenses. Also included in G&A are non-recurring costs related to the move of the support center to Frisco, Texas, settlement, legal, and other transitional charges. Total G&A expenses for the 13-week period ended June 28, 2016 were $9.4 million, an increase of $1.0 million, or 11.8%, compared to $8.4 million for the 13-week period ended June 30, 2015. The increase in total G&A expenses was primarily due to transition costs relating to the relocation of the headquarters to Frisco, Texas. Payroll & payroll related expenses increased due to severance and retention bonuses (approximately $1.1 million) and professional fees associated with litigation and temporary help (approximately $0.5 million) offset by a decrease in share-based compensation expense (approximately $0.6 million).

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Loss (gain) on Disposal of Assets

Loss or (gain) on disposal of assets includes losses from disposal of assets and gains from the refranchising of Company Stores and sales of related furniture, fixtures and equipment. For the 13-week period ended June 28, 2016, loss on disposal of assets was $0.2 million compared to a $4.5 million gain for the 13-week period ended June 30, 2015, a change of $4.7 million. The change was primarily due to the gain on refranchising of Company Stores in the second quarter of 2015 relating to our refranchising initiative. The refranchising initiative was completed in the fourth quarter of fiscal 2015.

Store Pre-Opening

For the 13-week period ended June 28, 2016, store pre-opening expense was $0.3 million compared to $0.2 million for the 13-week period ended June 30, 2015, an increase of approximately $0.2 million. The increase was primarily due to the rent associated with a store closed for remodeling (approximately $0.2 million).

Impairment of Long-Lived Assets

For the 13-week period ended June 28, 2016 impairment of long-lived assets was $0.1 million compared to $0.3 million for the 13-week period ended June 30, 2015.

Store Lease Termination and Closure

For the 13-week period ended June 28, 2016, store lease termination and closure costs were a reversal of $0.1 million compared to less than $0.1 million for the 13-week period ended June 30, 2015.

Other Operating, Net

Other operating, net consists primarily of income from jambacard breakage, jambacard-related fees, franchise expense, international expense, gain/loss on investments, bad debt expense, and CPG and JambaGO^® activities. For the 13-week period ended June 28, 2016, other operating, net was $0.2 million compared to $1.3 million for the 13-week period ended June 30, 2015. Changes in the components of other operating, net include a decrease in bad debt (approximately $0.8 million), increase in franchise sublease income due to increase in subleased franchise stores (approximately $0.2 million), a decrease in CPG and JambaGO^® direct expense (approximately $0.1 million), and an increase in other income (approximately $0.2 million), partially offset by an increase in jambacard expense (approximately $0.1 million) and an increase in franchise other expense (approximately $0.1 million).

Income Tax Expense

We have recorded income tax benefit and expense for the 13-week periods ended June 28, 2016 and June 30, 2015, respectively. Our effective income tax rates were 2.5% and 1.0% for the 13-week periods ended June 28, 2016 and June 30, 2015, respectively. For the 13-week periods ended June 28, 2016 and June 30, 2015, the effective tax rates were primarily affected by pre-tax loss, foreign withholding and the U.S. alternative minimum taxes in the respective periods.

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RESULTS OF OPERATIONS — 26-WEEK PERIOD ENDED JUNE 28, 2016 AS COMPARED TO 26-WEEK PERIOD ENDED JUNE 30, 2015 (UNAUDITED)

	26-Week Period Ended June 28, 2016			% (1)			26-Week Period Ended June 30, 2015			% (1)
Revenue:
Company stores	$	25,827			64.1	%	$	96,088			90.1	%
Franchise and other revenue		14,467			35.9	%		10,542			9.9	%
Total revenue		40,294			100.0	%		106,630			100.0	%
Costs and operating expenses:
Cost of sales		6,283			24.3	%		23,881			24.9	%
Labor		8,826			34.2	%		30,964			32.2	%
Occupancy		3,936			15.2	%		12,966			13.5	%
Store operating		4,634			17.9	%		16,093			16.7	%
Depreciation and amortization		3,176			7.9	%		3,217			3.0	%
General and administrative		17,033			42.3	%		17,390			16.3	%
Loss (gain) on disposal of assets		297			0.7	%		(5,258	)		(4.9	)%
Store pre-opening		650			1.6	%		188			0.2	%
Impairment of long-lived assets		127			0.3	%		295			0.3	%
Store lease termination and closure costs		64			0.2	%		62			0.1	%
Other operating, net		516			1.3	%		2,039			1.9	%
Total costs and operating expenses		45,542			113.0	%		101,837			95.5	%
(Loss) income from operations		(5,248	)		(13.0	)%		4,793			4.5	%
Other income (expense), net:
Interest income		145			0.4	%		29			0.0	%
Interest expense		(118	)		(0.3	)%		(109	)		(0.1	)%
Total other income (expense), net		27			0.1	%		(80	)		(0.1	)%
(Loss) income before income taxes		(5,221	)		(13.0	)%		4,713			4.4	%
Income tax expense		(78	)		(0.2	)%		(83	)		(0.1	)%
Net (loss) income		(5,299	)		(13.2	)%		4,630			4.3	%
Less: Net income attributable to noncontrolling interest		-			0.0	%		52			0.0	%
Net (loss) income attributable to Jamba, Inc.	$	(5,299	)		(13.2	)%	$	4,578			4.3	%

⁽¹⁾ Cost of sales, labor, occupancy and store operating percentages are calculated using Company Stores revenue. All other line items are calculated using total revenue.

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Revenue

(in thousands)

	26-Week Period Ended June 28, 2016		% of Total Revenue			26-Week Period Ended June 30, 2015		% of Total Revenue
Revenue:
Company stores	$	25,827		64.1	%	$	96,088		90.1	%
Franchise and other revenue		14,467		35.9	%		10,542		9.9	%
Total revenue	$	40,294		100.0	%	$	106,630		100.0	%

Total revenue is comprised of revenue from Company Stores, royalties and fees from Franchise Stores in the U.S. and from International Stores, income from JambaGO^® locations, license income from sales of Jamba-branded CPG products and direct sales of CPG products. Total revenue for the 26-week period ended June 28, 2016 was $40.3 million, a decrease of $66.3 million, or 62.2%, compared to $106.6 million for the 26-week period ended June 30, 2015. The decrease in total revenue was primarily due to a decrease in Company Stores for the year compared to the prior year. As of June 28, 2016 we had 68 Company Stores compared to 206 in the prior year.

Company Store revenue

Company Store revenue for the 26-week period ended June 28, 2016 was $25.8 million, a decrease of $70.3 million or 73.1%, compared to Company Store revenue of $96.1 million for the 26-week period ended June 30, 2015. The decrease in Company Store revenue was primarily due to a decrease in the number of Company Stores primarily as a result of our refranchising activities, partially offset by an increase in Company Store comparable sales as illustrated by the following table:

	Company Store Decrease in Revenue
	(in thousands)
Year-To-Date Q2 2016 vs. Year-To-Date Q2 2015:
Company Stores comparable sales increase	$	759
Reduction in number of Company Stores, net		(71,020	)
Total change in Company Store revenue	$	(70,261	)

Company Store comparable sales increased $0.8 million for the 26-week period ended June 28, 2016, or 3.0%, attributable to an increase of 4.6% in average check offset by a decrease in transaction count of (1.6)% as compared to the same period in the prior year. Company Store comparable sales represents the change in year-over-year sales for all Company Stores opened for at least a full fiscal year. As of June 28, 2016, 98.5% of our Company Stores had been open for at least one full year.

Franchise and other revenue

Franchise and other revenue was $14.5 million, an increase of $3.9 million or 37.2% for the 26-week period ended June 28, 2016 compared to $10.5 million for the 26-week period ended June 30, 2015. The increase was primarily due to the increase in royalties associated with the net increase in the number of Franchise and International Stores in addition to the Franchise Store comparable store sales increase of 1.1%.

The aggregate number of Franchise and International Stores as of June 28, 2016 and June 30, 2015 was 817 and 669, respectively.

Cost of Sales

Cost of sales is mostly comprised of fruit, dairy, and other products used to make smoothies and juices, paper products, and delivery fees at Company Stores. As a percentage of Company Store revenue, cost of sales decreased to 24.3% for the 26-week period ended June 28, 2016, compared to 24.9% for the 26-week period ended June 30, 2015. The decrease in cost of sales as a percentage of Company Store revenue was primarily due to retail price increase (approximately 0.8%) combined with lower discounting (approximately 0.1%), partially offset by higher product mix shift related to the expanded bowl offerings (approximately 0.4%). Cost of sales for the 26-week period ended June 28, 2016 was $6.3 million, a decrease of $17.6 million, or 73.7%, compared to $23.9 million for the 26-week period ended June 30, 2015, primarily related to the lower Company Store base as a result of refranchising initiatives.

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Labor

Labor costs are comprised of store management salaries and bonuses, hourly team member payroll, training costs and other associated fringe benefits. As a percentage of Company Store revenue, labor costs were 34.2% for the 26-week period ended June 28, 2016 compared to 32.2% for the 26-week period ended June 30, 2015. The increase was primarily attributable to an increase in California wage rate effective January 1, 2016 (approximately 1.5%) along with a shift in the store portfolio mix, resulting from refranchising activities, to Chicago stores with a higher labor percentage driven by lower sales volume (approximately 0.5%), and higher compensation incentive payout and fringe benefits (approximately 0.9%). This increase was partially offset by improved efficiencies in California stores, primarily driven by leverage on increased same-store sales (approximately 0.8%). Labor costs for the 26-week period ended June 28, 2016 were $8.8 million, a decrease of $22.1 million, or 71.5%, compared to $31.0 million for the 26-week period ended June 30, 2015, which is primarily due to the decrease in number of Company Stores as a result of our refranchising activities.

Occupancy

Occupancy costs include both fixed and variable portions of rent, common area maintenance charges, property taxes, licenses and property insurance for all Company Store locations. As a percentage of Company Store revenue, occupancy costs increased to 15.2% for the 26-week period ended June 28, 2016, compared to 13.5% for the 26-week period ended June 30, 2015. The increase in occupancy costs as a percentage of Company Store revenue was primarily due to the refranchising of Company Stores that carried a lower rent as a percentage of Company Store revenue. Occupancy costs for the 26-week period ended June 28, 2016 were $3.9 million, a decrease of $9.0 million, or 69.6%, compared to $13.0 million for the 26-week period ended June 30, 2015, which is primarily due to the decrease in number of Company Stores as a result of our refranchising activities.

Store Operating

Store operating expenses consist primarily of various store-level costs such as utilities, marketing, repairs and maintenance, credit card fees and other store operating expenses. As a percentage of Company Store revenue, total store operating expenses increased to 17.9% for the 26-week period ended June 28, 2016, compared to16.7% for the 26-week period ended June 30, 2015. The increase in total store operating expenses as a percentage of Company Store revenue was primarily due to higher utility costs (approximately 0.5%) and higher software/hardware expenses (approximately 0.6%). Total store operating expenses for the 26-week period ended June 28, 2016 were $4.6 million, a decrease of $11.5 million, or 71.2%, compared to $16.1 million for the 26-week period ended June 30, 2015.

Depreciation and Amortization

Depreciation and amortization expenses include the depreciation of fixed assets and the amortization of intangible assets. As a percentage of total revenue, depreciation and amortization increased to 7.9% for the 26-week period ended June 28, 2016, compared to 3.0% for the 26-week period ended June 30, 2015. The increase in depreciation and amortization as a percentage of total revenue was primarily due to the discontinuation of depreciation relating to stores in assets held for sale prior to their refranchising in the prior year and an increase in depreciation relating to capitalized information technology corporate programs and JambaGO^® equipment in the current year . Depreciation and amortization was $3.2 million for the 26-week periods ended June 28, 2016 and June 30, 2015. The expense remained relatively flat primarily due to lower Company Store base as a result of refranchising initiatives, offset by an increase in information technology corporate programs and JambaGO^® equipment.

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General and Administrative

General and administrative (G&A) expenses include costs associated with our corporate headquarters (in Emeryville, CA & Frisco, TX), field supervision, performance related incentives, outside and contract services, accounting and legal fees, travel and travel-related expenses, share-based compensation and other G&A expenses. Also included in G&A are non-recurring costs related to the move of the support center to Frisco, Texas, settlement, legal, and other transitional charges. Total G&A expenses for the 26-week period ended June 28, 2016 were $17.0 million, a decrease of $0.4 million, or 2.1%, compared to $17.4 million for the 26-week period ended June 30, 2015. The decrease of total G&A expenses was primarily due to a decrease in share-based compensation expense (approximately $0.9 million), and lower payroll and payroll related expenses (approximately $0.2 million), partially offset by an increase of legal and accounting fees (approximately $0.6 million) and recruiting fees (approximately $0.3 million) relating to the relocation of the headquarters to Frisco, Texas.

Loss (gain) on Disposal of Assets

Loss or (gain) on disposal of assets includes losses from disposal of assets and gains from the refranchising of Company Stores and sales of related furniture, fixtures and equipment. For the 26-week period ended June 28, 2016, loss on disposal of assets was $0.3 million compared to a $5.3 million gain for the 26-week period ended June 30, 2015, a change of $5.6 million. The change was primarily due to the gain on refranchising of Company Stores in the second quarter of 2015 relating to our refranchising initiative. The refranchising initiative was completed in the fourth quarter of fiscal 2015.

Store Pre-Opening

For the 26-week period ended June 28, 2016, store pre-opening expense was $0.7 million compared to $0.2 million for the 26-week period ended June 30, 2015, an increase of $0.5 million. The increase was primarily due to an increase in the number of Franchise stores being opened this year (approximately $0.2 million), and the rent associated with a store closed for remodeling (approximately $0.3 million).

Impairment of Long-Lived Assets

For the 26-week period ended June 28, 2016 impairment of long-lived assets was $0.1 million compared to $0.3 million for the 26-week period ended June 30, 2015.

Store Lease Termination and Closure

For the 26-week periods ended June 28, 2016, and June 30, 2015, store lease termination and closure costs was $0.1 million.

Other Operating, Net

Other operating, net consists primarily of income from jambacard breakage, jambacard-related fees, franchise expense, international expense, gain/loss on investments, bad debt expense, and CPG and JambaGO^® activities. For the 26-week period ended June 28, 2016, other operating, net was $0.5 million compared to $2.0 million for the 26-week period ended June 30, 2015. Changes in the components of other operating, net include a decrease in bad debt (approximately $0.8 million), an increase in franchise sublease income due to increase in subleased franchise stores (approximately $0.4 million), a decrease in equity loss of an investment (approximately $0.2 million), a decrease in franchise other expense relating to one-time expenses in prior year (approximately $0.2 million), and an increase in other income (approximately $0.3 million), a decrease in franchise discount expense (approximately $0.1 million), a decrease in CPG and JambaGO^® direct expense (approximately $0.1 million), partially offset by a decrease in jambacard breakage income (approximately $0.4 million) and an increase in jambacard expense (approximately $0.2 million).

Income Tax Expense

We have recorded income tax expense for both the 26-week periods ended June 28, 2016 and June 30, 2015, respectively. Our effective income tax rates were (1.5%) and 1.7% for the 26-week periods ended June 28, 2016 and June 30, 2015, respectively. For the 26-week periods ended June 28, 2016 and June 30, 2015, the effective tax rates were primarily affected by pre-tax loss, foreign withholding and the U.S. alternative minimum taxes in the respective periods.

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KEY FINANCIAL METRICS AND NON-GAAP MEASURES

We review and discuss our operations based on both financial and non-financial metrics. Among the key financial metrics upon which management focuses is reviewing our performance based on our consolidated GAAP results, including Company Store comparable sales. We also use certain supplemental, non-GAAP financial metrics in evaluating financial results, including Franchise Store comparable sales and system-wide comparable sales.

Company Store comparable sales represents the change in year-over-year sales for all Company Stores opened for at least one full year. Franchise Store comparable sales, a non-GAAP financial measure, represents the change in year-over-year sales for all Franchise Stores opened for at least one full year, as reported by franchisees and excludes International Stores. System-wide comparable store sales, a non-GAAP financial measure, represents the change in year-over-year sales for all Company and Franchise Stores opened for at least one full year and is based on sales by both company-owned and domestic franchise-operated stores, as reported by franchisees, which are in the store base. System-wide comparable store sales do not include International Stores, JambaGO^® units and Jamba Juice Express™. Comparable store sales exclude closed locations.

We review the increase or decrease in Company Store comparable sales, Franchise Store comparable sales and system-wide comparable sales compared with the same period in the prior year to assess business trends and make certain business decisions. We believe that Franchise Store comparable sales and system-wide comparable sales data, non-GAAP financial measures, are useful in assessing the overall performance of the Jamba brand and, ultimately, the performance of the Company.

The following table sets forth operating data that do not otherwise appear in our condensed consolidated financial statements as of, and for, the 13-week and 26-week periods ended June 28, 2016 and the 13-week and 26-week periods ended June 30, 2015:

	13-Week Period Ended						26-Week Period Ended
	June 28, 2016			June 30, 2015			June 28, 2016			June 30, 2015
Percentage change in Company Store comparable sales(1)		5.7	%		(5.9	)%		3.0	%		(0.4	)%
Percentage change in Franchise Store comparable sales(1)		4.0	%		(2.6	)%		1.1	%		0.3	%
Percentage change in system-wide comparable sales(2)		4.2	%		(3.9	)%		1.3	%		0.1	%
Total Company Stores		68			206			68			206
Total Franchise Stores		751			601			751			601
Total International Stores		66			68			66			68

⁽¹⁾ Percentage change in Company Store or Franchise Store comparable sales compares the sales of the specified stores during the specified period to the sales from the same set of stores for the equivalent period in the prior year. A store is included in this calculation after one full year of operations. Company Store comparable sales do not include Franchise Store sales.

⁽²⁾ Percentage change in system-wide comparable sales compares the combined sales of Company and Franchise Stores during the specified period to the combined sales from the same Company and Franchise Stores for the equivalent period in the prior year. A store is included in this calculation after one full year of operations.

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The following table sets forth certain data relating to Company Stores, Franchise and International Stores for the periods indicated:

	26-Week Period Ended June 28, 2016						26-Week Period Ended June 30, 2015
	Domestic			International			Domestic			International
Company Stores:
Beginning of period		70			-			263			-
Company Stores opened		1			-			-			-
Company Stores closed		(3	)		-			(4	)		-
Company Stores acquired from franchisees		-			-			-			-
Company Stores sold to franchisees		-			-			(53	)		-
Total Company Stores		68			-			206			-
Franchise and International Stores:
Beginning of period		748			75			543			62
Franchise Stores opened		22			5			14			8
Franchise Stores closed		(19	)		(14	)		(9	)		(2	)
Franchise Stores acquired by the Company		-			-			-			-
Franchise Stores purchased from the Company		-			-			53			-
Total Franchise and International Stores		751			66			601			68

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows Summary

The following table summarizes our cash flows for the 26-week periods ended June 28, 2016 and June 30, 2015 (in thousands):

	26-Week Period Ended
	June 28, 2016			June 30, 2015
Net cash used in operating activities	$	(2,370	)	$	(5,244	)
Net cash (used in) provided by investing activities		(2,018	)		10,089
Net cash provided by (used in) financing activities		431			(8,677	)
Net decrease in cash and cash equivalents	$	(3,957	)	$	(3,832	)

Liquidity

As of June 28, 2016, we had cash and cash equivalents of $15.8 million compared to $19.7 million as of December 29, 2015. As of June 28, 2016 and December 29, 2015, we had no short term or long term debt. Our primary sources of liquidity are cash flows provided by operating activities.

We expect that our cash on hand and future cash flows provided by operating activities and our refranchising initiative will be sufficient to fund our working capital and general corporate needs and the non-discretionary capital expenditures for the foreseeable future. Our primary liquidity and capital requirements are for working capital and general corporate needs and the planned fiscal 2016 capital expenditures of $4 to $5 million. The use of cash to fund discretionary capital expenditures will be based on the need to conserve our capital. Additionally, we expect to incur approximately $7.8 million in personnel relocation, employee attrition, retention, severance and replacement, office relocation and other costs related to our relocation of our corporate headquarters, and approximately $2.0 million in capital costs related to the buildout of our corporate headquarters and data center migration.

On July 22, 2016, the Company’s Credit Facility with Wells Fargo expired. Since the inception of the line of credit, the Company did not borrow on the facility and utilized it primarily for collateral against letters of credit. The existing letters of credit balance of $0.4 million will be collateralized by cash. The Company is currently evaluating replacement alternatives to the Revolver Credit Facility with other banks.

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The adequacy of our available funds will depend on many factors, including the macroeconomic environment, the operating performance of our Company Stores, the successful expansion of our franchise and licensing programs and the successful rollout and consumer acceptance of our new beverage and food initiatives. Given these factors, our foremost priorities for the near term continue to be preserving and generating cash sufficient to fund our liquidity needs.

Operating Activities

Net cash used in operating activities was $2.4 million for the 26-week period ended June 28, 2016, compared to $5.2 million for the 26-week period ended June 30, 2015, reflecting a net decrease in cash flows used in operating activities of $2.9 million. This decrease in cash used in operating activities was primarily due to a net decrease in cash used in operating assets and liabilities (approximately $7.4 million), partially offset by a net increase in net loss after adjustment for noncash items (approximately $4.6 million).

The amount of cash provided by our operating activities during any particular fiscal year is highly subject to variations in the seasons. The first and fourth quarters of the fiscal year encompass the winter and holiday seasons when we traditionally generate our lowest revenue, and our second and third quarters of the fiscal year encompass the warmer seasons where a significant portion of our revenue and cash flows are realized. For more information on seasonality, refer to the section below entitled “Seasonality and Quarterly Results.” We also expect to have increased expenditures during the first part of the current fiscal year as we invest in product development and domestic expansion with the goal to have new products released and new stores open by mid-year to take advantage of the busier summer months.

Investing Activities

Net cash used in investing activities was $2.0 million for the 26-week period ended June 28, 2016, compared to net cash provided by investing activities of $10.1 million for the 26-week period ended June 30, 2015. The $12.1 million change in net cash used in investing activities during the 26-week period ended June 28, 2016 was primarily due to a decrease in proceeds from disposal of fixed assets (approximately $12.2 million) due to refranchising activity that occurred in the first half of fiscal year 2015.

In fiscal 2016, we expect capital expenditures to be approximately $4 to $5 million depending on our liquidity needs, which includes store refreshes and redesigns to facilitate fresh-squeezed juice and whole food nutrition offerings in the Chicago market, investing in improvements to our technology infrastructure as well as maintenance capital.

Financing Activities

Net cash provided by financing activities was $0.4 million for the 26-week period ended June 28, 2016, compared to net cash used in financing activities of $8.7 million for the 26-week period ended June 30, 2015. The $9.1 million change in net cash provided by financing activities was primarily due to the repurchase of the shares of the Company's common stock (approximately $9.8 million) under the stock repurchase plan approved by our Board of Directors in 2014 that occurred in the second quarter of fiscal 2015, partially offset by a decrease in receipts from our stock issuance plans, including from the exercise of stock options (approximately $0.8 million).

Contractual Obligations

There have been no significant changes to our contractual obligations table as disclosed in our Annual Report on Form 10-K for the year ended December 29, 2015.

COMMODITY PRICES, AVAILABILITY AND GENERAL RISK CONDITIONS

We contract for significant amounts of individually quick frozen fruit, fruit concentrate and dairy products to support the needs of both our Company Stores and Franchise Stores. The price and availability of these commodities directly impact our results of operations and can be expected to impact our future results of operations.

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SEASONALITY AND QUARTERLY RESULTS

Our business is subject to seasonal fluctuations. We expect to realize significant portions of our revenue during the second and third quarters of the fiscal year, which align with the warmer summer season. In addition, quarterly results are affected by the timing of the opening of new stores and weather conditions. However, geographic diversification of our store locations may conceal or diminish the financial statement impact of such seasonal influences. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year or any subsequent quarter. 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to adopt accounting policies and make significant judgments and estimates to develop amounts reflected and disclosed in the financial statements. In many cases, there are alternative policies or estimation techniques that could be used. We maintain a process to review the application of our accounting policies and to evaluate the appropriateness of the many estimates that we are required to make in order to prepare the financial statements. However, even under optimal circumstances, estimates routinely require adjustment based on changing circumstances and the receipt of new or better information. There have been no significant changes to the policies and estimates as discussed in our Annual Report on Form 10-K for the year ended December 29, 2015.

Recent Accounting Pronouncements

See Recent Accounting Pronouncements section of Note 2 to our Notes to Condensed Consolidated Financial Statements for information about new accounting standards.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rates

We do not enter into market risk sensitive instruments for trading purposes. We are exposed to financial market risks due primarily to changes in interest rates in our interest bearing accounts. We do not believe a change in interest rates will materially affect our financial position or results of operations. As of December 29, 2015 a one percent change of the interest rate would result in an annual change in the results of operations of approximately $0.2 million.

Commodities Prices

We are exposed to the impact of commodity and utility price fluctuations related to unpredictable factors such as weather and various market conditions over which we do not have control. We purchase significant amounts of produce and dairy products to support the needs of our Company Stores. The price and availability of these commodities directly impact the results of operations and can be expected to impact the future results of operations.

We purchase fruit based on short-term seasonal pricing agreements. These short-term agreements generally set the price of procured frozen fruit and 100% pure fruit concentrates for less than one year based on estimated annual requirements. We purchase fresh produce based on annual pricing agreements. In order to mitigate the effects of price changes in any one commodity on our cost structure, we contract with multiple suppliers both domestically and internationally. These agreements typically set the price for some or all of our estimated annual fruit and fresh produce requirements, protecting us from short-term volatility. Nevertheless, these agreements typically contain a force majeure clause, which, if utilized (such as hurricanes in 2004 that destroyed the Florida orange crop and more recently with the 2007 freeze that affected California citrus), may subject us to significant price increases.

Our pricing philosophy is not to attempt to change consumer prices with every move up or down of the commodity market, but to take a longer term view of managing margins and the value perception of our products in the eyes of our customers. Our objective is to maximize our revenue through increased customer traffic.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We have established and maintain disclosure controls and procedures that are designed to ensure that material information relating to the Company and our subsidiaries required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only a reasonable assurance of achieving the desired control objectives, and management was necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of June 28, 2016.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended June 28, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are party to various legal proceedings arising in the ordinary course of our business. Based on the information currently available, the Company is not currently a party to any legal proceeding that management believes would have a material adverse effect on the consolidated financial position or results of operations.

Item 1A. Risk Factors

Our risk factors are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2015 and have not materially changed except for the following additional risk factor:

The relocation of our corporate headquarters and data center could adversely affect our operations, operating results and financial condition, as we may experience disruptions to our business and incur additional costs in connection with the relocation.

We announced on May 4, 2016, the relocation of our corporate headquarters and data center from Emeryville, California to Frisco, Texas, a suburb of Dallas.  The process of moving our headquarters is inherently complex and not part of our day-to-day operations, and includes the relocation of our data center, which contains a significant portion of our core business information and applications.  The relocation process could cause significant disruption to our operations and cause the temporary diversion of management resources, all of which could have a material adverse effect on our operations, operating results and financial condition.  The need to replace Company personnel who do not relocate, train new employees and transition Company operating knowledge may cause disruptions in our business.  While we have implemented a transition plan to provide for the move of our corporate operations and data center, including relocation benefits for employees who may be transferring, and severance and retention benefits for employees who will not be continuing with the Company after the move, we may encounter difficulties retaining employees who elect to transfer and attracting new talent in the Dallas area to replace our employees who are unwilling to relocate, and we may also experience difficulties in retaining employees who will remain in Emeryville, California during the transition period and who we are relying on to facilitate the transition of the Company operating knowledge. In addition, we may incur additional costs for duplication in staff as we effect the transition.  Furthermore, we may experience disruption in accessibility to our data as we migrate our data center, and any disruption could have a material adverse effect on our operations, operating knowledge and financial condition. Even though we are taking the necessary precautions, we can give no assurance that the relocation will be completed as planned or within the expected timeframe. In addition, the relocation may involve significant additional costs to us and the expected benefits of the move may not be fully realized due to associated disruption to our operations and personnel. 

29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

On August 5, 2016, the Company appointed Ms. Marie Perry as Executive Vice President, Chief Financial and Administrative Officer of the Company, effective immediately after the filing of this Quarterly Report on Form 10-Q. As previously announced, Ms. Perry is succeeding Ms. Karen Luey as Executive Vice President, Chief Financial and Administrative Officer of the Company. Before joining the Company in May 2016, Ms. Perry, [50], was most recently Senior Vice President, Treasurer and Controller at Brinker International. She has held roles leading all aspects of the Brinker finance team including having served as interim CFO during a 12 month period. She also held senior finance roles at American Airlines and brings an extensive leadership profile to the Jamba team. The terms of Ms. Perry’s employment with the Company are set forth in her employment agreement with Jamba Juice Company dated May 2, 2016, previously described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2016 and filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q.

Ms. Luey has agreed to continue to provide certain services to the Company after her resignation as Chief Financial and Administrative Officer. The terms of the compensation payable to Ms. Luey in connection with her transition and release of claims are governed by the Executive Retention and Severance Plan adopted by the Company effective July 25, 2013 (the “Plan”) and a Transition Services Agreement (the “Transition Services Agreement”) dated August 3, 2016, entered into between Ms. Luey and Jamba Juice Company. The Transition Services Agreement provides that $150,000 of the amount payable under the Plan would be payable to her on an accelerated basis on December 15, 2016 for remaining with the Company on a full-time basis through December 15, 2016. Ms. Luey will receive additional consideration for remaining with the Company on a full-time basis through March 20, 2017 or such earlier date as determined by the Company, including payment of salary through March 20, 2017, one additional year of accelerated vesting of outstanding stock options, restricted stock and restricted stock units and the extension of health care benefits for one year, subject to certain limitations. The descriptions of the Transition Services Agreement and the Plan are qualified in their entirety by the full text of the Transition Services Agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for its 2016 fiscal third quarter, and the full text of the Plan filed as Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q with the Securities and Exchange Commission on August 6, 2013.

Item 6. Exhibits

Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
10.1	Office Lease Agreement made and entered into effective as of May 3, 2016 between Hall Office Park Building 16, L.P. and Jamba Inc.					X
10.2	Employment Agreement dated May 2, 2016 by and between Jamba Juice Company and Marie Perry**					X

30

10.3	Jamba, Inc. 2013 Equity Incentive Plan (As Amended and Restated May 17, 2016) **	8-K	001-32552	10.1	May 20, 2016
10.4	Form of Stock Option Agreement under 2013 Equity Incentive Plan (As Amended and Restated May 17, 2016) **					X
10.5	Form of Restricted Stock Agreement under 2013 Equity Incentive Plan  (As Amended and Restated May 17, 2016) **					X
10.6	Form of Restricted Stock Units Agreement under 2013 Equity Incentive Plan (As Amended and Restated May 17, 2016) **					X
10.7	Form of Jamba, Inc. Inducement Award Notice of Grant of Non-Statutory Stock Option (Non-Plan Award) **					X
10.8	Form of Jamba, Inc. Inducement Award Non-Statutory Stock Option Agreement (Non-Plan Award) **					X
10.9	Form of Jamba, Inc. Inducement Award Notice of Grant of Time-Based Restricted Stock Units (Non-Plan Award) **					X
10.10	Form of Jamba, Inc. Inducement Award Time-Based Restricted Stock Units Agreement (Non-Plan Award) **					X
10.11	Form of Jamba, Inc. Inducement Award Notice of Grant of Market-Based Restricted Stock Units (Non-Plan Award) **					X
10.12	Form of Jamba, Inc. Inducement Award Market-Based Restricted Stock Units Agreement (Non-Plan Award) **					X
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.					X
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.					X
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

 **Management contract, or compensatory plan or arrangement.

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 5^th day of August, 2016.

JAMBA, INC.
By:	/s/ David A. Pace
	David A. Pace
	Chief Executive Officer
	(Duly Authorized Officer)
By:	/s/ Karen L. Luey
	Karen L. Luey
	Chief Financial Officer, Chief Administrative Officer, Executive Vice President and Secretary
	(Principal Financial Officer and Chief
	Accounting Officer)

32

EX-10.1

Exhibit 10.1

OFFICE LEASE AGREEMENT

by and between

HALL OFFICE PARK BUILDING 16, L.P.

and

JAMBA JUICE COMPANY

OFFICE BUILDING LEASE

TABLE OF CONTENTS

ARTICLE I - DEFINED TERMS				1
	1.1	Tenant		1
	1.2	Premises		1
	1.3	Term		1
	1.4	Base Rental		1
	1.5	Base Year		1
	1.6	Landlord's Share of Building Operating Costs		1
	1.7	First Year Estimated Energy Costs		1
	1.8	Prepaid Rent		1
	1.9	Security Deposit		2
	1.10	Premises Use		2
	1.11	Tenant's Insurance Requirements		2
	1.12	Addresses for Notices and Payment of Rent and Other Charges		2
	1.13	Broker		2
	1.14	Exhibits		2
	1.15	Incorporation		2
ARTICLE II - PREMISES, COMMON AREAS				3
	2.1	Demise		3
	2.2	Rentable Area of Building		3
	2.3	Acceptance of Premises and Building by Tenant		3
	2.4	Walls, Ceilings		3
	2.5	Common Areas		4
ARTICLE III-				4
	3.1	Lease Term		4
	3.2	Delivery of Premises
	3.3	Holding Over by Tenant		4
ARTICLE IV				5
	4.1	Base Rental		5
	4.2	Tenant's Share of Certain Building Costs.		5
		4.2.1	Pro Rata Share	5
		4.2.2	Building Operating Costs	5
		4.2.3	Energy Costs	6
		4.2.4	Electricity Savings Expenditures	6
		4.2.5	Estimated Costs	6
	4.3	Adjustment for Occupancy		7
	4.4	Prepaid Rent		7
	4.5	Security Deposit		8
	4.6	Taxes on Tenant's Property; Other Taxes		8
	4.7	Late Payments		8
	4.8	Interest		8
	4.9	Supervision Fee		8
	4.10	Additional Rental		8
ARTICLE V - CONSTRUCTION				9
ARTICLE VI - SERVICES AND UTILITIES				9
	6.1	Services by Landlord		9
	6.2	Tenant's Obligations		10
	6.3	Additional Services		10
		6.3.1	Heating and Air Conditioning	10
		6.3.2	Electricity	10
		6.3.3	Cleaning	11
	6.4	Interruption		11

-i- 

ARTICLE VII - USE AND OCCUPANCY				11
	7.1	Quiet Enjoyment		11
	7.2	Tenant's Use		11
	7.3	Rules and Regulations		12
	7.4	Additional Covenants of Tenant.		12
		7.4.1	Applicable Laws	12
		7.4.2	Waste, Hazards	12
	7.5	Entry by Landlord		12
	7.6	Building Name		13
ARTICLE VIII - REPAIRS, ALTERATIONS				13
	8.1	Repairs and Maintenance		13
	8.2	Surrender of Premises		13
	8.3	Alterations and Additions by Tenant.		14
		8.3.1	Approval Required	14
		8.3.2	Complex Alterations	14
		8.3.3	Standard of Work	14
		8.3.4	Ownership of Alterations	15
	8.4	Mechanics and Materialmen's Liens		15
	8.5	Control of Building and Common Areas		15
ARTICLE IX - INSURANCE				15
	9.1	Tenant's Insurance		15
		9.1.1	Liability Insurance; Other	15
		9.1.2	Property Insurance	16
		9.1.3	Policy Form	16
	9.2	Indemnity.		16
		9.2.1	WAIVER AND INDEMNITY BY TENANT	16
		9.2.2	INDEMNITY BY LANDLORD	16
	9.3	Landlord's Insurance		17
	9.4	Waiver of Subrogation		17
	9.5	Control of Proceeds		17
ARTICLE X - ASSIGNMENT AND SUBLETTING				18
	10.1	Consent		18
	10.2	Landlord's Options		18
	10.3	Definition of Assignment		19
	10.4	Bankruptcy, Insolvency		19
	10.5	Landlord's Assignment		19
ARTICLE XI - FIRE AND OTHER CASUALTY				20
	11.1	Total Destruction		20
	11.2	Partial Destruction		20
	11.3	No Liability		20
	ARTICLE XII - EMINENT DOMAIN			20
	12.1	Total Taking		20
	12.2	Partial Taking		21
	12.3	Award		21
ARTICLE XIII - DEFAULT BY TENANT				21
	13.1	Events of Default		21
		13.1.1	Monetary Default	21
		13.1.2	Non-monetary Default	21
		13.1.3	Assignment to Creditors	21
		13.1.4	Insolvency	21
		13.1.5	Receivership	21
		13.1.6	Abandonment	22
		13.1.7	Inaccuracy of Financial Information	22
	13.2	Remedies		22
		13.2.1	Landlord's Remedies.	22

-ii- 

		13.2.2	Relet Premises	23
		13.2.3	Cure Default	24
		13.2.4	Injunctive Relief	24
	13.3	Landlord's Damages		24
	13.4	Remedies Cumulative		24
	13.5	Joint and Several Liability		24
	13.6	Landlord's Lien; Security Interest		24
	13.7	Attorneys' Fees		24
	13.8	Waivers		25
	13.9	Landlord's Default		25
	13.10	Waiver of Trial by Jury		25
ARTICLE XIV - SUBORDINATION AND ATTORNMENT				26
	14.1	Subordination		26
	14.2	Attornment		26
	14.3	Further Documentation		26
ARTICLE XV - CERTIFICATES				26
	15.1	Estoppel Certificates		26
	15.2	Financial Statements		27
ARTICLE XVI - LIMITATIONS ON REMEDIES AND OBLIGATIONS; INTEREST OF LANDLORD				27
	16.1	Consents		27
	16.2	Force Majeure		27
	16.3	Best Efforts		27
	16.4	Exculpation		27
	16.5	Sale of Building		27
ARTICLE XVII - NOTICES				28
ARTICLE XVIII - BROKERS				28
ARTICLE XIX - RELOCATION OF TENANT				28
ARTICLE XX - MISCELLANEOUS				28
	20.1	No Implied Waiver		28
	20.2	No Recording		29
	20.3	Independent Contractor		29
	20.4	Additional Amenities		29
	20.5	Survival		29
	20.6	Severability		29
	20.7	Amendments		29
	20.8	Binding Effect; Authority		29
	20.9	Gender		29
	20.10	Captions; Section References		29
	20.11	Exhibits		30
	20.12	Entire Agreement		30
	20.13	Counterparts		30
	20.14	Governing Law and Venue; Miscellaneous		30
	20.15	No Reservation; Interpretation		30
	20.16	OFAC Certification		30

-iii- 

EXHIBITS

Exhibit "A" - Floor Plan of the Premises

Exhibit "B" - Legal Description of Property

Exhibit "C" - Building Operating Cost Examples

Exhibit "D" - Rules and Regulations

Exhibit "E" - Leasehold Improvements Agreement

Exhibit "F" - Parking Agreement

Exhibit "G" - Acceptance of Premises Memorandum

Exhibit "H" – Renewal Option

Exhibit "I" -  Termination Option

Exhibit "J" -  Right of First Refusal

-iv- 

OFFICE LEASE AGREEMENT

THIS OFFICE LEASE AGREEMENT (the "Lease") is made and entered into effective as of the 3rd day of May, 2016 (the "Effective Date"), between Hall Office Park Building 16, L.P., a Texas limited partnership (the "Landlord"), and Tenant (as defined below).

ARTICLE I

DEFINED TERMS

As used in this Lease, the following terms shall have the respective meanings set forth below:

1.1         Tenant.  Jamba Juice Company (the "Tenant"), a California corporation.  

1.2         Premises.  Designated as Suite 700, outlined and crosshatched on Exhibit "A" attached hereto and containing approximately Nineteen Thousand, One Hundred Fifty-Six (19,156) Rentable Square Feet on floor seven (7) and approximately Six Thousand, Two Hundred Twenty-Five (6,225) Rentable Square Feet on floor one (1) of the Building located at 3001 Dallas Parkway, Frisco, Texas.  (Article II)

1.3        Term.  Beginning on the Commencement Date, as defined in Section 3.1 hereof (contemplated to be on or about October 1, 2016) and ending on the last day of the One Hundred Twenty-Sixth (126^th) full calendar month following the Commencement Date.  (Article III)

1.4        Base Rental.   (Section 4.1)

Period	Annual Base Rental Rate per Rentable Square Foot		Monthly Base Rental Installment
CD – Month 18	$	32.00	$	67,682.67	*
Month 19 – Month 30	$	32.50	$	68,740.21
Month 31 – Month 42	$	33.00	$	69,797.75
Month 43 – Month 54	$	33.50	$	70,855.29
Month 55 – Month 66	$	34.00	$	71,912.83
Month 67- Month 78	$	34.50	$	72,970.38
Month 79 – Month 90	$	35.00	$	74,027.92
Month 91 – Month 102	$	35.50	$	75,085.46
Month 103 – Month 114	$	36.00	$	76,143.00
Month 115 - ED	$	36.50	$	77,200.54

CD = Commencement Date	ED = Expiration Date
Month = One full calendar month
* Subject to abatement as provided in Section 4.1 below

1.5        Base Year.  Calendar year 2017. (Section 4.2)

1.6        Landlord's Share of Building Operating Costs.  The actual Building Operating Costs for the Base Year.

1.7        First Year Estimated Energy Costs.  Thirty Thousand, Seven Hundred Eleven and 01/100 Dollars ($30,711.01) annually [computed on the basis of One and 21/100 Dollars ($1.21) per Rentable Square Foot of the Premises], payable in equal monthly installments.  (Section 4.2)

1.8        Prepaid Rent.  Sixty-Seven Thousand, Six Hundred Eighty-Two and 67/100 Dollars ($67,682.67) applicable to the seventh (7^th) month of the Term.  (Section 4.4)

1

1.9        Security Deposit.  Seventy-Two Thousand, Four Hundred Forty-One and 61/100 Dollars ($72,441.61).  (Section 4.5)

1.10      Premises Use.  General office use consistent with a first-class office building.  With respect to the portion of the Premises located on the first floor only, a test kitchen and general office use consistent with a first-class office building and for such uses specifically allowed under Section 7.2 below.  (Article VII)

1.11      Tenant's Insurance Requirements.  See Section 9.1 hereof.

1.12      Addresses for Notices and Payment of Rent and Other Charges.  (Article XVII)

To Tenant:	To Landlord:
3001 Dallas Parkway	Hall Office Park Building 16, L.P.
Suite 700	6801 Gaylord Parkway, Suite 406
Frisco, Texas 75037	Frisco, Texas 75034
Attn:  David Pace	Attn:      Building Manager
with copies of notices to:	with copies of notices to:
3001 Dallas Parkway	Hall Financial Group, Ltd.
Suite 700	6801 Gaylord Parkway, Suite 100
Frisco, Texas 75037	Frisco, Texas 75034
Attn:  Kathy Wright	Attn: Mark Depker

Prior to the Commencement Date:

Jamba Juice Company

2801 Network, Suite 500

Frisco, Texas 75034

Attn: David Pace

1.13      Broker.  Cushman & Wakefield of Texas, Inc., acting by and through its agents, Robbie Baty and Bill McClung.  (Article XVIII)

1.14      Exhibits.  The following-described exhibits (the "Exhibits") are attached to this Lease and made a part of this Lease for all purposes as if fully set forth herein:

Exhibit "A" - Floor Plan of the Premises

Exhibit "B" - Legal Description of Property

Exhibit "C" - Building Operating Cost Examples

Exhibit "D" - Rules and Regulations

Exhibit "E" -  Leasehold Improvements Agreement

Exhibit "F" - Parking Agreement

Exhibit "G" - Acceptance of Premises Memorandum

Exhibit "H" – Renewal Option

Exhibit "I" – Termination Option

Exhibit "J" – Right of First Refusal

1.15         Incorporation.  Each reference in this Lease or in any exhibit or any attachment to this Lease to any definition set forth in this Article I will be construed to incorporate all of the terms provided under the referenced provision in this Article I.  In the event of any conflict between a provision in this Article I and a provision in any other article of or exhibit, rider or attachment to this Lease, the latter will control.

