SC 13E3

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13E-3
(Rule 13e-100)
Rule 13e-3 Transaction Statement Under Section 13(e) of the
Securities Exchange Act of 1934

Jenny Craig, Inc.
(Name of the Issuer)

Jenny Craig, Inc.
Sidney Craig
Genevieve Craig
Craig Enterprises, Inc.
SJF Enterprises, Inc.
DA Holdings, Inc.
(Name of Person(s) Filing Statement)

Common Stock, Par Value $.000000005 Per Share
(Title of Class of Securities)

22406 10 2
(CUSIP Number of Class of Securities)

Sidney Craig
11355 N. Torrey Pines Rd.
La Jolla, California 92037
(858) 812-7000

with copies to:

Thomas W. Dollinger
Proskauer Rose LLP
2049 Century Park E., #3200
Telephone: (310) 284-5630

(Name, Address and Telephone Numbers of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)

This statement is filed in connection with (check the appropriate box):

a.	[X] The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.
b.	[   ] The filing of a registration statement under the Securities Act of 1933.
c.	[   ] A tender offer.
d.	[   ] None of the above.

     Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [X]

     Check the following box if the filing is a final amendment reporting the results of the transaction: [   ]

CALCULATION OF FILING FEE

Transaction Valuation*	Amount of Filing Fee
$114,459,649		$10,531

*     The transaction value was based upon the sum of (a) the product of 20,688,971 shares of Common Stock and the merger consideration of $5.30 per share and (b) the difference between the merger consideration of $5.30 per share and the exercise price per share of each of the 1,483,000 shares of Common Stock subject to outstanding options in which the exercise price per share is less than the merger consideration per share.

[X] Check the box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:	$10,531	Filing Party:	Jenny Craig, Inc.
Form or Registration No	Schedule 14A	Date Filed:	February 15, 2002

TABLE OF CONTENTS

	Item 1. Summary Term Sheet
	Item 2. Subject Company Information.
	Item 3. Identity and Background of Filing Person.
	Item 4. Terms of the Transaction.
	Item 5. Past Contacts, Transactions, Negotiations and Agreements.
	Item 6. Purposes of the Transaction and Plans or Proposals.
	Item 7. Purposes, Alternatives, Reasons and Effects.
	Item 8. Fairness of the Transaction.
	Item 9. Reports, Opinions, Appraisals and Negotiations.
	Item 10. Source and Amounts of Funds or Other Consideration.
	Item 11. Interest in Securities of the Subject Company.
	Item 12. The Solicitation or Recommendation.
	Item 13. Financial Statements.
	Item 14. Persons/Assets, Retained, Employed, Compensated or Used.
	Item 15. Additional Information.
	Item 16. Exhibits.
SIGNATURE
EXHIBIT (B)(1)
EXHIBIT (B)(2)
EXHIBIT (B)(3)
EXHIBIT (C)(2)
EXHIBIT (D)(2)
EXHIBIT (D)(4)
EXHIBIT (D)(5)

INTRODUCTION

     This Rule 13e-3 Transaction Statement on Schedule 13E-3 (this “Schedule 13E-3”) is being filed jointly by Jenny Craig, Inc., a Delaware corporation (“JCI”), Sidney Craig (“Mr. Craig”), Genevieve Craig (“Mrs. Craig”), Craig Enterprises, Inc., a Delaware corporation (“CEI”), SJF Enterprises, Inc., a Delaware corporation (“SJF”), and DA Holdings, Inc., a California corporation (“DAHI” and, together with Mr. Craig, Mrs. Craig, CEI and SJF, the “Craig Stockholders”), in connection with the Agreement and Plan of Merger (the “Merger Agreement”), dated as of January 27, 2002, by and among JCI, J Holdings Corp. (“J Holdings”) and J Acquisition Corp. (“J Acquisition”). JCI and the Craig Stockholders are referred to herein as the “Filing Persons.” If the Merger Agreement is adopted and the Merger (as defined herein) is approved by JCI’s stockholders, J Acquisition will merge with and into JCI (the “Merger”), with JCI continuing as the surviving corporation. In the Merger, each outstanding share of common stock, par value $0.000000005 per share, of JCI (the “Common Stock”), other than shares of Common Stock held in JCI’s treasury, held by J Holdings or J Acquisition or held by stockholders who perfect their appraisal rights under Delaware law, will be converted into the right to receive $5.30 in cash, without interest, less any applicable withholding taxes.