2

ARTICLE II

PREMISES, COMMON AREAS

2.1         Demise.  Landlord, in consideration of the rent to be paid and of the covenants and agreements in this Lease to be performed by Tenant, does hereby lease and demise unto Tenant, and Tenant hereby leases from Landlord, the Premises described in Section 1.2, in a building (the "Building") having the address of 3001 Dallas Parkway and situated on a tract of land in the City of Frisco, Collin County, Texas, and more particularly described in Exhibit "B" attached hereto (the "Property"), upon and subject to the terms, covenants and conditions set forth in this Lease, and further subject to all applicable building, zoning and other ordinances and governmental requirements affecting the Building or Premises and to all covenants, encumbrances and other matters of record encumbering or affecting the Building or Premises.

2.2         Rentable Area of Building.  For all purposes of this Lease, Landlord and Tenant hereby stipulate and agree that  there are approximately One Hundred Ninety-Two Thousand Five Hundred and Ninety-Three (192,593) Rentable Square Feet contained in the Building.  The determination of the number of Rentable Square Feet comprising the Premises, as set forth in Section 1.2 above, is similarly hereby stipulated and agreed to by the Landlord and Tenant.  Tenant and Landlord hereby stipulate and agree that the number of Rentable Square Feet comprising the Building and the Premises shall be and remain as set forth in this Section 2.2 and in Section 1.2 above, respectively, notwithstanding anything to the contrary contained in this Lease, and further notwithstanding any minor variations in measurement or other minor variations that may have been incurred in the calculation thereof.

2.3         Acceptance of Premises and Building by Tenant.  Subject to any obligations of Landlord pursuant to Section 7.4.1, and except for (a) the completion of the Basic Building Improvements and the Tenant Improvements (as each of such terms is defined in the Leasehold Improvements Agreement, if any, attached hereto as Exhibit "E"), (b) latent defects which are not observable upon a reasonable inspection and about which Tenant notifies Landlord within six (6) months after taking possession of the Premises, and (c) Landlord delivering the Premises in its existing condition in compliance with Applicable Laws (hereinafter defined), Tenant accepts the Premises in "AS IS, WITH ALL FAULTS" condition and the taking of possession of the Premises by Tenant will be conclusive evidence as to Tenant that:  (i) the Premises are suitable for the purposes for which the Premises are leased; (ii) the Building and each and every part and appurtenance thereof are in good and satisfactory condition; and (iii) Tenant waives any defects in the Premises and in all other parts of the Building and the appurtenances thereto.  TENANT ACKNOWLEDGES AND AGREES THAT, EXCEPT AS MAY BE OTHERWISE EXPRESSLY PROVIDED IN THIS LEASE (INCLUDING THE LEASEHOLD IMPROVEMENTS AGREEMENT, IF ANY, ATTACHED HERETO), NEITHER LANDLORD NOR ANY LANDLORD-RELATED PARTY (AS SUCH TERM IS DEFINED BELOW) HAS MADE ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE HABITABILITY, MERCHANTABILITY, SUITABILITY, QUALITY, CONDITION OR FITNESS FOR ANY PARTICULAR PURPOSE (COLLECTIVELY, THE "DISCLAIMED WARRANTIES") WITH REGARD TO THE PREMISES OR THE BUILDING; AND TENANT HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE DISCLAIMED WARRANTIES WITH REGARD TO THE PREMISES AND THE BUILDING.  Tenant agrees, upon the commencement of Tenant's occupancy of the Premises, to execute an Acceptance of Premises Memorandum substantially in the form of the instrument set forth in Exhibit "G" attached hereto.

2.4         Walls, Ceilings.  Landlord reserves the right to use all of the Building, including, without limitation, the Premises, the exterior Building walls, core corridor walls and doors and any core corridor entrance, any terraces or roofs adjacent to the Premises, and any space in or adjacent to the Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other Building facilities, as well as access thereto through the Premises, for the purposes of operation, maintenance, decoration and repair, so long as same does not unreasonably interfere with Tenant's use and occupancy of the Premises and Landlord shall not take any action under this Section 2.4 which will materially reduce the usable square footage of the Premises, lower the ceiling of the Premises, or raise the floor of the Premises.  The installation, erection, use and maintenance of any pipes, ducts and conduits in and through the Premises pursuant to this Section 2.4 will not be deemed to interfere with Tenant's use, enjoyment and occupancy of the Premises, provided that such pipes, ducts and conduits are concealed behind walls or above false ceilings to the extent practicable or otherwise boxed against walls or columns in a manner consistent with Tenant's decor.  Landlord shall give Tenant reasonable advance notice prior to entering the Premises for such purposes.

3

2.5         Common Areas.  Tenant is hereby granted a nonexclusive, revocable license to use the Common Areas (as hereinafter defined) during the term of this Lease for their intended purposes, in common with others, subject to the terms and conditions of this Lease, including, without limitation, the Rules and Regulations.  For purposes hereof, "Common Areas" will mean all areas, spaces, facilities and equipment made available by Landlord for the common and joint use of Landlord, Tenant and others in and around the Building, including, but not limited to, sidewalks, lobbies, loading areas, Building stairs, elevators, and such other areas and facilities, if any, as are designated by Landlord from time to time as Common Areas.

ARTICLE III

TERM

3.1         Lease Term.  This Lease will be in effect and continue in force during a period beginning on the Effective Date of this Lease and ending on the expiration of the Term, unless this Lease is terminated early or extended to a later date pursuant to the terms of this Lease.  The Term of this Lease shall commence and Rent will accrue beginning on the date ("Commencement Date") which shall be October 1, 2016, subject to postponement due to Landlord Delays (defined below) as provided below, and the Term of this Lease will expire on a date (the "Expiration Date") that corresponds to the number of full calendar months after the Commencement Date set forth in Section 1.3, unless sooner terminated in accordance with the provisions of this Lease, it being understood that this Lease terminates on the last day of the applicable calendar month.  In the event of Landlord Delays, the Commencement Date shall be postponed by an amount of time equal to the length of any Landlord Delays to the extent such Landlord Delays actually caused delays in the completion of the Tenant Improvements beyond October 1, 2016.  Notwithstanding anything to the contrary contained in the foregoing, if Tenant completes the Tenant Improvements and receives a Certificate of Occupancy prior to the Commencement Date, Tenant may have beneficial occupancy of the Premises prior to the Commencement Date subject to the terms and conditions of this Lease except that Tenant shall not be obligated to pay Base Rental or Building Operating Costs for any such occupancy prior to the Commencement Date but Tenant shall be obligated to pay Energy Costs.  "Landlord Delays" shall mean, for purposes hereof, any delays caused by acts or omissions to act, negligence or willful misconduct of Landlord or any of Landlord's employees, agents, contractors or representatives, but in no event delays caused by Tenant or delays due to force majeure.

3.2         Holding Over by Tenant.  If Tenant continues to hold the Premises after the Expiration Date or earlier termination of this Lease, Tenant will pay to Landlord, as Base Rental for the period of such holding over, a daily Base Rental amount equal to the number determined by multiplying the Base Rental for the final month of the Term by one hundred fifty percent (150%) and then dividing that result by thirty (30).  Such amount will be due and payable in advance on the first day of each calendar month during any such holdover period.  During such time as Tenant continues to hold the Premises after the expiration or termination hereof, such holding over will be a tenancy at sufferance, subject to all of the terms, provisions, covenants and agreements of this Lease except as modified by this Section 3.3 with respect to the length of the Term and the amount of the Base Rental.  No payments of money by Tenant to Landlord after the expiration or termination of this Lease or after the giving of any notice of termination by Landlord to Tenant will reinstate, continue or extend the Term or reduce the liability of Tenant to Landlord for damages incurred because of such holding over by Tenant or affect any termination notice given by Landlord to Tenant, and no extension of the Term will be valid unless and until the same will be reduced to writing and signed by both Landlord and Tenant.  In addition to the payment of the holdover rent provided above, if Landlord is unable to deliver possession of the Premises to a new tenant, or to perform improvements for a new tenant, as a result of Tenant’s holdover and Tenant fails to vacate the Premises within five (5) business days after Landlord notifies Tenant in writing of Landlord’s inability to deliver possession, or perform improvements, then notwithstanding any other provision of this Lease to the contrary, TENANT SHALL BE LIABLE TO LANDLORD FOR, AND SHALL PROTECT LANDLORD FROM AND INDEMNIFY AND DEFEND LANDLORD AGAINST, ALL LOSSES AND DAMAGES, INCLUDING ANY CLAIMS MADE BY ANY SUCCEEDING TENANT RESULTING FROM SUCH FAILURE TO VACATE, AND ANY CONSEQUENTIAL DAMAGES THAT LANDLORD SUFFERS FROM THE HOLDOVER.

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ARTICLE IV

TENANT'S MONETARY OBLIGATIONS

4.1         Base Rental.  Tenant agrees and promises to pay to Landlord at Landlord's offices in the Building (or at such other place as Landlord may designate from time to time), in lawful money of the United States of America, the Base Rental set forth in Section 1.4 hereof.  Notwithstanding anything to the contrary contained herein, provided no uncured event of default by Tenant exists under this Lease, Landlord agrees to abate the Base Rental due for a period of six (6) months after the Commencement Date; provided, however that in no event shall such abatement of Base Rental extend beyond March 31, 2017 regardless of whether the Commencement Date occurs after October 1, 2016.  The monthly installments of Base Rental will be due and payable in advance on the first day of each calendar month during the Term without notice or demand and without any offset or deduction whatsoever.  Should the Term commence on a day other than the first day of a calendar month or terminate on a day other than the last day of a calendar month, Base Rental for any such partial month will be prorated on a daily basis.  Base Rental for the first partial month, if any, will be payable on Commencement Date notwithstanding the receipt by Landlord of any prepaid rent under this Lease.  No payment by Tenant or receipt or acceptance by Landlord of a lesser amount than the correct installment of Base Rental or other amount due from Tenant will be deemed to be other than a payment on account, nor will any endorsement or statement on any check or any letter accompanying any check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance or pursue any other remedy provided by this Lease or by applicable law.  The acceptance by Landlord of rental payment(s) on a date after the due date of such payment(s) will not be construed to be a waiver of Landlord's right to declare a default for a subsequent late payment.

4.2         Tenant's Share of Certain Building Costs.  

4.2.1           Pro Rata Share.  The Term "Premises' Pro Rata Share" means the amount obtained by multiplying the fraction having as its numerator the number of Rentable Square Feet in the Premises and as its denominator the number of Rentable Square Feet in the Building, times the cost in question.  Tenant hereby agrees that the Premises' Pro Rata Share as of the Effective Date is Thirteen and 179/1000 percent (13.179%), as determined in accordance with the formula set forth in the initial sentence of this paragraph.

4.2.2           Building Operating Costs.  Tenant will pay to Landlord, as additional rental hereunder, in the manner set forth below, an amount ("Tenant's Pro Rata Share") equal to the Premises' Pro Rata Share of the amount by which Building Operating Costs for each calendar year of the Term exceeds Landlord's Share of Building Operating Costs.  For purposes hereof, the term "Building Operating Costs" means all costs, charges, and expenses incurred by Landlord in connection with owning, operating, maintaining, repairing, insuring and managing the Building and Common Areas except those costs, charges, and expenses included within the definition of Energy Costs.  Building Operating Costs include, without limitation, the items enumerated on Exhibit "C"  to this Lease.  If the Building Operating Costs for any calendar year is less than Landlord's Share of Building Operating Costs, the Premises' Pro Rata Share of Building Operating Costs will be deemed to be equal to Landlord's Share of Building Operating Costs.  Notwithstanding the foregoing, Tenant’s Pro Rata Share of Controllable Operating Costs (defined below) shall not increase by more than 5% over Tenant’s Pro Rata Share of Controllable Operating Costs in the previous calendar year, including the Base Year, on a cumulative, compounded basis.  However, any increases in Building Operating Costs not recovered by Landlord due to the foregoing limitation shall be carried forward into succeeding calendar years during the Term (subject to the foregoing limitation) until fully recouped by Landlord.  For example, if Controllable Operating Costs were $100.00 in 2017, then the total Controllable Operating Costs that could be included in Building Operating Costs in 2018 would be $105.00, for 2019 the amount would be $110.25, for 2020 the amount would be $115.76, and so on.  In the preceding example, if Controllable Operating Costs in both 2018 and 2019 were $107.00, then Landlord could include only $105.00 in Building Operating Costs in 2018, but $109.00 (the Controllable Operating Costs plus the carry-forward from 2018) in 2019.  The term “Controllable Operating Costs” means all Building Operating Costs excluding expenses relating to the cost of utilities, security expenses, insurance, real estate taxes and assessments, and other expenses arising from legal requirements.  Any category of expenses which was not included in Landlord’s Share of Building Operating Costs shall not be included in Building Operating Costs unless the cost of such new category is added to Landlord’s Share of Building Operating Costs.  

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4.2.3           Energy Costs.  Tenant will pay to Landlord, as additional rental hereunder, in the manner set forth below, the Premises' Pro Rata Share of Energy Costs for each calendar year of the Term.  For purposes hereof, the term "Energy Costs" means the costs charged to or incurred by Landlord for electricity and any and all other forms of energy for the Building and the Common Areas, including all costs of metering the Premises’ use of energy and all indirect costs of providing such energy, such as, but not limited to, any sales, use or other taxes and insurance; provided, that the Energy Costs passed through by, and reimbursable to, Landlord pursuant to this Section 4.2.3 shall be the actual costs incurred by Landlord with respect thereto with no mark-up for profit by Landlord or any affiliate of Landlord.  Tenant hereby acknowledges its understanding and agreement that Landlord has entered into (or may hereafter make and enter into) certain agreements with the Building's utility service provider(s), whereby each such provider has the exclusive right to provide utility services to the Building and Premises (provided the cost of such services are competitive in the market), and Tenant agrees to honor any such agreement(s) and to therefore use no other utility service provider(s) in respect to utilities to the Premises; provided, further, that it is acknowledged that Landlord shall have the right (at Landlord's option) at any time and from time to time during the Term to contract for service from a different company or companies providing electricity or any other applicable utility service (provided the cost of such services are competitive in the market), and Tenant shall reasonably cooperate with Landlord in connection with any such change in provider(s).  Landlord's obligation to furnish such utility services shall be subject to the rules and regulations of the supplier of such services and governmental rules and regulations; provided, further, that Landlord may, upon not less than 30 days' prior written notice to Tenant, discontinue any such services to the Premises, provided Landlord first arranges for a direct connection thereof through the supplier of such service (in which event Tenant shall be responsible for contracting with the supplier of such service, which has been approved by Landlord [such approval not to be unreasonably withheld by Landlord], and for paying all deposits for, and costs relating to, such service).

4.2.4           Electricity Savings Expenditures.  Notwithstanding anything contained in this Lease to the contrary, if for any reason, including but not limited to imposition of governmental requirements, laws or regulations, or in the event Landlord deems it necessary or prudent to expend monies directly or indirectly for the purpose of attempting to reduce energy consumption of the Building and if by generally accepted accounting principles those funds expended are, or may be treated as capital expenditures, the Tenant shall also pay: (i) Tenant's pro rata share of the utility charges actually incurred, in accordance with the Lease; plus (ii) Tenant's pro rata share of the savings generated by the capital expenditures for the applicable period, which savings shall be applied toward amortization of those capital expenditures until such time as the savings from the energy reduction have fully amortized and paid for the capital expenditure.

4.2.5           Estimated Costs.  Within ninety (90) days after the end of each calendar year after the Base Year, or as soon thereafter as is reasonably practicable, Landlord will deliver to Tenant a statement ("Statement") setting forth for the previous calendar year the actual Building Operating Costs, Energy Costs, Tenant's Pro Rata Share of Building Operating Costs and the Premises' Pro Rata Share of Energy Costs, the amounts paid by Tenant toward Building Operating Costs and Energy Costs and the amounts remaining due from or overpaid by Tenant.  If such Statement reveals that the amounts paid by Tenant toward Building Operating Costs and Energy Costs for such calendar year were in excess of Tenant's Pro Rata Share of actual Building Costs and/or the Premises' Pro Rata Share of actual Energy Costs, as the case may be, for such calendar year, Landlord shall reimburse Tenant, so long as Tenant is not then in default hereunder, for such excess payment amounts (or, at Landlord’s option, may credit such overpayment against Tenant's Pro Rata Share of Building Operating Costs, or the Premises' Pro Rata Share of Energy Costs, as applicable, next becoming due hereunder, provided that in no event shall such offset amount exceed 50% of the amount of any such payment next due, and any unused offset amounts remaining after a payment from Tenant shall roll over to future payments from Tenant until the full offset amount has been applied).  Likewise, if such Statement reveals that the amounts paid by Tenant toward Building Operating Costs and Energy Costs for such calendar year were less than Tenant's Pro Rata Share of the actual Building Operating Costs, or the Premises' Pro Rata Share of the actual Energy Costs, as the case may be, for such calendar year, then Tenant shall pay to Landlord the required additional amount upon Landlord’s demand therefor.  The foregoing provisions of this Section 4.2.5 shall survive the expiration or earlier termination of this Lease.In addition, the Statement shall contain Landlord's estimate of Tenant's Pro Rata Share of Building Operating Costs ("Estimated Building Operating Costs") and Landlord's estimate of the Premises' Pro Rata Share of Energy Costs ("Estimated Energy Costs") for the then current calendar year (it being hereby acknowledged and agreed by Tenant that such sums, including without limitation the First Year Estimated Energy Costs amount set forth in Section 1.7 above, are estimates only, which shall be subject to adjustment by Landlord from time to time during the then-ensuing calendar year and which shall be subject to final adjustment based on the actual charges therefor as determined following each such calendar year, with such final adjustment to be communicated and paid in the manner set forth in this Section 4.2).  Any Statement delivered to Tenant by Landlord shall be conclusively presumed to be true and correct unless Tenant delivers a written objection to such Statement to Landlord within thirty (30) days after delivery thereof.  In the event Tenant timely delivers any such written objection(s) to such Statement to Landlord, then Tenant shall have the right, at Tenant’s expense, within sixty (60) days following Tenant's delivery of such objection(s), to audit Landlord's books and records related to such Statement and, as applicable, the Base Year; provided, however, the following conditions shall apply to any such audit by Tenant:  (i) such audit may be conducted only by an employee of Tenant or a lease auditor who is not engaged on a contingency fee or similar basis; (ii) the books and records of Landlord to be audited shall not include any attorney work product or privileged information disclosed to be such by Landlord; (iii) such audit shall be conducted during normal business hours at Landlord's office(s) where such books and records are maintained; (iv) Landlord shall be entitled to obtain a copy of any report or statement rendered with respect to such audit; and (v) Tenant and Tenant’s audit firm shall treat each such audit in a confidential manner and shall, upon Landlord’s request, execute a commercially reasonable form of confidentiality agreement prior to commencing the audit.  In the event such audit proves that the cost(s) for the period of time covered by such audit and set forth in the audited Statement were overstated by Landlord by more than five percent (5%) of the actual cost(s) thereof for the applicable period of time so audited, then Landlord will pay to Tenant, within thirty (30) days following Landlord's receipt of demand therefor accompanied by reasonable evidence of the following cost(s), (i) the cost(s) of such audit actually and reasonably incurred by Tenant (but in no event to exceed Two Thousand Five Hundred Dollars ($2,500.00)), and (ii) the amount of any such overpayment by Tenant.

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4.2.5.1           Commencing on the first day of the first month following the delivery to Tenant of each Statement referred to above and on the first day of each month thereafter until delivery to Tenant of the next such Statement, Tenant will pay to Landlord, concurrently with the Tenant's payments of the monthly installments of Base Rental as provided in this Lease, one-twelfth (1/12th) of the Estimated Building Operating Costs and one-twelfth (1/12) of the Estimated Energy Costs, as contained in the Statement.

4.2.5.2           In addition, Tenant will pay to Landlord the balance of the amounts, if any, required to be paid pursuant to Section 4.2.5 for the previous calendar year, or if Tenant has overpaid such amount, Landlord will refund the amount of such overpayment to Tenant, except that Landlord may (at Landlord's sole option) credit any amounts due from Landlord to Tenant as further set forth in Section 4.2.5.

4.2.5.3           In the event that the Commencement Date of this Lease occurs on a day other than the first day of a calendar year, Landlord will notify Tenant of the monthly installments of Estimated Building Operating Costs, if any, for the remainder of such calendar year, no later than thirty (30) days prior to Commencement Date.  For such initial calendar year, the Tenant's Pro Rata Share of the Building Operating Costs shall be prorated based on a fraction the numerator of which shall be the number of days from the Commencement Date to December 31 and the denominator of which is three hundred sixty-five (365).

4.2.5.4           The First Year Estimated Energy Costs shall be the amount set forth in Section 1.7 above.

4.2.5.5           In the event that this Lease terminates on a date other than the last day of a calendar year, then upon termination Tenant will pay to Landlord a sum equal to Landlord's estimate of the amount due as of the date of termination, such estimate to be based on the facts currently available to Landlord on the termination date.  Landlord and Tenant will thereafter settle the actual amounts owing within thirty (30) days of the final determination of Building Operating Costs and Energy Costs for such year.

4.3         Adjustment for Occupancy.  During any calendar year in which the Building has less than full occupancy, those Building Operating Costs and Energy Costs that are not fixed costs and that under ordinary circumstances vary with variances in occupancy of the Building will be computed as though the Building had been ninety five percent (95%) occupied for the entire calendar year.

4.4         Prepaid Rent.  Contemporaneously with Tenant's execution of this Lease, Tenant will pay to Landlord the sum specified in Section 1.8 hereof, which sum shall be credited to monthly installments of Base Rental as specified in said Section 1.8.

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4.5         Security Deposit.  Contemporaneously with the execution of this Lease, Tenant will pay Landlord the sum set forth in Section 1.9 as security for the performance by Tenant under this Lease.  If Tenant defaults with respect to any provision of this Lease, Landlord may, but will not be required to, use, apply or retain all or any part of the Security Deposit for the payment of any rent or any other sum in default, or for the payment of any other amount which Landlord may spend or may become obligated to spend by reason of Tenant's default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's default.  If any portion of the Security Deposit is so used or applied, Tenant will, upon demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to the original amount.  So long as no uncured event of default by Tenant then exists under the Lease, the Security Deposit will be returned to Tenant within thirty (30) days after the Expiration Date, less any sums Landlord has deducted pursuant to this paragraph.  Tenant will not assign or encumber Tenant's interest in the Security Deposit and neither Landlord nor Landlord's successors or assigns will be bound by any such attempted assignment or encumbrance of the Security Deposit.

4.6         Taxes on Tenant's Property; Other Taxes.  Tenant will be liable for and will pay before delinquency all taxes, assessments, license fees, excise and other charges levied or assessed by any governmental or quasi-governmental authority against personal property, furniture or fixtures placed by Tenant in the Premises, the leasehold estate created hereby, or operations at, occupancy of, or conduct of business in or from the Premises.  Tenant shall also pay to Landlord, concurrently with the payments of rent as provided for herein, the amount of any applicable sales, use or excise tax with respect to any such rent, whether the same be levied, imposed or assessed by the State of Texas or any other federal, state, county or municipal governmental entity or agency, including any so called "rent taxes", but Tenant shall not be required to pay or reimburse Landlord for any income taxes payable by Landlord.  If any such taxes for which Tenant is liable are levied or assessed against Landlord or Landlord's property and if Landlord elects to pay the same or if the assessed value of Landlord's property is increased by inclusion of personal property, furniture or fixtures placed by Tenant in the Premises or the leasehold estate created hereby, and Landlord elects to pay the taxes based on such increase, then Tenant will be liable to Landlord for such payment by Landlord, and Tenant will pay to Landlord upon demand that part of such taxes for which Tenant is so liable.

4.7         Late Payments.  Should Tenant fail to pay any installment of Base Rental on or before the fifth (5th) day of each calendar month during the Term, a late charge in an amount equal to five percent (5%) of the installment then due will be paid by Tenant to Landlord at the time of payment of the delinquent sum; provided, however, Landlord agrees to waive such late charge for the first late payment in any twelve (12) month period so long as Tenant pays the amount due within five (5) days after written notice from Landlord.  The late charge is in addition to any Interest pursuant to Section 4.8 and is agreed by Landlord and Tenant to be a reasonable estimate of the extra administrative expenses incurred by Landlord in handling such delinquencies.

4.8         Interest.  All monetary obligations of Tenant to Landlord under this Lease remaining unpaid after the due date therefor will bear interest from and after such due date until paid at the lesser of (i) the highest lawful rate or (ii) eight percent (8%) per annum.  If no due date is established under the other terms and provisions of this Lease, such due date shall be five (5) days after the date upon which Landlord delivers to Tenant written demand for payment.  It is hereby agreed that in no event shall any charges permitted under this Lease, to the extent the same are considered to be interest under applicable law, ever exceed the maximum lawful rate of interest.

4.9         Supervision Fee.  If Tenant fails to perform any obligation of Tenant under this Lease after the applicable notice and cure period set forth in this Lease, Landlord may enter the Premises and perform such obligation without liability to Tenant for any loss or damage to Tenant, its property, its invitees or the property of its invitees thereby incurred, and Tenant will reimburse Landlord for the costs incurred by Landlord in connection with such performance, plus an additional ten percent (10%) of such cost to compensate Landlord for its overhead and supervision costs, within ten (10) days of receipt of Landlord's invoice therefor.

4.10       Additional Rental.  All amounts payable by Tenant to Landlord under this Lease in addition to Base Rental shall be deemed to be additional rental and will be payable and recoverable as rent in the manner prescribed in this Lease.  As used herein, the terms "rental" and/or "rent" shall mean and include, without limitation, the Base Rental, the Tenant's Pro Rata Share of Building Operating Costs, the Premises' Pro Rata Share of Energy Costs, and any other additional rental, charges, reimbursable costs and other sums that Tenant may owe to Landlord under the terms and conditions of this Lease from time to time or at any time.

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ARTICLE V

CONSTRUCTION

In the event any construction of tenant improvements is necessary for the Premises prior to Commencement Date, such construction will be accomplished and the cost of such construction will be borne by Landlord and/or Tenant in accordance with the Leasehold Improvement Agreement (if any) attached to this Lease, and except as expressly provided therein, Tenant acknowledges that Landlord has not undertaken and shall not be required to perform any modification, alteration or improvement to the Premises nor to provide any allowance or consideration in respect thereto.

ARTICLE VI

SERVICES AND UTILITIES

6.1         Services by Landlord.  Landlord agrees to furnish the following services during the term of this Lease:

(i)          Electric current to the Premises for lighting and machines of low electrical consumption, as may, in the sole judgment of Landlord, be reasonably required for use and occupancy under normal office operations;

(ii)         Air conditioning to the Premises, both heating and cooling (as required by the seasons), as may, in the sole judgment of Landlord, be reasonably required for comfortable use and occupancy under normal office operations, during normal hours (herein, the "Normal Business Hours") of office operations for the Building (which, for purposes of this Lease, shall be understood to be 7:00 a.m. to 7:00 p.m. [Frisco, Texas time] Monday through Friday, inclusive, and 7:00 a.m. to 2:00 p.m. [Frisco, Texas time] on Saturday);

(iii)        Cold water (at the normal temperature of the supply of water to the Building) for lavatory and toilet purposes, refrigerated water for drinking purposes and hot water (from the regular Building supply at prevailing temperatures) for lavatory purposes, all of such water service to be supplied from the Building's regular water supply;

(iv)        Janitorial cleaning service to the Premises including such window washing and wall cleaning as may in the sole judgment of Landlord be reasonably required;

(v)         Passenger elevators to the floor(s) on which the Premises are located for ingress to and egress from the Premises and freight elevator service in common with other tenants but only when scheduled through Landlord in advance;

(vi)        Electric lighting for all public areas and special service areas of the Building in the manner and to the extent as may be reasonable and standard in the sole judgment of Landlord; and

(vii)       Access to the Premises on a 24-hour-per-day, 7-day-per-week, basis; provided, that such access may be limited by Landlord during any periods other than Normal Business Hours, as well as on holidays and Sundays, to access by a cardkey access system or other system pursuant to which employees, contractors and/or visitors of Tenant shall be required to reasonably identify themselves in order to access the Building and Premises at such times, and such cards or other access systems may be issued or imposed by Landlord in accordance with Landlord's then-customary procedures (provided, further, that if access cards or other forms of identification issued by the Landlord are required by Tenant to replace lost or damaged cards or other forms of identification, Landlord may impose a reasonable fee to be reimbursed by Tenant for any such additional or replacement cards required to be so issued).

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(viii)      Security service patrolling Hall Office Park on a twenty-four (24) hours per day, seven (7) days per week basis.  NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN, HOWEVER, TENANT HEREBY ACKNOWLEDGES AND AGREES THAT LANDLORD DOES NOT MAKE, AND TENANT HEREBY WAIVES, ANY GUARANTY OR WARRANTY, EXPRESSED OR IMPLIED, WITH RESPECT TO ANY SECURITY AT HALL OFFICE PARK, THE BUILDING OR THE PREMISES, OR THAT ANY SECURITY MEASURES WILL BE TAKEN OR WILL PREVENT OCCURRENCES OR CONSEQUENCES OF CRIMINAL ACTIVITY, IT BEING HEREBY ACKNOWLEDGED AND AGREED BY TENANT THAT LANDLORD HAS NOT AGREED TO PROVIDE ANY SECURITY SERVICES OR MEASURES AT HALL OFFICE PARK, THE BUILDING OR THE PREMISES OTHER THAN AS MAY BE EXPRESSLY SET FORTH HEREIN AND THAT NEITHER LANDLORD NOR ANY OTHER LANDLORD-RELATED PARTY SHALL BE LIABLE TO TENANT IN ANY EVENT FOR, AND TENANT HEREBY RELEASES LANDLORD AND ALL LANDLORD-RELATED PARTIES FROM ANY RESPONSIBILITY FOR, LOSSES DUE TO THEFT OR BURGLARY OR FOR DAMAGE OR INJURY DONE BY UNAUTHORIZED PERSONS IN THE BUILDING OR THE PREMISES, OR IN CONNECTION WITH ANY SUCH SECURITY MATTERS (INCLUDING WITHOUT LIMITATION ANY DAMAGE OR INJURY RESULTING FROM A CRIMINAL OR TERRORIST ATTACK).

Landlord, Landlord's cleaning contractor and such cleaning contractor's employees will have access to the Premises after 5:30 p.m. and before 8:00 a.m. and will have the right to use, without charge therefor, all light, power and water in the Premises reasonably required to clean the Premises as required under this Lease.  Landlord will be deemed to have observed and performed the terms and conditions to be performed by Landlord under this Lease, including those relating to the provision of utilities and services, if in so doing Landlord acts in accordance with a directive, policy or request of any governmental or quasi-governmental authority.

6.2         Tenant's Obligations.  Tenant will pay, prior to delinquency, charges for all materials and services not expressly the obligation of Landlord that are furnished to or used on or about the Premises during the Term of this Lease.

6.3         Additional Services.  

6.3.1           Heating and Air Conditioning.  Landlord shall provide heating and air conditioning services to Tenant during Normal Business Hours at no additional cost, it being agreed that the cost thereof shall be included in the Building Operating Costs and/or Energy Costs in accordance with this Lease.  If Tenant requires heating and air conditioning after Normal Business Hours or on days other than normal business days, Landlord will furnish such services upon not less than twenty-four (24) hours' advance notice from Tenant, and Tenant will pay to Landlord upon demand Landlord's then established charges therefor.  The current charge for heating and air conditioning after Normal Business Hours is $50.00 per hour.  Tenant will not, without Landlord's prior written consent in each instance, install in the Premises equipment (including computer and telephone equipment) which generates sufficient heat to affect the temperature otherwise maintainable in the Premises by the Building air conditioning system as normally operated.  If any such heat generating equipment is installed, Landlord may install such supplementary air conditioning units, facilities or services in the Premises, or make such modifications to the Premises' air conditioning system, as may in Landlord's reasonable opinion be required to maintain proper temperature levels, and Tenant will pay Landlord within ten (10) days of Tenant's receipt of an invoice for the cost thereof, including installation plus Landlord's supervision fee, operation and maintenance expenses.

6.3.2           Electricity.  Tenant's use of electric current in the Premises will not at any time exceed the capacity of any of the electrical conductors and equipment in or serving the Premises.  Tenant will not, without Landlord's prior written consent in each instance, connect any fixtures, appliances or equipment to the Building's electric distribution system other than through outlets existing on Commencement Date or make any alteration or addition to the electric system of the Premises existing on the Commencement Date.  Should Landlord grant such consent, all additional risers or other equipment required therefor will be provided and installed by Landlord, and the cost thereof will be paid by Tenant to Landlord within ten (10) days after receipt of an invoice therefor.  If Landlord grants such consent pursuant to this Section 6.3.2 or if Tenant shall utilize additional equipment and/or services pursuant to Section 6.3.1 above or if Landlord from time to time reasonably determines that Tenant's use of electricity or any other utility or service in the Premises may be disproportionate to the use of other tenants, Landlord may separately charge Tenant for the excess costs attributable to such disproportionate use.  Landlord may in any such events install separate metering for any utility service, the cost of which separate metering, including installation and Landlord's supervision fee, Tenant will reimburse to Landlord within ten (10) days after invoicing by Landlord.

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6.3.3           Cleaning.  Tenant will pay to Landlord, within ten (10) days after receipt of an invoice from Landlord, the costs incurred by Landlord for (a) extra cleaning work in the Premises required because of the nature of the use and occupancy of the Premises by Tenant, and (b) removal from the Premises and the Building of any refuse and rubbish of Tenant in excess of that ordinarily accumulated in business office occupancy or at times other than Landlord's standard cleaning times.  If Tenant desires to have cleaning work done in the Premises in addition to that provided by Landlord pursuant to Section 6.1 hereof, Tenant must employ Landlord's janitorial cleaning contractor for such services, and the cost of such additional services will be borne solely by Tenant.

6.4         Interruption.  Landlord reserves the right, without any liability to Tenant and without affecting Tenant's covenants and obligations hereunder, to stop or interrupt or reduce any of the services listed in Section 6.1 and/or Section 6.3 or to stop or interrupt or reduce any other services required of Landlord under this Lease, whenever and for so long as may be necessary, by reason of (i) the making of repairs or changes which Landlord is required or is permitted by this Lease or by law to make or in good faith deems necessary or (ii) any other cause beyond Landlord's control.  Landlord does not warrant that the services provided for in Section 6.1 and/or Section 6.3 or elsewhere in this Lease will be free from interruption or stoppage and no such interruption or stoppage will in any manner relieve Tenant of any of Tenant's obligations under this Lease except as expressly provided in this Lease.  FAILURE TO ANY EXTENT TO MAKE AVAILABLE, OR ANY SLOW-DOWN, STOPPAGE OR INTERRUPTION OF ANY SERVICES DESCRIBED IN THIS ARTICLE VI RESULTING FROM ANY CAUSE WHATSOEVER (OTHER THAN LANDLORD'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) SHALL NOT RENDER LANDLORD LIABLE IN ANY RESPECT FOR DAMAGES, NOR BE CONSTRUED AS AN EVICTION OF TENANT (ACTUAL OR CONSTRUCTIVE) NOR RELIEVE TENANT FROM FULFILLMENT OF ANY COVENANT OR AGREEMENT HEREOF.  Notwithstanding anything to the contrary set forth in this Section 6.4 above, and subject to the express terms of Article XI and Article XII hereof, it is hereby agreed that if at any time during the Term of this Lease, and so long as not caused by any act or omission on the part of Tenant or Tenant’s agents, employees or contractors, Landlord fails to deliver electrical service, HVAC service, elevator service, and/or water service to the Premises and/or other portions of the Building in accordance with the requirements of this Article VI (individually and/or collectively, the foregoing services being herein called the “Critical Services”), and if such interruption continues for more than five (5) consecutive business days and renders the Premises or any portion thereof untenantable, then Tenant shall promptly give notice to Landlord that the Premises are untenantable, and all Base Rental and additional rent shall in such event be proportionately abated with respect to the portion of the Premises rendered untenantable commencing the first day following Landlord’s receipt of such notice and continuing until any such interrupted Critical Services are restored.

ARTICLE VII

USE AND OCCUPANCY

7.1         Quiet Enjoyment.  During the Term of this Lease, Landlord agrees to warrant and defend Tenant's rights under this Lease to enjoy possession of the Premises against any party claiming by, through or under Landlord, subject to the terms of this Lease and any ground lease, mortgage or deed of trust which is now or hereafter placed against the Building or Property, so long as Tenant is not in default under this Lease.  This covenant will be construed as a covenant running with the land, and is not, nor will this covenant be construed as, a personal covenant of Landlord, except to the extent of Landlord's interest in this Lease and only for so long as such interest continues.  Thereafter this covenant will be binding only upon subsequent successors in interest of Landlord's interest in this Lease, to the extent of such successors' respective interests, as and when they will acquire the same, and for so long as such successors will retain such interest.

7.2         Tenant's Use.  Tenant agrees that the Premises will be used and occupied by Tenant only for those uses permitted by Section 1.10 of this Lease.  Notwithstanding anything to the contrary contained in the foregoing, Tenant may operate a retail store from a portion of the Premises located on the first floor of the Building to sell or provide to the public at no cost, Tenant’s products so long as such retail store is not visible from the front lobby of the Building.  In Tenant’s retail store on the first floor of the Building, Tenant shall be allowed to sell fresh juices and smoothies, health and promotional products (including, but not limited to, apparel, headwear, drinkware, activity items, health-oriented books and nutritional products), juice-related equipment and supplies.   However, in no event shall Tenant sell or provide to the public specialty coffees or teas or any other coffee or tea service, breakfast food items or deli foods from any portion of the Premises.  Tenant may submit to Landlord a written request from time to time to sell other items from Tenant’s retail store, and Landlord’s approval to such request will not be unreasonably withheld so long as such items do not violate the existing exclusive uses of other tenants in the Building or Hall Office Park.  From and after the date of this Lease, Landlord shall not enter into a lease for space in this Building or in the new building being constructed at 3201 Dallas Parkway, Frisco, Texas, with a tenant whose sales of fresh juice and smoothie products exceed ten percent (10%) of such tenant’s total sales from such location (“Tenant’s Exclusive Use”); provided, however, nothing shall preclude Landlord from leasing space to a restaurant tenant who sells juice beverages ancillary to its business and such sales account for less than ten percent (10%) of such restaurant’s total sales from such location.  In addition, Landlord agrees that it will not approve or consent to any assignment or sublease by an existing tenant (to the extent Landlord is entitled to withhold such approval or consent) that would allow any occupant to violate Tenant’s Exclusive Use.  

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7.3         Rules and Regulations.  Tenant will comply fully with all requirements of the "Rules and Regulations" (herein so called) of the Building which are contained in Exhibit "D" attached hereto; provided that, in the event of any conflict between the provisions of this Lease and the Rules and Regulations, the provisions of this Lease shall control.  Landlord will at all times have the right to change such Rules and Regulations or to promulgate other non-discriminatory Rules and Regulations in such manner as may be deemed advisable for the safety, care, or cleanliness of the Building and Common Areas, and for the preservation of good order therein, all of which Rules and Regulations, changes and amendments will be forwarded to Tenant in writing and will be carried out and observed by Tenant.  Tenant will also be responsible for the compliance with such Rules and Regulations by the agents, employees, licensees and invitees of Tenant.  Nothing contained in this Lease shall be construed to impose upon Landlord any duty or obligation to enforce the Rules and Regulations against any other tenant or any employees or agents of any other tenant, and Landlord will not be liable to Tenant for violation of the Rules and Regulations by any other tenant or such other tenant's employees, agents, invitees or licensees, provided however, that Landlord agrees to enforce the Rules and Regulations in a reasonably non-discriminatory manner.

7.4         Additional Covenants of Tenant.  

7.4.1           Applicable Laws.  Tenant agrees to use and maintain the Premises in a careful, safe and proper manner and to comply with all applicable laws, ordinances, orders, rules and regulations of all governmental bodies, federal, state, county and municipal (collectively "Applicable Laws") from time to time in force which affect Tenant's use or occupancy of the Premises.  Tenant will pay all costs, expenses, fines, penalties and damages which may be imposed upon Landlord by reason of or arising out of Tenant's failure to comply with and observe fully and promptly such Applicable Laws.  Tenant will, at Tenant's expense, procure and maintain all governmental licenses or permits required for the proper and lawful conduct of Tenant's business in the Premises.  Tenant will give prompt notice to Landlord of any notice Tenant receives of the violation of any Applicable Laws.  Landlord will be responsible for compliance with Applicable Laws in the Common Areas, at Landlord’s expense, provided that such expense may be included in Building Operating Costs to the extent allowed pursuant to this Lease.  