     Information contained in this Schedule 13E-3 concerning JCI and its affiliates (except for information relating to the Craig Stockholders other than in their capacities as directors or officers of JCI) has been supplied by JCI, and information concerning the Craig Stockholders (except for information relating to the Craig Stockholders in their capacities as directors or officers of JCI) has been supplied by the Craig Stockholders.

     Concurrently with the filing of this Schedule 13E-3, JCI is filing a preliminary proxy statement (the “Proxy Statement”) pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), pursuant to which the JCI board of directors is soliciting proxies from stockholders of JCI in connection with the Merger. The cross reference sheet below is being supplied pursuant to General Instruction G to Schedule 13E-3 and shows the location in the Proxy Statement of the information required to be included in response to the items of this Schedule 13E-3. The information set forth in the Proxy Statement, including all appendices thereto, is hereby incorporated herein by this reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy Statement and the appendices thereto. As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion and amendment. Capitalized terms used but not defined in this Schedule 13E-3 shall have the meanings given to them in the Proxy Statement.

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Item  1.    Summary Term Sheet

Regulation M-A
Item 1001

The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER” and “SUMMARY TERM SHEET” is incorporated herein by reference.

Item  2.    Subject Company Information.

Regulation M-A
Item 1002

(a)	The information set forth in the Proxy Statement under the caption “SUMMARY TERM SHEET — The Companies” is incorporated herein by reference. JCI is the issuer of the class of equity securities which is the subject of the Rule 13e-3 transaction.
(b)	The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Special Meeting” and “INTRODUCTION — Voting Rights; Vote Required for Approval” is incorporated herein by reference.
(c)	The information set forth in the Proxy Statement under the caption “INTRODUCTION — Comparative Market Price Data” is incorporated herein by reference.
(d)	The information set forth in the Proxy Statement under the caption “INTRODUCTION — Dividends” is incorporated herein by reference.
(e)	Not applicable.
(f)	Not applicable.

Item  3.    Identity and Background of Filing Person.

Regulation M-A
Item 1003

(a)-(c)

The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Companies” is incorporated herein by reference.

Mr. Craig, a citizen of the United States, has his principal business address at 11355 N. Torrey Pines Rd., La Jolla, California 92037. The principal occupation of Mr. Craig is to serve as the Chairman of the Board and Chief Executive Officer of JCI. Mr. Craig has been Chairman of the Company or its predecessors since 1983 and served as Chief Executive Officer from 1983 through April, 1994. In October 1997, Mr. Craig was appointed Chief Executive Officer of the Company.

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Mrs. Craig, a citizen of the United States, has her business address at 11355 N. Torrey Pines Rd., La Jolla, California 92037. The principal occupation of Mrs. Craig is to serve as the Chairman of the Executive Committee of the Board of JCI. Mrs. Craig has served as Chairman of the Executive Committee since September 2000, as Vice-Chairman of JCI from September 1991 to September 2000, as President and Chief Operating Officer of JCI or its predecessors from 1983 to August 1991 and as a director of JCI or its predecessors from 1983 to date. Mrs. Craig served as President of JCI from October 1997 through December 1998. Mr. and Mrs. Craig are husband and wife.

CEI, a Delaware corporation, has its principal business address at 16092 San Dieguito Rd., Rancho Santa Fe, California 92067. The business telephone number of CEI is (619) 756-6980. CEI’s principal business is investing in securities and business enterprises. Mr. and Mrs. Craig beneficially own all of the outstanding capital stock of CEI. Mr. and Mrs. Craig are the directors of CEI. Mr. Craig is the Chairman of the Board of CEI, Mrs. Craig is the President and Chief Financial Officer of CEI, and Marvin Sears is the Vice President and Secretary of CEI.

SJF, a Delaware corporation, has its principal business address at 16092 San Dieguito Rd., Rancho Santa Fe, California 92067. The business telephone number of SJF is (619) 756-6980. SJF’s principal business is to hold shares of Common Stock. CEI beneficially owns all of the outstanding capital stock of SJF. Mr. and Mrs. Craig are the directors of SJF. Mr. Craig is the Chairman of the Board of SJF, Mrs. Craig is the President and Chief Financial Officer of SJF, and Marvin Sears is the Vice President and Secretary of SJF.

DAHI, a California corporation, has its principal business address at 16092 San Dieguito Rd., Rancho Santa Fe, California 92067. The business telephone number of DAHI is (619) 756-6980. DAHI was incorporated on February 8, 1996 and has engaged in no activities other than issuance of shares of common stock of DAHI to SJF in exchange for shares of Common Stock. SJF beneficially owns all of the outstanding capital stock of DAHI. Mr. and Mrs. Craig are the directors of DAHI. Mr. Craig is the Chairman of the Board of DAHI, Mrs. Craig is the President and Chief Financial Officer of DAHI, and Marvin Sears is the Vice President and Secretary of DAHI.

Directors and Executive Officers of JCI. Set forth below are the (i) name, (ii) address, (iii) current principal occupation or employment, and the name, principal business and address of any corporation or other organization in which the employment or occupation is conducted, and (iv) material occupations, positions, offices or employment during the past five years, and the name, principal business and address of any corporation or other organization in which the occupation, position, office or employment was carried on, of each of the directors and executive officers of JCI, except for Mr. and Mrs. Craig, whose information is provided above. Each person identified below is a United States citizen.

Marvin Sears has his principal business address at 2049 Century Park East, Suite 3200, Los Angeles, California 90027. Mr. Sears has been a director of JCI since July 1989, has served as the Secretary of JCI since June 1991, and as Assistant Secretary of JCI from August 1985 to June 1991. Mr. Sears is a practicing attorney in Los Angeles, California.

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where, since May 1989, he has been a partner in the law firm of Proskauer Rose LLP, counsel to the Company during fiscal 2001 and currently.

Scott Bice has his principal business address at Room 434, University Park MC-0071, 699 Exposition Boulevard, Los Angeles, California 90089. Mr. Bice has served as a director of the Company since February 1995. Mr. Bice is the Robert C. Packard Professor of Law at the University of Southern California Law Center and served as Dean of the University of Southern California Law Center from 1980 until June 2000.

Andrea Van de Kamp has her business address at 9665 Wilshire Blvd., Beverly Hills, California 90212. Ms. Van de Kamp has served as a director of the Company since August, 1994. Ms. Van de Kamp was Senior Vice President and Managing Director of West Coast Operations, Sotheby’s, from 1989 through May 1997 and has been Chairman, West Coast Operations of Sotheby’s since May 1997.

Robert Wolf has his business address at 1880 Century Park East, Suite 611, Los Angeles, California 90067. Mr. Wolf has served as a director of the Company since February, 1995. Mr. Wolf is a Managing Partner of Bob Wolf Partners, a marketing and advertising consulting company. Mr. Wolf was the Chairman and Chief Executive Officer of Chiat/Day North America, an advertising firm, from 1989 through November 1995.

Patricia Larchet has her business address at 11355 N. Torrey Pines Rd., La Jolla, California 92037. Ms. Larchet, a director of the Company since September 2000, has served as the President and Chief Operating Officer of the Company since December 1999. Prior to serving as the Company’s President, Ms. Larchet was General Manager of the Australian division of the Company. Ms. Larchet has worked for the Company since 1985.

Duayne Weinger has his business address at 11355 N. Torrey Pines Rd., La Jolla, California 92037. Mr. Weinger has served as the Chief Administrative Officer of the Company since December, 1999, and as Vice-Chairman of the Company since September 2000. From 1994 until joining the Company, Mr. Weinger was a private investor. From 1987 until 1994, Mr. Weinger owned and operated franchised centres of the Company. Mr. Weinger is the son-in-law of Sidney and Jenny Craig.