7.4.2           Waste, Hazards.  Tenant agrees not to commit waste or permit waste to be committed or to allow or permit any public nuisance on or in the Premises.  Tenant will not use the Premises or allow or permit the same to be used in any way which will increase the rate of fire or other insurance for the Building or the Building's contents, which may render the Building uninsurable at normal rates by responsible insurance carriers authorized to do business in the State of Texas or which may render void or voidable any insurance on the Building or the Building's contents; provided, such restriction shall not prohibit Tenant from using the portion of the Premises located on the first (1^st) floor of the Building as a test kitchen in accordance with the other terms and provisions of this Lease.  Tenant will not violate, or permit the violation of, any condition imposed by any insurance policy covering the Building and/or the Property and will not do, or permit anything to be done in the Premises which would result in the cancellation of fire or other insurance for the Building, the Building's contents or the Property, or limit the assertion of any defense by the insured, in whole or in part, to claims under any policy of insurance in respect of the Building or the Property.  In the event that by reason of Tenant's acts or conduct of business there is an increase in the rate of insurance on the Building or the contents thereof, then Tenant hereby agrees to pay such increase, but such payment will not be deemed a waiver of Landlord's rights to enforce the covenants herein contained.

7.5         Entry by Landlord.  Upon reasonable prior notice to Tenant, Landlord will have the right at any time to enter the Premises for the purpose of examining and inspecting the Premises and to make such repairs, additions or alterations to the Premises or other portions of the Building as Landlord may deem necessary or proper for the safety, improvement or preservation of the Premises or of the Building, so long as same do not unreasonably interfere with Tenant's use and occupancy of the Premises.  During the period of nine (9) months prior to the expiration date of this Lease, Landlord and Landlord's agent may show the Premises to prospective tenants.

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7.6         Building Name.  Landlord reserves and retains the right at any time and from time to time to change the name by which the Building is designated; provided, however, in the event Landlord elects to make such change, Landlord shall reimburse Tenant for the reasonable expenses incurred by Tenant in replacing Tenant’s letterhead and other printed materials bearing the name of the Building in such quantities on hand as of the date of such change, not to exceed a three (3) month supply.

ARTICLE VIII

REPAIRS, ALTERATIONS

8.1         Repairs and Maintenance.  Landlord will repair and maintain the structural components of the Building, the basic Building core, the basic Building facilities systems which pass through the Premises and the Common Areas.  Landlord will not be responsible for maintenance or repair of improvements made by or at the request of Tenant that are not Building Standard (which term, as used herein and herein so called, shall mean the level or type of service or equipment standard in the Building or the type, brand or quality of materials Landlord designates from time to time to be the minimum or exclusive type, brand or quality to be used in the Building), it being hereby agreed that Tenant shall be solely responsible for the cost of maintenance or repair of any non-Building Standard improvements made by or at the request of Tenant.  Tenant will, at Tenant's expense, take good care of and maintain the Premises in good order, condition and repair, except as provided in the preceding sentence.  Tenant will be liable for any damage to the Premises or to any other part of the Building which arises out of any act, omission, misuse or neglect of Tenant or any of Tenant's subtenant's, employees, agents, contractors or invitees entering upon the Premises.  Tenant, at Tenant's expense, will promptly replace all scratched, damaged or broken doors and glass in and about the Premises and will be responsible for all repairs, maintenance and replacement of wall and floor coverings in the Premises and replacement of all non-Building Standard (it being the agreement of Landlord that Landlord shall replace, at Landlord's expense, any Building Standard lighting in the Premises) light bulbs and fluorescent tubes in the Premises.  Any repairs in or to the Premises or the Building for which Tenant is responsible will, only after Landlord's receipt of written request therefor, be performed by Landlord at Tenant's expense (including Landlord's supervision fee under Section 4.9 hereof).

8.2         Surrender of Premises.  Upon termination or earlier expiration of this Lease, or upon the exercise by Landlord of Landlord's right to re-enter the Premises without terminating this Lease, Tenant will deliver the Premises to Landlord in a condition comparable to the condition existing on the Commencement Date, ordinary wear, tear and obsolescence only excepted.  Tenant will deliver to Landlord all keys for the Premises and combinations to safes located in the Premises.  Tenant will, at Landlord's option, remove, or cause to be removed, from the Premises or the Building, at Tenant's expense and as of Expiration Date or earlier termination of this Lease, all of Tenant's signs, notices, displays, movable trade or business fixtures, and, unless otherwise requested or required by Landlord, cabling, wiring, conduit, telecommunications equipment and, subject to Section 8.3 of this Lease, any non-Building standard tenant improvements placed in the Premises or the Building of which Landlord notified Tenant at the time of Landlord’s approval thereof that such improvements would be required to be removed (provided, that in no event shall Tenant remove any light fixtures, dishwashers, refrigerators or similar equipment, or any equipment, improvements or items otherwise required to remain in the Premises pursuant to this Lease [including, without limitation, Section 8.3.4 hereof], unless Landlord requests in writing Tenant's removal of same).  Tenant agrees to repair, at Tenant's expense, any damage to the Premises or the Building resulting from the removal of any articles of personal property, movable business or trade fixtures, machinery, equipment, furniture, movable partitions or non-Building standard tenant improvements (provided Landlord notified Tenant at the time of Landlord’s approval of such improvements that such restoration work would be required), including without limitation, repairing the floor and patching and painting the walls where reasonably required by Landlord.  Tenant's obligations under this Section 8.2 will survive the expiration or earlier termination of this Lease.  If Tenant fails to remove any item of property permitted or required to be removed at the expiration or earlier termination of the Term, Landlord, may, at Landlord's option, (a) remove such property from the Premises at the expense of Tenant and sell or dispose of same in such manner as Landlord deems advisable, or (b) place such property in storage at the expense of Tenant.  Any property of Tenant remaining in the Premises ten (10) days after the Expiration Date or earlier termination of this Lease will be deemed to have been abandoned by Tenant, and in such case such items may be retained by Landlord as Landlord's property or disposed of by Landlord without accountability to Tenant, in such manner as Landlord determines, at Tenant's expense.

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8.3         Alterations and Additions by Tenant.  

8.3.1           Approval Required.  Tenant will not make, or cause or permit to be made, any additions, alterations, installations or improvements in or to the Premises (singularly "Alteration" and collectively "Alterations"), without the prior written consent of Landlord, which consent shall not be unreasonably withheld.  Notwithstanding the foregoing provisions of this paragraph, Landlord's consent shall not be required for any Alteration that satisfies all of the following criteria:  (a) is solely of a cosmetic nature, such as painting, wallpapering, hanging pictures and installing carpeting; (b) is not visible from outside the Premises or the Building; (c) will not affect the systems or structure of the Building; and (d) does not require work to be performed inside the walls or above the ceiling of the Premises; provided, that even for Alterations not requiring the consent of Landlord pursuant hereto, the contractor or contractors providing and/or undertaking any such Alterations shall be subject to the prior written approval of Landlord (which approval shall not be unreasonably withheld or delayed) and must provide evidence of insurance against such risks and in such amounts as may be reasonably required by Landlord (such evidence of insurance to be provided prior to the commencement of any such Alterations), and the hours of construction and proposed construction methods with regard to such Alterations must in any event be reasonably coordinated with Landlord in advance so as to avoid unreasonable interference with the management, use or occupancy of the Building by others.  Unless Landlord has waived such requirement in writing, together with Tenant's request for approval of any Alteration, Tenant must also submit details with respect to the proposed source of funds for the payment of the cost of the Alteration by Tenant, design concept, plans and specifications, names of proposed contractors, and financial and other pertinent information about such contractors (including without limitation, the labor organization affiliation or lack of affiliation of any contractors), certificates of insurance to be maintained by Tenant's contractors, hours of construction, proposed construction methods, details with respect to the quality of the proposed work and evidence of security (such as payment and performance bonds) to assure timely completion of the work by the contractor and payment by the contractor of all costs of the work.  It is hereby agreed that, in any event, prior to the commencement of any Alterations by Tenant, Tenant shall record or cause to be recorded a notice in the applicable real property records in the county in which the Building is located, identifying Tenant as the party for whom the aforesaid Alterations are being performed and providing notice that Landlord shall not be responsible for any liens or claims of lien arising or claimed by reason of any such Alterations.  Moreover, Tenant must maintain and/or cause any of its contractors and subcontractors to maintain insurance coverage against such risks, in such amounts and with such companies as Landlord reasonably requires in connection with any such Alterations, and certificates or other evidence of such insurance in form and content satisfactory to Landlord must be provided to Landlord prior to the commencement of any such Alterations, and such certificate(s) shall list Landlord and, upon request, Landlord's property manager and/or mortgagee as additional insureds.  Any approvals by Landlord of Tenant's contractors or of any of Tenant's drawings, plans or specifications which were prepared in connection with any construction of Alterations in the Premises shall not in any way be construed as or constitute a representation or warranty of Landlord as to the abilities of the contractor(s) or as to the adequacy or sufficiency of such drawings, plans or specifications, or the Alterations to which they relate, for any use, purpose or condition.  With respect to any Alteration which is visible from outside the Premises, such proposed Alteration must, in the sole opinion of Landlord, also be architecturally and aesthetically harmonious with the remainder of the Building.

8.3.2           Complex Alterations.  If the nature, volume or complexity of any proposed Alterations causes Landlord to consult with an independent architect, engineer or other consultant, Tenant will reimburse Landlord for the reasonable fees and expenses incurred by Landlord.  If any improvements will affect the basic heat, ventilation and air conditioning or other Building systems or the Building, Landlord may require that such work be designed by consultants designated by Landlord and be performed by Landlord or Landlord's contractors.

8.3.3           Standard of Work.  All work to be performed by or for Tenant pursuant hereto will be performed diligently and in a first-class, workmanlike manner, and in compliance with all applicable laws, ordinances, regulations and rules of any public authority having jurisdiction over the Building and/or Tenant and Landlord's insurance carriers.  Landlord will have the right, but not the obligation, to inspect periodically the work on the Premises and to require Tenant to correct or cause to be corrected any defects or deficiencies with respect to such work or to make changes in the method or quality of the work.

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8.3.4           Ownership of Alterations.  All Alterations made by or for Tenant (other than the Tenant's movable trade fixtures), will immediately upon installation become the property of the Landlord, without compensation to the Tenant; provided, however, Landlord will have no obligation to repair or maintain such Alterations.  Carpeting, shelving and cabinetry will be deemed improvements of the Premises and not movable trade fixtures, regardless of how or where affixed.  Such Alterations will not be removed by Tenant from the Premises either during or at the expiration or earlier termination of the Term and will be surrendered as a part of the Premises unless such Alteration is not Building standard and Landlord has requested that Tenant remove same.  Tenant will have the right to request at the time of submission to Landlord of Tenant's information in connection with a proposed Alteration that Landlord designate which non-Building standard Tenant improvements resulting from such Alteration will be subject to removal at the end of the Term.  In the absence of such request, all non-Building standard improvements resulting from such Alteration will be subject to removal.  Tenant will reimburse Landlord for the cost of repair for all damage done to the Premises or the Building by the installation and/or removal of any Alterations.

8.4         Mechanics and Materialmen's Liens.  Tenant will not permit to be placed upon the Premises, the Building, the Common Areas or the Property during the Term, any mechanics' or materialmen's lien or liens caused by or resulting from any work performed, materials furnished or obligations incurred by or at the request of Tenant, and in the case of the filing of any such lien, Tenant promptly will pay or bond around the same so as to obtain the discharge and release thereof.  If any such lien or liens are not so discharged and released within twenty (20) days after written notice thereof from Landlord to Tenant (or such shorter period as may be reasonably required by Landlord in the event that a sale or refinancing of the Building may then be pending), Landlord will have the right and privilege, at Landlord's option, of paying the same or any portion thereof without inquiry as to the validity thereof, and any amounts so paid, including expenses and interest, will be additional rental hereunder due from Tenant to Landlord and will be repaid to Landlord within ten (10) days after delivery to Tenant of an invoice therefor.

8.5         Control of Building and Common Areas.  The Building and Common Areas will be at all times under the exclusive control, management and operation of the Landlord.  Landlord hereby reserves the right from time to time (i) to alter or redecorate the Building (including the Common Areas) or construct additional facilities adjoining or proximate to the Building, provided that Landlord’s exercise of such rights does not materially adversely affect Tenant’s access to or use of the Premises; (ii) to close temporarily doors, entry ways, public spaces and corridors and to interrupt or suspend temporarily Building services and facilities in order to perform any redecorating or alteration or in order to prevent the public from acquiring prescriptive rights in the Common Areas, provided that Landlord’s exercise of such rights does not materially adversely affect Tenant’s access to or use of the Premises; and (iii) to change the name of the Building.

ARTICLE IX

INSURANCE

9.1         Tenant's Insurance.  

9.1.1           Liability Insurance; Other.  Tenant agrees to maintain throughout the Term a policy or policies of commercial general liability insurance covering the Premises and Tenant's use thereof, insuring against claims for personal or bodily injury or death or property damage (including contractual indemnity and liability coverage without contractual exclusion) occurring upon, in or about the Premises, in the following amount(s):  One Million Dollars ($1,000,000.00) per occurrence for bodily injury and property damage, and Two Million Dollars ($2,000,000.00) general aggregate, together with One Million Dollars ($1,000,000.00) per occurrence for personal or advertising injury, and together with Five Million Dollars ($5,000,000.00) umbrella coverage.  Tenant additionally agrees to carry (i) workers' compensation insurance to the statutory limit and employer's liability insurance to the limit of One Million Dollars ($1,000,000.00) per occurrence (each with a waiver of subrogation endorsement in favor of Landlord and, upon Landlord's request, Landlord's property manager and/or mortgagee), and (ii) motor vehicle liability insurance with coverage for all owned, non-owned and hired vehicles with combined limits of not less than One Million Dollars ($1,000,000) per each accident for bodily injury or property damage.  Moreover, if it becomes customary for a significant number of tenants of properties similar in size and use to the Premises in the area in which the Building is located to be required to provide insurance with other coverages or increased coverages over the insurance described in this Section 9.1, then, within thirty (30) days after Landlord's reasonable request therefor, Tenant shall provide Landlord with an insurance policy or policies as so requested to provide such increased or other coverages, and which insurance policy or policies shall otherwise be in accordance with the terms and conditions of this Lease.  

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9.1.2           Property Insurance.  Tenant agrees to maintain throughout the Term an insurance policy or policies of "Causes of Loss – Special Form" (formerly, "all-risks"), or comparable coverage by whatever name denominated, on all Alterations and all of Tenant's personal property, including removable trade fixtures, office supplies and movable office furniture and equipment, located on the Premises, in an amount equal to full replacement cost thereof and endorsed to provide that Tenant's insurance is primary in the event of any overlapping coverage with the insurance carried by Landlord.  Such insurance will be maintained at the expense of Tenant and payment for losses thereunder will be made solely to Tenant or to the mortgagees of Tenant (if permitted hereunder) as their interests may appear.

9.1.3           Policy Form.  Such insurance will be written by an insurance carrier which carries a Best's Insurance Report's rating of at least A XII (or an equivalent rating if Best's ratings are substantially revised or discontinued) and will name Landlord and (upon request by Landlord) any property manager and/or mortgagee of Landlord as either (as applicable) an "additional insured" or insured "as such party's interest will appear".  Landlord will be furnished, on or before the earlier to occur of (i) thirty (30) days after execution hereof or (ii) the date on which Tenant commences occupancy of the Premises, a certificate of insurance (in each case in form and content satisfactory to Landlord) of the original policy and of all renewals within thirty (30) days before the effective dates of such renewals.  Such certificate will contain an endorsement to the effect that the insurance company will give Landlord at least thirty (30) days' prior written notice by certified mail in the event of cancellation, non-renewal or material change in any such policy.  All commercial general liability, property and other insurance policies maintained by Tenant pursuant hereto (other than workers' compensation) shall be written as and endorsed to be primary policies, not contributing with and not supplemental to the coverage that Landlord and any Landlord's mortgagee and/or property manager may carry (with any policies of Landlord and any Landlord's mortgagee and/or property manager being excess, secondary and non-contributing).

9.2         Indemnity.  

9.2.1           WAIVER AND INDEMNITY BY TENANT.  SUBJECT TO SECTION 9.4 BELOW, TENANT HEREBY WAIVES AS TO THE LANDLORD AND OTHER LANDLORD-RELATED PARTIES (AS DEFINED BELOW), AND HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS LANDLORD, AND ANY OFFICER, DIRECTOR, OWNER, PARTNER, EMPLOYEE, AGENT, CONTRACTOR, PROPERTY MANAGER OR OTHER AUTHORIZED REPRESENTATIVE OF LANDLORD (THE "LANDLORD-RELATED PARTIES," WHETHER ONE OR MORE), FROM AND AGAINST, ANY AND ALL LIABILITIES, OBLIGATIONS, DAMAGES, CLAIMS, SUITS, LOSSES, CAUSES OF ACTION, LIENS, JUDGMENTS AND EXPENSES (INCLUDING COURT COSTS, ATTORNEYS' FEES AND COSTS OF INVESTIGATION) OF ANY KIND, NATURE OR DESCRIPTION RESULTING FROM OR ALLEGED TO RESULT FROM ANY INJURIES TO OR DEATH OF ANY PERSON OR ANY DAMAGE TO PROPERTY WHICH ARISES, OR IS CLAIMED TO ARISE FROM, ANY OF THE FOLLOWING (COLLECTIVELY THE "TENANT-RELATED CLAIMS"):  (i) AN INCIDENT OR EVENT WHICH OCCURRED WITHIN OR ON THE PREMISES; (ii) ANY ALTERATIONS PERFORMED BY OR ON BEHALF OF TENANT UNDER SECTION 8.3 HEREOF; (iii) THE CONSTRUCTION OF ANY TENANT IMPROVEMENTS OR ALTERATIONS BY TENANT OR A PARTY ON BEHALF OF TENANT; (iv) THE NEGLIGENCE OR WILLFUL MISCONDUCT OF TENANT OR THE TENANT-RELATED PARTIES, OR THEIR AGENTS, SUBTENANTS, LICENSEES OR VISITORS IN THE PARKING AREAS; (v) THE OPERATION OR CONDUCT OF TENANT'S BUSINESS WITHIN THE PREMISES; OR (vi) THE BREACH OF THIS LEASE BY TENANT.  SUCH INDEMNIFICATION WILL BE IN EFFECT EVEN IF THE TENANT-RELATED CLAIM IS THE RESULT OF OR CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OF LANDLORD OR ANY LANDLORD-RELATED PARTY EXCEPT WITH RESPECT TO ITEM (iv) ABOVE.  The indemnity obligations of Tenant under this Section 9.2.1 will not apply to a Tenant-Related Claim arising out of the gross negligence or intentional misconduct of Landlord or any Landlord-Related Party.

9.2.2           INDEMNITY BY LANDLORD.  SUBJECT TO SECTION 9.4 BELOW, LANDLORD HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS TENANT, AND ANY OFFICER, DIRECTOR, OWNER, PARTNER, EMPLOYEE, AGENT, CONTRACTOR OR OTHER AUTHORIZED REPRESENTATIVE OF TENANT (THE "TENANT-RELATED PARTIES," WHETHER ONE OR MORE), FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, DAMAGES, CLAIMS, SUITS, LOSSES, CAUSES OF ACTION, LIENS, JUDGMENTS AND EXPENSES (INCLUDING COURT COSTS, ATTORNEYS' FEES AND COSTS OF INVESTIGATION) OF ANY KIND, NATURE OR DESCRIPTION RESULTING FROM ANY INJURIES TO OR DEATH OF ANY PERSON OR ANY DAMAGE TO PROPERTY WHICH ARISES, OR IS CLAIMED TO ARISE FROM, ANY OF THE FOLLOWING (COLLECTIVELY, THE "LANDLORD-RELATED CLAIMS"):  (i) EXCEPT AS OTHERWISE SET FORTH IN SECTION 9.2.1 ABOVE, AN INCIDENT OR EVENT WHICH OCCURRED WITHIN OR ON THE COMMON AREAS; (ii) THE OPERATION OR CONDUCT OF LANDLORD'S BUSINESS WITHIN THE COMMON AREAS; OR (iii) THE BREACH OF THIS LEASE BY LANDLORD.  SUCH INDEMNIFICATION WILL BE IN EFFECT EVEN IF THE LANDLORD-RELATED CLAIM IS THE RESULT OF OR CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OF TENANT OR ANY TENANT-RELATED PARTY.  The indemnity obligations of Landlord under this Section 9.2.2 will not apply to a Landlord-Related Claim arising out of the gross negligence or intentional misconduct of Tenant or any Tenant-Related Party.  Furthermore, all claims against Landlord are limited by Section 16.4 hereof.

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9.3         Landlord's Insurance.  Landlord agrees to maintain throughout the Term a policy or policies of insurance covering loss of or damage to the Building in an amount equal to not less than eighty percent (80%) of the full replacement value of the Building.  The premium(s) for such policy or policies will be included as part of the Building Operating Costs.  Payment for losses covered under such policy or policies will be made solely to Landlord or to the Landlord's mortgagees as their interests may appear.  Landlord shall have the right to self-insure the obligations set forth in this paragraph.

9.4         Waiver of Subrogation.  EACH PARTY AGREES TO NOTIFY SUCH PARTY'S PROPERTY INSURANCE CARRIER OF THE EXISTENCE OF THIS WAIVER OF SUBROGATION PROVISION AND TO HAVE INCLUDED IN EACH OF THE PROPERTY INSURANCE POLICIES REQUIRED TO BE CARRIED BY SUCH PARTY UNDER THIS LEASE A WAIVER OF THE INSURER'S RIGHT OF SUBROGATION AGAINST THE OTHER PARTY DURING THE TERM OF THIS LEASE OR, IF SUCH WAIVER SHOULD BE UNOBTAINABLE OR UNENFORCEABLE, (I) AN EXPRESS AGREEMENT THAT SUCH POLICY WILL NOT BE INVALIDATED IF THE INSURED WAIVES THE RIGHT OF RECOVERY AGAINST ANY PARTY RESPONSIBLE FOR A CASUALTY COVERED BY THE POLICY BEFORE THE CASUALTY OR (II) ANY OTHER FORM OF PERMISSION FOR THE RELEASE OF THE OTHER PARTY.  IF SUCH WAIVER, AGREEMENT OR PERMISSION IS NOT, OR CEASES TO BE, OBTAINABLE FROM EITHER PARTY'S THEN CURRENT INSURANCE COMPANY, THE INSURED PARTY WILL NOTIFY THE OTHER PARTY PROMPTLY AFTER LEARNING THEREOF, AND SHALL USE SUCH PARTY'S BEST EFFORTS TO OBTAIN SAME FROM ANOTHER ACCEPTABLE INSURANCE COMPANY.  Unless the waivers contemplated by this sentence are not obtainable for the reasons described in this Section 9.4, Landlord waives any and all rights of recovery, claims, actions or causes of action against Tenant and the Tenant-Related Parties, and Tenant waives any and all rights of recovery, claims, actions or causes of action against Landlord and the Landlord-Related Parties, for any loss or damage to property which is covered or would have been covered under the insurance policies required under this Lease.  The foregoing release will not apply to losses or damages in excess of actual or required policy limits (whichever is greater) nor to any deductible (up to a maximum of $10,000) applicable under any policy obtained by the waiving party, provided, however, that for purposes of this Section 9.4, Landlord shall be deemed to have been required to have full replacement value insurance on the Building.  The failure of either party (the "Defaulting Party") to take out or maintain any insurance policy required under this Lease will be a defense to any claim asserted by the Defaulting Party against the other party hereto by reason of any loss sustained by the Defaulting Party that would have been covered by any such required policy.  The waivers set forth in the immediately preceding sentence will be in addition to, and not in substitution for, any other waivers, indemnities or exclusions set forth in this Lease.

9.5         Control of Proceeds.  Any insurance which may be carried by Landlord or Tenant against loss or damage to the Building or to the Premises will be for the sole benefit of the party carrying such insurance and under such party's sole control.

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ARTICLE X

ASSIGNMENT AND SUBLETTING

10.1       Consent.  Tenant will not assign this Lease or sublet all or any portion of the Premises without the prior written consent of the Landlord, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that without limiting the foregoing, Landlord and Tenant acknowledge that it would be reasonable for Landlord to withhold its consent in any of the following instances: (1) in Landlord's reasonable judgment, the use of the Premises by the proposed assignee or sublessee would entail alterations which would reduce the value of the leasehold improvements in the Premises, or would require increased services by Landlord; (2) any proposed assignee or sublessee of Tenant is not reasonably creditworthy, in Landlord's reasonable judgment, or Landlord has received a report of defaults by such proposed assignee or sublessee under prior leases, which report has been confirmed by Landlord to the best of its reasonable ability; (3) Landlord has experienced previous uncured defaults by or is in litigation with the proposed assignee or sublessee; (4) the proposed assignee's or sublessee's anticipated use of the Premises involves the generation, storage, use, treatment or disposal of unlawful levels of Hazardous Materials; (5) the proposed sublessee or assignee is a current tenant of the Hall Office Park (unless Landlord is unable to accommodate such current tenant’s need for additional space of a size comparable to that portion of the Premises covered by the proposed assignment or sublease) or an entity with whom Landlord is actively negotiating a letter of terms or letter of intent to lease space in the Hall Office Park; (6) the proposed assignment or sublease would cause a violation of another lease for space in Hall Office Park or would give an occupant of Hall Office Park a right to terminate or cancel its lease; (7) the Landlord's mortgagee does not consent to such assignment or subletting for any reason; (8) the proposed assignee or sublessee is a governmental agency (except to the extent that Tenant is required by law to assign or sublease thereto or such assignment or sublease is a result of operation of applicable law); (9) an event of default then exists under this Lease; or (10) the proposed assignee or sublessee's anticipated use of the Premises is prohibited by the terms of this Lease or would violate a then-existing exclusive use granted to any tenant or other occupant of Hall Office Park.  If consent to any assignment or subletting is given by Landlord, such consent will not relieve the Tenant or any guarantor of this Lease from any obligation or liability under this Lease.  If Landlord consents to such assignment or sublease, Tenant shall furnish Landlord with an executed copy of such assignment or sublease instrument at the time such is executed, and Tenant shall in any event pay and reimburse to Landlord all reasonable fees and expenses (including reasonable attorneys' fees) incurred by Landlord in connection with the processing of any such request for consent.  Tenant must, in the case of any such assignment or sublease, cause the assignee or sublessee to expressly assume and agree to perform all of the covenants, duties and obligations of Tenant under this Lease, but Tenant will nevertheless remain directly and primarily liable for the performance of all such covenants, duties and obligations.  If this Lease is assigned or any part of the Premises is occupied by any person other than the Tenant without the consent of Landlord, the Landlord may nevertheless enforce the provisions of this Lease against, and collect Base Rental and additional rent from, the assignee or occupant, and apply the net amount collected to the Base Rental and other amounts payable under this Lease, but, in no event will such enforcement or collection be construed as a waiver of this covenant or release of Tenant or Guarantor on this Lease.  The consent by Landlord to any assignment or subletting shall not relieve Tenant, or any permitted sublessee or assignee, from obtaining the express consent of Landlord to any further assignment or subletting.  Any attempt to effect an assignment or sublease without the required consent of Landlord will be void and of no effect.

10.2       Landlord's Options.  If the Tenant desires to assign this Lease or sublet all or part of the Premises, Tenant will notify Landlord in writing at least thirty (30) days in advance of the date on which Tenant desires to make such assignment or enter into such sublease, and Tenant will provide Landlord with a copy of the proposed assignment or sublease, and sufficient information concerning the proposed sublessee or assignee to allow Landlord to make informed judgments as to the financial condition, reputation, operations and general desirability of the proposed assignee or subtenant(s).  Within fifteen (15) days after Landlord's receipt of Tenant's proposed assignment or sublease and all required information concerning the proposed subtenant(s) or assignee, Landlord will have the option to:

(i)          Cancel this Lease as to all of the Premises on the effective or commencement date of such proposed assignment or subletting, if Tenant proposes to assign Tenant's interest in the Lease or sublet more than seventy-five percent (75%) of the Premises (or so much of the Premises which, when combined with those portions theretofore assigned or sublet by Tenant, results in seventy-five percent (75%) or more of the Premises having been so transferred), or cancel this Lease as to the portion of the Premises proposed to be sublet if Tenant proposes to sublet less than seventy-five percent (75%) of the Premises; or

(ii)         Consent to the proposed assignment or sublease, provided, however, if the rent due and payable by any assignee or sublessee under any such permitted assignment or sublease (or a combination of the rent payable under such assignment or sublease plus any bonus or any other consideration for the assignment or sublease or any payment incident to the assignment or sublease) exceeds the rent payable under the Lease for such space, Tenant will pay to Landlord fifty percent (50%) of all such excess rent and other excess consideration, after deducting therefrom the amount of any reasonable expenses incurred by Tenant in connection with the procural of such assignment, sublease or other transfer, which payment shall be made by Tenant to Landlord within ten (10) days following Tenant's receipt of such excess rent and/or consideration by Tenant; or

(iii)        Refuse to consent to the proposed assignment or sublease, if such refusal is reasonable, but allow Tenant to continue in the search for an assignee or sublessee that will be acceptable to Landlord, which option will be deemed to be elected unless Landlord gives Tenant notice providing otherwise.

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10.3       Definition of Assignment.  The use of the words "assignment", "subletting", "assign", or "assigned" or "sublet" in this Article X will include (i) the pledging, mortgaging or encumbering of Tenant's interest in this Lease, or the Premises or any part thereof, (ii) the total or partial occupation of all or any part of the Premises by any person, firm, partnership, or corporation, to any groups of persons, firms, partnerships, or corporations, or any combination thereof, other than Tenant, (iii) an assignment or transfer by operation of law, and (iv) with respect to a corporation, partnership, or other business entity, a transfer or issue by sale, assignment, bequest, inheritance, operation of law, or other disposition, or by subscription, of any part or all of the corporate shares of or general partnership interest or other interests in the Tenant, so as to result in any change in the present effective voting control of the Tenant by the party or parties holding such voting control on the date of this Lease.  Upon the request of Landlord, Tenant will make available to the Landlord or to Landlord's representatives, for inspection, all books and records of the Tenant necessary to ascertain whether there has, in effect, been a change in control of Tenant, subject to any restrictions of applicable securities’ laws.  Item (iv) of this Section 10.3 will not apply to a corporation whose shares are traded on a nationally recognized stock exchange.  Notwithstanding anything to the contrary set forth in this Article X, however, Tenant shall have the right to assign the Lease or sublet the Premises or any portion thereof, without Landlord's consent (which following-described assignment or subletting shall be herein referred to as a "Permitted Transfer"), to:  (i) any corporation or other legal entity which controls, is controlled by or is under common control with Tenant, so long as Tenant remains liable in such event for all obligations of Tenant under this Lease; or (ii) any corporation or other legal entity which acquires all or substantially all of the Tenant’s stock or the assets of Tenant's business as an ongoing concern, or into or with which Tenant is merged or consolidated in accordance with all applicable laws governing such mergers and consolidations, so long as such acquirer's and/or survivor's (as the case may be) tangible net worth after such acquisition, merger or consolidation is not less than the greater of Tenant's tangible net worth as of the date immediately preceding the date of such acquisition, merger or consolidation or Tenant's tangible net worth as of the date immediately preceding the Effective Date of this Lease; provided, that any such permitted transferee under the circumstances described in the immediately preceding clauses (i) and (ii) must first assume, in full, all of the obligations of Tenant set forth in this Lease, and Tenant shall remain fully liable in any such event for all of its obligations under this Lease; provided, further, that Tenant shall in any event notify Landlord of any such Permitted Transfer, as provided in this sentence above, in writing not less than ten (10) business days in advance of the date of consummation of any such Permitted Transfer (which notice shall be accompanied by evidence, in form and content reasonably satisfactory to Landlord, of the tangible net worth of such permitted transferee, where applicable, and of the express assumption by such permitted transferee of Tenant's obligations under this Lease as provided above); provided, however, that if Tenant is prevented from providing Landlord advance notice under Applicable Laws or the terms and conditions of the transaction, Tenant shall give Landlord written notice as soon as possible and in no event later than ten (10) business days after the consummation of the Permitted Transfer .  It is agreed that, for purposes hereof, the term "tangible net worth" means the excess of total assets over total liabilities, in each case determined in accordance with generally acceptable accounting principles, consistently applied, excluding from the determination of total assets all assets which can be classified as intangible assets under generally acceptable accounting principles (including, without limitation, goodwill, licenses, patents, trademarks, trade names, copyrights and franchises).  

10.4       Bankruptcy, Insolvency.  If this Lease is assigned to any person or entity pursuant to  the provisions of the Federal Bankruptcy Code, 11 U.S.C. § 101, et seq., as subsequently amended (the "Bankruptcy Code"), any and all monies or other considerations payable or otherwise to be delivered in connection with such assignment will be paid or delivered to Landlord, will be and remain the exclusive property of Landlord, and will not constitute property of Tenant within the meaning of the Bankruptcy Code.  Any and all monies or other considerations constituting Landlord's property under the preceding sentence not paid or delivered to Landlord will be held in trust for the benefit of Landlord and be promptly paid to or turned over to Landlord.  For purposes of Section 365(f)(2) of the Bankruptcy Code "adequate assurances of future performance" will include, but not be limited to, a Security Deposit, net worth, and creditworthiness equal to that of Tenant on the date of this Lease.  Any person or entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code, will be deemed without further act or deed to have assumed all of the obligations arising under this Lease on and after the date of such assignment.  Any such assignee will upon demand execute and deliver to Landlord an instrument confirming such assumption.

10.5       Landlord's Assignment.  Landlord shall have the right to sell, convey, transfer, assign, pledge, mortgage or encumber, in whole or in part, all and every feature of Landlord's rights and obligations hereunder and in the Building and the Property.  Upon the occurrence of any sale, conveyance, transfer or assignment, such successor in interest shall be deemed to have assumed Landlord's rights and obligations under this Lease, Landlord will be released from all obligations hereunder, and Tenant agrees to look solely to such successor in interest of Landlord for the performance of such obligations.

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ARTICLE XI

FIRE AND OTHER CASUALTY

11.1       Total Destruction.  In the event that (i) the Building is totally destroyed by fire, tornado or other casualty, or (ii) the Premises or the Building is so damaged that rebuilding or repair of such damage cannot be completed within two hundred seventy (270) days after the date of such damage, as set forth in the estimate to be obtained as provided below, then, in either such event, either Landlord or Tenant may terminate this Lease, in which event rent payable hereunder will be abated during the unexpired portion of the Term of this Lease effective from the date of such damage.  If Tenant wishes to terminate this Lease, Tenant must do so by notifying Landlord in writing of such election within thirty (30) days after the date of Tenant's receipt of the below-described estimate.  In determining whether rebuilding or repair can be completed within two hundred seventy (270) days, a statement of the estimated time for rebuilding or repair certified to by Landlord's architect will be conclusive, and Landlord shall deliver a copy of such estimate to Tenant promptly following receipt thereof.

11.2       Partial Destruction.  In the event the Building or the Premises is damaged by fire, tornado or other casualty, but only to such extent that rebuilding or repairs can be completed within two hundred seventy (270) days after the date of such damage, or if the damage is more serious but neither Landlord nor Tenant elects to terminate this Lease, Landlord will, following Landlord's receipt of insurance proceeds with respect to such damage in an amount sufficient (in Landlord's discretion) to pay the costs of the following rebuilding or repair, commence to rebuild or repair the Building and/or the Premises and proceed with reasonable diligence to restore the Building and/or the Premises to substantially the same condition in which the same existed immediately prior to the happening of the casualty; provided, however, that (i) Landlord will not be required to rebuild, repair or replace any part of the furniture, equipment, fixtures and leasehold improvements which have been placed by Tenant, or on behalf of Tenant, on or within the Premises, nor any Alterations which Tenant is required to insure pursuant to Section 9.1.2 above, (ii) Landlord shall not be required to rebuild or repair any damage to the extent that such damage is not insured under the insurance policy or policies required to be carried by Landlord pursuant to Section 9.3 above, nor shall Landlord be required to spend more than the amount of insurance proceeds actually received, and (iii) in no event shall Landlord be required to rebuild or repair the Premises or Building to other than substantially the same condition each was in immediately prior to the happening of the fire or other casualty.  Following any such rebuilding or repair by Landlord, Tenant shall rebuild and repair Tenant's insured Alterations, fixtures and improvements in the Premises.  Landlord will allow Tenant a fair diminution of rental during the time the Premises are unfit for occupancy.  In the event any mortgagee under a deed of trust, security agreement or mortgage on the Building requires that the insurance proceeds be applied to the debt secured thereby, Landlord will have no obligation to rebuild or is unable to by virtue of any such requirement or by virtue of any restrictions, prohibitions or requirements of law, and if Landlord elects not to rebuild or is unable to rebuild by virtue of any such requirement or by virtue of any restrictions, prohibitions or requirements of law, this Lease will terminate upon notice of such election given by Landlord to Tenant.  Except as specifically provided above, there will be no reduction of  rental.

11.3       No Liability.  Landlord shall have no liability to Tenant by reason of any injury to or interference with Tenant's business or property arising from fire or other casualty, howsoever caused, or from the making of any repairs resulting therefrom if any, in or to any portion of the Building of the Premises.  Moreover, Landlord shall not be responsible for, and Tenant releases and discharges Landlord from, and Tenant further waives any right of recovery from Landlord for, any loss from business interruption or loss of use of the Premises suffered by Tenant in connection with Tenant's use or occupancy of the Premises, whether by virtue of fire, casualty or otherwise, EVEN IF SUCH LOSS IS CAUSED SOLELY OR IN PART BY THE NEGLIGENCE OF LANDLORD OR ANY LANDLORD-RELATED PARTIES.

ARTICLE XII

EMINENT DOMAIN

12.1       Total Taking.  If the whole or substantially the whole of the Building or of the Property is condemned or taken in any manner including a voluntary conveyance by Landlord in lieu of condemnation, during the Term of this Lease by any governmental or quasi-governmental agency having the power of eminent domain, this Lease will terminate as of the date of taking of possession for such purpose.  If less than the whole or substantially the whole of the Building or the Premises is taken but the portion of the Premise taken is so great that Tenant cannot continue to conduct business in a manner comparable to the manner in which Tenant conducted Tenant's business prior to the taking, Tenant may elect to terminate this Lease by delivering written notice thereof to Landlord and thereupon this Lease will terminate upon the date of the taking.

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12.2       Partial Taking.  If less than the whole or substantially the whole of the Building or the Premises is taken but the portion of the Building or the Property taken is such that the taking materially adversely affects the value of the Property or the Building, Landlord may elect to terminate this Lease by delivering written notice thereof to Tenant and thereupon this Lease will terminate upon the date of the taking.  Any election to terminate this Lease pursuant to the preceding sentences must be exercised within sixty (60) days after the date of taking.  Upon any condemnation of less than the whole of the Building or the Premises which does not result in the termination of this Lease as described above, this Lease will nevertheless terminate as to the portion of the Premises so taken and continue in full force and effect as to the remaining portion of the Premises and the rent payable hereunder will equitably abate with respect to the portion of the Premises so taken (with no effect on the rental payable for the remainder of the Premises).

12.3       Award.  Landlord shall be entitled to receive the entire award in any condemnation proceeding for a permanent taking which affects the Building or the Premises described in Sections 12.1 or Section 12.2 above, including without limitation, any award for the value of the unexpired portion of the Term of this Lease.  Tenant hereby expressly assigns to Landlord all of Tenant's right, title and interest in and to any such award or payment for a permanent taking.  No temporary taking of the Premises, and/or Tenant's rights therein, by a public or quasi-public agency under the right of eminent domain will terminate this Lease or give Tenant any right to any abatement of Base Rental or Additional Rent under this Lease.  Any award made to Tenant by reason of any temporary taking will belong entirely to Tenant and Landlord will not be entitled to share in such award.

ARTICLE XIII

DEFAULT BY TENANT

13.1       Events of Default.  The occurrence of any of the following will constitute a default by Tenant under this Lease:

13.1.1           Monetary Default.  If Tenant fails to pay any monetary obligation of Tenant under this Lease at the time such monetary obligation is due, and such failure continues for five (5) days after delivery of written notice from Landlord to Tenant specifying such default (provided, that if two [2] such failures have already occurred in any consecutive twelve [12] month period, Tenant shall not be entitled thereafter to any such notice of, or such period to cure, any subsequent failure during such twelve [12] month period, and any such subsequent failure during such period shall be and constitute an immediate event of default under this Lease without further requirement of notice from Landlord to Tenant thereof).

13.1.2           Non-monetary Default.  If Tenant fails to comply with any term, provision or covenant of this Lease, other than the payment of monetary obligations, within thirty (30) days after written notice from Landlord to Tenant specifying that Tenant has failed to comply with such term, provision or covenant, or if such failure cannot reasonably be cured within such 30-day period, Tenant fails to commence to cure such failure within such 30-day period or thereafter fails to prosecute the cure diligently and continuously or fails to complete the cure within 60 days after the date of Landlord's notice of such default.

13.1.3           Assignment to Creditors.  If Tenant shall make a general assignment for the benefit of creditors.

13.1.4           Insolvency.  If Tenant becomes insolvent, or unable to pay Tenant's debts as the same become due, or Tenant files or there is filed against Tenant and not dismissed within a period of sixty (60) days, a petition seeking entry as to Tenant of an order for relief under any chapter of the Bankruptcy Code, or under any similar law or statute of the United States or any State thereof.

13.1.5           Receivership.  If a receiver, custodian, examiner, sequestrator or trustee is appointed for all or substantially all of the assets of Tenant and the same is not terminated or stayed within sixty (60) days.

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13.1.6           Abandonment.  If Tenant abandons any substantial portion of the Premises for a period of ten (10) or more consecutive days and thereafter fails to pay any rent due hereunder with respect thereto.

13.1.7           Inaccuracy of Financial Information.  If Tenant provides financial or credit information to Landlord that is materially inaccurate or incomplete as of either the date provided to Landlord or the date, if any, on which such information is reaffirmed by Tenant to Landlord as accurate.

As used in this Section 13.1, the term "Tenant" includes any guarantor of Tenant's obligations under this Lease.

13.2       Remedies.  Upon the occurrence of any event of default specified in Section 13.1.1, Section 13.1.2, Section 13.1.6 or Section 13.1.7, Landlord will have the option to pursue any one or more of the following remedies without any further notice or demand whatsoever.  Upon the occurrence of any other event of default under Section 13.1, this Lease will automatically terminate without action on the part of Landlord and Section 13.2.1 hereof will control.

13.2.1           Landlord's Remedies.  

(a)          Landlord may at any time thereafter (without being under any obligation to do so) re-enter the Premises and correct or repair any condition which shall constitute a failure on the part of Tenant to observe, perform, or satisfy any term, condition, covenant, agreement, or obligation of Tenant under this Lease; and Tenant shall fully reimburse and compensate Landlord on demand for the costs incurred by Landlord in doing so, plus a fee for Landlord's administrative and overhead costs and efforts in an amount equal to fifteen percent (15%) of such cost.  No action taken by Landlord under this Subsection shall relieve Tenant from any of Tenant's obligations under this Lease or from any consequences or liabilities arising from the failure of Tenant to perform such obligations.

(b)          Landlord may terminate this Lease and repossess the Premises.  In the event that Landlord elects to terminate this Lease, Landlord shall be entitled to recover damages equal to the total of (i) the cost of recovering the Premises (including reasonable attorneys' fees and costs); (ii) the cost of removing and storing Tenant's or any other occupant's property; (iii) the unpaid Rent owed at the time of termination, plus interest thereon from the date when due at the maximum rate of interest then allowed by law; (iv) the cost of reletting the Premises (as reasonably estimated by Landlord and including reasonable alterations or repairs to the Premises and third-party brokerage commissions); (v) the costs of collecting any sum due to Landlord (including without limitation, reasonable attorneys' fees and costs); (vi) the Discounted Future Rent (as defined herein below); and (vii) any other sum of money or damages owed by Tenant to Landlord as a result of the default by Tenant, whether under this Lease, at law, or in equity (including without limitation any loan-related damages which may be incurred by Landlord as a result of any event of default by Tenant, such as the payment of default interest, legal fees, late charges and collection costs, it being hereby acknowledged by Tenant that an event of default by Tenant under this Lease may cause Landlord to incur such damages under its mortgage and/or other financing documents).

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(c)          Landlord may terminate Tenant's right of possession of the Premises without terminating this Lease and repossess the Premises.  In the event that Landlord elects to take possession of the Premises without terminating this Lease, Tenant shall remain liable for, and shall pay to Landlord, from time to time on demand, (i) all costs and damages described in Subsection (b) of this Section 13.2.1 and (ii) any deficiency between the total Rent due under this Lease for the remainder of the Term and rents, if any, which Landlord is able to collect from another tenant for the Premises during the remainder of the Term ("Rental Deficiency").  Landlord may file suit to recover any sums falling due under the terms of this Lease from time to time, and no delivery to or recovery by Landlord of any portion of the sums owed to Landlord by Tenant under this Lease shall be a defense in any action to recover any amount not previously reduced to judgment in favor of Landlord.  To the extent required by Applicable Law, Landlord shall use reasonable efforts to relet the Premises on such terms and conditions and to such parties as Landlord, in Landlord's sole but reasonable discretion, may determine (including a term different from the Term, rental concessions, and alterations and improvements to the Premises); but Landlord shall never be obligated to relet the Premises before leasing other rentable areas within the Building, it being the intent of the parties that Tenant shall not be placed in a preferential position by reason of Tenant's own default, nor shall Landlord be required to relet for less than fair market rental or be required to relet to a tenant (or for a use) which is not in keeping with the character of the Building; and Landlord shall in no event be liable in any manner, nor shall Tenant's obligations hereunder be diminished, by the failure of Landlord to relet the Premises or, in the event of reletting, to collect rent thereunder.  If the Premises or any portion thereof are relet by Landlord during the unexpired portion of the Term of this Lease, or any part thereof, before presentation of proof of such damages to any court, commission or tribunal, the amount of rental reserved upon such reletting will, prima facie, be deemed to be the fair and reasonable rental value for the Premises, or part thereof, so relet during the term of the reletting, so long as such reletting is to an unrelated third party in a bona fide lease transaction.  No refusal or failure to relet or failure to collect rental will release or affect Tenant's liability for damages or otherwise under this Lease so long as Landlord complies with the provisions of this Section 13.2.1(c).  Any sums received by Landlord through reletting shall reduce the sums owing by Tenant to Landlord, but Tenant shall not be entitled to any excess of any sums obtained by reletting over and above a credit for the Rent provided in this Lease under any circumstances.  For the purpose of such reletting, Landlord is authorized to decorate or to make any repairs, changes, alterations, or additions in and to the Premises that Landlord may deem reasonably necessary or advisable, and any such reasonable costs incurred by Landlord in connection therewith may be included within the loss or damage suffered by Landlord and recoverable hereunder by reason of the event of default by Tenant, together with any other reasonable costs of recovering the Premises or reletting same.  No taking of possession or reletting of the Premises or any other action or omission to act by Landlord shall be construed as an election on the part of Landlord to terminate this Lease unless a written notice of such intention is given to Tenant by Landlord.  Notwithstanding any such reletting without termination, Landlord may, at any time thereafter, elect to terminate this Lease for such previous default.  In the alternative (but only in the event that Tenant's default constitutes a material breach), Landlord may elect to terminate Tenant's right to possession of the Premises and to immediately recover as damages, in lieu of the Rental Deficiency, a sum equal to the difference between (a) the total Rent due under this Lease for the remainder of the Term and (b) the then fair market rental value (which phrase shall, for purposes hereof, mean the rental rate that would be received from a comparable tenant for a comparable lease for premises and other properties of equivalent quality, size, condition and location as the Premises, taking into account any free rent or other concessions that are generally prevailing in the marketplace at the time of Tenant's default, market conditions, and the period of time the Premises may reasonably be expected to remain vacant before Landlord is able to re-let the Premises to a suitable new tenant) of the Premises during such period, discounted to present value at the Prime Rate (defined below) in effect upon the date of determination ("Discounted Future Rent").  For purposes hereof, the “Prime Rate” shall be the per annum interest rate publicly announced by a federally insured bank selected by Landlord in the state in which the Building is located as such bank’s prime or base rate.  In such event, Landlord shall have no obligation to relet or the Premises or to apply any rentals received by Landlord as a result of any reletting to Tenant's obligations under this Lease; and the aggregate amount of all damages due to Landlord, including the Discounted Future Rent, shall be immediately due and payable to Landlord upon demand.

(d)          If the event of default is, in whole or in part, abandonment of any substantial portion of the Premises for a period of ten (10) or more consecutive days, Landlord may, in its sole discretion and to the maximum extent permitted by applicable law, in addition to all other remedies available, upon 30 days advance written notice to Tenant, do each or all of the following:

(1)         Charge Tenant the full amount of all increases in insurance premiums for the Building caused by or related to Tenant's abandonment of the Premises, until the Premises are re-let or the abandonment is otherwise terminated; and/or

(2)         Charge Tenant all increased costs of maintenance and repair, including increased security costs, incurred at the Building caused by or related to Tenant's abandonment of the Premises, until the Premises are re-let or the abandonment is terminated.

13.2.2           Relet Premises.  Landlord may enter upon and take possession of the Premises and expel or remove Tenant and any other party who may be occupying the Premises or any part thereof without being liable for prosecution or any claim for damages therefor, and if Landlord so elects, relet the Premises on such terms as Landlord deems advisable and receive the rental thereof.  Tenant will pay to Landlord on demand any deficiency that may arise by reason of such reletting for the remainder of the Term of this Lease.  If the Premises or any portion thereof are relet by Landlord during the unexpired portion of the Term of this Lease, or any part thereof, before presentation of proof of such damages to any court, commission or tribunal, the amount of rental reserved upon such reletting will, prima facie, be the fair and reasonable rental value for the Premises, or part thereof, so relet during the term of the reletting.  Landlord will not be liable in any way whatsoever for Landlord's failure or refusal to relet the Premises or any portion thereof, or if the Premises or any portion thereof are relet, for Landlord's failure to collect the rental under such reletting, and no such refusal or failure to relet or failure to collect rental will release or affect Tenant's liability for damages or otherwise under this Lease.  No re-entry or taking of possession of the Premises by Landlord will be construed as an election on Landlord's part to terminate this Lease, unless a written notice of such intention is given to Tenant.  Notwithstanding any reletting or re-entry or taking possession, Landlord may at any time thereafter elect to terminate this Lease for a previous default.

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13.2.3           Cure Default.  Landlord may enter upon the Premises without being liable for prosecution or any claim for damages therefor, and do whatever Tenant is obligated to do under the terms of this Lease.  Tenant shall reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant's obligations under this Lease together with Landlord's supervision fee, and Tenant further agrees that Landlord will not be liable for any damages resulting to Tenant from such action.

13.2.4           Injunctive Relief.  In the event of a breach or threatened breach by Tenant of any of Tenant's obligations under this Lease, Tenant expressly acknowledges and agrees that Landlord will also have the right of injunction.  Tenant acknowledges that, if Landlord seeks injunctive relief, irreparable injury for breach or threatened breach shall be presumed.

13.3       Landlord's Damages.  The loss or damage suffered by Landlord by reason of termination of this Lease or the deficiency from any reletting as provided for above will include the expense of repossession and any repairs or remodeling undertaken by Landlord following repossession, brokerage fees resulting from reletting the Premises, and all damages Landlord may incur by reason of such default, including without limitation, the cost of recovering the Premises.

13.4       Remedies Cumulative.  The specific remedies to which Landlord may resort hereunder are cumulative and are not intended to be exclusive of any other remedies to which Landlord may lawfully be entitled at any time and Landlord may invoke any remedy allowed at law or in equity as if specific remedies were not provided for herein.  Pursuit of any of the foregoing remedies will not preclude pursuit of any of the other remedies herein provided or any other remedies provided by law or equity, nor will pursuit of any remedy herein provided constitute a forfeiture or waiver of any rental due to Landlord hereunder or of any damages accruing to Landlord by reason of the violation of any of the terms, provisions and covenants herein contained.

13.5       Joint and Several Liability.  If more than one party is defined as Tenant in this Lease, all of the duties, obligations, promises, covenants and agreements contained in this Lease to be paid and performed by Tenant will be the joint and several obligation of all parties defined as Tenant.  Each party defined as Tenant agrees that Landlord in Landlord's sole discretion may (i) institute or bring suit against each such party, jointly and severally, or against any one or more of such parties, (ii) compromise or settle with any one or more of such parties for such consideration as Landlord may deem proper, and (iii) release one or more of such parties from liability hereunder; and each agrees that no such action by Landlord will impair or affect Landlord's right to collect costs, expenses, losses or damages incurred or suffered by Landlord from the other parties defined as Tenant, or any of such parties, not so sued, compromised, settled with or released.

13.6       Landlord's Lien; Security Interest.  Intentionally deleted.

13.7       Attorneys' Fees.  If Landlord or Tenant employs an attorney to assert or defend any action arising out of the breach of any term, covenant or provision of this Lease, or to bring legal action for the unlawful detainer of the Premises, the prevailing party in such action will be entitled to recover from the non-prevailing party therein all attorneys' fees and costs of suit incurred by such prevailing party in connection therewith.  For purposes of this Section 13.7, a party will be considered to be the "prevailing party" if (i) such party initiated the litigation and substantially obtained the relief which it sought (whether by judgment, voluntary agreement or action of the other party, trial or alternative dispute resolution process), (ii) such party did not initiate the litigation and either (A) received a judgment in its favor, or (B) did not receive judgment in its favor, but the party receiving the judgment did not substantially obtain the relief which it sought, or (iii) the other party to the litigation withdrew its claim or action without having substantially received the relief which it was seeking.

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13.8       Waivers.  Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of default will not be deemed or construed to constitute a waiver of any other violation or default.  Landlord's acceptance of rental following an event of default will not be construed as a waiver by Landlord of such event of default, nor be deemed or construed to constitute a waiver of any other violation or breach of any of the terms, provisions and covenants herein contained.  TENANT HEREBY WAIVES AND SURRENDERS, FOR ITSELF AND ALL PERSONS OR ENTITIES CLAIMING BY, THROUGH AND UNDER TENANT, ANY RIGHTS, PRIVILEGES AND LIENS SET OUT UNDER SECTION 91.004 OF THE TEXAS PROPERTY CODE (AS AMENDED), AND TENANT EXEMPTS LANDLORD FROM ANY LIABILITY OR DUTY THEREUNDER.  TENANT FURTHER HEREBY WAIVES ALL RIGHTS UNDER THE TEXAS PROPERTY TAX CODE, NOW OR HEREAFTER IN EFFECT, INCLUDING WITHOUT LIMITATION ALL RIGHTS UNDER SECTION 41.413 AND 42.015 THEREOF, GRANTING TO TENANTS OF REAL PROPERTY OR LESSEES OF TANGIBLE PERSONAL PROPERTY THE RIGHT TO PROTEST THE APPRAISED VALUE, OR RECEIVE NOTICE OF ANY REAPPRAISAL, OF ALL OR ANY PORTION OF THE BUILDING AND PROPERTY, IRRESPECTIVE OF WHETHER LANDLORD HAS ELECTED TO PROTEST SUCH APPRAISED VALUE.  LANDLORD AND TENANT FURTHER HEREBY EACH ACKNOWLEDGE AND AGREE THAT THEY ARE KNOWLEDGEABLE AND EXPERIENCED IN COMMERCIAL TRANSACTIONS AND FURTHER HEREBY ACKNOWLEDGE AND AGREE THAT THE PROVISIONS OF THIS LEASE FOR DETERMINING CHARGES, AMOUNTS AND ADDITIONAL RENT PAYABLE BY TENANT (including, without limitation, under Sections 4.2, 4.6, 4.9, 6.2 and 6.3 OF THIS LEASE) ARE COMMERCIALLY REASONABLE AND VALID and, as to each such charge or amount, constitutes a "method by which the charge is to be computed" for purposes of Section 93.012 of the Texas Property Code (as such section now exists or as same may be hereafter amended or succeeded), EVEN THOUGH SUCH METHODS MAY NOT STATE PRECISE MATHEMATICAL FORMULAE FOR DETERMINING SUCH CHARGES; PROVIDED, FURTHER, THAT NOTWITHSTANDING THE FOREGOING, TENANT HEREBY VOLUNTARILY AND KNOWINGLY WAIVES, to the extent permitted by applicable law, ALL RIGHTS AND BENEFITS TO WHICH TENANT MAY BE ENTITLED UNDER SECTION 93.012 OF THE TEXAS PROPERTY CODE, AS SUCH SECTION NOW EXISTS OR AS SAME MAY BE HEREAFTER AMENDED OR SUCCEEDED.  

13.9       Landlord's Default.  Landlord shall be in default under this Lease if Landlord fails to perform any of Landlord's obligations hereunder and said failure continues for a period of thirty (30) days after Tenant delivers written notice thereof to Landlord, provided that if such failure cannot reasonably be cured within said 30-day period, Landlord shall not be in default hereunder if the curative action is commenced within said 30-day period and is thereafter diligently pursued until cured.  In no event shall (a) Tenant claim a constructive or actual eviction or that the Premises have become unsuitable hereunder, or (b) a constructive or actual eviction or breach of the implied warranty of suitability be deemed to have occurred under this Lease, prior to the expiration of the notice and cure periods provided under this Section 13.9.  Tenant is granted no contractual right of termination by this Lease except as may be expressly set forth herein, and Tenant is granted no contractual right of offset or deduction with respect to Tenant except to the extent expressly set forth in this Lease.  Moreover, Tenant's remedies for any such default by Landlord shall be limited by the terms of Section 16.4 hereof.  

13.10     Waiver of Certain Damages.  In no event shall Landlord be liable for any punitive, incidental, special or consequential damages arising under or in connection with this Lease, even if Tenant has been advised of the possibility of such damages, any claims for such damages being hereby knowingly and voluntarily waived and released by Tenant for all purposes under and in connection with this Lease and the Premises.  EXCEPT FOR DAMAGES LANDLORD MAY SUFFER IN THE EVENT OF A HOLDOVER BY TENANT PURSUANT TO SECTION 3.2 ABOVE AND EXCEPT FOR ANY DAMAGES LANDLORD MAY SUFFER RELATING TO A CONTAMINATION OF THE PREMISES, BUILDING OR THE PROPERTY BY HAZARDOUS MATERIALS RELEASED OR BROUGHT ONTO THE PROPERTY BY TENANT OR A TENANT-RELATED PARTY, In no event shall TENANT be liable for any punitive, incidental, special or consequential damages arising under or in connection with this Lease, even if LANDLORD has been advised of the possibility of such damages, any claims for such damages being hereby knowingly and voluntarily waived and released by LANDLORD for all purposes under and in connection with this Lease and the Premises.

13.11         Waiver of Trial by Jury.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO AGREE TO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (OTHER THAN A MANDATORY COUNTERCLAIM) BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, AND/OR THE RELATIONSHIP OF THE PARTIES HEREUNDER AND/OR ANY CLAIM OF INJURY OR DAMAGE IN RESPECT HERETO, AND/OR ANY STATUTORY REMEDY RELATED THERETO OR TO THIS LEASE.

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ARTICLE XIV

SUBORDINATION AND ATTORNMENT

14.1       Subordination.  Tenant hereby subordinates this Lease and all rights of Tenant hereunder to any ground lease, mortgage or deed of trust and all liens created pursuant to future advances thereunder which are now or which may from time to time be placed upon the Premises, the Building, the Property or any part thereof, and any such ground lease, mortgage or deed of trust and all modifications, consolidations, replacements and extensions thereof (all such encumbrances being collectively referred to herein as the "Encumbrances" or individually as an "Encumbrance") will be superior to and have priority over this Lease.  This Section 14.1 is self-operative and no further instrument of subordination is required.  Notwithstanding the foregoing, it is agreed that any holder of a ground lease, lien, mortgage or deed of trust covering all or any part of the Building may at any time elect to have this Lease have priority over its lien, mortgage, deed of trust or ground lease by executing unilaterally an instrument of subordination or placing a clause of such subordination in any pleadings or in its lien, mortgage, deed of trust or ground lease instrument and recording the same.  Landlord shall use commercially reasonable efforts to obtain a nondisturbance agreement from any current or future holder of a mortgage or deed of trust on the Building for the benefit of Tenant, on such holder’s then-current form.

14.2       Attornment.  Tenant further covenants and agrees that if the lessor of any ground lease acquires title to the Property through termination or assignment of such ground lease or if the holder of any mortgage or deed of trust acquires the Premises by foreclosure or deed in lieu of foreclosure, or if any other party acquires the Premises as a purchaser at any foreclosure sale (any such lessor of any ground lease, holder of any mortgage or deed of trust or purchaser at a foreclosure sale being each hereinafter referred to as the "Purchaser"), Tenant will thereafter, but only at the option of the Purchaser, as evidenced by the written notice of the Purchaser's election given to Tenant within a reasonable time after the Purchaser's acquisition of title, attorn to such Purchaser and remain bound by novation or otherwise to the same effect as if a new and identical lease containing the terms of this Lease between the Purchaser, as Landlord, and Tenant, as tenant, had been entered into for the remainder of the Term of this Lease effective on the date of the Purchaser's acquisition of title.

14.3       Further Documentation.  Tenant agrees to execute any instrument(s) which may be deemed necessary or desirable to effect the subordination of this Lease to each such Encumbrance or to confirm any election to continue this Lease in effect in the event of foreclosure or ground lease termination or assignment, as above provided.  During the pendency of a default by Tenant under this Lease, Landlord is hereby irrevocably appointed and authorized as agent and attorney-in-fact (such power to be deemed to be coupled with an interest) of Tenant to execute and deliver all such subordination instruments in the event that Tenant fails to execute and deliver such instruments within ten (10) days after notice from landlord requesting the execution thereof.  The Purchaser will not be liable for any act or omission of Landlord, or subject to any offsets or defenses which Tenant might have against Landlord.  If the Purchaser requires any modification(s) of this Lease, Tenant will, at Landlord's request, promptly execute and deliver to Landlord such instruments effecting such modification(s) as the Purchaser requires, provided that such modification(s) do not adversely affect in any material respect any of Tenant's monetary obligations under this Lease.

ARTICLE XV

CERTIFICATES

15.1       Estoppel Certificates.  Tenant agrees that upon tender of possession of the Premises and from time to time thereafter, upon not less than ten (10) days' prior written request by Landlord, or any  mortgagee of Landlord or prospective purchaser of the Building or any interest therein, Tenant will execute, acknowledge and deliver to Landlord and for such mortgagee or purchaser a statement certifying that no breach of or default in the Lease by Landlord has occurred and that this Lease has not been modified unless such modifications are stated therein, and certifying to such other factual matters in connection with the Lease and/or Premises as may be reasonably requested by the party requesting such certificate, which estoppel certificate shall be in a form acceptable to Landlord and/or such mortgagee or purchaser.  Any such statement may be relied upon by any prospective transferee or mortgagee of all or any portion of the Building or the Property, or any assignee of any such persons.  If Tenant fails to timely deliver such statement, Tenant shall be deemed to have acknowledged that this Lease is in full force and effect, without modification except as may be represented by Landlord, and that there are no uncured defaults in Landlord's performance.

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15.2       Financial Statements.  Landlord will have the right to request financial statements from Tenant for purposes of selling, financing or refinancing the Building.  Tenant shall, within ten (10) days after receipt of a request from Landlord setting forth the purposes for which such financial statement will be used, deliver to Landlord a current financial statement certified by Tenant's chief financial officer to be true and correct and to fairly express Tenant's then current financial condition.  For so long as Tenant is a corporation the stock of which is listed on a national securities exchange (as this term is used in the Securities Exchange Act of 1934, as amended) or is publicly traded on the over-the-counter market and prices therefor are published daily on business days in a recognized financial journal (a “Public Company”), Tenant’s obligations under this Section 15.2 may be satisfied by the financial information that is disclosed in the publicly available 10K and 10Q reports.  All such financial statements will be received by Landlord in confidence and used only for the purposes set forth in the request, except as may otherwise be required to be disclosed under applicable law.  In addition to the foregoing, if this Lease has been guaranteed, Landlord may request similar financial statement(s) with regard to any such guarantor(s), and Tenant shall, within ten (10) days after receipt of such request from Landlord setting forth the purposes for which such financial statement(s) will be used, deliver or cause to be delivered to Landlord current financial statement(s) for any such guarantor(s) satisfying the conditions set forth above.

ARTICLE XVI

LIMITATIONS ON REMEDIES AND OBLIGATIONS; INTEREST OF LANDLORD

16.1       Consents.  If Tenant requires Landlord's consent under any provision of this Lease and Landlord fails or refuses to give such consent, Tenant will not be entitled to any damages for any withholding by Landlord of Landlord's consent; it being intended that Tenant's sole remedy will be an action for specific performance or injunction, and that such remedy shall be available only in those cases where Landlord has expressly agreed in this Lease not to unreasonably withhold Landlord's consent or where as a matter of law Landlord may not unreasonably withhold Landlord's consent.

16.2       Force Majeure.  Whenever a period of time is herein prescribed for action to be taken by Landlord or Tenant, Landlord and Tenant will not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war or acts of terrorism or violence, governmental laws, regulations or restrictions or any other causes (other than financial inability) of any kind whatsoever which are beyond the control of Landlord or Tenant, as applicable; provided, however, that the provisions of this Section 16.2 will never be construed as allowing an extension of time with respect to Tenant's obligation to pay rent when and as due under this Lease.

16.3       Best Efforts.  Whenever in this Lease or any exhibit hereto there is imposed upon Landlord the obligation to use Landlord's best efforts or reasonable efforts or diligence, Landlord will be required to exert such efforts or diligence only to the extent the same are economically feasible and will not impose upon Landlord extraordinary financial or other burdens.

16.4       Exculpation.  In any action brought by Tenant against Landlord in the event of any default by Landlord hereunder, Tenant will look only to Landlord's interest in the Property and the Building for satisfaction of Tenant's remedies or for the collection of a judgment or other judicial process requiring the payment of money by Landlord, and no other property or assets of Landlord, disclosed or undisclosed, will be subject to levy, execution or other enforcement procedure for the satisfaction of Tenant's remedies under or with respect to this Lease, the relationship of Landlord and Tenant hereunder or Tenant's use and occupancy of the Premises.  As used in this Section 16.4, the term "Landlord" will be deemed to include any (i) partner, (ii) principal (disclosed or undisclosed), (iii) director, officer, or shareholder of any corporation which is Landlord or a partner of Landlord, or (iv) agent, servant or employee of Landlord.

16.5       Sale of Building.  The term "Landlord" will mean only the owner at the time in question of the fee title or a tenant's interest in a ground lease of the Premises.  The obligations contained in this Lease to be performed by Landlord will be binding on Landlord and Landlord's successors and assigns only during their respective periods of ownership.  In the event of a sale of the Building or assignment of this Lease by Landlord, Landlord will have the right to transfer the Security Deposit to Landlord's vendee or assignee, subject to Tenant's rights therein, and Landlord will thereafter be released from any liability to Tenant with respect to the return of the Security Deposit to Tenant.

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ARTICLE XVII

NOTICES

Each provision of this Lease with reference to the sending, mailing, or delivery of any notice, or with reference to the making of any payment by Tenant to Landlord, will be deemed to be complied with when and if the following steps are taken:

(i)          All rent and other payments required to be made by Tenant to Landlord hereunder will be payable to Landlord at the address set forth in Section 1.12 hereof, or at such other address as Landlord may specify from time to time by written notice delivered in accordance herewith.

(ii)         Any notice or document required to be delivered hereunder must be in writing and will be deemed to be delivered, whether or not received, when delivered by receipted delivery by an independent, reputable courier service or three (3) business days after deposited with the United States Postal Service, postage prepaid, certified or registered mail, with return receipt requested, addressed to the parties hereto in either such event at the respective addresses set forth in Section 1.12 hereof, or at such other address as they have theretofore specified by written notice delivered in accordance herewith, provided that after the Commencement Date, Tenant's address for notice or other communication will be Tenant's address in the Building.

Notices required hereunder to be given by Landlord to Tenant may be given by Landlord or by Landlord's agent or attorney.

ARTICLE XVIII

BROKERS

Landlord and Tenant each represent to the other that they have had no dealings with any broker or agent (other than the Broker named in Section 1.13 hereof, if any) in connection with the negotiation or execution of this Lease.  TENANT HEREBY AGREES TO INDEMNIFY AND HOLD LANDLORD HARMLESS FROM ANY SUCH CLAIMS OR LIABILITY ARISING OR RESULTING FROM ANYONE CLAIMING SUCH A COMMISSION BY, THROUGH OR UNDER TENANT OR BY VIRTUE OF THE ACT OR COMMITMENT OF TENANT.  Landlord covenants and agrees to pay the lease commission(s) due to the Broker named in Section 1.13 hereof, pursuant to one or more written lease commission agreement(s) between Landlord and said Broker (and the Broker shall be solely responsible for any portion of such commission(s) which is then payable to any other brokers pursuant to any commission-splitting or other agreement between Broker and any other brokers, and Landlord shall have no liability or responsibility and shall be held harmless by Broker with respect thereto), AND LANDLORD HEREBY AGREES TO INDEMNIFY AND HOLD TENANT HARMLESS FROM ANY DAMAGES ARISING OR OTHERWISE CONNECTED WITH LANDLORD'S BREACH OF THE COVENANT SET FORTH IN THIS SENTENCE AND FURTHER AGREES TO INDEMNIFY AND HOLD TENANT HARMLESS FROM ANY OTHER CLAIMS OR LIABILITY ARISING OR RESULTING FROM ANYONE CLAIMING A COMMISSION BY, THROUGH OR UNDER LANDLORD OR BY VIRTUE OF THE ACT OR COMMITMENT OF LANDLORD.

ARTICLE XIX

RELOCATION OF TENANT

Intentionally deleted.

ARTICLE XX

MISCELLANEOUS

20.1       No Implied Waiver.  No provision of this Lease will be deemed to have been released or waived by Landlord unless such release or waiver is in writing and is signed by Landlord.

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20.2       No Recording.  Tenant agrees that Tenant will not record this Lease or a memorandum thereof or a reference thereto without first securing the prior written consent of Landlord, which may be withheld at Landlord's sole discretion.  Any such memorandum shall not be deemed to change or affect any of the obligations or provisions of this Lease.

20.3       Independent Contractor.  It is understood and agreed that in leasing and operating the Premises, Tenant is acting as an independent contractor and is not acting as agent, partner, joint venturer or employee of Landlord, and nothing contained in this Lease shall create any relationship between the parties hereto other than that of Landlord and Tenant.

20.4       Additional Amenities.  Tenant acknowledges that Landlord may make additional amenities available within Hall Office Park, including without limitation access to notary services, discount priced tickets for community activities, availability of a childcare and/or a health club facility, and artwork for view. Tenant acknowledges and agrees that it is not a condition of this Lease that any such amenities, which are not included in the services and utilities referenced in Article VI above, be provided. Tenant further acknowledges and agrees that availability of such amenities may be discontinued without notice at any time, that Landlord may impose or increase a charge in connection with offering such amenities at any time, and that there is no assurance that any artwork that may be located within Hall Office Park will remain at a specific site thereon for any period of time or remain thereon for the term of this Lease.  Notwithstanding anything to the contrary contained in the foregoing, Landlord will agree to make available an area in Hall Office Park large enough for Tenant to conduct training for up to sixty (60) people during the Term of this Lease.  Tenant further acknowledges and agrees that, for any amenities available within Hall Office Park that are provided by a third-party provider, Tenant will not attempt to hold Landlord liable for any action or inaction of such third-party provider, and any attempt to hold Landlord liable therefor shall constitute a breach by Tenant of this Lease.

20.5       Survival.  All of the terms, conditions, covenants, promises and agreements contained  in this Lease (including, without limitation, each indemnity and hold harmless agreement contained herein) will survive the expiration or termination of this Lease with respect to all rights or remedies which have accrued prior to such expiration or termination.

20.6       Severability.  If any term or provision of this Lease is illegal, invalid or unenforceable under present or future laws effective during the Term of this Lease, then and in that event, it is the intention of the parties hereto that the remainder of this Lease will not be affected thereby.  Each covenant, agreement, obligation or other provision of this Lease to be performed by Tenant will be deemed and construed as a separate and independent covenant of Tenant and not as dependent on any other provision of this Lease.

20.7       Amendments.  This Lease may not be altered, changed or amended, except by an instrument in writing signed by both parties hereto.  No custom or practice which may arise between the parties in the administration of the terms, provisions, covenants and conditions hereof will be construed to modify, waive or lessen the rights of Landlord hereunder.

20.8       Binding Effect; Authority.  The terms, provisions, covenants and conditions contained in this Lease will apply to, inure to the benefit of, and be binding upon the parties hereto, and upon such parties' respective permitted assigns, successors in interest and legal representatives, except as otherwise herein expressly provided.  Each individual executing this Lease on behalf of Landlord and Tenant warrants that he/she is duly authorized to execute and deliver this Lease on behalf of said party, and each party hereto hereby warrants to the other that this Lease has been duly authorized in accordance with such party's governing instruments and that this Lease is binding upon said party in accordance with its terms (and that such party shall provide reasonable evidence of such authority upon reasonable advance notice and request from the other party hereto).

20.9       Gender.  Words of any gender used in this Lease shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural unless the context otherwise requires.

20.10     Captions; Section References.  The captions contained in this Lease are for convenience of reference only, and in no way limit or enlarge the terms, provisions, covenants and conditions of this Lease.  Any reference herein to an article, paragraph or section shall mean and refer to an article, paragraph or section of this Lease unless otherwise expressly specified.

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20.11     Exhibits.  All exhibits, attachments, annexed or referenced instruments and addenda referred to herein shall be considered a part hereof for all purposes with the same force and effect as if copied verbatim herein.

20.12     Entire Agreement.  This Lease, and the attachments, riders and exhibits thereto constitute the entire agreement between the parties hereto with respect to the subject matter of this Lease.  Tenant expressly acknowledges and agrees that Landlord has not made and is not making, and Tenant, in executing and delivering this Lease, is not relying upon, any warranties, representations, promises or statements, except to the extent that the same are expressly set forth in this Lease or in any other written agreement which may be made between the parties concurrently with the execution and delivery of this Lease and shall expressly refer to this Lease.  All understanding and agreements heretofore had between the parties are merged in this Lease and any other written agreement(s) made concurrently herewith, which alone fully and completely express the agreement of the parties and which are entered into after full investigation. Neither party is relying upon any statement or representation not embodied in this Lease or in other written agreement(s) made concurrently herewith.

20.13     Counterparts.  This Lease may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.

20.14     Governing Law and Venue; Miscellaneous.  This Lease and all of the transactions contemplated herein shall be governed by and construed in accordance with the laws of the State of Texas, and Landlord and Tenant both irrevocably agree that their respective agreements and obligations hereunder will be performable in Frisco, Texas, and that venue for any action arising under or relating to the terms of this Lease shall be in Dallas County, Texas.  In no event shall any charges permitted under this Lease, to the extent the same are considered to be interest under applicable law, exceed the maximum lawful rate of interest.

20.15     No Reservation; Interpretation.  Submission by Landlord of  this instrument to Tenant for examination or signature does not constitute a reservation of or option for lease.  This Lease will be effective as a lease or otherwise only upon execution and delivery by both Landlord and Tenant.  The terms and conditions of this Lease represent the result of negotiations between Landlord and Tenant, each of which were represented and/or had the opportunity to be represented by independent legal counsel and neither of which has acted under compulsion or duress; consequently, the normal rule of construction that any ambiguity be resolved against the drafting party shall not apply to the interpretation of this Lease or of any exhibits, addenda or amendments hereto.

20.16     OFAC Certification.  Tenant represents and warrants to Landlord that Tenant and any person or entity that directly owns a 10% or greater equity interest in it are currently in compliance with, and Tenant covenants that it shall at all times during the Term (including any extension thereof) be and remain in compliance with, the regulations of the U.S. Department of the Treasury Office of Foreign Asset Control ("OFAC") and any statute, executive order (including (i) the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support Terrorism, to be referred to herein as the "Executive Order", and (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, being Public Law 107-56 and sometimes referred to herein as the "USA Patriot Act") or other governmental action relating thereto, including without limitation any and all other laws related to terrorism or money laundering (all of the foregoing being herein referred to collectively as the "Anti-Terrorism Laws").  Tenant further hereby covenants with Landlord that neither Tenant nor any person or entity that directly owns a 10% or greater equity interest in it is or shall be during the Term of this Lease a "Prohibited Person", which is defined as follows:  (A) a person or entity that is listed in the Annex to, or is otherwise subject to, the provisions of the Executive Order; (B) a person or entity owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (C) a person or entity with whom Landlord is prohibited from dealing with or otherwise engaging in any transaction by any Anti-Terrorism Law, including without limitation the Executive Order and the USA Patriot Act; (D) a person or entity who commits, threatens or conspires to commit or support "terrorism" as defined in Section 3(d) of the Executive Order; (E) a person or entity that is named as a "specially designated national and blocked person" on the then-most current list published by OFAC at its official website or at any replacement website or other replacement official publication of such list; and (F) a person or entity who is affiliated with a person or entity listed in items (A) through (E) above.  At any time and from time to time during the Term, Tenant shall deliver to Landlord, within ten (10) business days after receipt of a written request therefor, a written certification or such other evidence reasonably acceptable to Landlord evidencing and confirming Tenant's compliance with this Section 20.16.  TENANT HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS LANDLORD AND ALL LANDLORD-RELATED PARTIES FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, RISKS, LIABILITIES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND COSTS) ARISING FROM OR RELATED TO ANY BREACH OF THE FOREGOING CERTIFICATION.  The indemnification obligations set forth in this Section 20.16 shall survive the expiration or earlier termination of this Lease.

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20.17     Option to Renew.  Tenant shall have the right to renew the Term of this Lease in accordance with the terms and conditions set forth in Exhibit "H" attached hereto and made a part hereof.

20.18     Termination Option.  Tenant shall have the option to terminate the Term of this Lease prior to the scheduled Expiration Date upon, and subject to, the terms and conditions set forth in Exhibit "I" attached hereto and made a part hereof.

20.19     Right of First Refusal.  Tenant shall have and is hereby granted certain rights to lease additional space in the Building in accordance with, and subject to, the terms, conditions and limitations set forth in Exhibit "J" attached hereto and made a part hereof.

20.20     Building Signage.  During the initial Term, but only so long as (a) Tenant leases at least 25,381 Rentable Square Feet in the Building and (b) no event of default exists under the Lease beyond any applicable notice and cure period, Tenant shall have the right to install and maintain, at Tenant’s sole expense, exterior signage identifying Tenant’s name (the “Signage”) located on the top of the northwest exterior façade of the Building.  The signage rights granted herein are personal to the specific party originally identified as the “Tenant” under the Lease and may not be transferred, shared or assigned in whole or in part to any assignee, subtenant or other tenant in the Building, except to a permitted transferee in connection with a Permitted Transfer provided that Landlord has first approved of the name such permitted transferee desires to place on the Signage, which approval shall not be unreasonably withheld.  In addition, Tenant’s right to Signage shall terminate upon any sublease of all or any portion of the Premises, except to a permitted transferee in connection with a Permitted Transfer provided that Landlord has first approved of the name such permitted transferee desires to place on the Signage, which approval shall not be unreasonably withheld.  The location, size, material, construction and design of the Signage shall be subject to (a) the prior written approval of Landlord, in its sole discretion; (b) compliance with applicable laws; and (c) any required approval under the restrictive covenants applicable to the Property, as the same may be amended or modified from time to time (the “Covenants”).  Tenant shall not make any subsequent alterations in or additions to the Signage without in each instance first complying with the foregoing requirements.  Tenant acknowledges that Landlord has made no representation that any Signage proposed by Tenant will comply with applicable law or the Covenants.  In  no event shall Tenant use a name on the Signage that is in competition with another tenant of Landlord or its affiliates or in contravention of any prior signage rights.  Tenant, at its expense, shall obtain all necessary governmental permits and certificates required for the installation and use of the Signage, as well as any approvals necessary under the Covenants.  All construction, installation, alterations and repair and maintenance work shall be performed in a good and workmanlike manner in compliance with the Building’s rules and regulations and shall not interfere with, delay or otherwise impose any additional expenses upon Landlord in the maintenance and operation of the Building or upon the use and enjoyment by other tenants of their respective premises in the Building.  Tenant shall maintain the Signage and keep it in good working order repair and shall timely pay or cause to be paid all costs for work done by Tenant or caused to be done by Tenant related to the Signage.  Upon the expiration or earlier termination of Tenant’s right to possess the Premises, or if Tenant otherwise fails at any time to comply with the requirements of this Paragraph, Tenant shall, at its sole expense, promptly remove all such Signage which shall become the property of Tenant, and repair any damage caused by the Signage or its removal.  However, if the Signage is not removed from the Property within ten (10) business days after Landlord’s notice, then the Signage shall conclusively be deemed to have been abandoned by Tenant and may be removed, appropriated, sold, stored, destroyed or otherwise disposed of by Landlord without further notice to Tenant or any other person and without obligation to account therefor.  Tenant shall pay Landlord all expenses incurred in connection with any such removal, appropriation, sale, storage, destruction and disposition of the Signage and the repair of any damage caused by the Signage or its removal.  Notwithstanding anything to the contrary contained in this Paragraph, or in any approvals or other communications, Landlord reserves the right, in its sole discretion and at its expense, to change any existing signage or modify its signage guidelines for the Property at any time and from time to time.  Tenant may use the Allowance (as defined in Exhibit “E”) to pay for the costs of the Signage.  

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20.21     Telecommunications Equipment.  It is agreed that during the Term of this Lease, telecommunications equipment and systems with associated antennae and cables (the "Telecommunications System(s)") may be installed and operated on the roof of the Building above the Premises, at Tenant's sole cost and expense, but at no additional rental or occupancy charge.  Prior to installation of the Telecommunications System(s), Tenant shall obtain Landlord's prior written approval, which will not be unreasonably withheld, conditioned or delayed, of the location and type of said Telecommunications System(s), provided that Landlord's approval shall include the right of approval by Landlord as to the size, nature and screening of any such Telecommunications System(s), as well as approval with respect to the manner of installation thereof (it being hereby agreed by Tenant, for example and without limitation, that if the installation of any such Telecommunications System(s) shall require alterations or improvements to the roof of the Building, then Landlord may require that any such roof work be undertaken by contractors utilized or approved by Landlord and otherwise in a manner which will avoid the breach or voiding of any warranties then in effect with respect to such roof).  Tenant shall, at Tenant's sole cost and expense, be solely responsible for obtaining and maintaining in effect all necessary permits, licenses and/or approvals for the installation and operation of the Telecommunications System(s).  Tenant shall also be solely responsible, at Tenant's sole cost and expense, for the maintenance of the Telecommunications System(s), and for the cost of installation and maintenance thereof, and Tenant shall comply with all Applicable Laws in connection with the installation and maintenance of any such Telecommunications System(s) and shall obtain any and all necessary permits, licenses or other approvals of any governmental or quasi-governmental authority which may be required with respect to the installation, maintenance and/or use of such Telecommunications System(s) and shall ensure that same shall thereafter be operated and used only in accordance with such Applicable Laws, permits, approvals and/or licenses.  Tenant shall be responsible, at Tenant's sole cost and expense, for obtaining and maintaining in effect at all times that such Telecommunications System(s) are in place liability and property insurance for the Telecommunications System(s) consistent with the requirements set forth in Section 9.1 of this Lease.  The location of the Telecommunications System(s) will be considered to be part of the Premises for the purposes of any indemnity, waiver, or obligation to defend contained in this Lease or in any insurance policy carried by Tenant.  In the event that the Telecommunications System(s) causes interference to equipment used by Landlord or another tenant in the Building or Hall Office Park, Tenant shall use reasonable efforts, and shall cooperate with Landlord and other tenants, to promptly eliminate such interference.  Tenant shall, upon the expiration or termination of this Lease, at Tenant's sole cost and expense, remove the Telecommunications System(s) and repair any damage to the roof or other parts of the Building caused by the installation or removal of such Telecommunications System(s), unless Landlord consents in writing to the Telecommunications System(s) remaining on the roof after Tenant's tenancy hereunder has expired or terminated.  Landlord shall not charge Tenant for the use of the roof space for the Telecommunications System(s), so long as the amount of space required and utilized by Tenant in respect thereto does not exceed nine (9) square feet.

NOTICE OF INDEMNIFICATION

The parties to this Lease agreement hereby acknowledge and agree that this lease agreement contains certain indemnification provisions, including, without limitation, as set forth in Sections 9.2.1 and 9.2.2, Article XVIII,
Section 20.16, Exhibit "E" and Exhibit "F".

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EXECUTED, made and entered into by Landlord and Tenant effective as of the Effective Date.