Barbara Barry has her business address at 11355 N. Torrey Pines Rd., La Jolla, California 92037. Ms. Barry has served as Vice President, Marketing since June 2000. From June 1999 until June 2000, Ms. Barry was Vice President of Sales, Marketing and Merchandising for 3 Day Blinds Inc., a custom manufacturer and retailer of hard window coverings. From June 1997 until June 1999, Ms. Barry was Director of Marketing for Smart and Final, a 220 store retail chain. From April 1994 until June 1997, Ms. Barry was Senior Brand Development Manager for Unocal 76 Products.

James S. Kelly has his business address at 11355 N. Torrey Pines Rd., La Jolla, California 92037. Mr. Kelly has served as Vice President, Chief Financial Officer and Treasurer since June 1999 after having served as Vice President and Controller since 1993 and as Controller from 1989 through 1993. From January 1983 to January 1989,

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Mr. Kelly was employed by KPMG LLP, an international accounting firm, most recently as an audit manager.

Alan V. Dobies has his business address at 11355 N. Torrey Pines Rd., La Jolla, California 92037. Mr. Dobies has served as Vice President, Corporate Services since June 1990. From July 1988 to May 1990, Mr. Dobies was Vice President, Operations of Joico International, a manufacturer of professional hair-care products.

During the last five years, none of the Filing Persons and none of the directors and executive officers of the Filing Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

Item  4.    Terms of the Transaction.

Regulation M-A
Item 1004

(a)(1)	Not applicable.
(a)(2)(i)	The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET” and “INTRODUCTION — Proposal to be Considered at the Special Meeting” is incorporated herein by reference.
(a)(2)(ii)	The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “INTRODUCTION — Proposal to be Considered at the Special Meeting” and “THE MERGER — The Merger Agreement” is incorporated herein by reference.
(a)(2)(iii)	The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Purpose of the Merger,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger” and “SPECIAL FACTORS — The Continuing Stockholders’ Reasons for the Merger” is incorporated herein by reference.
(a)(2)(iv)	The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET — The Special Meeting — Vote Required for Approval” and “INTRODUCTION — Voting Rights; Vote Required for Approval” is incorporated herein by reference.
(a)(2)(v)	The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET — The Merger — Interests of Directors and Executive Officers in the Merger,” “SPECIAL FACTORS — Certain Effects of the Merger; Plans or Proposals After the Merger,”

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	“SPECIAL FACTORS — Interests of Executive Officers and Directors in the Merger” and “SPECIAL FACTORS — Certain Relationships Among ACI, DB Capital, J Holdings, J Acquisition and the Continuing Stockholders” is incorporated herein by reference.
(a)(2)(vi)	The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Accounting Treatment” and “THE MERGER — Accounting Treatment” is incorporated herein by reference.
(a)(2)(vii)	The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET — The Merger — Material U.S. Federal Income Tax Consequences” and “SPECIAL FACTORS — Material U.S. Federal Income Tax Consequences of the Merger to JCI’s Stockholders” is incorporated herein by reference.
(c)	The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET — The Merger — Interests of Directors and Executive Officers in the Merger,” “SPECIAL FACTORS — Certain Effects of the Merger; Plans or Proposals After the Merger,” “SPECIAL FACTORS — Interests of Executive Officers and Directors in the Merger” and “SPECIAL FACTORS — Certain Relationships Among ACI, DB Capital, J Holdings, J Acquisition and the Continuing Stockholders” is incorporated herein by reference.
(d)	The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET — The Merger — Appraisal Rights” and “THE MERGER — Appraisal Rights” is incorporated herein by reference.
(e)	None.
(f)	Not Applicable.

Item  5.    Past Contacts, Transactions, Negotiations and Agreements.