LANDLORD:
HALL OFFICE PARK BUILDING 16, L.P.,
a Texas limited partnership
By:	Hall Office Park GP, LLC, a Texas limited liability company, its General Partner
	By:	/s/ Donald Braun
		Donald L. Braun
		Its:  President

TENANT:
JAMBA JUICE COMPANY,
a California corporation
By:	/s/ David Pace
	Name: David A. Pace
	Title: President and Chief Executive Officer

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EX-10.2

Exhibit 10.2

May 2, 2016

Marie Perry

Dear Marie:

Jamba Juice started as a fruitful idea that took root in a small store in the beach town of San Luis Obispo. Today, that idea hasn’t changed: We take the best nature has to offer and make wholesome nutrition accessible to everyone by making it delicious and keeping it fun. It’s our unique blend of health and fun that makes Jamba Juice unlike any other brand.

OUR MISSION:     To be the leading healthy lifestyle brand offering consumers great tasting and differentiated products inside and outside our stores.

OUR TIMELESS PURPOSE:     To inspire and simplify healthy living.

Jamba’s vision and values will shed insight into what we’re all about and what we strive to be. The acronym FIBER sums it up the best.

Fun	Have FUN! Enjoy what you do.  Live a healthy, energetic life.
Integrity	Act with INTEGRITY! Be honest and honorable in all you do. Communicate openly and treat others with respect.
Believe	BELIEVE in yourself and Jamba! Lead with enthusiasm, passion and confidence.
Excellence	Achieve EXCELLENCE in everything you do! Strive for only the best.
Results	Deliver great RESULTS! Our success is measured by our results.

Offer:     I am excited to offer you the position of Executive Vice President, Chief Finance & Administration Officer conditional on a satisfactory background check and proof of your right to work in the United States. In this capacity you will report directly to me.

Compensation:     Your gross base salary will be $340,000 per year, payable bi-weekly ($13,076.92), in each case less applicable tax withholding, and will start at an agreed upon date in May 2016.

Benefits:     Medical, vision, dental, and life & disability insurance programs are available and will become effective on the first of the month after thirty (30) days of employment. You will be eligible to accrue up to 20 days (4 weeks) of vacation in your first year of employment pursuant to our time off policy. The details of these and other programs will be explained to you during your orientation.

Sign on Bonus: I am also pleased to provide you with a sign-on bonus of $50,000 less applicable taxes which will be paid to you on the first payroll cycle after your start date. Sign-on bonuses are subject to a repayment agreement which will be provided upon acceptance of the offer. Should your employment terminate within 18 months for any reason other than position elimination, you will be required to reimburse the Company for all or part of your sign-on bonus. This agreement must be signed and returned prior to your receiving your sign-on bonus.

Management Incentive Plan Bonus: In addition to your regular pay, you will be eligible for a 60% target bonus pursuant to our management incentive plan adopted annually each year. The annual bonus for 2016 is guaranteed at target. Bonus will be paid in March 2017.

All Equity Grants will be outside the current 2013 Equity Incentive Plan as Inducement Grants under Nasdaq listing rules.

Stock Options:     I am also pleased to provide you with 75,000 Non-Qualified Stock Options. In accordance with our stock option policy, these will be granted during the first available open window after your hire date, but vesting will be credited to your date of hire. The options will have an exercise price equal to the fair market value of common stock of Jamba, Inc. based upon the closing price at the date of grant, and to vest annually over a three year period, with one third (1/3) of the total number of shares subject to this option vesting on each anniversary of the initial vesting date.

RSU Grant:     We are pleased to provide you with 6,000 RSU’s. with each restricted stock unit representing the right to receive one share of Parent’s common stock, and which restricted stock units shall vest annually over a three year period, with one third (1/3) or the total number of shares subject to this RSU vesting on each anniversary of the initial vesting date.

RSU Grant:     We are pleased to provide you with 85,000 RSU’s, with each restricted stock unit representing the right to receive one share of Parent’s common stock, and which restricted stock units shall vest upon achievement of stock price targets of $19.50, $24.00 and $28.50, respectively (the 15%, 22.5% and 30% TSR RSUs, as follows:

(i) 15% TSR RSUs. 40,000 restricted stock units shall vest if at any time prior to the third anniversary of the initial vesting date (x) the closing price of Jamba, Inc. common stock for a thirty consecutive trading day period equals or exceeds $19.50 (as adjusted in accordance for stock splits and the like) or (y) a Change of Control (as such term is defined in the applicable RSU agreement) occurs whereby Jamba, Inc.’s stockholders receive a per share consideration equaling or exceeding $19.50 (as adjusted in accordance for stock splits and the like), in each case where you remain an employee of Jamba Juice and /or its affiliates at such time; and

(ii) 22.5% TSR RSUs. 25,000 restricted stock units shall vest if at any time prior to the third anniversary of the initial vesting date (x) the closing price of Jamba, Inc. common stock for a thirty consecutive trading day period equals or exceeds $24.00 (as adjusted in accordance for stock splits and the like) or (y) a Change of Control (as such term is defined in the applicable RSU agreement) occurs whereby Jamba, Inc.’s stockholders receive a per share consideration equaling or exceeding $24.00 (as adjusted in accordance for stock splits and the like), in each case where you remain an employee of Jamba Juice and /or its affiliates at such time; and

(iii) 30% TSR RSUs. 20,000 restricted stock units shall vest if at any time prior to the third anniversary of the initial vesting date (x) the closing price of Jamba, Inc. common stock for a thirty consecutive trading day period equals or exceeds $28.50 (as adjusted in accordance for stock splits and the like) or (y) a Change of Control (as such term is defined in the applicable RSU agreement) occurs whereby Jamba, Inc.’s stockholders receive a per share consideration equaling or exceeding $28.50 (as adjusted in accordance for stock splits and the like), in each case where you remain an employee of Jamba Juice and /or its affiliates at such time

The RSUs would be granted at the same time as the stock option grant referenced above.

All Equity Grants referenced above are subject to Board approval.

Restricted stock units, to the extent granted and vesting, shall be settled (x) with respect to the restricted stock units granted under clause (i), on the first annual anniversary of the vesting date and (y) with respect to the restricted stock units granted under clauses (ii) and (iii), as soon as practicable following the vesting date of such grants (in each case, the “Settlement Date”); provided, however, that if such Settlement Date would be outside of the period under the company’s insider trading policies permitting trades in such securities, then such shares shall be settled as soon as such insider trading policy would permit such trades.

Clawback Policy. All compensation contemplated under this agreement and all cash and equity awards under the company’s incentive compensation plans will be subject to the company’s recoupment policy for incentive compensation.

Standard Severance Agreement: You will be eligible to participate in our Executive Retention and Severance Plan which would provide you with a severance benefit of twelve (12) month’s salary continuation (subject to mitigation) in the event of a qualifying termination (without cause or resignation for good reason, as defined in the plan), calculated on your then current base salary payable on the Company’s ordinary payroll schedule and subject to customary withholdings, subject to signing a release. In addition the terms for acceleration of stock options following a qualifying termination after a change of control will be included.

The relationship that exists between you and the company is for an unspecified term and considered employment at will. The relationship can be terminated by you or the company “at will” at any time either with or without cause or advance notice. This “at will” agreement constitutes the entire agreement between the employee and the company on the subject of termination, and supersedes all prior agreements and cannot be changed by future events, even though other policies and procedures may change from time to time. No one has the authority to modify this relationship except for the President and CEO or VP, Human Resources in writing and signed by you and the President and CEO or VP, Human Resources.

Marie, I look forward to the many contributions you will make to the company. Upon acceptance, please acknowledge the terms of this letter by returning one signed copy to Kathy Wright at kwright@jambajuice.com.

Sincerely,

/s/ Dave Pace	/s/ Marie Perry
Dave Pace	Marie Perry
Chief Executive Officer	Acknowledged and Agreed

EX-10.4

Exhibit 10.4

JAMBA, INC.

STOCK OPTION AGREEMENT

Jamba, Inc. (the “Company”) has granted to the Participant named in the Notice of Grant of Stock Option (the “Grant Notice”) to which this Stock Option Agreement (the “Option Agreement”) is attached an option (the “Option”) to purchase certain shares of Stock upon the terms and conditions set forth in the Grant Notice and this Option Agreement. The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions of the 2013 Equity Incentive Plan of Jamba, Inc. (the “Plan”), as may be amended from time to time, the provisions of which are incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges receipt of, and represents that the Participant has read and is familiar with, the Grant Notice, this Option Agreement, the Plan and a prospectus for the Plan prepared in connection with the registration with the Securities and Exchange Commission of shares issuable pursuant to the Option (the “Plan Prospectus”), (b) accepts the Option subject to all of the terms and conditions of the Grant Notice, this Option Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice, this Option Agreement or the Plan.

1.          Definitions and Construction.

1.1           Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

1.2           Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.          Tax Status of Option.

2.1           Tax Status of Option. This Option is intended to have the tax status designated in the Grant Notice.

(a)          Incentive Stock Option. If the Grant Notice so designates, this Option is intended to be an Incentive Stock Option within the meaning of Section 422(b) of the Code, but the Company does not represent or warrant that this Option qualifies as such. The Participant should consult with the Participant’s own tax advisor regarding the tax effects of this Option and the requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements. (NOTE TO PARTICIPANT: If the Option is exercised more than three (3) months after the date on which you cease to be an Employee (other than by reason of your death or permanent and total disability as defined in Section 22(e)(3) of the Code), the Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to the extent required by Section 422 of the Code.)

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(b)          Nonstatutory Stock Option. If the Grant Notice so designates, this Option is intended to be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code.

2.2           ISO Fair Market Value Limitation. If the Grant Notice designates this Option as an Incentive Stock Option, then to the extent that the Option (together with all Incentive Stock Options granted to the Participant under all stock option plans of the Participating Company Group, including the Plan) becomes exercisable for the first time during any calendar year for shares having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of such options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes of this Section 2.2, options designated as Incentive Stock Options are taken into account in the order in which they were granted, and the Fair Market Value of stock is determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from that set forth in this Section 2.2, such different limitation shall be deemed incorporated herein effective as of the date required or permitted by such amendment to the Code. If the Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 2.2, the Participant may designate which portion of such Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. (NOTE TO PARTICIPANT: If the aggregate Exercise Price of the Option (that is, the Exercise Price multiplied by the Number of Option Shares) plus the aggregate exercise price of any other Incentive Stock Options you hold (whether granted pursuant to the Plan or any other stock option plan of the Participating Company Group) is greater than $100,000, you should contact the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an Incentive Stock Option.)

3.          Administration.

All questions of interpretation concerning the Grant Notice, this Agreement and the Plan shall be determined by the Committee or its designee. All such determinations shall be final and binding upon all persons having an interest in the Award as provided by the Plan. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent or actual authority with respect to such matter, right, obligation, or election.

4.          Exercise of the Option.

4.1           Right to Exercise. Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Vesting Date and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares less the number of shares previously acquired upon exercise of the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares, as adjusted pursuant to Section 9.

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4.2          Method of Exercise. Exercise of the Option shall be by means of electronic or written notice (the “Exercise Notice”) in a form authorized by the Company. An electronic Exercise Notice must be digitally signed or authenticated by the Participant in such manner as required by the notice and transmitted to the Company or an authorized representative of the Company (including a third-party administrator designated by the Company). In the event that the Participant is not authorized or is unable to provide an electronic Exercise Notice, the Option shall be exercised by a written Exercise Notice addressed to the Company, which shall be signed by the Participant and delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Company, or an authorized representative of the Company (including a third-party administrator designated by the Company). Each Exercise Notice, whether electronic or written, must state the Participant’s election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Participant’s investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement. Further, except as set forth in Section 4.3, each Exercise Notice must be received by the Company prior to the termination of the Option as set forth in Section 6 and must be accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such electronic or written Exercise Notice and the aggregate Exercise Price.

4.3          Automatic Exercise of Option. If on the date the Option would otherwise terminate or expire, the Option is otherwise vested and exercisable immediately prior to such termination or expiration and, if so exercised, the Fair Market Value of the Stock would exceed the Exercise Price of the Option, then any portion of such Option which has not previously been exercised shall automatically be deemed to be exercised as of such date with respect to such portion pursuant to the Net Exercise procedure described in Section 4.4(b)(ii) and withholding in shares of Stock as described in Section 4.4(b). Notwithstanding the foregoing, the Participant may elect, in a manner prescribed by the Company, not to have his or her Option automatically exercised pursuant to this Section 4.3 provided the Participant makes such election prior to the date referenced above.

4.4          Payment of Exercise Price.

(a)          Forms of Consideration Authorized. Except as otherwise provided below, payment of the aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised shall be made (i) in cash, by check or in cash equivalent; (ii) if permitted by the Company and subject to the limitations contained in Section 4.4(b), by means of (1) a Cashless Exercise, (2) a Net-Exercise, or (3) a Stock Tender Exercise; or (iii) by any combination of the foregoing.

(b)          Limitations on Forms of Consideration. The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve or terminate any program or procedure providing for payment of the Exercise Price through any of the means described below, including with respect to the Participant notwithstanding that such program or procedures may be available to others.

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(i)          Cashless Exercise. A “Cashless Exercise” means the delivery of a properly executed Exercise Notice together with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale or loan with respect to shares of Stock acquired upon the exercise of the Option in an amount not less than the aggregate Exercise Price for such shares (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System).

(ii)         Net-Exercise. A “Net-Exercise” means the delivery of a properly executed Exercise Notice electing a procedure pursuant to which (1) the Company will reduce the number of shares otherwise issuable to the Participant upon the exercise of the Option by the largest whole number of shares having a Fair Market Value that does not exceed the aggregate Exercise Price for the shares with respect to which the Option is exercised, and (2) the Participant shall pay to the Company in cash the remaining balance of such aggregate Exercise Price not satisfied by such reduction in the number of whole shares to be issued. Following a Net-Exercise, the number of shares remaining subject to the Option, if any, shall be reduced by the sum of (1) the net number of shares issued to the Participant upon such exercise, and (2) the number of shares deducted by the Company for payment of the aggregate Exercise Price.

(iii)        Stock Tender Exercise. A “Stock Tender Exercise” means the delivery of a properly executed Exercise Notice accompanied by (1) the Participant’s tender to the Company, or attestation to the ownership, in a form acceptable to the Company of whole shares of Stock having a Fair Market Value that does not exceed the aggregate Exercise Price for the shares with respect to which the Option is exercised, and (2) the Participant’s payment to the Company in cash of the remaining balance of such aggregate Exercise Price not satisfied by such shares’ Fair Market Value. A Stock Tender Exercise shall not be permitted if it would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. If required by the Company, the Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Participant for a period of time required by the Company (and not used for another option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company.

4.5          Tax Withholding.

(a)          In General. At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by a Participating Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for (including by means of a Cashless Exercise to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company Group, if any, which arise in connection with the Option. The Company shall have no obligation to deliver shares of Stock until the tax withholding obligations of the Participating Company Group have been satisfied by the Participant.

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(b)          Withholding in Shares. The Company shall have the right, but not the obligation, to require the Participant to satisfy all or any portion of a Participating Company’s tax withholding obligations upon exercise of the Option by deducting from the shares of Stock otherwise issuable to the Participant upon such exercise a number of whole shares having a fair market value, as determined by the Company as of the date of exercise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates.

4.6           Beneficial Ownership of Shares; Certificate Registration. The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with the broker designated by the Company with which the Participant has an account, any or all shares acquired by the Participant pursuant to the exercise of the Option. Except as provided by the preceding sentence, a certificate for the shares as to which the Option is exercised shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

4.7           Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

4.8           Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise of the Option.

5.          Transferability of the Option.

5.1           Except as provided in Section 5.2, the Option may be exercised during the lifetime of the Participant only by the Participant or the Participant’s guardian or legal representative and shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. Following the death of the Participant, the Option, to the extent provided in Section 7, may be exercised by the Participant’s legal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.

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5.2           With the consent of the Committee and subject to any conditions or restrictions as the Committee may impose, in its discretion, the Participant may transfer during the Participant’s lifetime and prior to the Participant’s termination of Service all or any portion of a Nonstatutory Stock Option to one or more of such persons (each a “Permitted Transferee”) as permitted in accordance with the applicable limitations, if any, described in the General Instructions to the Form S-8 Registration Statement under the Securities Act. Transfers of Incentive Stock Options shall not be permitted. No transfer or purported transfer of the Option shall be effective unless and until: (i) the Participant has delivered to the Company a written request describing the terms and conditions of the proposed transfer in such form as the Company may require, (ii) the Participant has made adequate provision, in the sole determination of the Company, for satisfaction of the tax withholding obligations of the Participating Company Group as provided in Section 4.5 that may arise with respect to the transferred portion of the Option, (iii) the Committee has approved the requested transfer, and (iv) the Participant has delivered to the Company written documentation of the transfer in such form as the Company may require. With respect to the transferred portion of the Option, all of the terms and conditions of the Grant Notice, this Option Agreement and the Plan shall apply to the Permitted Transferee and not to the original Participant, except for (i) the Participant’s rendering of Service, (ii) provision for the Participating Company Group’s tax withholding obligations, if any, and (iii) any subsequent transfer of the Option by the Permitted Transferee, which shall be prohibited except as provided in Section 5.1, unless otherwise permitted by the Committee, in its sole discretion. The Company shall have no obligation to notify a Permitted Transferee of any expiration, termination, lapse or acceleration of the transferred Option, including, without limitation, an early termination of the transferred Option resulting from the termination of Service of the original Participant. Exercise of the transferred Option by a Permitted Transferee shall be subject to compliance with all applicable federal, state and foreign securities laws; however, the Company shall have no obligation to register with any federal, state or foreign securities commission or agency such transferred Option or any shares that may be issuable upon the exercise of the transferred Option by the Permitted Transferee.

6.          Termination of the Option.

The Option shall terminate and may no longer be exercised after the first to occur of (a) the close of business on the Option Expiration Date, (b) the close of business on the last date for exercising the Option following termination of the Participant’s Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8.

7.          Effect of Termination of Service.

7.1           Option Exercisability. The Option shall terminate immediately upon the Participant’s termination of Service to the extent that it is then unvested and shall be exercisable after the Participant’s termination of Service to the extent it is then vested only during the applicable time period as determined below and thereafter shall terminate.

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(a)          Disability. If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of one (1) year after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.

(b)          Death. If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any time prior to the expiration of one (1) year after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date. The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within three (3) months after the Participant’s termination of Service.

(c)          Termination for Cause. Notwithstanding any other provision of this Option Agreement to the contrary, if the Participant’s Service is terminated for Cause or if, following the Participant’s termination of Service and during any period in which the Option otherwise would remain exercisable, the Participant engages in any act that would constitute Cause, the Option shall terminate in its entirety and cease to be exercisable immediately upon such termination of Service or act.

(d)          Other Termination of Service. If the Participant’s Service terminates for any reason, except Disability, death or Cause, the Option, to the extent unexercised and exercisable for Vested Shares by the Participant on the date on which the Participant’s Service terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.

7.2           Extension if Exercise Prevented by Law. Notwithstanding the foregoing, other than termination of the Participant’s Service for Cause, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.7, the Option shall remain exercisable until the later of (a) thirty (30) calendar days after the date such exercise first would no longer be prevented by such provisions, or (b) the end of the applicable time period under Section 7.1, but in any event no later than the Option Expiration Date.

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8.          Effect of Change in Control.

In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of the Participant, assume or continue in full force and effect the Company’s rights and obligations under all or any portion of the Option or substitute for all or any portion of the Option a substantially equivalent option for the Acquiror’s stock. For purposes of this Section, the Option or any portion thereof shall be deemed assumed if, following the Change in Control, the Option confers the right to receive, subject to the terms and conditions of the Plan and this Option Agreement, for each share of Stock subject to such portion of the Option immediately prior to the Change in Control, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a share of Stock on the effective date of the Change in Control was entitled; provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to be received upon the exercise of the Option for each share of Stock to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Stock pursuant to the Change in Control. The Option shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control to the extent that the Option is neither assumed or continued by the Acquiror in connection with the Change in Control nor exercised as of the time of the Change in Control. Notwithstanding the foregoing, if the Option is not assumed, substituted for, or otherwise continued by the Acquiror, the Option shall vest in full effective immediately prior to, but contingent upon, the consummation of the Change in Control; provided, however, that any Award which has its Vesting Conditions based on performance goals that vests pursuant to this sentence shall only become vested based on actual results measured against the performance goals as of the Change in Control, and thereafter, all Awards shall terminate to the extent not exercised or settled as of the date of the Change in Control.

9.          Adjustments for Changes in Capital Structure.

Subject to any required action by the stockholders of the Company and the requirements of Sections 409A and 424 of the Code to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number, Exercise Price and kind of shares subject to the Option, in order to prevent dilution or enlargement of the Participant’s rights under the Option. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number and the Exercise Price shall be rounded up to the nearest whole cent. In no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.

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10.         Rights as a Stockholder, Director, Employee or Consultant.

The Participant shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date the shares are issued, except as provided in Section 9. If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified term. Nothing in this Option Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Participant’s Service as a Director, an Employee or Consultant, as the case may be, at any time.

11.         Legends.

The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of stock subject to the provisions of this Option Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Participant in order to carry out the provisions of this Section.

12.         Miscellaneous Provisions.

12.1         Termination or Amendment. The Committee may amend or terminate the Plan at any time. No amendment or addition to this Option Agreement shall be effective unless in writing and, to the extent such amendment is necessary to comply with applicable law or government regulation, may be made without the consent of the Participant.

12.2         Further Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Option Agreement.

12.3         Binding Effect. This Option Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

12.4         Delivery of Documents and Notices. Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

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(a)          Description of Electronic Delivery. The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Option Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. In addition, if permitted by the Company, the Participant may deliver electronically the Grant Notice and Exercise Notice called for by Section 4.2 to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

(b)          Consent to Electronic Delivery. The Participant acknowledges that the Participant has read Section 12.4(a) of this Option Agreement and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant Notice and Exercise Notice, as described in Section 12.4(a). The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in Section 12.4(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 12.4(a).

12.5         Integrated Agreement. The Grant Notice, this Option Agreement and the Plan, together with any employment, service or other agreement between the Participant and a Participating Company referring to the Option, shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter. To the extent contemplated herein or therein, the provisions of the Grant Notice, the Option Agreement and the Plan shall survive any exercise of the Option and shall remain in full force and effect.

12.6         Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in California and agree that such litigation shall be conducted in the courts of San Francisco County, California or the federal courts of the United States for the Northern District of California.

12.7         Counterparts. The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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¨  Incentive Stock Option	Participant:
¨  Nonstatutory Stock Option
	Date:

STOCK OPTION EXERCISE NOTICE

Jamba, Inc.

Ladies and Gentlemen:

1.           Option. I was granted an option (the “Option”) to purchase shares of the common stock (the “Shares”) of Jamba, Inc. (the “Company”) pursuant to the 2013 Equity Incentive Plan of Jamba, Inc. (the “Plan”), my Notice of Grant of Stock Option (the “Grant Notice”) and my Stock Option Agreement (the “Option Agreement”) as follows:

Date of Grant:
Number of Option Shares:
Exercise Price per Share:	$

2.           Exercise of Option. I hereby elect to exercise the Option to purchase the following number of Shares, all of which are Vested Shares in accordance with the Grant Notice and the Option Agreement:

Total Shares Purchased:
Total Exercise Price (Total Shares  X  Price per Share)	$

3.           Payments. I enclose payment in full of the total exercise price for the Shares in the following form(s), as authorized by my Option Agreement:

¨  Cash:	$
¨  Check:	$
¨  Cashless Exercise:	Contact Plan Administrator
¨  Net Exercise:	Contact Plan Administrator
¨  Stock Tender Exercise:	Contact Plan Administrator

4.           Tax Withholding. I authorize payroll withholding and otherwise will make adequate provision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with my exercise of the Option. (Contact Plan Administrator for amount of tax due.)

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5.           Participant Information.

My address is:

My Social Security Number is:

6.           Binding Effect. I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions of the Grant Notice, the Option Agreement and the Plan, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon my heirs, executors, administrators, successors and assigns.

Very truly yours,

(Signature)

Receipt of the above is hereby acknowledged.

JAMBA, INC.

By:

Name:

Title:

Dated:

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EX-10.5

Exhibit 10.5

JAMBA, INC.

RESTRICTED STOCK AGREEMENT

Jamba, Inc. (the “Company”) has granted to the Participant named in the Notice of Grant of Restricted Stock (the “Grant Notice”) to which this Restricted Stock Agreement (the “Agreement”) is attached an Award consisting of Shares subject to the terms and conditions set forth in the Grant Notice and this Agreement. The Award has been granted pursuant to and shall in all respects be subject to the terms and conditions of the Jamba, Inc. 2013 Equity Incentive Plan (the “Plan”), as may be amended from time to time, the provisions of which are incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with the Grant Notice, this Agreement, the Plan and a prospectus for the Plan prepared in connection with the registration with the Securities and Exchange Commission of the shares of Stock (the “Plan Prospectus”), (b) accepts the Award subject to all of the terms and conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice, this Agreement or the Plan.

1.           Definitions and Construction.

1.1           Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

1.2           Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.           Administration.

All questions of interpretation concerning the Grant Notice, this Agreement and the Plan shall be determined by the Committee or its designee. All such determinations shall be final and binding upon all persons having an interest in the Award as provided by the Plan. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent or actual authority with respect to such matter, right, obligation, or election.

3.           The Award.

3.1           Grant and Issuance of Shares. On the Date of Grant, the Participant shall acquire and the Company shall issue, subject to the provisions of this Agreement, a number of shares of Stock equal to the Total Number of shares of Stock. As a condition to the issuance of the shares of Stock, the Participant shall execute and deliver the Grant Notice to the Company, and, if required by the Company, an Assignment Separate from Certificate duly endorsed (with date and number of shares blank) in the form provided by the Company.

3.2           No Monetary Payment Required. The Participant is not required to make any monetary payment (other than to satisfy applicable tax withholding, if any, with respect to the issuance or vesting of the shares of Stock) as a condition to receiving the shares of Stock, the consideration for which shall be past services actually rendered or future services to be rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, if required by applicable law, the Participant shall furnish consideration in the form of cash or past services rendered to a Participating Company or for its benefit having a value not less than the par value of the shares of Stock issued pursuant to the Award.

3.3           Beneficial Ownership of Shares; Certificate Registration. As security for the Participant’s performance of the terms of this Agreement and to ensure the availability for delivery of the Participant’s shares of Stock upon the exercise of the Company Reacquisition Right, the Participant agrees to deliver and deposit with the Secretary of the Company (or the Secretary’s designee), the certificates evidencing the shares of Stock during the term of the Escrow pursuant to Section 6. Furthermore, the Participant hereby authorizes the Company, in its sole discretion, to deposit, following the term of such Escrow, for the benefit of the Participant with the broker designated by the Company with which the Participant has an account, any or all shares of Stock which are no longer subject to such Escrow. Except as provided by the foregoing, a certificate for the Shares of Stock shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

3.4           Issuance of Shares of Stock in Compliance with Law. The issuance of the shares of Stock shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. No shares of Stock shall be issued hereunder if their issuance would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares of Stock shall relieve the Company of any liability in respect of the failure to issue such shares of Stock as to which such requisite authority shall not have been obtained. As a condition to the issuance of the shares of Stock, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

4.           Vesting of Shares.

Shares of Stock acquired pursuant to this Agreement shall become Vested Shares as provided in the Grant Notice. For purposes of determining the number of Vested Shares following an Ownership Change Event, credited Service shall include all Service with any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating Company both before and after the Ownership Change Event.

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5.           Company Reacquisition Right.

5.1           Grant of Company Reacquisition Right. Except to the extent otherwise provided by any employment service, or other agreement referring to the Award, if any, in the event that (a) the Participant’s Service terminates for any reason or no reason, with or without cause, or (b) the Participant, the Participant’s legal representative, or other holder of the shares of Stock, attempts to sell, exchange, transfer, pledge, or otherwise dispose of (other than pursuant to an Ownership Change Event), including, without limitation, any transfer to a nominee or agent of the Participant, any shares of Stock which are not Vested Shares (“Unvested Shares”), the Participant shall forfeit and the Company shall automatically reacquire the Unvested Shares, and the Participant shall not be entitled to any payment therefor (the “Company Reacquisition Right”).

5.2           Ownership Change Event, Non-Cash Dividends, Distributions and Adjustments. Upon the occurrence of an Ownership Change Event, a dividend or distribution to the stockholders of the Company paid in shares of Stock or other property, or any other adjustment upon a change in the capital structure of the Company as described in Section 9, any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on share of Stock pursuant to the Company’s dividend policy) to which the Participant is entitled by reason of the Participant’s ownership of Unvested Shares shall be immediately subject to the Company Reacquisition Right and included in the terms “Stock” and “Unvested Shares” for all purposes of the Company Reacquisition Right with the same force and effect as the Unvested Shares immediately prior to the Ownership Change Event, dividend, distribution or adjustment, as the case may be. For purposes of determining the number of Vested Shares following an Ownership Change Event, dividend, distribution or adjustment, credited Service shall include all Service with any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating Company both before and after any such event.

5.3           Obligation to Repay Certain Cash Dividends and Distributions. Unless otherwise elected by the Committee, dividends, if any, paid with respect to Unvested Shares shall not be paid directly to the Participant, but shall be held in escrow, subject to the Company’s Reacquisition Right. To the extent the Committee permits dividends, if any, with respect to Unvested Shares to be paid directly to the Participant, then the Participant shall, at the discretion of the Committee, be obligated to promptly repay to the Company upon termination of the Participant’s Service any dividends and other distributions paid to the Participant in cash with respect to Unvested Shares reacquired by the Company pursuant to the Company Reacquisition Right.

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6.           Escrow.

6.1           Appointment of Agent. To ensure that shares of Stock subject to the Company Reacquisition Right will be available for reacquisition, the Participant and the Company hereby appoint the Secretary of the Company, or any other person designated by the Secretary, as their agent and as attorney-in-fact for the Participant (the “Agent”) to hold any and all Unvested Shares and to sell, assign and transfer to the Company any such Unvested Shares reacquired by the Company pursuant to the Company Reacquisition Right. The Participant understands that appointment of the Agent is a material inducement to make this Agreement and that such appointment is coupled with an interest and is irrevocable. The Agent shall not be personally liable for any act the Agent may do or omit to do hereunder as escrow agent, agent for the Company, or attorney in fact for the Participant while acting in good faith and in the exercise of the Agent’s own good judgment, and any act done or omitted by the Agent pursuant to the advice of the Agent’s own attorneys shall be conclusive evidence of such good faith. The Agent may rely upon any letter, notice or other document executed by any signature purporting to be genuine and may resign at any time.

6.2           Establishment of Escrow. The Participant authorizes the Company to deposit the Unvested Shares with the Company’s transfer agent the certificates representing the Unvested Shares, as provided in Section 3.3, and the Participant agrees to deliver to and deposit with the Agent such certificates, if required by the Company, an Assignment Separate from Certificate with respect to each such certificate duly endorsed (with date and number of shares of Stock blank) in the form attached to this Agreement, to be held by the Agent under the terms and conditions of this Section 6 (the “Escrow”). Upon the occurrence of an Ownership Change Event, a dividend or distribution to the stockholders of the Company paid in shares of Stock or other property (other than regular, periodic dividends paid on Stock pursuant to the Company’s dividend policy) or any other adjustment upon a change in the capital structure of the Company, as described in Section 9, any and all new, substituted or additional securities or other property to which the Participant is entitled by reason of his or her ownership of the Shares of Stock that remain, following such Ownership Change Event, dividend, distribution or change described in Section 9, subject to the Company Reacquisition Right shall be immediately subject to the Escrow to the same extent as the shares of Stock immediately before such event. The Company shall bear the expenses of the Escrow.

6.3           Delivery of Shares to Participant. The Escrow shall continue with respect to any shares of Stock for so long as such shares of Stock remain subject to the Company Reacquisition Right. Upon termination of the Company Reacquisition Right with respect to shares of Stock, the Company shall so notify the Agent and direct the Agent to deliver such number of shares of Stock to the Participant. As soon as practicable after receipt of such notice, the Agent shall cause the shares of Stock specified by such notice to be delivered to the Participant, and the Escrow shall terminate with respect to such shares of Stock.

7.           Tax Matters.

7.1          Tax Withholding.

(a)          In General. At the time the Grant Notice is executed, or at any time thereafter as requested by a Participating Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company, if any, which arise in connection with the Award, including, without limitation, obligations arising upon (a) the transfer of shares of Stock to the Participant, (b) the lapsing of any restriction with respect to any shares of Stock, (c) the filing of an election to recognize tax liability, or (d) the transfer by the Participant of any shares of Stock (the “Taxable Event”). The Company shall have no obligation to deliver the shares of Stock or to release any shares of Stock from the Escrow established pursuant to Section 6 until the tax withholding obligations of the Participating Company have been satisfied by the Participant.

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(b)          Assignment of Sale Proceeds. Subject to compliance with applicable law and the Company’s Trading Compliance Policy, if permitted by the Company, the Participant may satisfy the Participating Company’s tax withholding obligations in accordance with procedures established by the Company providing for delivery by the Participant to the Company or a broker approved by the Company of properly executed instructions, in a form approved by the Company, providing for the assignment to the Company of the proceeds of a sale with respect to some or all of the shares becoming Vested Shares on a Vesting Date as provided in the Grant Notice.

(c)          Withholding in Shares of Stock. The Company shall have the right, but not the obligation, to require the Participant to satisfy all or any portion of a Participating Company’s tax withholding obligations by withholding a number of whole, Vested Shares otherwise deliverable to the Participant or by the Participant’s tender to the Company of a number of whole, Vested Shares or vested shares acquired otherwise than pursuant to the Award having, in any such case, a fair market value, as determined by the Company as of the date on which the tax withholding obligations arise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates.

(d)          Default Withholding Provision. Except as otherwise provided by the Company, if the Participant does not deliver to the Company at least five (5) days prior to a Taxable Event a written notice of Participant’s election to satisfy by cash, check, or other manner agreeable to the Company, all federal, state, local or foreign tax withholding obligations related to such Shares, Participant and the Company agree that the Company shall retain that number of the shares of Stock, based on the Fair Market Value of the Company’s common stock on such Settlement Date, with an aggregate value equal to the amount of all federal, state, local or foreign tax withholding obligations that Participant or the Participating Company would incur as a result of the Settlement of such shares of Stock determined by the applicable minimum statutory withholding rates.

7.2          Election Under Section 83(b) of the Code.

(a)          The Participant understands that Section 83 of the Code taxes as ordinary income the difference between the amount paid for the shares of Stock, if anything, and the fair market value of the shares of Stock as of the date on which the shares of Stock are “substantially vested,” within the meaning of Section 83. In this context, “substantially vested” means that the right of the Company to reacquire the shares of Stock pursuant to the Company Reacquisition Right has lapsed. The Participant understands that he or she may elect to have his or her taxable income determined at the time he or she acquires the shares of Stock rather than when and as the Company Reacquisition Right lapses by filing an election under Section 83(b) of the Code with the Internal Revenue Service no later than thirty (30) days after the date the shares of Stock are transferred to the Participant which will generally be the Date of Grant. The Participant understands that failure to make a timely filing under Section 83(b) will result in his or her recognition of ordinary income, as the Company Reacquisition Right lapses, on the difference between the purchase price, if anything, and the fair market value of the shares of Stock at the time such restrictions lapse. The Participant further understands, however, that if shares of Stock with respect to which an election under Section 83(b) has been made are forfeited to the Company pursuant to its Company Reacquisition Right, such forfeiture will be treated as a sale on which there is realized a loss equal to the excess (if any) of the amount paid (if any) by the Participant for the forfeited shares of Stock over the amount realized (if any) upon their forfeiture. If the Participant has paid nothing for the forfeited shares of Stock and has received no payment upon their forfeiture, the Participant understands that he or she will be unable to recognize any loss on the forfeiture of the shares of Stock even though the Participant incurred a tax liability by making an election under Section 83(b).

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(b)          The Participant understands that he or she should consult with his or her tax advisor regarding the advisability of filing with the Internal Revenue Service an election under Section 83(b) of the Code, which must be filed no later than thirty (30) days after the date the shares of Stock subject to this Agreement are transferred to the Participant (which will generally be the Date of Grant, unless the Participant has purchased the shares of Stock, in which case it will be the date of purchase). Failure to file an election under Section 83(b), if appropriate, may result in adverse tax consequences to the Participant. The Participant acknowledges that he or she has been advised to consult with a tax advisor regarding the tax consequences to the Participant of the acquisition of shares of Stock hereunder. ANY ELECTION UNDER SECTION 83(b) THE PARTICIPANT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH THE SHARES OF STOCK ARE TRANSFERRED TO THE PARTICIPANT (AS NOTED ABOVE, GENERALLY THE DATE OF GRANT). THIS TIME PERIOD CANNOT BE EXTENDED. THE PARTICIPANT ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS THE PARTICIPANT’S SOLE RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.

(c)          The Participant will notify the Company in writing if the Participant files an election pursuant to Section 83(b) of the Code. The Company intends, in the event it does not receive from the Participant evidence of such filing, to claim a tax deduction for any amount which would otherwise be taxable to the Participant in the absence of such an election.

8.           Effect of Change in Control.

In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of the Participant, assume or continue in full force and effect the Company’s rights and obligations under the Award or substitute for the Award a substantially equivalent award for the Acquiror’s stock. Notwithstanding the foregoing, shares of Stock acquired pursuant to the Award prior to the Change in Control and any consideration received pursuant to the Change in Control with respect to such shares of Stock shall continue to be subject to all applicable provisions of this Agreement except as otherwise provided herein.

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9.           Adjustments for Changes in Capital Structure.

Subject to any required action by the stockholders of the Company, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number and kind of shares of stock or other property subject to the Award, in order to prevent dilution or enlargement of the Participant’s rights under the Award. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy, subject to Section 5.3) to which Participant is entitled by reason of ownership of shares acquired pursuant to this Award will be immediately subject to the provisions of this Award on the same basis as all shares originally acquired hereunder. Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number. Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.

10.          Rights as a Stockholder, Director, Employee or Consultant.

The Participant shall have no rights as a stockholder with respect to any shares of Stock subject to the Award until the date of the issuance of the shares of Stock (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date the shares of Stock are issued, except as provided in Section 9. Subject to the provisions of this Agreement, the Participant shall exercise all rights and privileges of a stockholder of the Company with respect to shares of Stock deposited in the Escrow pursuant to Section 6, including the right to vote such shares of Stock and to receive all dividends and other distributions paid with respect to such shares of Stock, subject to Section 5.3. If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified term. Nothing in this Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Participant’s Service at any time.

11.          Legends.

The Company may at any time place legends referencing the Company Reacquisition Right and any applicable federal, state or foreign securities law restrictions on all certificates representing the shares of Stock. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing the shares of Stock in the possession of the Participant in order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following:

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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN AN AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.”

12.          Transfers in Violation of Agreement.

No shares of Stock may be sold, exchanged, transferred, assigned, pledged, hypothecated or otherwise disposed of, including by operation of law, in any manner which violates any of the provisions of this Agreement and, except pursuant to an Ownership Change Event, until the date on which such shares become Vested Shares, and any such attempted disposition shall be void. The Company shall not be required (a) to transfer on its books any shares of Stock which will have been transferred in violation of any of the provisions set forth in this Agreement or (b) to treat as owner of such shares of Stock or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares of Stock will have been so transferred. In order to enforce its rights under this Section, the Company shall be authorized to give a stop transfer instruction with respect to the shares of Stock to the Company’s transfer agent.

13.          Miscellaneous Provisions.

13.1         Termination or Amendment. The Committee may terminate or amend the Plan. No amendment or addition to this Agreement shall be effective unless in writing and, to the extent such amendment is necessary to comply with applicable law or government regulation, may be made without the consent of the Participant.

13.2         Nontransferability of the Award. The right to acquire shares of Stock pursuant to the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. All rights with respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

13.3         Further Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

13.4         Binding Effect. This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

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13.5         Delivery of Documents and Notices. Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

(a)          Description of Electronic Delivery. The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. In addition, if permitted by the Company, the parties may deliver electronically any notices called for in connection with the Escrow and the Participant may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

(b)          Consent to Electronic Delivery. The Participant acknowledges that the Participant has read Section 13.5(a) of this Agreement and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant Notice and notices in connection with the Escrow, as described in Section 13.5(a). The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in Section 13.5(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 13.5(a).

13.6         Integrated Agreement. The Grant Notice, this Agreement and the Plan, together with any employment, service or other agreement between the Participant and a Participating Company referring to the Award, if any, shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter. To the extent contemplated herein or therein, the provisions of the Grant Notice, this Agreement and the Plan shall survive any settlement of the Award and shall remain in full force and effect.

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13.7         Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in California and agree that such litigation shall be conducted in the courts of San Francisco County, California or the federal courts of the United States for the Northern District of California.

13.8         Counterparts. The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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SAMPLE

Internal Revenue Service

[IRS Service Center

where Form 1040 is Filed]

Re: Section 83(b) Election

Dear Sir or Madam:

The following information is submitted pursuant to section 1.83-2 of the Treasury Regulations in connection with this election by the undersigned under section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”).

1. The name, address and taxpayer identification number of the taxpayer are:

Name:

Address:

Social Security Number:

2. The following is a description of each item of property with respect to which the election is made:

________________ shares of common stock of the Jamba, Inc. (the “Shares”), acquired from the Jamba, Inc. (the “Company”) pursuant to a restricted stock grant.

3. The property was transferred to the undersigned on:

Restricted stock grant date: ________________________

The taxable year for which the election is made is:

Calendar Year ___________

4. The nature of the restriction to which the property is subject:

The Shares are subject to automatic forfeiture to the Company upon the occurrence of certain events. This forfeiture provision lapses with regard to a portion of the Shares based upon the continued performance of services by the taxpayer over time.

5. The following is the fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) of the property with respect to which the election is made:

$__________________ (_____________ Shares at $__________ per share).

The property was transferred to the taxpayer pursuant to the grant of an award of restricted stock.

6. The following is the amount paid for the property:

No monetary consideration was provided in exchange for the Shares.

7. A copy of this election has been furnished to the Company, and, if different, the corporation for which the services were performed by the undersigned.

Please acknowledge receipt of this election by date or received-stamping the enclosed copy of this letter and returning it to the undersigned. A self-addressed stamped envelope is provided for your convenience.

Very truly yours,

Date: 

Enclosures

cc: Jamba, Inc.

EX-10.6

Exhibit 10.6

JAMBA, INC.

RESTRICTED STOCK UNITS AGREEMENT

Jamba, Inc. has granted to the Participant named in the Notice of Grant of Restricted Stock Units (the “Grant Notice”) to which this Restricted Stock Units Agreement (the “Agreement”) is attached an Award consisting of Restricted Stock Units (the “Units”) and a corresponding Dividend Equivalent Right subject to the terms and conditions set forth in the Grant Notice and this Agreement. The Award has been granted pursuant to and shall in all respects be subject to the terms conditions of the 2013 Equity Incentive Plan of Jamba, Inc. (the “Plan”), as may be amended from time to time, the provisions of which are incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with the Grant Notice, this Agreement, the Plan and a prospectus for the Plan prepared in connection with the registration with the Securities and Exchange Commission of the shares of Stock issuable pursuant to the Award (the “Plan Prospectus”), (b) accepts the Award subject to all of the terms and conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice, this Agreement or the Plan.

1.    Definitions and Construction.

1.1  Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned in the Grant Notice or the Plan.

1.2  Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.    Administration.

All questions of interpretation concerning the Grant Notice, this Agreement and the Plan shall be determined by the Committee or its designee. All such determinations shall be final and binding upon all persons having an interest in the Award as provided by the Plan. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent or actual authority with respect to such matter, right, obligation, or election.

3.     The Award.

3.1  Grant of Units. On the Grant Date, the Participant shall acquire, subject to the provisions of this Agreement, the Number of Restricted Stock Units set forth in the Grant Notice, subject to adjustment as provided in Section 3.3 and Section 9. Each Unit represents a right to receive on a date determined in accordance with the Grant Notice and this Agreement one (1) share of Stock for each Vested Unit.

3.2  No Monetary Payment Required. The Participant is not required to make any monetary payment (other than applicable tax withholding, if any) as a condition to receiving the Units or shares of Stock issued upon settlement of the Units, the consideration for which shall be past services actually rendered and/or future services to be rendered to a Participating Company for its benefit. Notwithstanding the foregoing, if required by applicable state corporate law, the Participant shall furnish consideration in the form of cash or past services rendered having a value not less than the par value of the shares of Stock issued upon settlement of the Units.

3.3  Dividend Equivalent Units. In addition to the award of Units, this Award also provides for the award of Dividend Equivalent Rights as set forth below. On the date that the Company pays a cash dividend to holders of Stock generally, the Participant shall be credited with a number of additional whole “Dividend Equivalent Units” determined by dividing (a) the product of (i) the dollar amount of the cash dividend paid per share of Stock on such date and (ii) the sum of the Total Number of Units and the number of Dividend Equivalent Units previously credited to the Participant pursuant to the Award and which have not been settled or forfeited pursuant to the Company Reacquisition Right (as defined below) as of such date, by (b) the Fair Market Value per share of Stock on such date. Any resulting fractional Dividend Equivalent Unit shall be rounded down to the nearest whole number. Such additional Dividend Equivalent Units shall be subject to the same terms and conditions and shall be settled or forfeited in the same manner and at the same time as the Restricted Stock Units originally subject to the Award with respect to which they have been credited.

4.    Vesting of Units.

The Units shall vest and become Vested Units as provided in the Grant Notice. Dividend Equivalent Units shall become Vested Units at the same time as the Restricted Stock Units originally subject to the Award with respect to which they have been credited.

5.    Company Reacquisition Right.

5.1  Grant of Company Reacquisition Right. Except to the extent otherwise provided in an employment agreement between a Participating Company and the Participant, in the event that the Participant’s Service terminates for any reason or no reason, with or without cause, the Participant shall forfeit and the Company shall automatically reacquire all Units which are not, as of the time of such termination, Vested Units (“Unvested Units”), and the Participant shall not be entitled to any payment therefor (the “Company Reacquisition Right”).

5.2  Ownership Change Event, Non-Cash Dividends, Distributions and Adjustments. Upon the occurrence of an Ownership Change Event, a dividend or distribution to the stockholders of the Company paid in shares of Stock or other property, or any other adjustment upon a change in the capital structure of the Company as described in Section 9, any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy, which shall be treated in accordance with Section 3.3) to which the Participant is entitled by reason of the Participant’s ownership of Unvested Units shall be immediately subject to the Company Reacquisition Right and included in the terms “Units” and “Unvested Units” for all purposes of the Company Reacquisition Right with the same force and effect as the Unvested Units immediately prior to the Ownership Change Event, dividend, distribution or adjustment, as the case may be. For purposes of determining the number of Vested Units following an Ownership Change Event, dividend, distribution or adjustment, credited Service shall include all Service with any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating Company both before and after any such event.

6.    Settlement of the Award.

6.1  Issuance of Shares of Stock. Subject to the provisions of Section 6.3 below, the Company shall issue to the Participant on the Settlement Date with respect to each Vested Unit to be settled on such date one (1) share of Stock. Shares of Stock issued in settlement of Units shall not be subject to any restriction on transfer other than any such restriction as may be required pursuant to Section 6.3, Section 7 or the Company’s Trading Compliance Policy.

6.2  Beneficial Ownership of Shares; Certificate Registration. The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with the broker designated by the Company with which the Participant has an account, any or all shares of Stock acquired by the Participant pursuant to the settlement of the Award. Except as provided by the preceding sentence, a certificate for the shares of Stock as to which the Award is settled shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

6.3  Postponement of Settlement Date. Notwithstanding the provisions set forth in Section 6.1, in the event that a Settlement Date with respect to a Vesting Date would occur on a date on which a sale by the Participant of the shares of Stock to be issued in settlement of the Units on such Settlement Date would violate the Trading Compliance Policy of the Company, such Settlement Date shall be postponed until the first to occur of (a) the next business day on which a sale by the Participant of such shares of Stock would not violate the Trading Compliance Policy; and (b) March 15th of the calendar year following the calendar year in which the Vesting Date occurred.

6.4   Restrictions on Grant of the Award and Issuance of Shares. The grant of the Award and issuance of shares of Stock upon settlement of the Award shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. No shares of Stock may be issued hereunder if the issuance of such shares of Stock would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the shares of Stock may then be listed. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares subject to the Award shall relieve the Company of any liability in respect of the failure to issue such shares of Stock as to which such requisite authority shall not have been obtained. As a condition to the settlement of the Award, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

6.5  Fractional Shares. The Company shall not be required to issue fractional shares of Stock upon the settlement of the Award. Any fractional share of Stock resulting from a settlement of an Award shall be rounded down to the nearest whole number.

7.    Tax Withholding.

7.1  In General. At the time the Grant Notice is executed, or at any time thereafter as requested by a Participating Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company, if any, which arise in connection with the Award, the vesting of Units or the issuance of shares of Stock in settlement thereof. The Company shall have no obligation to deliver shares of Stock until such tax withholding obligations have been satisfied by the Participant.

7.2  Assignment of Sale Proceeds; Payment of Tax Withholding by Check. Subject to compliance with applicable law and the Company’s Trading Compliance Policy, the Company may permit the Participant to satisfy the tax withholding obligations in accordance with procedures established by the Company providing for either (i) delivery by the Participant to the Company or a broker approved by the Company of properly executed instructions, in a form approved by the Company, providing for the assignment to the Company of the proceeds of a sale with respect to some or all of the shares of Stock being acquired upon settlement of Units, or (ii) payment by check. The Participant shall deliver written notice of any such permitted election to the Company on a form specified by the Company for this purpose at least thirty (30) days (or such other period established by the Company) prior to such Settlement Date. If the Participant elects payment by check, the Participant agrees to deliver a check for the full amount of the required tax withholding to the Company (or its Affiliates, if applicable) on or before the third business day following the Settlement Date. If the Participant elects to payment by check but fails to make such payment as required by the preceding sentence, the Company is hereby authorized, at its discretion, to satisfy the tax withholding obligations through any means authorized by this Section 7, including by directing a sale for the account of the Participant of some or all of the shares of Stock being acquired upon settlement of Units from which the required taxes shall be withheld, by withholding from payroll and any other amounts payable to the Participant or by withholding shares of Stock in accordance with Section 7.3.

7.3  Withholding in Shares. The Company may require the Participant to satisfy all or any portion of a Participating’ Company’s tax withholding obligations by deducting from the shares of Stock otherwise deliverable to the Participant in settlement of the Award a number of whole shares of Stock having a fair market value, as determined by the Company as of the date on which the tax withholding obligations arise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates.

8.    Effect of Change in Control.

In the event of a Change in Control, the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of the Participant, assume or continue in full force and effect the Company’s rights and obligations under all or any portion of the outstanding Units or substitute for all or any portion of the outstanding Units substantially equivalent rights with respect to the Acquiror’s stock. For purposes of this Section, a Unit shall be deemed assumed if, following the Change in Control, the Unit confers the right to receive, subject to the terms and conditions of the Plan and this Agreement, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a share of Stock on the effective date of the Change in Control was entitled (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Stock); provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to be received upon settlement of the Unit to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Stock pursuant to the Change in Control. Notwithstanding the foregoing, if the Units are not assumed, substituted for, or otherwise continued by the Acquiror, the Units shall vest in full effective immediately prior to, but contingent upon, the consummation of the Change in Control; provided, however, that any Award which has its Vesting Conditions based on performance goals that vests pursuant to this sentence shall only become vested based on actual results measured against the performance goals as of the Change in Control, and thereafter, all Awards shall terminate to the extent not exercised or settled as of the date of the Change in Control. Subject to Section 16.4(f) of the Plan, such Units shall be settled upon becoming Vested Units.

9.    Adjustments for Changes in Capital Structure.

Subject to any required action by the stockholders of the Company and the requirements of Section 409A of the Code to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number of Units subject to the Award and/or the number and kind of shares to be issued in settlement of the Award, in order to prevent dilution or enlargement of the Participant’s rights under the Award. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy, which shall be treated in accordance with Section 3.3) to which the Participant is entitled by reason of the grant of Units acquired pursuant to this Award will be immediately subject to the provisions of this Award on the same basis as all Units originally acquired hereunder. Any fractional Unit or share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number. Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.

10.  Rights as a Stockholder or Employee.

The Participant shall have no rights as a stockholder with respect to any shares of Stock which may be issued in settlement of this Award until the date of the issuance of a certificate for such shares of Stock (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 3.3 and Section 9. If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified term. Nothing in this Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right to terminate the Participant’s Service at any time.

11.  Legends.

The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Stock issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares of Stock acquired pursuant to this Award in the possession of the Participant in order to carry out the provisions of this Section.

12.  Compliance with Section 409A.

It is intended that any election, payment or benefit which is made or provided pursuant to or in connection with this Award that may result in Section 409A Deferred Compensation shall comply in all respects with the applicable requirements of Section 409A (including applicable regulations or other administrative guidance thereunder, as determined by the Committee in good faith) to avoid the unfavorable tax consequences provided therein for non-compliance. In connection with effecting such compliance with Section 409A, the following shall apply:

12.1    Separation from Service; Required Delay in Payment to Specified Employee. Notwithstanding anything set forth herein to the contrary, no amount payable pursuant to this Agreement on account of the Participant’s termination of Service which constitutes a “deferral of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless and until the Participant has incurred a “separation from service” within the meaning of the Section 409A Regulations. Furthermore, to the extent that the Participant is a “specified employee” within the meaning of the Section 409A Regulations as of the date of the Participant’s separation from service, no amount that constitutes a deferral of compensation which is payable on account of the Participant’s separation from service shall be paid to the Participant before the date (the “Delayed Payment Date”) which is first day of the seventh month after the date of the Participant’s separation from service or, if earlier, the date of the Participant’s death following such separation from service. All such amounts that would, but for this Section, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.

12.2    Other Changes in Time of Payment. Neither the Participant nor the Company shall take any action to accelerate or delay the payment of any benefits which constitute a “deferral of compensation” within the meaning of Section 409A Regulations in any manner which would not be in compliance with the Section 409A Regulations.

12.3    Amendments to Comply with Section 409A; Indemnification. Notwithstanding any other provision of this Agreement to the contrary, the Company is authorized to amend this Agreement, to void or amend any election made by the Participant under this Agreement and/or to delay the payment of any monies and/or provision of any benefits in such manner as may be determined by the Company, in its discretion, to be necessary or appropriate to comply with the Section 409A Regulations without prior notice to or consent of the Participant. The Participant hereby releases and holds harmless the Company, its directors, officers and stockholders from any and all claims that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Participant in connection with the Award, including as a result of the application of Section 409A.

12.4    Advice of Independent Tax Advisor. The Company has not obtained a tax ruling or other confirmation from the Internal Revenue Service with regard to the application of Section 409A to the Award, and the Company does not represent or warrant that this Agreement will avoid adverse tax consequences to the Participant, including as a result of the application of Section 409A to the Award. The Participant hereby acknowledges that he or she has been advised to seek the advice of his or her own independent tax advisor prior to entering into this Agreement and is not relying upon any representations of the Company or any of its agents as to the effect of or the advisability of entering into this Agreement.

13.  Miscellaneous Provisions.

13.1    Termination or Amendment. The Committee may terminate or amend the Plan at any time. No amendment or addition to this Agreement shall be effective unless in writing and, to the extent such amendment is necessary to comply with applicable law or government regulation (including, but not limited to Section 409A), may be made without the consent of the Participant.

13.2    Nontransferability of the Award. Prior to the issuance of shares of Stock on the applicable Settlement Date, neither this Award nor any Units subject to this Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. All rights with respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

13.3    Further Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

13.4    Binding Effect. This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

13.5    Delivery of Documents and Notices. Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature to the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

(a)      Description of Electronic Delivery. The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. In addition, the Participant may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

(b)      Consent to Electronic Delivery. The Participant acknowledges that the Participant has read Section 13.5(a) of this Agreement and consents to the electronic delivery of the Plan documents and Grant Notice, as described in Section 13.5(a). The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in Section 13.5(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 13.5(a).

13.6     Integrated Agreement. The Grant Notice, this Agreement and the Plan, together with any employment, service or other agreement between the Participant and a Participating Company referring to the Award, shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Grant Notice, this Agreement and the Plan shall survive any settlement of the Award and shall remain in full force and effect.

13.7     Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in California and agree that such litigation shall be conducted in the courts of San Francisco County, California or the federal courts of the United States for the Northern District of California.

13.8     Counterparts. The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

EX-10.7

Exhibit 10.7

JAMBA, INC.

INDUCEMENT AWARD

NOTICE OF GRANT OF NON-STATUTORY STOCK OPTION

(NON-PLAN AWARD)

Jamba, Inc. (the “Company”) has granted to the Participant an option (the “Option” or “Award”) to purchase certain shares of Stock, as follows:

Participant:
Date of Grant:
Number of Option Shares:	, subject to adjustment as provided by the Option Agreement.
Exercise Price:	$
Vesting Commencement Date:
Option Expiration Date:
Tax Status of Option:	Non-statutory Stock Option
Vested Shares:	[Insert Vesting Schedule]
Superseding Agreement:	None/.  To the extent that a Superseding Agreement is listed, to the extent that such Superseding Agreement provides for more beneficial vesting and/or exercise terms, then, notwithstanding anything in this Grant Notice or the Stock Option Agreement to the contrary, the provisions of that Superseding Agreement shall govern.

By their signatures below or by electronic acceptance or authentication in a form authorized by the Company, the Company and the Participant agree that the Option is governed by this Grant Notice and by the Stock Option Agreement. The Participant acknowledges that copies of the Stock Option Agreement and the prospectus for this Award have been provided to the Participant. The Participant represents that the Participant has read and is familiar with the provisions of the Stock Option Agreement, and hereby accepts the Award subject to all of their terms and conditions.

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JAMBA, INC.	PARTICIPANT
By:
	Signature
	Date
Address
	Address

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EX-10.8

Exhibit 10.8

JAMBA, INC.

INDUCEMENT AWARD

NON-STATUTORY STOCK OPTION AGREEMENT

(NON-PLAN AWARD)

Jamba, Inc. (the “Company”) has granted to the Participant named in the Notice of Grant of Non-statutory Stock Option (the “Grant Notice”) to which this Non-statutory Stock Option Agreement (the “Option Agreement”) is attached an option (the “Option” or the “Award”) to purchase certain shares of Stock upon the terms and conditions set forth in the Grant Notice and this Option Agreement. This Option has not been granted pursuant to the Jamba, Inc. 2013 Equity Incentive Plan of the Company in reliance on NASDAQ Marketplace Rule 5635(c)(4). By signing the Grant Notice, the Participant: (a) acknowledges receipt of, and represents that the Participant has read and is familiar with, the Grant Notice, this Option Agreement, and the prospectus prepared in connection with the registration with the Securities and Exchange Commission of shares issuable pursuant to the Option (the “Prospectus”), (b) accepts the Option subject to all of the terms and conditions of the Grant Notice and this Option Agreement, and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice and this Option Agreement.

1.   Definitions and Construction.

1.1   Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice:

(a)   “Affiliate” means (i) a parent entity, other than a Parent Corporation, that directly, or indirectly through one or more intermediary entities, controls the Company or (ii) a subsidiary entity, other than a Subsidiary Corporation, that is controlled by the Company directly or indirectly through one or more intermediary entities. For this purpose, the terms “parent,” “subsidiary,” “control” and “controlled by” shall have the meanings assigned such terms for the purposes of registration of securities on Form S-8 under the Securities Act.

(b)   “Board” means the Board of Directors of the Company.

(c)   “Cause” means, unless such term or an equivalent term is otherwise defined by another written agreement between the Participant and a Participating Company applicable to the Award, any of the following: (i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Participating Company documents or records; (ii) the Participant’s material failure to abide by a Participating Company’s code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of a Participating Company (including, without limitation, the Participant’s improper use or disclosure of a Participating Company’s confidential or proprietary information); (iv) any intentional act by the Participant which has a material detrimental effect on a Participating Company’s reputation or business; (v) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (vi) any material breach by the Participant of any employment, service, non-disclosure, non-competition, non-solicitation or other similar agreement between the Participant and a Participating Company, which breach is not cured pursuant to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with a Participating Company.

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(d)   “Change in Control” means the occurrence of any one or a combination of the following:

(i)        any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total Fair Market Value or total combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of Directors; provided, however, that a Change in Control shall not be deemed to have occurred if such degree of beneficial ownership results from any of the following: (A) an acquisition by any person who on the Effective Date is the beneficial owner of more than fifty percent (50%) of such voting power, (B) any acquisition directly from the Company, including, without limitation, pursuant to or in connection with a public offering of securities, (C) any acquisition by the Company, (D) any acquisition by a trustee or other fiduciary under an employee benefit plan of a Participating Company or (E) any acquisition by an entity owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the voting securities of the Company; or

(ii)       an Ownership Change Event or series of related Ownership Change Events (collectively, a “Transaction”) in which the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Directors or, in the case of an Ownership Change Event described in Section 1.1(r), the entity to which the assets of the Company were transferred (the “Transferee”), as the case may be; or

(iii)      approval by the stockholders of a plan of complete liquidation or dissolution of the Company.

For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Committee shall determine whether multiple acquisitions of the voting securities of the Company and/or multiple Ownership Change Events are related and to be treated in the aggregate as a single Change in Control, and its determination shall be final, binding and conclusive.

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(e)   “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations or administrative guidelines promulgated thereunder.

(f)   “Committee” means the Compensation Committee and such other committee or subcommittee of the Board, if any, duly appointed to administer this Award and having such powers in each instance as shall be specified by the Board. If, at any time, there is no committee of the Board then authorized or properly constituted to administer this Award, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers.

(g)   “Company” means Jamba, Inc., a Delaware corporation, or any successor corporation thereto.

(h)   “Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a member of the Board) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person in reliance on registration on Form S-8 under the Securities Act.

(i)   “Director” means a member of the Board.

(j)   “Disability” means the permanent and total disability of the Participant, within the meaning of Section 22(e)(3) of the Code.

(k)   “Employee” means an employee (including an Officer or a member of the Board who is also treated as an employee) in the records of a Participating Company; provided, however, that neither service as a member of the Board nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Agreement. The Company shall determine in good faith and in the exercise of its discretion, whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, as of the time of the Company’s determination of whether or not the individual is an Employee, all such determinations by the Company shall be final, binding and conclusive as to such rights, if any, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination as to such individual’s status as an Employee.

(l)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(m)   “Fair Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:

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(i)        Except as otherwise determined by the Committee, if, on such date, the Stock is listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock as quoted on the national or regional securities exchange or quotation system constituting the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or quotation system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded or quoted prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion.

(ii)       Notwithstanding the foregoing, the Committee may, in its discretion, determine the Fair Market Value of a share of Stock on the basis of the opening, closing, or average of the high and low sale prices of a share of Stock on such date or the preceding trading day, the actual sale price of a share of Stock received by the Participant, any other reasonable basis using actual transactions in the Stock as reported on a national or regional securities exchange or quotation system, or on any other basis consistent with the requirements of Section 409A of the Code (“Section 409A”). The Committee may vary its method of determination of the Fair Market Value as provided in this Section for different purposes to the extent consistent with the requirements of Section 409A.

(n)   If, on such date, the Stock is not listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse, and in a manner consistent with the requirements of Section 409A.

(o)   “Insider” means an Officer, Director or any other person whose transactions in Stock are subject to Section 16 of the Exchange Act.

(p)   “Non-statutory Stock Option” means a stock option not intended to be or which does not qualify as an incentive stock option within the meaning of Section 422(b) of the Code.

(q)   “Officer” means any person designated by the Board as an officer of the Company.

(r)   “Ownership Change Event” means the occurrence of any of the following with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of securities of the Company representing more than fifty percent (50%) of the total combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of Directors; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company).

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(s)   “Parent Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code.

(t)   “Participant” means Marie Perry.

(u)   “Participating Company” means the Company or any Parent Corporation, Subsidiary Corporation or Affiliate.

(v)   “Participating Company Group” means, at any point in time, the Company and all other entities collectively which are then Participating Companies.

(w)    “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation.

(x)    “Securities Act” means the Securities Act of 1933, as amended.

(y)   “Service” means the Participant’s employment or service with the Participating Company Group, whether as an Employee, a Director or a Consultant. Unless otherwise provided by the Committee, the Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders such Service or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore, the Participant’s Service shall not be deemed to have been interrupted or terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company. However, unless otherwise provided by the Committee, if any such leave taken by the Participant exceeds ninety (90) days, then on the ninety-first (91st) day following the commencement of such leave the Participant’s Service shall be deemed to have terminated, unless the Participant’s right to return to Service is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, an unpaid leave of absence shall not be treated as Service for purposes of determining vesting under this Award. The Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the business entity for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of such termination.

(z)   “Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 9 hereof.

(aa)   “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code.

(bb)   “Trading Compliance Policy” means the written policy of the Company pertaining to the purchase, sale, transfer or other disposition of the Company’s equity securities by Directors, Officers, Employees or other service providers who may possess material, nonpublic information regarding the Company or its securities.

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(cc)   “Vesting Conditions” mean those conditions of which the Award or shares subject to the Award remain subject to forfeiture or a repurchase option in favor of the Company exercisable for the Participant’s monetary purchase price, if any, for such shares upon the Participant’s termination of Service.

1.2   Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.   Tax Status of Option.

This Option is intended to be a Non-statutory Stock Option and shall not be treated as an incentive stock option within the meaning of Section 422(b) of the Code. The exercise price for this Option shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the Option. The Company intends that this Option shall either be exempt from or comply with Section 409A, and shall be construed to be so exempt or so comply.

3.   Administration.

3.1   Administration by the Committee. This Agreement shall be administered by the Committee. All questions of interpretation concerning the Grant Notice and this Agreement shall be determined by the Committee or its designee. All such determinations shall be final and binding upon all persons having an interest in the Award.

3.2   Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent or actual authority with respect to such matter, right, obligation, or election.

3.3   Administration with Respect to Insiders. At any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, this Agreement shall be administered in compliance with the requirements, if any, of Rule 16b-3 if Participant is an Insider.

3.4   Powers of the Committee. In addition to any other powers set forth herein, subject to the terms hereof, the Committee shall have the full and final power and authority, in its discretion:

(a)   to determine the Fair Market Value of shares of Stock or other property;

(b)   to determine the terms, conditions and restrictions applicable to the Award and any shares of Stock acquired pursuant thereto;

(c)   to determine whether the Award will be settled in shares of Stock, cash, other property or in any combination thereof;

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(d)   to amend, modify, or cancel the Award or to waive any restrictions or conditions applicable to the Award or any shares acquired pursuant thereto;

(e)   to accelerate, continue, extend or defer the exercisability or vesting of the Award or any shares acquired pursuant thereto, including with respect to the period following the Participant’s termination of Service;

(f)   to prescribe, amend or rescind rules, guidelines and policies relating to the Award, including, without limitation, as the Committee deems necessary or desirable to comply with the laws or regulations of or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions; and

(g)   to correct any defect, supply any omission or reconcile any inconsistency in the Award and to make all other determinations and take such other actions with respect to the Award as the Committee may deem advisable to the extent not inconsistent with the provisions of this Agreement or applicable law.

3.5   Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees of the Participating Company Group, to the extent permitted by applicable law, members of the Board or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Award, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

4.   Exercise of the Option.

4.1   Right to Exercise. Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Vesting Date and prior to the termination of the Option (as provided in Section 6 below) in an amount not to exceed the number of Vested Shares less the number of shares previously acquired upon exercise of the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares, as adjusted pursuant to Section 9.

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4.2   Method of Exercise. Exercise of the Option shall be by means of electronic or written notice (the “Exercise Notice”) in a form authorized by the Company. An electronic Exercise Notice must be digitally signed or authenticated by the Participant in such manner as required by the notice and transmitted to the Company or an authorized representative of the Company (including a third-party administrator designated by the Company). In the event that the Participant is not authorized or is unable to provide an electronic Exercise Notice, the Option shall be exercised by a written Exercise Notice addressed to the Company, which shall be signed by the Participant and delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Company, or an authorized representative of the Company (including a third-party administrator designated by the Company). Each Exercise Notice, whether electronic or written, must state the Participant’s election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Participant’s investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement. Further, except as set forth in Section 4.3 below, each Exercise Notice must be received by the Company prior to the termination of the Option as set forth in Section 6 and must be accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such electronic or written Exercise Notice and the aggregate Exercise Price.

4.3   Automatic Exercise of Option. If on the date the Option would otherwise terminate or expire, the Option is otherwise vested and exercisable immediately prior to such termination or expiration and, if so exercised, the Fair Market Value of the Stock would exceed the Exercise Price of the Option, then any portion of such Option which has not previously been exercised shall automatically be deemed to be exercised as of such date with respect to such portion pursuant to the Net Exercise procedure described in Section 4.4(b)(ii) below and withholding in shares of Stock as described in Section 4.4(b) below. Notwithstanding the foregoing, the Participant may elect, in a manner prescribed by the Company, not to have his or her Option automatically exercised pursuant to this Section 4.3 provided the Participant makes such election prior to the date referenced above.

4.4   Payment of Exercise Price.

(a)   Forms of Consideration Authorized. Except as otherwise provided below, payment of the aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised shall be made (i) in cash, by check or in cash equivalent; (ii) if permitted by the Company and subject to the limitations contained in Section 4.4(b) below, by means of (1) a Cashless Exercise, (2) a Net-Exercise, or (3) a Stock Tender Exercise; or (iii) by any combination of the foregoing.

(b)   Limitations on Forms of Consideration. The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve or terminate any program or procedure providing for payment of the Exercise Price through any of the means described below, including with respect to the Participant notwithstanding that such program or procedures may be available to others.

(i)        Cashless Exercise. A “Cashless Exercise” means the delivery of a properly executed Exercise Notice together with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale or loan with respect to shares of Stock acquired upon the exercise of the Option in an amount not less than the aggregate Exercise Price for such shares (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System).

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(ii)       Net-Exercise. A “Net-Exercise” means the delivery of a properly executed Exercise Notice electing a procedure pursuant to which (1) the Company will reduce the number of shares otherwise issuable to the Participant upon the exercise of the Option by the largest whole number of shares having a Fair Market Value that does not exceed the aggregate Exercise Price for the shares with respect to which the Option is exercised, and (2) the Participant shall pay to the Company in cash the remaining balance of such aggregate Exercise Price not satisfied by such reduction in the number of whole shares to be issued. Following a Net-Exercise, the number of shares remaining subject to the Option, if any, shall be reduced by the sum of (1) the net number of shares issued to the Participant upon such exercise, and (2) the number of shares deducted by the Company for payment of the aggregate Exercise Price.

(iii)      Stock Tender Exercise. A “Stock Tender Exercise” means the delivery of a properly executed Exercise Notice accompanied by (1) the Participant’s tender to the Company, or attestation to the ownership, in a form acceptable to the Company of whole shares of Stock having a Fair Market Value that does not exceed the aggregate Exercise Price for the shares with respect to which the Option is exercised, and (2) the Participant’s payment to the Company in cash of the remaining balance of such aggregate Exercise Price not satisfied by such shares’ Fair Market Value. A Stock Tender Exercise shall not be permitted if it would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. If required by the Company, the Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Participant for a period of time required by the Company (and not used for another option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company.

4.5   Tax Withholding.

(a)        In General. At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by a Participating Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for (including by means of a Cashless Exercise to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company Group, if any, which arise in connection with the Option. The Company shall have no obligation to deliver shares of Stock until the tax withholding obligations of the Participating Company Group have been satisfied by the Participant.

(b)        Withholding in Shares. The Company shall have the right, but not the obligation, to require the Participant to satisfy all or any portion of a Participating Company’s tax withholding obligations upon exercise of the Option by deducting from the shares of Stock otherwise issuable to the Participant upon such exercise a number of whole shares having a fair market value, as determined by the Company as of the date of exercise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates.

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4.6   Beneficial Ownership of Shares; Certificate Registration. The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with the broker designated by the Company with which the Participant has an account, any or all shares acquired by the Participant pursuant to the exercise of the Option. Except as provided by the preceding sentence, a certificate for the shares as to which the Option is exercised shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

4.7   Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities, including without limitation any Trading Compliance Policy. The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

4.8   Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise of the Option.

5.   Transferability of the Option.

5.1   Except as provided in Section 5.2, the Option may be exercised during the lifetime of the Participant only by the Participant or the Participant’s guardian or legal representative and shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. Following the death of the Participant, the Option, to the extent provided in Section 7 below, may be exercised by the Participant’s legal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.

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5.2   With the consent of the Committee and subject to any conditions or restrictions as the Committee may impose, in its discretion, the Participant may transfer during the Participant’s lifetime and prior to the Participant’s termination of Service all or any portion of the Option to one or more of such persons (each a “Permitted Transferee”) as permitted in accordance with the applicable limitations, if any, described in the General Instructions to the Form S-8 Registration Statement under the Securities Act. No transfer or purported transfer of the Option shall be effective unless and until: (i) the Participant has delivered to the Company a written request describing the terms and conditions of the proposed transfer in such form as the Company may require, (ii) the Participant has made adequate provision, in the sole determination of the Company, for satisfaction of the tax withholding obligations of the Participating Company Group as provided in Section 4.5 that may arise with respect to the transferred portion of the Option, (iii) the Committee has approved the requested transfer, and (iv) the Participant has delivered to the Company written documentation of the transfer in such form as the Company may require. With respect to the transferred portion of the Option, all of the terms and conditions of the Grant Notice and this Option Agreement shall apply to the Permitted Transferee and not to the original Participant, except for (i) the Participant’s rendering of Service, (ii) provision for the Participating Company Group’s tax withholding obligations, if any, and (iii) any subsequent transfer of the Option by the Permitted Transferee, which shall be prohibited except as provided in Section 5.1 above, unless otherwise permitted by the Committee, in its sole discretion. The Company shall have no obligation to notify a Permitted Transferee of any expiration, termination, lapse or acceleration of the transferred Option, including, without limitation, an early termination of the transferred Option resulting from the termination of Service of the original Participant. Exercise of the transferred Option by a Permitted Transferee shall be subject to compliance with all applicable federal, state and foreign securities laws; however, the Company shall have no obligation to register with any federal, state or foreign securities commission or agency such transferred Option or any shares that may be issuable upon the exercise of the transferred Option by the Permitted Transferee.

6.   Termination of the Option.

The Option shall terminate and may no longer be exercised after the first to occur of (a) the close of business on the Option Expiration Date, (b) the close of business on the last date for exercising the Option following termination of the Participant’s Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8.

7.   Effect of Termination of Service.

7.1   Option Exercisability. The Option shall terminate immediately upon the Participant’s termination of Service to the extent that it is then unvested and shall be exercisable after the Participant’s termination of Service to the extent it is then vested only during the applicable time period as determined below and thereafter shall terminate.

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(a)   Disability. If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of one (1) year after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.

(b)   Death. If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any time prior to the expiration of one (1) year after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date. The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within three (3) months after the Participant’s termination of Service.

(c)   Termination for Cause. Notwithstanding any other provision of this Option Agreement to the contrary, if the Participant’s Service is terminated for Cause or if, following the Participant’s termination of Service and during any period in which the Option otherwise would remain exercisable, the Participant engages in any act that would constitute Cause, the Option shall terminate in its entirety and cease to be exercisable immediately upon such termination of Service or act.

(d)   Other Termination of Service. If the Participant’s Service terminates for any reason, except Disability, death or Cause, the Option, to the extent unexercised and exercisable for Vested Shares by the Participant on the date on which the Participant’s Service terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.

7.2   Extension if Exercise Prevented by Law. Notwithstanding the foregoing, other than termination of the Participant’s Service for Cause, if the exercise of the Option within the applicable time periods set forth in Section 7.1 above is prevented by the provisions of Section 4.7 above, the Option shall remain exercisable until the later of (a) thirty (30) calendar days after the date such exercise first would no longer be prevented by such provisions, or (b) the end of the applicable time period under Section 7.1 above, but in any event no later than the Option Expiration Date.

8.   Effect of Change in Control.

In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of the Participant, assume or continue in full force and effect the Company’s rights and obligations under all or any portion of the Option or substitute for all or any portion of the Option a substantially equivalent option for the Acquiror’s stock.

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Notwithstanding the foregoing, if this Option is not assumed, substituted for, or otherwise continued by the Acquiror, the Option shall vest in full effective immediately prior to, but contingent upon, the consummation of the Change in Control; provided, however, that any Option which has its Vesting Conditions based on performance goals that vests pursuant to this sentence shall only become vested based on actual results measured against the performance goals as of the Change in Control, and thereafter, all Options shall terminate to the extent not exercised or settled as of the date of the Change in Control.

9.   Adjustments for Changes in Capital Structure.

Subject to any required action by the stockholders of the Company and the requirements of Section 409A to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number, Exercise Price and kind of shares subject to the Option, in order to prevent dilution or enlargement of the Participant’s rights under the Option. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number and the Exercise Price shall be rounded up to the nearest whole cent. In no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.

10.   Rights as a Stockholder, Director, Employee or Consultant.

The Participant shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date the shares are issued, except as provided in Section 9 above. If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified term. Nothing in this Option Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Participant’s Service as a Director, an Employee or Consultant, as the case may be, at any time.

11.   Legends.

The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of stock subject to the provisions of this Option Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Participant in order to carry out the provisions of this Section.

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12.   Miscellaneous Provisions.

12.1      Termination or Amendment. The Committee may amend or terminate this Option Agreement at any time. No amendment or addition to this Option Agreement shall be effective unless in writing and, to the extent such amendment is necessary to comply with applicable law or government regulation, may be made without the consent of the Participant.

12.2      Further Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Option Agreement.

12.3      Binding Effect. This Option Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

12.4      Delivery of Documents and Notices. Any document relating to this Option or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

(a)   Description of Electronic Delivery. The Grant Notice, this Option Agreement, the Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. In addition, if permitted by the Company, the Participant may deliver electronically the Grant Notice and Exercise Notice called for by Section 4.2 above to the Company or to such third party involved in administering the Option as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Option, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

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(b)   Consent to Electronic Delivery. The Participant acknowledges that the Participant has read Section 12.4(a) of this Option Agreement and consents to the electronic delivery of the Option documents and, if permitted by the Company, the delivery of the Grant Notice and Exercise Notice, as described in Section 12.4(a). The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in Section 12.4(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 12.4(a).

12.5      Integrated Agreement. The Grant Notice, this Option Agreement, together with any employment, service or other agreement between the Participant and a Participating Company referring to the Option, shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter. To the extent contemplated herein or therein, the provisions of the Grant Notice and this Option Agreement shall survive any exercise of the Option and shall remain in full force and effect.

12.6      Applicable Law. This Option Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in California and agree that such litigation shall be conducted in the courts of San Francisco County, California or the federal courts of the United States for the Northern District of California.

12.7       Counterparts. The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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Participant: _________________

Date: _______________

NON-STATUTORY STOCK OPTION EXERCISE NOTICE

Jamba, Inc.

Ladies and Gentlemen:

1.        Option. I was granted a non-statutory option (the “Option”) to purchase shares of the common stock (the “Shares”) of Jamba, Inc. (the “Company”) pursuant to my Notice of Grant of Stock Option (the “Grant Notice”) and my Non-Statutory Stock Option Agreement (the “Option Agreement”) as follows:

Date of Grant:
Number of Option Shares:
Exercise Price per Share:	$

2.        Exercise of Option. I hereby elect to exercise the Option to purchase the following number of Shares, all of which are Vested Shares in accordance with the Grant Notice and the Option Agreement:

Total Shares Purchased:
Total Exercise Price (Total Shares  X  Price per Share)	$

3.        Payments. I enclose payment in full of the total exercise price for the Shares in the following form(s), as authorized by my Option Agreement:

¨  Cash:	$
¨  Check:	$
¨  Cashless Exercise:	Contact Administrator
¨  Net Exercise:	Contact Administrator
¨  Stock Tender Exercise:	Contact Administrator

4.        Tax Withholding. I authorize payroll withholding and otherwise will make adequate provision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with my exercise of the Option. (Contact the Administrator for amount of tax due.)

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5.        Participant Information.

My address is:

My Social Security Number is:

6.        Binding Effect. I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions of the Grant Notice and the Option Agreement, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon my heirs, executors, administrators, successors and assigns.

Very truly yours,

(Signature)

Receipt of the above is hereby acknowledged.

JAMBA, INC.

By:

Name:

Title:

Dated:

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EX-10.9

Exhibit 10.9

JAMBA, INC.

INDUCEMENT AWARD

NOTICE OF GRANT OF RESTRICTED STOCK UNITS

(NON-PLAN AWARD)

The Participant has been granted an award of Restricted Stock Units (the “Award”), which represents the right to receive on the applicable Settlement Date one (1) share of the common stock of Jamba, Inc. (the “Company”) for each Vested Unit, as follows:

Participant:
Date of Grant:	/Upon Company’s filing of Form S-8 registering the Award	Vesting Commencement Date

Total Number of Restricted Stock Units:	______, subject to adjustment as provided by the Restricted Stock Unit Agreement.
Settlement Date:	Except as otherwise provided in the Restricted Stock Unit Agreement, for each Restricted Stock Unit, the date on which such unit becomes a Vested Unit in accordance with the vesting schedule set forth below.
Vested Units:	[Insert Vesting Schedule]
Superseding Agreement:	None/______.  To the extent that a Superseding Agreement is listed, to the extent that such Superseding Agreement provides for more beneficial vesting terms, then, notwithstanding anything in this Grant Notice or the Restricted Stock Unit Agreement to the contrary, the provisions of that Superseding Agreement shall govern.

By their signatures below or by electronic acceptance or authentication in a form authorized by the Company, the Company and the Participant agree that the Award is governed by this Notice and by the Restricted Stock Unit Agreement. The Participant acknowledges that copies of the Restricted Stock Unit Agreement and the prospectus for this Award have been provided to the Participant. The Participant represents that the Participant has read and is familiar with the provisions of the Restricted Stock Unit Agreement, and hereby accepts the Award subject to all of the terms and conditions.

JAMBA, INC.	PARTICIPANT
By:
	Signature
	Date
Address:
	Address

EX-10.10

Exhibit 10.10

JAMBA, INC.

INDUCEMENT AWARD

RESTRICTED STOCK UNIT AGREEMENT

(NON-PLAN AWARD)

Jamba, Inc. has granted to the Participant named in the Notice of Grant of Restricted Stock Units (the “Grant Notice”) to which this Restricted Stock Unit Agreement (the “Agreement”) is attached an Award consisting of Restricted Stock Units (the “Units”) and a corresponding Dividend Equivalent Right subject to the terms and conditions set forth in the Grant Notice and this Agreement. This Award has not been granted pursuant to the Jamba, Inc. 2013 Equity Incentive Plan of the Company in reliance on NASDAQ Marketplace Rule 5635(c)(4). By signing the Grant Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with the Grant Notice and this Agreement and a prospectus for this Award prepared in connection with the registration with the Securities and Exchange Commission of the shares of Stock issuable pursuant to the Award (the “Prospectus”), (b) accepts the Award subject to all of the terms and conditions of the Grant Notice and this Agreement and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice and this Agreement.

1.    Definitions and Construction.

1.1     Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice:

(a)    “Affiliate” means (i) a parent entity, other than a Parent Corporation, that directly, or indirectly through one or more intermediary entities, controls the Company or (ii) a subsidiary entity, other than a Subsidiary Corporation, that is controlled by the Company directly or indirectly through one or more intermediary entities. For this purpose, the terms “parent,” “subsidiary,” “control” and “controlled by” shall have the meanings assigned such terms for the purposes of registration of securities on Form S-8 under the Securities Act.

(b)    “Board” means the Board of Directors of the Company.

(c)    “Cause” means, unless such term or an equivalent term is otherwise defined by another written agreement between the Participant and a Participating Company applicable to the Award, any of the following: (i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Participating Company documents or records; (ii) the Participant’s material failure to abide by a Participating Company’s code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of a Participating Company (including, without limitation, the Participant’s improper use or disclosure of a Participating Company’s confidential or proprietary information); (iv) any intentional act by the Participant which has a material detrimental effect on a Participating Company’s reputation or business; (v) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (vi) any material breach by the Participant of any employment, service, non-disclosure, non-competition, non-solicitation or other similar agreement between the Participant and a Participating Company, which breach is not cured pursuant to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with a Participating Company.

(d)     “Change in Control” means the occurrence of any one or a combination of the following:

(i)    any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total Fair Market Value or total combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of Directors; provided, however, that a Change in Control shall not be deemed to have occurred if such degree of beneficial ownership results from any of the following: (A) an acquisition by any person who on the Effective Date is the beneficial owner of more than fifty percent (50%) of such voting power, (B) any acquisition directly from the Company, including, without limitation, pursuant to or in connection with a public offering of securities, (C) any acquisition by the Company, (D) any acquisition by a trustee or other fiduciary under an employee benefit plan of a Participating Company or (E) any acquisition by an entity owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the voting securities of the Company; or

(ii)       an Ownership Change Event or series of related Ownership Change Events (collectively, a “Transaction”) in which the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Directors or, in the case of an Ownership Change Event described in Section 1.1(r), the entity to which the assets of the Company were transferred (the “Transferee”), as the case may be; or

(iii)      approval by the stockholders of a plan of complete liquidation or dissolution of the Company.

For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Committee shall determine whether multiple acquisitions of the voting securities of the Company and/or multiple Ownership Change Events are related and to be treated in the aggregate as a single Change in Control, and its determination shall be final, binding and conclusive.

(e)     “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations or administrative guidelines promulgated thereunder.

(f)    “Committee” means the Compensation Committee and such other committee or subcommittee of the Board, if any, duly appointed to administer this Award and having such powers in each instance as shall be specified by the Board. If, at any time, there is no committee of the Board then authorized or properly constituted to administer this Award, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers.

(g)     “Company” means Jamba, Inc., a Delaware corporation, or any successor corporation thereto.

(h)     “Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a member of the Board) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person in reliance on registration on Form S-8 under the Securities Act.

(i)    “Director” means a member of the Board.

(j)    “Dividend Equivalent Right” means the right of the Participant, granted at the discretion of the Committee, to receive a credit for the account of such Participant in an amount equal to the cash dividends paid on one share of Stock for each share of Stock represented by the Award.

(k)     “Disability” means the permanent and total disability of the Participant, within the meaning of Section 22(e)(3) of the Code.

(l)    “Employee” means an employee (including an Officer or a member of the Board who is also treated as an employee) in the records of a Participating Company; provided, however, that neither service as a member of the Board nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Agreement. The Company shall determine in good faith and in the exercise of its discretion, whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, as of the time of the Company’s determination of whether or not the individual is an Employee, all such determinations by the Company shall be final, binding and conclusive as to such rights, if any, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination as to such individual’s status as an Employee.

(m)     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(n)     “Fair Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:

(i)    Except as otherwise determined by the Committee, if, on such date, the Stock is listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock as quoted on the national or regional securities exchange or quotation system constituting the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or quotation system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded or quoted prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion.

(ii)       Notwithstanding the foregoing, the Committee may, in its discretion, determine the Fair Market Value of a share of Stock on the basis of the opening, closing, or average of the high and low sale prices of a share of Stock on such date or the preceding trading day, the actual sale price of a share of Stock received by the Participant, any other reasonable basis using actual transactions in the Stock as reported on a national or regional securities exchange or quotation system, or on any other basis consistent with the requirements of Section 409A of the Code (“Section 409A”). The Committee may vary its method of determination of the Fair Market Value as provided in this Section for different purposes to the extent consistent with the requirements of Section 409A.

(o)     If, on such date, the Stock is not listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse, and in a manner consistent with the requirements of Section 409A.

(p)     “Insider” means an Officer, Director or any other person whose transactions in Stock are subject to Section 16 of the Exchange Act.

(q)     “Officer” means any person designated by the Board as an officer of the Company.

(r)    “Ownership Change Event” means the occurrence of any of the following with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of securities of the Company representing more than fifty percent (50%) of the total combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of Directors; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company).

(s)     “Parent Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code.

(t)    “Participant” means Marie Perry.

(u)     “Participating Company” means the Company or any Parent Corporation, Subsidiary Corporation or Affiliate.

(v)     “Participating Company Group” means, at any point in time, the Company and all other entities collectively which are then Participating Companies.

(w)     “Restricted Stock Unit” means a right to receive, on a future date or event, a share of Stock or cash in lieu thereof, as determined by the Committee.

(x)    “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation.

(y)     “Securities Act” means the Securities Act of 1933, as amended.

(z)    “Service” means the Participant’s employment or service with the Participating Company Group, whether as an Employee, a Director or a Consultant. Unless otherwise provided by the Committee, the Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders such Service or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore, the Participant’s Service shall not be deemed to have been interrupted or terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company. However, unless otherwise provided by the Committee, if any such leave taken by the Participant exceeds ninety (90) days, then on the ninety-first (91st) day following the commencement of such leave the Participant’s Service shall be deemed to have terminated, unless the Participant’s right to return to Service is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, an unpaid leave of absence shall not be treated as Service for purposes of determining vesting under this Award. The Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the business entity for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of such termination.

(aa)    “Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 9 hereof.

(bb)   “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code.

(cc)    “Trading Compliance Policy” means the written policy of the Company pertaining to the purchase, sale, transfer or other disposition of the Company’s equity securities by Directors, Officers, Employees or other service providers who may possess material, nonpublic information regarding the Company or its securities.

(dd)   “Vesting Conditions” mean those conditions of which the Award or shares subject to the Award remain subject to forfeiture or a repurchase option in favor of the Company exercisable for the Participant’s monetary purchase price, if any, for such shares upon the Participant’s termination of Service.

1.2     Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.    Administration.

2.1     Administration by the Committee. This Agreement shall be administered by the Committee. All questions of interpretation concerning the Grant Notice and this Agreement shall be determined by the Committee or its designee. All such determinations shall be final and binding upon all persons having an interest in the Award.

2.2     Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent or actual authority with respect to such matter, right, obligation, or election.

2.3     Administration with Respect to Insiders. At any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, this Agreement shall be administered in compliance with the requirements, if any, of Rule 16b-3 if Participant is an Insider.

2.4     Powers of the Committee. In addition to any other powers set forth herein, subject to the terms hereof, the Committee shall have the full and final power and authority, in its discretion:

(a)    to determine the Fair Market Value of shares of Stock or other property;

(b)    to determine the terms, conditions and restrictions applicable to the Award and any shares of Stock acquired pursuant thereto;

(c)    to determine whether the Award will be settled in shares of Stock, cash, other property or in any combination thereof;

(d)    to amend, modify, or cancel the Award or to waive any restrictions or conditions applicable to the Award or any shares acquired pursuant thereto;

(e)    to accelerate, continue, extend or defer the vesting of the Award or any shares acquired pursuant thereto, including with respect to the period following the Participant’s termination of Service;

(f)     to prescribe, amend or rescind rules, guidelines and policies relating to the Award, including, without limitation, as the Committee deems necessary or desirable to comply with the laws or regulations of or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions; and

(g)    to correct any defect, supply any omission or reconcile any inconsistency in the Award and to make all other determinations and take such other actions with respect to the Award as the Committee may deem advisable to the extent not inconsistent with the provisions of this Agreement or applicable law.

2.5     Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees of the Participating Company Group, to the extent permitted by applicable law, members of the Board or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Award, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

3.    The Award.

3.1     Grant of Units. On the Grant Date, the Participant shall acquire, subject to the provisions of this Agreement, the Number of Restricted Stock Units set forth in the Grant Notice, subject to adjustment as provided in Section 3.3 below and Section 9 hereof. Each Unit represents a right to receive on a date determined in accordance with the Grant Notice and this Agreement one (1) share of Stock for each Vested Unit.

3.2     No Monetary Payment Required. The Participant is not required to make any monetary payment (other than applicable tax withholding, if any) as a condition to receiving the Units or shares of Stock issued upon settlement of the Units, the consideration for which shall be past services actually rendered and/or future services to be rendered to a Participating Company for its benefit. Notwithstanding the foregoing, if required by applicable state corporate law, the Participant shall furnish consideration in the form of cash or past services rendered having a value not less than the par value of the shares of Stock issued upon settlement of the Units.

3.3     Dividend Equivalent Units. In addition to the award of Units, this Award also provides for the award of Dividend Equivalent Rights as set forth below. On the date that the Company pays a cash dividend to holders of Stock generally, the Participant shall be credited with a number of additional whole “Dividend Equivalent Units” determined by dividing (a) the product of (i) the dollar amount of the cash dividend paid per share of Stock on such date and (ii) the sum of the Total Number of Units and the number of Dividend Equivalent Units previously credited to the Participant pursuant to the Award and which have not been settled or forfeited pursuant to the Company Reacquisition Right (as defined in Section 5 below) as of such date, by (b) the Fair Market Value per share of Stock on such date. Any resulting fractional Dividend Equivalent Unit shall be rounded down to the nearest whole number. Such additional Dividend Equivalent Units shall be subject to the same terms and conditions and shall be settled or forfeited in the same manner and at the same time as the Restricted Stock Units originally subject to the Award with respect to which they have been credited.

4.    Vesting of Units.

The Units shall vest and become Vested Units as provided in the Grant Notice. Dividend Equivalent Units shall become Vested Units at the same time as the Restricted Stock Units originally subject to the Award with respect to which they have been credited.

5.    Company Reacquisition Right.

5.1     Grant of Company Reacquisition Right. Except to the extent otherwise provided in an employment agreement between a Participating Company and the Participant, in the event that the Participant’s Service terminates for any reason or no reason, with or without Cause, the Participant shall forfeit and the Company shall automatically reacquire all Units which are not, as of the time of such termination, Vested Units (“Unvested Units”), and the Participant shall not be entitled to any payment therefor (the “Company Reacquisition Right”).

5.2     Ownership Change Event, Non-Cash Dividends, Distributions and Adjustments. Upon the occurrence of an Ownership Change Event, a dividend or distribution to the stockholders of the Company paid in shares of Stock or other property, or any other adjustment upon a change in the capital structure of the Company as described in Section 9 hereof, any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy, which shall be treated in accordance with Section 3.3) to which the Participant is entitled by reason of the Participant’s ownership of Unvested Units shall be immediately subject to the Company Reacquisition Right and included in the terms “Units” and “Unvested Units” for all purposes of the Company Reacquisition Right with the same force and effect as the Unvested Units immediately prior to the Ownership Change Event, dividend, distribution or adjustment, as the case may be. For purposes of determining the number of Vested Units following an Ownership Change Event, dividend, distribution or adjustment, credited Service shall include all Service with any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating Company both before and after any such event.

6.    Settlement of the Award.

6.1     Issuance of Shares of Stock. Subject to the provisions of Section 6.3 below, the Company shall issue to the Participant on the Settlement Date with respect to each Vested Unit to be settled on such date one (1) share of Stock. Shares of Stock issued in settlement of Units shall not be subject to any restriction on transfer other than any such restriction as may be required pursuant to Section 6.3, Section 7 or any Trading Compliance Policy.

6.2     Beneficial Ownership of Shares; Certificate Registration. The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with the broker designated by the Company with which the Participant has an account, any or all shares of Stock acquired by the Participant pursuant to the settlement of the Award. Except as provided by the preceding sentence, a certificate for the shares of Stock as to which the Award is settled shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

6.3     Postponement of Settlement Date. Notwithstanding the provisions set forth in Section 6.1, in the event that a Settlement Date with respect to a Vesting Date would occur on a date on which a sale by the Participant of the shares of Stock to be issued in settlement of the Units on such Settlement Date would violate the Trading Compliance Policy, such Settlement Date shall be postponed until the first to occur of (a) the next business day on which a sale by the Participant of such shares of Stock would not violate the Trading Compliance Policy; and (b) March 15th of the calendar year following the calendar year in which the Vesting Date occurred.

6.4     Restrictions on Grant of the Award and Issuance of Shares. The grant of the Award and issuance of shares of Stock upon settlement of the Award shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. No shares of Stock may be issued hereunder if the issuance of such shares of Stock would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the shares of Stock may then be listed. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares subject to the Award shall relieve the Company of any liability in respect of the failure to issue such shares of Stock as to which such requisite authority shall not have been obtained. As a condition to the settlement of the Award, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

6.5     Fractional Shares. The Company shall not be required to issue fractional shares of Stock upon the settlement of the Award. Any fractional share of Stock resulting from a settlement of the Award shall be rounded down to the nearest whole number.

7.    Tax Withholding.

7.1     In General. At the time the Grant Notice is executed, or at any time thereafter as requested by a Participating Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company, if any, which arise in connection with the Award, the vesting of Units or the issuance of shares of Stock in settlement thereof. The Company shall have no obligation to deliver shares of Stock until such tax withholding obligations have been satisfied by the Participant.

7.2     Assignment of Sale Proceeds; Payment of Tax Withholding by Check. Subject to compliance with applicable law and any Trading Compliance Policy, the Company may permit the Participant to satisfy the tax withholding obligations in accordance with procedures established by the Company providing for either (i) delivery by the Participant to the Company or a broker approved by the Company of properly executed instructions, in a form approved by the Company, providing for the assignment to the Company of the proceeds of a sale with respect to some or all of the shares of Stock being acquired upon settlement of Units, or (ii) payment by check. The Participant shall deliver written notice of any such permitted election to the Company on a form specified by the Company for this purpose at least thirty (30) days (or such other period established by the Company) prior to such Settlement Date. If the Participant elects payment by check, the Participant agrees to deliver a check for the full amount of the required tax withholding to the Company (or its Affiliates, if applicable) on or before the third business day following the Settlement Date. If the Participant elects to payment by check but fails to make such payment as required by the preceding sentence, the Company is hereby authorized, at its discretion, to satisfy the tax withholding obligations through any means authorized by this Section 7, including by directing a sale for the account of the Participant of some or all of the shares of Stock being acquired upon settlement of Units from which the required taxes shall be withheld, by withholding from payroll and any other amounts payable to the Participant or by withholding shares of Stock in accordance with Section 7.3 below.

7.3     Withholding in Shares. The Company may require the Participant to satisfy all or any portion of a Participating’ Company’s tax withholding obligations by deducting from the shares of Stock otherwise deliverable to the Participant in settlement of the Award a number of whole shares of Stock having a fair market value, as determined by the Company as of the date on which the tax withholding obligations arise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates.

8.    Effect of Change in Control.

8.1     In the event of a Change in Control, the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of the Participant, assume or continue in full force and effect the Company’s rights and obligations under all or any portion of the outstanding Units or substitute for all or any portion of the outstanding Units substantially equivalent rights with respect to the Acquiror’s stock.

8.2     Notwithstanding the foregoing, if the Units are not assumed, substituted for, or otherwise continued by the Acquiror, the Units shall vest in full effective immediately prior to, but contingent upon, the consummation of the Change in Control; provided, however, Vesting Conditions based on performance goals shall only become vested based on actual results measured against the performance goals set forth in the Notice of Grant as of the Change in Control, and thereafter, the Award shall terminate. Subject to compliance with Section 409A of the Code, such Units shall be settled upon becoming Vested Units.

9.    Adjustments for Changes in Capital Structure.

Subject to any required action by the stockholders of the Company and the requirements of Section 409A of the Code to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number of Units subject to the Award and/or the number and kind of shares to be issued in settlement of the Award, in order to prevent dilution or enlargement of the Participant’s rights under the Award. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy, which shall be treated in accordance with Section 3.3) to which the Participant is entitled by reason of the grant of Units acquired pursuant to this Award will be immediately subject to the provisions of this Award on the same basis as all Units originally acquired hereunder. Any fractional Unit or share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number. Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.

10.    Rights as a Stockholder or Employee.

The Participant shall have no rights as a stockholder with respect to any shares of Stock which may be issued in settlement of this Award until the date of the issuance of a certificate for such shares of Stock (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 3.3 and Section 9. If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified term. Nothing in this Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right to terminate the Participant’s Service at any time.

11.    Legends.

The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Stock issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares of Stock acquired pursuant to this Award in the possession of the Participant in order to carry out the provisions of this Section.

12.    Compliance with Section 409A.

It is intended that any election, payment or benefit which is made or provided pursuant to or in connection with this Award that may result in Section 409A Deferred Compensation shall comply in all respects with the applicable requirements of Section 409A (including applicable regulations or other administrative guidance thereunder, as determined by the Committee in good faith) to avoid the unfavorable tax consequences provided therein for non-compliance. In connection with effecting such compliance with Section 409A, the following shall apply:

12.1       Separation from Service; Required Delay in Payment to Specified Employee. Notwithstanding anything set forth herein to the contrary, no amount payable pursuant to this Agreement on account of the Participant’s termination of Service which constitutes a “deferral of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless and until the Participant has incurred a “separation from service” within the meaning of the Section 409A Regulations. Furthermore, to the extent that the Participant is a “specified employee” within the meaning of the Section 409A Regulations as of the date of the Participant’s separation from service, no amount that constitutes a deferral of compensation which is payable on account of the Participant’s separation from service shall be paid to the Participant before the date (the “Delayed Payment Date”) which is first day of the seventh month after the date of the Participant’s separation from service or, if earlier, the date of the Participant’s death following such separation from service. All such amounts that would, but for this Section, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.

12.2       Other Changes in Time of Payment. Neither the Participant nor the Company shall take any action to accelerate or delay the payment of any benefits which constitute a “deferral of compensation” within the meaning of Section 409A Regulations in any manner which would not be in compliance with the Section 409A Regulations.

12.3       Amendments to Comply with Section 409A; Indemnification. Notwithstanding any other provision of this Agreement to the contrary, the Company is authorized to amend this Agreement, to void or amend any election made by the Participant under this Agreement and/or to delay the payment of any monies and/or provision of any benefits in such manner as may be determined by the Company, in its discretion, to be necessary or appropriate to comply with the Section 409A Regulations without prior notice to or consent of the Participant. The Participant hereby releases and holds harmless the Company, its directors, officers and stockholders from any and all claims that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Participant in connection with the Award, including as a result of the application of Section 409A.

12.4       Advice of Independent Tax Advisor. The Company has not obtained a tax ruling or other confirmation from the Internal Revenue Service with regard to the application of Section 409A to the Award, and the Company does not represent or warrant that this Agreement will avoid adverse tax consequences to the Participant, including as a result of the application of Section 409A to the Award. The Participant hereby acknowledges that he or she has been advised to seek the advice of his or her own independent tax advisor prior to entering into this Agreement and is not relying upon any representations of the Company or any of its agents as to the effect of or the advisability of entering into this Agreement.

13.    Miscellaneous Provisions.

13.1       Termination or Amendment. The Committee may terminate or amend the this Agreement at any time, however, no amendment or addition to this Agreement shall be effective unless in writing and, to the extent such amendment is necessary to comply with applicable law or government regulation (including, but not limited to Section 409A), may be made without the consent of the Participant.

13.2       Nontransferability of the Award. Prior to the issuance of shares of Stock on the applicable Settlement Date, neither this Award nor any Units subject to this Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. All rights with respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

13.3       Further Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

13.4       Binding Effect. This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

13.5       Delivery of Documents and Notices. Any document relating to this Award or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature to the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

(a)    Description of Electronic Delivery. The Grant Notice, this Agreement, the Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. In addition, the Participant may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Award as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Award, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

(b)    Consent to Electronic Delivery. The Participant acknowledges that the Participant has read Section 13.5(a) of this Agreement and consents to the electronic delivery of the Grant Notice and related documents, as described in Section 13.5(a). The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in Section 13.5(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 13.5(a).

13.6       Integrated Agreement. The Grant Notice, this Agreement and the Prospectus, together with any employment, service or other agreement between the Participant and a Participating Company referring to the Award, shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Grant Notice and this Agreement shall survive any settlement of the Award and shall remain in full force and effect.

13.7       Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in California and agree that such litigation shall be conducted in the courts of San Francisco County, California or the federal courts of the United States for the Northern District of California.

13.8       Counterparts. The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

EX-10.11

Exhibit 10.11

JAMBA, INC.

INDUCEMENT AWARD

NOTICE OF GRANT OF RESTRICTED STOCK UNITS

(NON-PLAN AWARD)

The Participant has been granted an award of Restricted Stock Units (the “Award”), which represents the right to receive on the applicable Settlement Date one (1) share of the common stock of Jamba, Inc. (the “Company”) for each Vested Unit, as follows:

Participant:	________	Vesting Commencement Date:	________
Date of Grant:	________
Total Number of Restricted Stock Units:	_____, subject to adjustment as provided by the Restricted Stock Unit Agreement.
Settlement Date:	________.
Vested Units:	Vesting Schedule                                           Number of Units Vesting Closing price of the Company’s common stock for 30 consecutive trading day period equals or exceeds $___ (during the time period of ________ to ________) _________ [Number of Units] Closing price of the Company’s common stock for 30 consecutive trading day period equals or exceeds $___ (during the time period of ________ to ________) _________ [Number of Units] Closing price of the Company’s common stock for 30 consecutive trading day period equals or exceeds $___ (during the time period of ________ to ________) _________ [Number of Units] or [Insert alternative vesting schedule]
Superseding Agreement:	None/_______________.  To the extent that a Superseding Agreement is listed, to the extent that such Superseding Agreement provides for more beneficial vesting terms, then, notwithstanding anything in this Grant Notice or the Restricted Stock Unit Agreement to the contrary, the provisions of that Superseding Agreement shall govern.

By their signatures below or by electronic acceptance or authentication in a form authorized by the Company, the Company and the Participant agree that the Award is governed by this Notice and by the Restricted Stock Unit Agreement. The Participant acknowledges that copies of the Restricted Stock Unit Agreement and the prospectus for this Award have been provided to the Participant. The Participant represents that the Participant has read and is familiar with the provisions of the Restricted Stock Unit Agreement, and hereby accepts the Award subject to all of its terms and conditions.

JAMBA, INC.	PARTICIPANT
By:
	Signature
	Date
Address:
	Address

EX-10.12

Exhibit 10.12

JAMBA, INC.

INDUCEMENT AWARD

RESTRICTED STOCK UNIT AGREEMENT

(NON-PLAN AWARD)

Jamba, Inc. has granted to the Participant named in the Notice of Grant of Restricted Stock Units (the “Grant Notice”) to which this Restricted Stock Unit Agreement (the “Agreement”) is attached an Award consisting of Restricted Stock Units (the “Units”) and a corresponding Dividend Equivalent Right subject to the terms and conditions set forth in the Grant Notice and this Agreement. This Award has not been granted pursuant to the Jamba, Inc. 2013 Equity Incentive Plan of the Company in reliance on NASDAQ Marketplace Rule 5635(c)(4). By signing the Grant Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with the Grant Notice and this Agreement and a prospectus for this Award prepared in connection with the registration with the Securities and Exchange Commission of the shares of Stock issuable pursuant to the Award (the “Prospectus”), (b) accepts the Award subject to all of the terms and conditions of the Grant Notice and this Agreement and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice and this Agreement.

1.    Definitions and Construction.

1.1    Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice:

(a)    “Affiliate” means (i) a parent entity, other than a Parent Corporation, that directly, or indirectly through one or more intermediary entities, controls the Company or (ii) a subsidiary entity, other than a Subsidiary Corporation, that is controlled by the Company directly or indirectly through one or more intermediary entities. For this purpose, the terms “parent,” “subsidiary,” “control” and “controlled by” shall have the meanings assigned such terms for the purposes of registration of securities on Form S-8 under the Securities Act.

(b)    “Board” means the Board of Directors of the Company.

(c)    “Cause” means, unless such term or an equivalent term is otherwise defined by another written agreement between the Participant and a Participating Company applicable to the Award, any of the following: (i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Participating Company documents or records; (ii) the Participant’s material failure to abide by a Participating Company’s code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of a Participating Company (including, without limitation, the Participant’s improper use or disclosure of a Participating Company’s confidential or proprietary information); (iv) any intentional act by the Participant which has a material detrimental effect on a Participating Company’s reputation or business; (v) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (vi) any material breach by the Participant of any employment, service, non-disclosure, non-competition, non-solicitation or other similar agreement between the Participant and a Participating Company, which breach is not cured pursuant to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with a Participating Company.

(d)    “Change in Control” means the occurrence of any one or a combination of the following:

(i)    any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total Fair Market Value or total combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of Directors; provided, however, that a Change in Control shall not be deemed to have occurred if such degree of beneficial ownership results from any of the following: (A) an acquisition by any person who on the Effective Date is the beneficial owner of more than fifty percent (50%) of such voting power, (B) any acquisition directly from the Company, including, without limitation, pursuant to or in connection with a public offering of securities, (C) any acquisition by the Company, (D) any acquisition by a trustee or other fiduciary under an employee benefit plan of a Participating Company or (E) any acquisition by an entity owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the voting securities of the Company; or

(ii)    an Ownership Change Event or series of related Ownership Change Events (collectively, a “Transaction”) in which the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Directors or, in the case of an Ownership Change Event described in Section 1.1(r), the entity to which the assets of the Company were transferred (the “Transferee”), as the case may be; or

(iii)    approval by the stockholders of a plan of complete liquidation or dissolution of the Company.

    For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Committee shall determine whether multiple acquisitions of the voting securities of the Company and/or multiple Ownership Change Events are related and to be treated in the aggregate as a single Change in Control, and its determination shall be final, binding and conclusive.

(e)    “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations or administrative guidelines promulgated thereunder.

(f)    “Committee” means the Compensation Committee and such other committee or subcommittee of the Board, if any, duly appointed to administer this Award and having such powers in each instance as shall be specified by the Board. If, at any time, there is no committee of the Board then authorized or properly constituted to administer this Award, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers.

(g)    “Company” means Jamba, Inc., a Delaware corporation, or any successor corporation thereto.

(h)    “Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a member of the Board) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person in reliance on registration on Form S-8 under the Securities Act.

(i)    “Director” means a member of the Board.

(j)    “Dividend Equivalent Right” means the right of the Participant, granted at the discretion of the Committee, to receive a credit for the account of such Participant in an amount equal to the cash dividends paid on one share of Stock for each share of Stock represented by the Award.

(k)    “Disability” means the permanent and total disability of the Participant, within the meaning of Section 22(e)(3) of the Code.

(l)    “Employee” means an employee (including an Officer or a member of the Board who is also treated as an employee) in the records of a Participating Company; provided, however, that neither service as a member of the Board nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Agreement. The Company shall determine in good faith and in the exercise of its discretion, whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, as of the time of the Company’s determination of whether or not the individual is an Employee, all such determinations by the Company shall be final, binding and conclusive as to such rights, if any, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination as to such individual’s status as an Employee.

(m)     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(n)    “Fair Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:

(i)    Except as otherwise determined by the Committee, if, on such date, the Stock is listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock as quoted on the national or regional securities exchange or quotation system constituting the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or quotation system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded or quoted prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion.

(ii)    Notwithstanding the foregoing, the Committee may, in its discretion, determine the Fair Market Value of a share of Stock on the basis of the opening, closing, or average of the high and low sale prices of a share of Stock on such date or the preceding trading day, the actual sale price of a share of Stock received by the Participant, any other reasonable basis using actual transactions in the Stock as reported on a national or regional securities exchange or quotation system, or on any other basis consistent with the requirements of Section 409A of the Code (“Section 409A”). The Committee may vary its method of determination of the Fair Market Value as provided in this Section for different purposes to the extent consistent with the requirements of Section 409A.

(o)    If, on such date, the Stock is not listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse, and in a manner consistent with the requirements of Section 409A.

(p)    “Insider” means an Officer, Director or any other person whose transactions in Stock are subject to Section 16 of the Exchange Act.

(q)    “Officer” means any person designated by the Board as an officer of the Company.

(r)    “Ownership Change Event” means the occurrence of any of the following with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of securities of the Company representing more than fifty percent (50%) of the total combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of Directors; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company).

(s)    “Parent Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code.

(t)    “Participant” means Marie Perry.

(u)    “Participating Company” means the Company or any Parent Corporation, Subsidiary Corporation or Affiliate.

(v)    “Participating Company Group” means, at any point in time, the Company and all other entities collectively which are then Participating Companies.

(w)     “Restricted Stock Unit” means a right to receive, on a future date or event, a share of Stock or cash in lieu thereof, as determined by the Committee.

(x)    “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation.

(y)     “Securities Act” means the Securities Act of 1933, as amended.

(z)    “Service” means the Participant’s employment or service with the Participating Company Group, whether as an Employee, a Director or a Consultant. Unless otherwise provided by the Committee, the Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders such Service or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore, the Participant’s Service shall not be deemed to have been interrupted or terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company. However, unless otherwise provided by the Committee, if any such leave taken by the Participant exceeds ninety (90) days, then on the ninety-first (91st) day following the commencement of such leave the Participant’s Service shall be deemed to have terminated, unless the Participant’s right to return to Service is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, an unpaid leave of absence shall not be treated as Service for purposes of determining vesting under this Award. The Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the business entity for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of such termination.

(aa)    “Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 9 hereof.

(bb)    “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code.

(cc)    “Trading Compliance Policy” means the written policy of the Company pertaining to the purchase, sale, transfer or other disposition of the Company’s equity securities by Directors, Officers, Employees or other service providers who may possess material, nonpublic information regarding the Company or its securities.

(dd)    “Vesting Conditions” mean those conditions of which the Award or shares subject to the Award remain subject to forfeiture or a repurchase option in favor of the Company exercisable for the Participant’s monetary purchase price, if any, for such shares upon the Participant’s termination of Service.

1.2    Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.    Administration.

2.1    Administration by the Committee. This Agreement shall be administered by the Committee. All questions of interpretation concerning the Grant Notice and this Agreement shall be determined by the Committee or its designee. All such determinations shall be final and binding upon all persons having an interest in the Award.

2.2    Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent or actual authority with respect to such matter, right, obligation, or election.

2.3    Administration with Respect to Insiders. At any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, this Agreement shall be administered in compliance with the requirements, if any, of Rule 16b-3 if Participant is an Insider.

2.4    Powers of the Committee. In addition to any other powers set forth herein, subject to the terms hereof, the Committee shall have the full and final power and authority, in its discretion:

(a)    to determine the Fair Market Value of shares of Stock or other property;

(b)    to determine the terms, conditions and restrictions applicable to the Award and any shares of Stock acquired pursuant thereto;

(c)    to determine whether the Award will be settled in shares of Stock, cash, other property or in any combination thereof;

(d)    to amend, modify, or cancel the Award or to waive any restrictions or conditions applicable to the Award or any shares acquired pursuant thereto;

(e)    to accelerate, continue, extend or defer the vesting of the Award or any shares acquired pursuant thereto, including with respect to the period following the Participant’s termination of Service;

(f)    to prescribe, amend or rescind rules, guidelines and policies relating to the Award, including, without limitation, as the Committee deems necessary or desirable to comply with the laws or regulations of or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions; and

(g)    to correct any defect, supply any omission or reconcile any inconsistency in the Award and to make all other determinations and take such other actions with respect to the Award as the Committee may deem advisable to the extent not inconsistent with the provisions of this Agreement or applicable law.

2.5    Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees of the Participating Company Group, to the extent permitted by applicable law, members of the Board or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Award, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

3.    The Award.

3.1    Grant of Units. On the Grant Date, the Participant shall acquire, subject to the provisions of this Agreement, the Number of Restricted Stock Units set forth in the Grant Notice, subject to adjustment as provided in Section 3.3 below and Section 9 hereof. Each Unit represents a right to receive on a date determined in accordance with the Grant Notice and this Agreement one (1) share of Stock for each Vested Unit.

3.2    No Monetary Payment Required. The Participant is not required to make any monetary payment (other than applicable tax withholding, if any) as a condition to receiving the Units or shares of Stock issued upon settlement of the Units, the consideration for which shall be past services actually rendered and/or future services to be rendered to a Participating Company for its benefit. Notwithstanding the foregoing, if required by applicable state corporate law, the Participant shall furnish consideration in the form of cash or past services rendered having a value not less than the par value of the shares of Stock issued upon settlement of the Units.

3.3    Dividend Equivalent Units. In addition to the award of Units, this Award also provides for the award of Dividend Equivalent Rights as set forth below. On the date that the Company pays a cash dividend to holders of Stock generally, the Participant shall be credited with a number of additional whole “Dividend Equivalent Units” determined by dividing (a) the product of (i) the dollar amount of the cash dividend paid per share of Stock on such date and (ii) the sum of the Total Number of Units and the number of Dividend Equivalent Units previously credited to the Participant pursuant to the Award and which have not been settled or forfeited pursuant to the Company Reacquisition Right (as defined in Section 5 below) as of such date, by (b) the Fair Market Value per share of Stock on such date. Any resulting fractional Dividend Equivalent Unit shall be rounded down to the nearest whole number. Such additional Dividend Equivalent Units shall be subject to the same terms and conditions and shall be settled or forfeited in the same manner and at the same time as the Restricted Stock Units originally subject to the Award with respect to which they have been credited.

4.    Vesting of Units.

        The Units shall vest and become Vested Units as provided in the Grant Notice. Dividend Equivalent Units shall become Vested Units at the same time as the Restricted Stock Units originally subject to the Award with respect to which they have been credited.

5.    Company Reacquisition Right.

5.1    Grant of Company Reacquisition Right. Except to the extent otherwise provided in an employment agreement between a Participating Company and the Participant, in the event that the Participant’s Service terminates for any reason or no reason, with or without Cause, the Participant shall forfeit and the Company shall automatically reacquire all Units which are not, as of the time of such termination, Vested Units (“Unvested Units”), and the Participant shall not be entitled to any payment therefor (the “Company Reacquisition Right”).

5.2    Ownership Change Event, Non-Cash Dividends, Distributions and Adjustments. Upon the occurrence of an Ownership Change Event, a dividend or distribution to the stockholders of the Company paid in shares of Stock or other property, or any other adjustment upon a change in the capital structure of the Company as described in Section 9 hereof, any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy, which shall be treated in accordance with Section 3.3) to which the Participant is entitled by reason of the Participant’s ownership of Unvested Units shall be immediately subject to the Company Reacquisition Right and included in the terms “Units” and “Unvested Units” for all purposes of the Company Reacquisition Right with the same force and effect as the Unvested Units immediately prior to the Ownership Change Event, dividend, distribution or adjustment, as the case may be. For purposes of determining the number of Vested Units following an Ownership Change Event, dividend, distribution or adjustment, credited Service shall include all Service with any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating Company both before and after any such event.

6.    Settlement of the Award.

6.1    Issuance of Shares of Stock. Subject to the provisions of Section 6.3 below, the Company shall issue to the Participant on the Settlement Date with respect to each Vested Unit to be settled on such date one (1) share of Stock. Shares of Stock issued in settlement of Units shall not be subject to any restriction on transfer other than any such restriction as may be required pursuant to Section 6.3, Section 7 or any Trading Compliance Policy.

6.2    Beneficial Ownership of Shares; Certificate Registration. The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with the broker designated by the Company with which the Participant has an account, any or all shares of Stock acquired by the Participant pursuant to the settlement of the Award. Except as provided by the preceding sentence, a certificate for the shares of Stock as to which the Award is settled shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

6.3    Postponement of Settlement Date. Notwithstanding the provisions set forth in Section 6.1, in the event that a Settlement Date with respect to a Vesting Date would occur on a date on which a sale by the Participant of the shares of Stock to be issued in settlement of the Units on such Settlement Date would violate the Trading Compliance Policy, such Settlement Date shall be postponed until the first to occur of (a) the next business day on which a sale by the Participant of such shares of Stock would not violate the Trading Compliance Policy; and (b) March 15th of the calendar year following the calendar year in which the Vesting Date occurred.

6.4    Restrictions on Grant of the Award and Issuance of Shares. The grant of the Award and issuance of shares of Stock upon settlement of the Award shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. No shares of Stock may be issued hereunder if the issuance of such shares of Stock would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the shares of Stock may then be listed. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares subject to the Award shall relieve the Company of any liability in respect of the failure to issue such shares of Stock as to which such requisite authority shall not have been obtained. As a condition to the settlement of the Award, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

6.5    Fractional Shares. The Company shall not be required to issue fractional shares of Stock upon the settlement of the Award. Any fractional share of Stock resulting from a settlement of the Award shall be rounded down to the nearest whole number.

7.    Tax Withholding.

7.1    In General. At the time the Grant Notice is executed, or at any time thereafter as requested by a Participating Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company, if any, which arise in connection with the Award, the vesting of Units or the issuance of shares of Stock in settlement thereof. The Company shall have no obligation to deliver shares of Stock until such tax withholding obligations have been satisfied by the Participant.

7.2    Assignment of Sale Proceeds; Payment of Tax Withholding by Check. Subject to compliance with applicable law and any Trading Compliance Policy, the Company may permit the Participant to satisfy the tax withholding obligations in accordance with procedures established by the Company providing for either (i) delivery by the Participant to the Company or a broker approved by the Company of properly executed instructions, in a form approved by the Company, providing for the assignment to the Company of the proceeds of a sale with respect to some or all of the shares of Stock being acquired upon settlement of Units, or (ii) payment by check. The Participant shall deliver written notice of any such permitted election to the Company on a form specified by the Company for this purpose at least thirty (30) days (or such other period established by the Company) prior to such Settlement Date. If the Participant elects payment by check, the Participant agrees to deliver a check for the full amount of the required tax withholding to the Company (or its Affiliates, if applicable) on or before the third business day following the Settlement Date. If the Participant elects to payment by check but fails to make such payment as required by the preceding sentence, the Company is hereby authorized, at its discretion, to satisfy the tax withholding obligations through any means authorized by this Section 7, including by directing a sale for the account of the Participant of some or all of the shares of Stock being acquired upon settlement of Units from which the required taxes shall be withheld, by withholding from payroll and any other amounts payable to the Participant or by withholding shares of Stock in accordance with Section 7.3 below.

7.3    Withholding in Shares. The Company may require the Participant to satisfy all or any portion of a Participating’ Company’s tax withholding obligations by deducting from the shares of Stock otherwise deliverable to the Participant in settlement of the Award a number of whole shares of Stock having a fair market value, as determined by the Company as of the date on which the tax withholding obligations arise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates.

8.    Effect of Change in Control.

8.1    In the event of a Change in Control, the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of the Participant, assume or continue in full force and effect the Company’s rights and obligations under all or any portion of the outstanding Units or substitute for all or any portion of the outstanding Units substantially equivalent rights with respect to the Acquiror’s stock. For purposes of this Section, a Unit shall be deemed assumed if, following the Change in Control, the Unit confers the right to receive, subject to the terms and conditions of this Agreement, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a share of Stock on the effective date of the Change in Control was entitled (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Stock); provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to be received upon settlement of the Unit to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Stock pursuant to the Change in Control.

8.2    Notwithstanding the foregoing, if the Units are not assumed, substituted for, or otherwise continued by the Acquiror, the Units shall vest in full effective immediately prior to, but contingent upon, the consummation of the Change in Control; provided, however, Vesting Conditions based on performance goals shall only become vested based on actual results measured against the performance goals set forth in the Notice of Grant as of the Change in Control, and thereafter, the Award shall terminate. Subject to compliance with Section 409A of the Code, such Units, if any, shall be settled upon becoming Vested Units.

9.    Adjustments for Changes in Capital Structure.

Subject to any required action by the stockholders of the Company and the requirements of Section 409A of the Code to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number of Units subject to the Award and/or the number and kind of shares to be issued in settlement of the Award, in order to prevent dilution or enlargement of the Participant’s rights under the Award. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy, which shall be treated in accordance with Section 3.3) to which the Participant is entitled by reason of the grant of Units acquired pursuant to this Award will be immediately subject to the provisions of this Award on the same basis as all Units originally acquired hereunder. Any fractional Unit or share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number. Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.

10.    Rights as a Stockholder or Employee.

The Participant shall have no rights as a stockholder with respect to any shares of Stock which may be issued in settlement of this Award until the date of the issuance of a certificate for such shares of Stock (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 3.3 and Section 9. If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified term. Nothing in this Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right to terminate the Participant’s Service at any time.

11.    Legends.

The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Stock issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares of Stock acquired pursuant to this Award in the possession of the Participant in order to carry out the provisions of this Section.

12.    Compliance with Section 409A.

It is intended that any election, payment or benefit which is made or provided pursuant to or in connection with this Award that may result in Section 409A Deferred Compensation shall comply in all respects with the applicable requirements of Section 409A (including applicable regulations or other administrative guidance thereunder, as determined by the Committee in good faith) to avoid the unfavorable tax consequences provided therein for non-compliance. In connection with effecting such compliance with Section 409A, the following shall apply:

12.1    Separation from Service; Required Delay in Payment to Specified Employee. Notwithstanding anything set forth herein to the contrary, no amount payable pursuant to this Agreement on account of the Participant’s termination of Service which constitutes a “deferral of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless and until the Participant has incurred a “separation from service” within the meaning of the Section 409A Regulations. Furthermore, to the extent that the Participant is a “specified employee” within the meaning of the Section 409A Regulations as of the date of the Participant’s separation from service, no amount that constitutes a deferral of compensation which is payable on account of the Participant’s separation from service shall be paid to the Participant before the date (the “Delayed Payment Date”) which is first day of the seventh month after the date of the Participant’s separation from service or, if earlier, the date of the Participant’s death following such separation from service. All such amounts that would, but for this Section, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.

12.2    Other Changes in Time of Payment. Neither the Participant nor the Company shall take any action to accelerate or delay the payment of any benefits which constitute a “deferral of compensation” within the meaning of Section 409A Regulations in any manner which would not be in compliance with the Section 409A Regulations.

12.3    Amendments to Comply with Section 409A; Indemnification. Notwithstanding any other provision of this Agreement to the contrary, the Company is authorized to amend this Agreement, to void or amend any election made by the Participant under this Agreement and/or to delay the payment of any monies and/or provision of any benefits in such manner as may be determined by the Company, in its discretion, to be necessary or appropriate to comply with the Section 409A Regulations without prior notice to or consent of the Participant. The Participant hereby releases and holds harmless the Company, its directors, officers and stockholders from any and all claims that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Participant in connection with the Award, including as a result of the application of Section 409A.

12.4    Advice of Independent Tax Advisor. The Company has not obtained a tax ruling or other confirmation from the Internal Revenue Service with regard to the application of Section 409A to the Award, and the Company does not represent or warrant that this Agreement will avoid adverse tax consequences to the Participant, including as a result of the application of Section 409A to the Award. The Participant hereby acknowledges that he or she has been advised to seek the advice of his or her own independent tax advisor prior to entering into this Agreement and is not relying upon any representations of the Company or any of its agents as to the effect of or the advisability of entering into this Agreement.

13.    Miscellaneous Provisions.

13.1    Termination or Amendment. The Committee may terminate or amend the this Agreement at any time, however, no amendment or addition to this Agreement shall be effective unless in writing and, to the extent such amendment is necessary to comply with applicable law or government regulation (including, but not limited to Section 409A), may be made without the consent of the Participant.

13.2    Nontransferability of the Award. Prior to the issuance of shares of Stock on the applicable Settlement Date, neither this Award nor any Units subject to this Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. All rights with respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

13.3    Further Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

13.4    Binding Effect. This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

13.5    Delivery of Documents and Notices. Any document relating to this Award or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature to the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

(a)    Description of Electronic Delivery. The Grant Notice, this Agreement, the Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. In addition, the Participant may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Award as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Award, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

(b)    Consent to Electronic Delivery. The Participant acknowledges that the Participant has read Section 13.5(a) of this Agreement and consents to the electronic delivery of the Grant Notice and related documents, as described in Section 13.5(a). The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in Section 13.5(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 13.5(a).

13.6    Integrated Agreement. The Grant Notice, this Agreement and the Prospectus, together with any employment, service or other agreement between the Participant and a Participating Company referring to the Award, shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Grant Notice and this Agreement shall survive any settlement of the Award and shall remain in full force and effect.

13.7    Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in California and agree that such litigation shall be conducted in the courts of San Francisco County, California or the federal courts of the United States for the Northern District of California.

13.8    Counterparts. The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, David A. Pace, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Jamba, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ David A. Pace

David A. Pace

Chief Executive Officer

(Principal Executive Officer)  

Date: August 5, 2016

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Karen L. Luey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Jamba, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Karen L. Luey

Karen L. Luey

Chief Financial Officer, Chief Administrative Officer,

Executive Vice President and Secretary

(Principal Financial Officer)

Date: August 5, 2016

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Jamba, Inc. (the “Company”) on Form 10-Q for the quarter ended June 28, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David A. Pace, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that:

(1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David A. Pace

David A. Pace

Chief Executive Officer

Date: August 5, 2016

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. 

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Jamba, Inc. (the “Company”) on Form 10-Q for the quarter ended June 28, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Karen L. Luey, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that:

(1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Karen L. Luey

Karen L. Luey

Chief Financial Officer, Chief Administrative Officer,

Executive Vice President and Secretary

Date: August 5, 2016

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. 

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 28, 2016	Jul. 29, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 28, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Entity Registrant Name	JAMBA, INC.
Entity Central Index Key	0001316898
Current Fiscal Year End Date	--01-03
Entity Filer Category	Accelerated Filer
Trading Symbol	JMBA
Entity Common Stock, Shares Outstanding		15,254,707

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 28, 2016	Dec. 29, 2015
Current Assets:
Cash and cash equivalents	$ 15,773	$ 19,730
Receivables, net of allowances of $369 and $618	12,259	16,932
Inventories	704	818
Prepaid expenses and other current assets	4,217	6,533
Total current assets	32,953	44,013
Property, fixtures and equipment, net of accumulated depreciation of $37,876 and $36,815	17,775	18,744
Goodwill	1,184	1,184
Trademarks and other intangible assets, net	1,390	1,464
Other long-term assets	3,159	4,211
Total assets	56,461	69,616
Current Liabilities:
Accounts payable	1,812	3,815
Accrued compensation and benefits	4,645	3,788
Workers’ compensation and health insurance reserves	344	633
Accrued jambacard liability	25,230	29,306
Accrued expenses	8,237	9,977
Other current liabilities	7,208	8,116
Total current liabilities	47,476	55,635
Deferred rent and other long-term liabilities	7,162	8,990
Total liabilities	54,638	64,625
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.001 par value—30,000,000 shares authorized; 18,112,896 and 15,254,079 shares issued and outstanding at June 28, 2016, respectively, and 17,938,820 and 15,080,003 shares issued and outstanding at December 29, 2015, respectively	18	18
Additional paid-in capital	405,736	403,605
Treasury shares, at cost	(40,009)	(40,009)
Accumulated deficit	(363,922)	(358,623)
Total stockholders’ equity	1,823	4,991
Total liabilities and stockholders’ equity	$ 56,461	$ 69,616

XML

CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands	Jun. 28, 2016	Dec. 29, 2015
Receivables, allowances (in dollars)	$ 369	$ 618
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 37,876	$ 36,815
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	18,112,896	17,938,820
Common stock, shares outstanding	15,254,079	15,080,003

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 28, 2016	Jun. 30, 2015	Jun. 28, 2016	Jun. 30, 2015
Revenue:
Company stores	$ 13,874	$ 48,360	$ 25,827	$ 96,088
Franchise and other revenue	7,666	5,766	14,467	10,542
Total revenue	21,540	54,126	40,294	106,630
Costs and operating expenses:
Cost of sales	3,321	11,474	6,283	23,881
Labor	4,668	14,876	8,826	30,964
Occupancy	1,900	6,131	3,936	12,966
Store operating	2,272	8,059	4,634	16,093
Depreciation and amortization	1,674	1,344	3,176	3,217
General and administrative	9,423	8,427	17,033	17,390
Loss (gain) on disposal of assets	188	(4,480)	297	(5,258)
Store pre-opening	326	166	650	188
Impairment of long-lived assets	127	295	127	295
Store lease termination and closure costs	(56)	40	64	62
Other operating, net	245	1,333	516	2,039
Total costs and operating expenses	24,088	47,665	45,542	101,837
(Loss) income from operations	(2,548)	6,461	(5,248)	4,793
Other income (expense), net:
Interest income	74	14	145	29
Interest expense	(59)	(68)	(118)	(109)
Total other income (expense), net	15	(54)	27	(80)
(Loss) income before income taxes	(2,533)	6,407	(5,221)	4,713
Income tax benefit (expense)	54	(57)	(78)	(83)
Net (loss) income	(2,479)	6,350	(5,299)	4,630
Less: Net income attributable to noncontrolling interest	0	21	0	52
Net (loss) income attributable to Jamba, Inc.	$ (2,479)	$ 6,329	$ (5,299)	$ 4,578
Weighted-average shares used in the computation of earnings (loss) per share attributable to Jamba, Inc.
Basic (in shares)	15,168,348	16,073,667	15,126,192	16,222,276
Diluted (in shares)	15,168,348	16,573,444	15,126,192	16,723,127
(Loss) earnings per share attributable to Jamba, Inc. common stockholders
Basic (in dollar per share)	$ (0.16)	$ 0.39	$ (0.35)	$ 0.28
Diluted (in dollar per share)	$ (0.16)	$ 0.38	$ (0.35)	$ 0.27

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 28, 2016	Jun. 30, 2015
Cash flows used in operating activities:
Net (loss) income	$ (5,299)	$ 4,630
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	3,176	3,217
Store closure costs and gain on disposals	410	(6,140)
Jambacard breakage income	(1,645)	(1,996)
Gain on contingent consideration	0	(156)
Gain on sale of investment in joint venture	0	(662)
Stock-based compensation	1,698	2,626
Bad debt and purchase obligation reserves	0	1,009
Deferred rent	(820)	(631)
Loss on investment	26	204
Changes in operating assets and liabilities:
Receivables	4,673	(779)
Inventories	114	(80)
Prepaid expenses and other current assets	2,315	(408)
Other long-term assets	1,026	(55)
Accounts payable	(2,558)	(2,842)
Accrued compensation and benefits	857	(1,340)
Workers’ compensation and health insurance reserves	(289)	443
Accrued jambacard liability	(2,431)	(4,757)
Accrued expenses	(1,738)	1,551
Other current liabilities	(909)	623
Other long-term liabilities	(976)	299
Net cash used in operating activities	(2,370)	(5,244)
Cash flows (used in) provided by investing activities:
Capital expenditures	(2,018)	(2,102)
Proceeds from disposal of assets	0	12,191
Net cash (used in) provided by investing activities	(2,018)	10,089
Cash flows provided by (used in) financing activities:
Payment on capital lease obligations	(2)	0
Payments for treasury shares	0	(9,823)
Proceeds pursuant to stock issuance	433	1,222
Payments to noncontrolling interest	0	(52)
Proceeds from sale to noncontrolling interest	0	(24)
Net cash provided by (used in) financing activities	431	(8,677)
Net decrease in cash and cash equivalents	(3,957)	(3,832)
Cash and cash equivalents at beginning of period	19,730	17,750
Cash and cash equivalents at end of period	15,773	13,918
Supplemental cash flow information:
Cash paid for interest	12	20
Cash paid for income taxes	10	0
Noncash investing and financing activities:
Property, fixtures and equipment in accounts payable	$ 555	$ 387

XML

DESCRIPTION OF BUSINESS

6 Months Ended

Jun. 28, 2016

Business Combination, Description [Abstract]

Business Combination Disclosure [Text Block]

1. DESCRIPTION OF BUSINESS

Business

Jamba, Inc. consummated its initial public offering in July 2005. On March 10, 2006, Jamba, Inc. entered into an Agreement and Plan of Merger with Jamba Juice Company (the “Merger Agreement”). On November 29, 2006 (the “Merger Date”), Jamba, Inc. consummated the merger with Jamba Juice Company (the “Merger”) whereby Jamba Juice Company, which first began operations in 1990, became its wholly owned subsidiary.

Jamba, Inc. through its wholly-owned subsidiary, Jamba Juice Company, is a healthy, active lifestyle brand with a robust expanding global business driven by a portfolio of franchised and company-owned Jamba Juice^® stores and licensed JambaGO^® and Jamba Juice Express™ formats. The Jamba^® brand includes innovative product platforms and both licensed and company driven consumer packaged goods. The Company is a leading restaurant retailer of “better-for-you” specialty food and beverage offerings which include great tasting, whole fruit smoothies, fresh squeezed juices and juice blends, Energy Bowls™, and a variety of food items including, hot oatmeal, breakfast wraps, Artisan Flatbreads™, baked goods, and snacks. Jamba Juice Company continues to expand the Jamba brand by direct selling of consumer packaged goods (“CPG”) products, and by licensing its trademarks for CPG products sold through retail channels such as grocery stores, warehouse clubs, and convenience stores. The Company’s headquarters are located in Emeryville, California and will be relocated to Frisco, Texas by the end of fiscal 2016.

As of June 28, 2016, there were 885 Jamba Juice stores globally, consisting of 68 Company-owned and operated stores (“Company Stores”), 751 franchisee-owned and operated stores (“Franchise Stores”) in the United States, and 66 Franchise Stores in international locations (“International Stores”). The JambaGO^® business consists of approximately 2,000 licensed units located across the United States. JambaGO^® units are typically installed in K-12 schools, colleges, universities, Target Cafes, as well as other captive venues.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 28, 2016

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and consolidation 

The accompanying unaudited condensed consolidated financial statements of Jamba, Inc. have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q. The December 29, 2015 Condensed Consolidated Balance Sheets was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The results of the 13-week or 26-week periods ended June 28, 2016 are not necessarily indicative of the results of operations to be expected for the entire fiscal year.

The condensed consolidated financial statements include the accounts of the Company and its direct or indirect subsidiary, Jamba Juice Company. The accounts of Jamba Juice Southern California, LLC (“JJSC”) are included through April 28, 2015, when the Company sold its 88% interest in JJSC to the holder of JJSC’s noncontrolling interest. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications were made to the Company’s prior financial statements to conform to current year presentation. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 29, 2015.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

Comprehensive Income

Comprehensive income is defined as the change in equity during a period from transactions and other events, excluding changes resulting from investments from owners and distributions to owners. The Company currently has no components of comprehensive income other than net income, therefore no separate statement of comprehensive income is presented.

Earnings (Loss) Per Share

Earnings (loss) per share is computed in accordance with Accounting Standards Codification (“ASC”) 260, Earnings per Share. Basic earnings (loss) per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted-average number of common shares and potentially dilutive securities, which includes preferred stock outstanding, outstanding warrants and outstanding options and restricted stock awards granted under the Company’s stock option plans.

Anti-dilutive common stock equivalents totaling 2.0 million and 1.9 million were excluded from the calculation of diluted weighted-average shares outstanding for the 13-week and 26-week periods ended June 28, 2016, respectively.  Anti-dilutive common stock equivalents totaling 2.3 million and 1.9 million were excluded from the calculation of diluted weighted-average shares outstanding for the 13-week and 26-week periods ended June 30, 2015, respectively.

Fair Value Measurement

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1: Quoted prices are available in active markets for identical assets or liabilities.

Level 2: Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable.

Level 3: Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions that market participants would use in pricing.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued amended guidance on revenue from contracts with customers which amended the existing accounting standards for revenue recognition. Accounting Standards Update (“ASU”) 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective date to fiscal years beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of the fiscal year beginning after December 15, 2016 (including interim reporting periods within those periods). The amendment guidance may be applied retrospectively to each prior period presented with the option to apply practical expedients or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently assessing the impact this ASU will have on its Consolidated Financial Statements and related disclosure.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance on management’s responsibility to evaluate whether there is substantial doubt about the ability to continue as a going concern and to provide related disclosures. This guidance will be effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. The Company does not expect the adoption of this guidance to have a significant impact on its Consolidated Financial Statements and related disclosure.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. ASU 2015-11 applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost method and requires measurement of that inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance will be effective for the Company beginning fiscal year 2017, with early adoption permitted. The Company does not expect the adoption of this guidance to have a significant impact on its Consolidated Financial Statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The guidance will be effective for the Company beginning fiscal year 2018. The Company does not expect the adoption of this guidance to have a significant impact on its Consolidated Financial Statements and related disclosure.

In February 2016, the FASB issued ASU 2016-02, Leases, which will require lessees to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. The guidance will be effective for the Company beginning fiscal year 2019, with early adoption permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently assessing the impact the adoption of this ASU will have on its Consolidated Financial Statements and related disclosure.

 In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products. The new guidance creates an exception under ASC 405-20, Liabilities-Extinguishments of Liabilities, to derecognize financial liabilities related to certain prepaid stored-value products using a revenue-like breakage model. The guidance will be effective for the Company beginning fiscal year 2018, with early adoption permitted. This guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently assessing what impact, if any, the adoption of this ASU will have on its Consolidated Financial Statements and related disclosure.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance will be effective for the Company beginning fiscal year 2017, with early application permitted. The Company is currently assessing the impact the adoption of this ASU will have on its Consolidated Financial Statements and related disclosure.

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ASSETS HELD FOR SALE

6 Months Ended

Jun. 28, 2016

Assets Held-for-sale, Not Part of Disposal Group [Abstract]

Assets Held For Sale [Text Block]

3. ASSETS HELD FOR SALE

 

In November 2014, the Company announced plans to transition to an asset light model through the refranchising of Company stores. In connection with that planned transition, 99 Company Stores and one unopened company store met the criteria as assets held for sale as of December 30, 2014. During fiscal 2015, an additional 125 stores met the criteria to be classified as assets held for sale increasing the total to 224 stores of which 176 stores were refranchised from assets held for sale. The 48 remaining stores were reclassified out of assets held for sale back to their original asset group based on management’s decision to retain the stores. As of June 28, 2016 and December 29, 2015 there are no stores in assets held for sale and $0 is reflected as held for sale in the accompanying Condensed Consolidated Balance Sheets.

Gain or loss on the disposal of assets held for sale is recorded within gain on disposal of assets in the condensed consolidated statement of operations. The Company recognized a loss on disposal of assets of $0.2 million and $0.3 million during the 13-week and 26-week periods ended June 28, 2016, respectively.

The Company sold 49 stores and 53 stores for a total price of $11.3 million and $13.7 million in the 13-week and 26-week periods ended June 30, 2015, respectively. The Company recorded a gain of $4.5 million and $5.3 million from the disposal of assets held for sale primarily relating to refranchising during the 13-week and 26-week periods ended June 30, 2015, respectively. 

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FAIR VALUE MEASUREMENT

6 Months Ended

Jun. 28, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

4. FAIR VALUE MEASUREMENT

 

Financial Assets and Liabilities

The following instruments are not measured at fair value on the Company’s consolidated balance sheets but require disclosure of their fair values: cash and cash equivalents, accounts receivables, notes receivable and accounts payable. The estimated fair value of such instruments, excluding notes receivable, approximates their carrying value as reported on the consolidated balance sheets due to the short-term nature. The estimated fair value of notes receivable approximates its carrying value due to the interest rates aligning with market rates. The fair value of such financial instruments is determined using the income approach based on the present value of estimated future cash flows. The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1.

Non-financial Assets and Liabilities

The Company’s non-financial assets and liabilities primarily consist of long-lived assets, trademarks and other intangibles, and are reported at carrying value. They are not required to be measured at fair value on a recurring basis. The Company evaluates long-lived assets for impairment when facts and circumstances indicate that their carrying values may not be recoverable. Trademarks and other intangibles are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

As a result of the quarterly impairment reviews, the Company recognized total losses of $0.1 million and $0.3 million were recognized for the 26-week periods ended June 28, 2016 and June 30, 2015, respectively, included in impairment of long-lived assets.  The losses in fiscal year 2016 relate to impairment of fixed assets of an individual store.

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CREDIT AGREEMENT

6 Months Ended

Jun. 28, 2016

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

5. CREDIT AGREEMENT

 

On February 14, 2012, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association (the “Lender”) which, as amended on November 1, 2012, July 22, 2013, November 4, 2013, December 30, 2014, and December 29, 2015 (as amended, the “Credit Agreement”), makes available to the Company a revolving line of credit in the amount of $10.0 million. The outstanding balance under the Credit Agreement bears interest at a LIBOR Market Index Rate based upon the rate for one month U.S. dollar deposits, plus 2.50% per annum. Under the terms of the Credit Agreement, the Company is required to either maintain minimum cash or consolidated EBITDA levels, minimum levels of tangible net worth and a minimum fixed charge coverage ratio. The credit facility is subject to customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company with respect to liens, indebtedness, guaranties, investments, distributions, mergers and acquisitions and dispositions of assets. The credit facility is evidenced by a revolving note made by the Company in favor of the Lender, is guaranteed by the Company and is secured by substantially all of its assets including the assets of its subsidiaries and a pledge of stock of its subsidiaries. In addition, the Credit Agreement replaced restricted cash requirements established in prior periods, as the line of credit also collateralizes the Company’s outstanding letters of credit of $0.4 million as of June 28, 2016.

During the 13-week period ended June 28, 2016, there were no borrowings under the Credit Agreement. To acquire the credit facility, the Company incurred upfront fees which are being amortized over the term of the Credit Agreement. As of June 28, 2016 and December 29, 2015, the unamortized commitment fee amount was not material. As of June 28, 2016, the Company was not in compliance with all the financial covenants to the Credit Agreement, which will restrict any future borrowings. Subsequent to the quarter end, the Credit Agreement expired on July 22, 2016, with no amounts drawn on the credit facility since its inception. After the expiration of the Credit Agreement, the Company subsequently collateralized the existing letters of credit with a restricted cash collateral account.

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SHARE-BASED COMPENSATION

6 Months Ended

Jun. 28, 2016

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure Of Compensation Related Costs Share Based Payments [Text Block]

6. SHARE-BASED COMPENSATION

On May 17, 2016, at its 2016 Annual Meeting of Stockholders, the Company’s stockholders, upon the recommendation of the Board of Directors, approved an additional 900,000 shares of common stock to be offered or issued under the Company’s 2013 Equity Incentive Plan.

Stock Options — A summary of stock option activity under the Plans as of June 28, 2016, and changes during the 26-week period then ended are presented below (shares in thousands):

						Weighted-Average
	Number of			Weighted-Average		Contractual Term		Aggregate
Options	Shares			Exercise Price		Remaining (years)		Intrinsic Value
Balance at December 29, 2015		1,530		$	12.42		5.76	$	3,960
Granted		282			13.41
Exercised		(111	)		3.89
Canceled		(194	)		15.25
Balance at June 28, 2016		1,507		$	12.87		6.12	$	1,400
Vested and expected to vest—June 28, 2016		1,358		$	12.78		5.82	$	1,400
Exercisable—June 28, 2016		625		$	11.71		2.23	$	1,400

During the 13-week and 26-week periods ended June 28, 2016, stock options of 132,000 and 282,000 were granted under the 2013 Equity Incentive Plan at a weighted average grant date fair value of $4.73 and $4.74, respectively. The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

	26-Week Period Ended
	June 28, 2016
Risk-free interest rate		1.36	%
Expected term (in years)		5.19
Expected volatility		44.3	%
Expected dividend yield		0	%

No options were granted during the 13-week period ended June 30, 2015. During the 26-week period ended June 30, 2015, stock options of 1.0 million were granted under the 2013 Equity Incentive Plan at a weighted-average grant date fair value of $6.04.  

Restricted Stock — Information regarding activities during the 26-week period ended June 28, 2016 for outstanding restricted stock units (RSUs) granted under the 2013 Equity Incentive Plan is as follows (shares in thousands):

				Weighted-Average
	Number of			Grant Date
RSUs	Shares			Fair Value
Non-vested at December 29, 2015		190		$	14.09
Granted		474			3.76
Vested		(58	)		14.51
Forfeited		(25	)		13.96
Non-vested at June 28, 2016		581		$	5.63

During the 13-week and 26-week periods ended June 28, 2016, RSUs of 473,500 were granted under the 2013 Equity Incentive Plan at a weighted average grant date fair value of $3.76. The grant date fair value is primarily driven by achieving the growth rate targets of the market-based restricted stock units. During the 26-week period ended June 30, 2015, RSUs of 35,000 shares were granted under the 2013 Equity Incentive Plan at a weighted average grant date fair value of $15.86.

Performance Stock — No performance stock units were granted or vested during the 13-week or 26-week periods ended June 28, 2016 or June 30, 2015. During the 26-week period ended June 28, 2016, PSUs of 1,300 were issued and PSUs of 1,300 were canceled. During the 26-week period ended June 30, 2015, PSUs of 22,800 were canceled.

Share-based compensation expense, which is included in general and administrative expenses, was $0.9 million and $1.7 million for the 13-week and 26-week periods ended June 28, 2016 and $1.5 million and $2.6 million for the 13-week and 26-week periods ended June 30, 2015, respectively. At June 28, 2016, unvested share-based compensation for stock options and restricted stock awards, net of forfeitures, totaled $4.9 million. This expense will be recognized over the remaining weighted average vesting period of approximately 2 years.

 

In January 2016, in connection with the hiring of the Company’s new Chief Executive Officer, the Company agreed to grant equity awards which included an award of 350,000 market-based restricted stock units vesting upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30% over a three-year period, 50,000 “premium-priced” stock options with an exercise price determined based on a 15% compound annual stock price growth rate over three years, and 150,000 stock options granted at 100% of fair market value on the grant date. The 150,000 stock options granted at 100% of fair market value on the grant date were granted in March 2016 and the 50,000 “premium-priced” stock options were granted in April 2016. The 350,000 market-based restricted stock units were granted in May 2016.

During the 13-week period ended June 28, 2016, in connection with employee hiring, the Company agreed to grant inducement awards which included an award of 85,000 market-based restricted stock units vesting upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30%, 75,000 stock options granted at 100% of fair market value on the grant date, and 6,000 time-based restricted stock units. These equity awards vest over a three-year period.

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STOCK REPURCHASES

6 Months Ended

Jun. 28, 2016

Equity [Abstract]

Treasury Stock [Text Block]

7. STOCK REPURCHASES

On October 29, 2014, the Company’s Board of Directors authorized the repurchase of up to $25.0 million of shares of common stock over an 18-month period (the "2014 Stock Repurchase Program"). The Company’s Board of Directors authorized an increase to the Stock Repurchase Program of $15.0 million to a total of $40.0 million in May 2015 and an additional $5.0 million to a total of $45.0 million in September 2015, which expired on May 4, 2016. During the 13-week and 26-week periods ended June 28, 2016, the Company did not repurchase shares. Shares repurchased under the Stock Repurchase Program are considered treasury stock until retired. The Company's total shares of common stock repurchased since inception through June 28, 2016 was 2.9 million, at an average price per share of $13.99.

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OTHER OPERATING, NET

6 Months Ended

Jun. 28, 2016

Other Operating Net [Abstract]

Other Operating Net [Text Block]

8. OTHER OPERATING, NET

 

For the 13-week periods ended June 28, 2016 and June 30, 2015, the components of other operating, net were as follows (in thousands):

	13-Week Period Ended				26-Week Period Ended
	June 28, 2016		June 30, 2015		June 28, 2016		June 30, 2015
Jambacard breakage income	$	(940)	$	(974)	$	(1,645)	$	(1,996)
Jambacard expense		224		128		384		238
CPG and JambaGO® direct expense		518		633		1,151		1,243
Franchise discount expense		120		165		313		439
Franchise sublease (income) expense		(36)		125		(297)		84
Franchise other expense		287		197		359		533
Bad debt		-		785		-		798
International expense		158		206		324		359
Loss on investments		-		-		26		204
Other (income) expense		(86)		68		(99)		137
Total other operating, net	$	245	$	1,333	$	516	$	2,039

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 28, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

9. COMMITMENTS AND CONTINGENCIES

The Company is a defendant in litigation arising in the normal course of business. Although there can be no assurance as to the ultimate disposition of these matters, it is the opinion of the Company’s management, based upon the information available at this time, that the expected outcome of these matters, individually or in the aggregate, will not have a material adverse effect on the results of operations, liquidity or financial condition of the Company.

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RELATED-PARTY TRANSACTIONS

6 Months Ended

Jun. 28, 2016

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

10. RELATED-PARTY TRANSACTIONS

During the 26-week period ending June 28, 2016, the Company received $0.1 million from Country Pure Foods related to vendor supply chain management fees and approximately $0.2 million from Sodexo related to licensing fees for Jamba units operated by Sodexo. One Jamba Juice Director is on the Board of Directors for Country Pure Foods and another Jamba Juice Director is an executive with Sodexo.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 28, 2016

Subsequent Events [Abstract]

Subsequent Events [Text Block]

11. SUBSEQUENT EVENTS

 

On July 6, 2016 the Company entered into a development agreement with a franchisee for the development of 20 Jamba Juice stores within the state of Michigan over the next eight years. The agreement includes a $0.2 million development fee to be received in the third quarter of fiscal year 2016.

On July 8, 2016, the Company entered into an agreement with the state of Texas to receive economic development grants of up to $0.8 million. These grants are contingent upon the Company fulfilling new full-time job and occupancy requirements in Texas from 2017 through 2024.

On July 22, 2016, the Company’s Credit Facility with Wells Fargo expired. Since the inception of the line of credit, the Company did not borrow on the facility and utilized it primarily for collateral against letters of credit. The existing letters of credit balance of $0.4 million will be collateralized by cash.

On August 4, 2016 the Company announced that its Board of Directors has approved the terms of a share repurchase plan. Pursuant to the program, the Company is authorized to repurchase up to $20 million of its common stock subject to available cash resources over the next two year period.  Under the program, the Company may repurchase shares on the open market, through privately negotiated transactions or otherwise, at times, in amounts and at prices considered appropriate by the Company.  The number of shares to be purchased and the timing of any purchases are subject to various factors, including the price of the Company’s common stock, the Company’s capital position, the amount of retained earnings of the Company, general market conditions and other economic factors and corporate and regulatory requirements, and may be modified, suspended or terminated at any time.

On August 5, 2016, the Company appointed Ms. Marie Perry as Executive Vice President, Chief Financial and Administrative Officer of the Company succeeding Ms. Karen Luey as Chief Financial and Administrative Officer of the Company.  The Company’s wholly-owned subsidiary Jamba Juice Company previously entered into an employment agreement with Ms. Perry dated May 2, 2016 described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2016 and filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q.  Jamba Juice Company also entered into a Transition Services Agreement dated August 3, 2016 with Ms. Luey.  See Item 5 of Part II for additional details.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 28, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of presentation and consolidation 

The accompanying unaudited condensed consolidated financial statements of Jamba, Inc. have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q. The December 29, 2015 Condensed Consolidated Balance Sheets was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The results of the 13-week or 26-week periods ended June 28, 2016 are not necessarily indicative of the results of operations to be expected for the entire fiscal year.

The condensed consolidated financial statements include the accounts of the Company and its direct or indirect subsidiary, Jamba Juice Company. The accounts of Jamba Juice Southern California, LLC (“JJSC”) are included through April 28, 2015, when the Company sold its 88% interest in JJSC to the holder of JJSC’s noncontrolling interest. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications were made to the Company’s prior financial statements to conform to current year presentation. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 29, 2015.

Use of Estimates, Policy [Policy Text Block]

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income

Comprehensive income is defined as the change in equity during a period from transactions and other events, excluding changes resulting from investments from owners and distributions to owners. The Company currently has no components of comprehensive income other than net income, therefore no separate statement of comprehensive income is presented.

Earnings Per Share, Policy [Policy Text Block]

Earnings (Loss) Per Share

Earnings (loss) per share is computed in accordance with Accounting Standards Codification (“ASC”) 260, Earnings per Share. Basic earnings (loss) per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted-average number of common shares and potentially dilutive securities, which includes preferred stock outstanding, outstanding warrants and outstanding options and restricted stock awards granted under the Company’s stock option plans.

Anti-dilutive common stock equivalents totaling 2.0 million and 1.9 million were excluded from the calculation of diluted weighted-average shares outstanding for the 13-week and 26-week periods ended June 28, 2016, respectively.  Anti-dilutive common stock equivalents totaling 2.3 million and 1.9 million were excluded from the calculation of diluted weighted-average shares outstanding for the 13-week and 26-week periods ended June 30, 2015, respectively.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurement

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1: Quoted prices are available in active markets for identical assets or liabilities.

Level 2: Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable.

Level 3: Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions that market participants would use in pricing.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued amended guidance on revenue from contracts with customers which amended the existing accounting standards for revenue recognition. Accounting Standards Update (“ASU”) 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective date to fiscal years beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of the fiscal year beginning after December 15, 2016 (including interim reporting periods within those periods). The amendment guidance may be applied retrospectively to each prior period presented with the option to apply practical expedients or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently assessing the impact this ASU will have on its Consolidated Financial Statements and related disclosure.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance on management’s responsibility to evaluate whether there is substantial doubt about the ability to continue as a going concern and to provide related disclosures. This guidance will be effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. The Company does not expect the adoption of this guidance to have a significant impact on its Consolidated Financial Statements and related disclosure.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. ASU 2015-11 applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost method and requires measurement of that inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance will be effective for the Company beginning fiscal year 2017, with early adoption permitted. The Company does not expect the adoption of this guidance to have a significant impact on its Consolidated Financial Statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The guidance will be effective for the Company beginning fiscal year 2018. The Company does not expect the adoption of this guidance to have a significant impact on its Consolidated Financial Statements and related disclosure.

In February 2016, the FASB issued ASU 2016-02, Leases, which will require lessees to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. The guidance will be effective for the Company beginning fiscal year 2019, with early adoption permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently assessing the impact the adoption of this ASU will have on its Consolidated Financial Statements and related disclosure.

 In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products. The new guidance creates an exception under ASC 405-20, Liabilities-Extinguishments of Liabilities, to derecognize financial liabilities related to certain prepaid stored-value products using a revenue-like breakage model. The guidance will be effective for the Company beginning fiscal year 2018, with early adoption permitted. This guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently assessing what impact, if any, the adoption of this ASU will have on its Consolidated Financial Statements and related disclosure.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance will be effective for the Company beginning fiscal year 2017, with early application permitted. The Company is currently assessing the impact the adoption of this ASU will have on its Consolidated Financial Statements and related disclosure.

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SHARE-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 28, 2016

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of stock option activity under the Plans as of June 28, 2016, and changes during the 26-week period then ended are presented below (shares in thousands):

					Weighted-Average
	Number of		Weighted-Average		Contractual Term		Aggregate
Options	Shares		Exercise Price		Remaining (years)		Intrinsic Value
Balance at December 29, 2015		1,530	$	12.42		5.76	$	3,960
Granted		282		13.41
Exercised		(111)		3.89
Canceled		(194)		15.25
Balance at June 28, 2016		1,507	$	12.87		6.12	$	1,400
Vested and expected to vest—June 28, 2016		1,358	$	12.78		5.82	$	1,400
Exercisable—June 28, 2016		625	$	11.71		2.23	$	1,400

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	26-Week Period Ended
	June 28, 2016
Risk-free interest rate		1.36	%
Expected term (in years)		5.19
Expected volatility		44.3	%
Expected dividend yield		0	%

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

Information regarding activities during the 26-week period ended June 28, 2016 for outstanding restricted stock units (RSUs) granted under the 2013 Equity Incentive Plan is as follows (shares in thousands):

			Weighted-Average
	Number of		Grant Date
RSUs	Shares		Fair Value
Non-vested at December 29, 2015		190	$	14.09
Granted		474		3.76
Vested		(58)		14.51
Forfeited		(25)		13.96
Non-vested at June 28, 2016		581	$	5.63

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OTHER OPERATING, NET (Tables)

6 Months Ended

Jun. 28, 2016

Other Operating Net [Abstract]

Schedule of Other Operating Cost and Expense, by Component [Table Text Block]

For the 13-week periods ended June 28, 2016 and June 30, 2015, the components of other operating, net were as follows (in thousands):

	13-Week Period Ended				26-Week Period Ended
	June 28, 2016		June 30, 2015		June 28, 2016		June 30, 2015
Jambacard breakage income	$	(940)	$	(974)	$	(1,645)	$	(1,996)
Jambacard expense		224		128		384		238
CPG and JambaGO® direct expense		518		633		1,151		1,243
Franchise discount expense		120		165		313		439
Franchise sublease (income) expense		(36)		125		(297)		84
Franchise other expense		287		197		359		533
Bad debt		-		785		-		798
International expense		158		206		324		359
Loss on investments		-		-		26		204
Other (income) expense		(86)		68		(99)		137
Total other operating, net	$	245	$	1,333	$	516	$	2,039

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DESCRIPTION OF BUSINESS (Details Textual)	Jun. 28, 2016
Company Stores [Member]
Franchisor Disclosure [Line Items]
Number of Stores	68
Franchise Stores [Member]
Franchisor Disclosure [Line Items]
Number of Stores	751
International Stores [Member]
Franchisor Disclosure [Line Items]
Number of Stores	66
Jamba Juice stores [Member]
Franchisor Disclosure [Line Items]
Number of Stores	885

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 28, 2016	Jun. 30, 2015	Jun. 28, 2016	Jun. 30, 2015	Apr. 28, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2.0	2.3	1.9	1.9
Jamba Juice Southern California, LLC [Member]
Noncontrolling Interest, Ownership Percentage by Parent					88.00%

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ASSETS HELD FOR SALE (Details Textual)	1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 30, 2014	Jun. 28, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 28, 2016 USD ($)	Jun. 30, 2015 USD ($)	Dec. 29, 2015 USD ($)
Assets Held For Sale Current [Line Items]
Disposal Group, Including Discontinued Operation, Assets, Current		$ 0		$ 0		$ 0
Number Of Unopened Stores	one
Franchised Units [Member]
Assets Held For Sale Current [Line Items]
Number of Stores						224
Disposal Group, Held-for-sale, Not Discontinued Operations [Member]
Assets Held For Sale Current [Line Items]
Number of Stores						48
Proceeds from Sale of Property Held-for-sale			$ 11,300,000		$ 13,700,000
Gain (Loss) on Disposition of Property Plant Equipment		$ (200,000)	$ 4,500,000	$ (300,000)	$ 5,300,000
Significant Changes, Franchises Sold			49		53
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Franchised Units [Member]
Assets Held For Sale Current [Line Items]
Number of Stores						176
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Company store [Member]
Assets Held For Sale Current [Line Items]
Number of Stores	99					125

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FAIR VALUE MEASUREMENT (Details Textual) - USD ($) $ in Millions	6 Months Ended
	Jun. 28, 2016	Jun. 30, 2015
Asset Impairment Charges	$ 0.1	$ 0.3

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CREDIT AGREEMENT (Details Textual) - Line of Credit [Member] $ in Millions	6 Months Ended
	Jun. 28, 2016 USD ($)
Credit Agreement [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 10.0
Letters of Credit Outstanding, Amount	$ 0.4
Line of Credit Facility, Interest Rate Description	LIBOR Market Index Rate based upon the rate for one month U.S. dollar deposits, plus 2.50% per annum.

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SHARE-BASED COMPENSATION (Details) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 28, 2016 USD ($) $ / shares shares	Dec. 29, 2015 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares outstanding, Beginning Balance | shares	1,530
Number of Shares, Granted | shares	282
Number of Shares, Exercised | shares	(111)
Number of Shares, Canceled | shares	(194)
Number of Shares outstanding, Ending Balance | shares	1,507	1,530
Number of Shares, Vested and expected to vest—June 28, 2016 | shares	1,358
Number of Shares, Exercisable—June 28, 2016 | shares	625
Weighted-Average Exercise Price outstanding, Beginning Balance (in dollars per share) | $ / shares	$ 12.42
Weighted-Average Exercise Price, Granted (in dollars per share) | $ / shares	13.41
Weighted-Average Exercise Price, Exercised (in dollars per share) | $ / shares	3.89
Weighted-Average Exercise Price, Canceled (in dollars per share) | $ / shares	15.25
Weighted-Average Exercise Price outstanding, Ending Balance (in dollars per share) | $ / shares	12.87	$ 12.42
Weighted-Average Exercise Price, Vested and expected to vest - June 28, 2016 (in dollars per share) | $ / shares	12.78
Weighted-Average Exercise Price, Exercisable - June 28, 2016 (in dollars per share) | $ / shares	$ 11.71
Weighted-Average Contractual Term Remaining (years)	6 years 1 month 13 days	5 years 9 months 4 days
Weighted-Average Contractual Term Remaining (years), Vested and expected to vest - June 28, 2016	5 years 9 months 25 days
Weighted-Average Contractual Term Remaining (years), Exercisable - June 28, 2016	2 years 2 months 23 days
Aggregate Intrinsic Value, Beginning Balance | $	$ 3,960
Aggregate Intrinsic Value, Ending Balance | $	1,400	$ 3,960
Aggregate Intrinsic Value, Vested and expected to vest - June 28, 2016 | $	1,400
Aggregate Intrinsic Value, Exercisable at June 28, 2016 | $	$ 1,400

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SHARE-BASED COMPENSATION (Details 1)	6 Months Ended
	Jun. 28, 2016
Risk-free interest rate	1.36%
Expected term (in years)	5 years 2 months 8 days
Expected volatility	44.30%
Expected dividend yield	0.00%

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SHARE-BASED COMPENSATION (Details 2) - Restricted Stock Units (RSUs) [Member] - $ / shares	3 Months Ended	6 Months Ended
	Jun. 28, 2016	Jun. 28, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, Non-vested (in shares)		190,000
Number of shares, Granted (in shares)	473,500	473,500	35,000
Number of shares, Vested (in shares)		(58,000)
Number of shares, Forfeited (in shares)		(25,000)
Number of shares, Non-vested (in shares)	581,000	581,000
Weighted-Average Grant Date Fair Value, Outstanding (in dollar per share)		$ 14.09
Weighted-Average Grant Date Fair Value, Granted (in dollars per share)		3.76	$ 15.86
Weighted-Average Grant Date Fair Value, Vested (in dollars per share)		14.51
Weighted-Average Grant Date Fair Value, Forfeited/canceled (in dollars per share)		13.96
Weighted- Average Grant Date Fair Value, Outstanding (in dollar per share)	$ 5.63	$ 5.63

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SHARE-BASED COMPENSATION (Details Textual) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	May 17, 2016	Jun. 28, 2016	Jun. 30, 2015	Jun. 28, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Option And Restricted Stock, Remaining Weighted Average Vesting Period				2 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				282,000
Amortized Expenses On Stock Option Issuance				$ 4.9
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense				$ 0.0	$ 0.0
Equity Incentive Plan 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	900,000
Equity Incentive Plan 2013 [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 4.73		$ 4.74	$ 6.04
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		132,000		282,000	1,000,000
Inducement Awards [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		15.00%
Inducement Awards [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		22.50%
Inducement Awards [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		30.00%
Inducement Awards [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		75,000
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		100.00%
Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years
Chief Executive Officer [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent				15.00%
Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent				22.50%
Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent				30.00%
Chief Executive Officer [Member] | Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred Compensation Arrangement with Individual, Shares Authorized for Issuance		150,000		150,000
Share Based Compensation, Valuation Assumptions Compound Annual Stock Price Growth Rate		100.00%		100.00%
Chief Executive Officer [Member] | Premium-Priced Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred Compensation Arrangement with Individual, Shares Authorized for Issuance		50,000		50,000
Share Based Compensation, Valuation Assumptions Compound Annual Stock Price Growth Rate		15.00%		15.00%
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense		$ 0.9	$ 1.5	$ 1.7	$ 2.6
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value				$ 3.76	$ 15.86
Number of Shares Granted		473,500		473,500	35,000
Number of Shares Forfeited (Canceled)				25,000
Time Based Restricted Stock Units [Member] | Inducement Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted		6,000
Market-based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted		85,000		1,300
Number of Shares Forfeited (Canceled)				1,300	22,800
Market-based Restricted Stock Units [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Granted	350,000

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STOCK REPURCHASES (Details Textual) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	1 Months Ended		6 Months Ended
	Sep. 30, 2015	May 31, 2015	Jun. 28, 2016	Oct. 29, 2014
Equity, Class of Treasury Stock [Line Items]
Stock Repurchase Program, Authorized Amount	$ 45.0	$ 40.0		$ 25.0
Treasury Stock Acquired, Average Cost Per Share			$ 13.99
Increase Stock Repurchase Program Authorized Amount	$ 5.0	$ 15.0
Treasury Stock, Shares, Acquired			2.9

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OTHER OPERATING, NET (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 28, 2016	Jun. 30, 2015	Jun. 28, 2016	Jun. 30, 2015
Other Operating Income Expenses [Line Items]
Jambacard breakage income	$ (940)	$ (974)	$ (1,645)	$ (1,996)
Jambacard expense	224	128	384	238
CPG and JambaGO® direct expense	518	633	1,151	1,243
Franchise discount expense	120	165	313	439
Franchise sublease (income) expense	(36)	125	(297)	84
Franchise other expense	287	197	359	533
Bad debt	0	785	0	798
International expense	158	206	324	359
Loss on investment	0	0	26	204
Other (income) expense	(86)	68	(99)	137
Total other operating, net	$ 245	$ 1,333	$ 516	$ 2,039

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RELATED-PARTY TRANSACTIONS (Details Textual) $ in Millions	6 Months Ended
	Jun. 28, 2016 USD ($)
Country Pure Foods [Member]
Related Party Transaction [Line Items]
Management Fees Revenue, Total	$ 0.1
Sodexo [Member]
Related Party Transaction [Line Items]
Licenses Revenue	$ 0.2

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SUBSEQUENT EVENTS (Details Textual) $ in Millions	Jul. 06, 2016 USD ($)	Aug. 04, 2016 USD ($)	Jul. 22, 2016 USD ($)	Jul. 08, 2016 USD ($)	Sep. 30, 2015 USD ($)	May 31, 2015 USD ($)	Oct. 29, 2014 USD ($)
Subsequent Event [Line Items]
Stock Repurchase Program, Authorized Amount					$ 45.0	$ 40.0	$ 25.0
Subsequent Event [Member]
Subsequent Event [Line Items]
Grants Receivable				$ 0.8
Letters of Credit Outstanding, Amount			$ 0.4
Stock Repurchase Program, Authorized Amount		$ 20.0
Subsequent Event [Member] | Franchise Stores Commitments Exist [Member]
Subsequent Event [Line Items]
Number of Stores	20
Franchise Development Fee Receivable	$ 0.2