Regulation M-A
Item 1005

(a)(1)	None.
(a)(2)	The information set forth in the Proxy Statement under the caption “OTHER MATTERS — Legal Counsel” is incorporated herein by reference. The information set forth under the headings “Compensation Committee Interlocks and Insider Participation” and “Certain Transactions” in the proxy statement filed by JCI on October 11, 2001 in connection with the 2001 Annual Meeting of Stockholders is incorporated herein by reference.
(b)-(c)	The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Interests of Directors and Executive Officers in the Merger,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Interests of Executive Officers and Directors in the Merger,” “SPECIAL FACTORS — Certain

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Relationships Among ACI, DB Capital, J Holdings, J Acquisition and the Continuing Stockholders” and “OTHER MATTERS — Information Concerning Proposal by Craig Enterprises, Inc.” is incorporated herein by reference.

(e)

The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Interests of Directors and Executive Officers in the Merger,” “INTRODUCTION — Voting Rights; Vote Required for Approval,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Interests of Executive Officers and Directors in the Merger” and “SPECIAL FACTORS — Certain Relationships Among ACI, DB Capital, J Holdings, J Acquisition and the Continuing Stockholders” is incorporated herein by reference. The information set forth in Exhibits (d)(1), (d)(2), (d)(3), (d)(4), (d)(5) and (d)(6) is incorporated herein by reference.

Item  6.    Purposes of the Transaction and Plans or Proposals.

Regulation M-A
Item 1006

(b)

The information set forth in the Proxy Statement under the captions “SPECIAL FACTORS — Purpose and Structure of the Merger,” “SPECIAL FACTORS — Certain Effects of the Merger; Plans or Proposals After the Merger,” “SPECIAL FACTORS — Certain Relationships Among ACI, DB Capital, J Holdings, J Acquisition and the Continuing Stockholders “ and “THE MERGER — The Merger Agreement — Consideration to be Received by JCI Stockholders” is incorporated herein by reference.

(c)(1)-(8)

The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Effects of the Merger,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Certain Effects of the Merger; Plans or Proposals After the Merger,” “SPECIAL FACTORS — Interest of Executive Officers and Directors in the Merger” and “SPECIAL FACTORS — Certain Relationships Among ACI, DB Capital, J Holdings, J Acquisition and the Continuing Stockholders “ is incorporated herein by reference.

Item  7.    Purposes, Alternatives, Reasons and Effects.

Regulation M-A
Item 1013

(a)	The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Purpose of the Merger,” “SPECIAL FACTORS — Background of the Merger” and “SPECIAL FACTORS — Purpose and Structure of the Merger” is incorporated herein by reference.
(b)	The information set forth in the Proxy Statement under the captions “SPECIAL FACTORS — Background of the Merger” and “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger” is incorporated herein by reference.

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(c)

The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Purpose of the Merger,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger,” “SPECIAL FACTORS — JCI’s Reasons for the Merger,” “SPECIAL FACTORS — The Continuing Stockholders’ Reasons for the Merger” and “SPECIAL FACTORS — Purpose and Structure of the Merger” is incorporated herein by reference.

(d)

The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET — The Merger — Effects of the Merger,” “SUMMARY TERM SHEET — The Merger — Interests of Directors and Executive Officers in the Merger,” “SUMMARY TERM SHEET — The Merger — Material U.S. Federal Income Tax Consequences,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger,” “SPECIAL FACTORS — Forecasts,” “SPECIAL FACTORS — Purpose and Structure of the Merger,” “SPECIAL FACTORS — Certain Effects of the Merger; Plans or Proposals After the Merger,” “SPECIAL FACTORS — Interests of Executive Officers and Directors in the Merger,” “SPECIAL FACTORS — Certain Relationships Among ACI, DB Capital, J Holdings, J Acquisition and the Continuing Stockholders,” “SPECIAL FACTORS — Material U.S. Federal Income Tax Consequences of the Merger to JCI Stockholders,” “THE MERGER — Payment of Merger Consideration and Surrender of Stock Certificates” and “THE MERGER — The Merger Agreement” is incorporated herein by reference.

Item  8.    Fairness of the Transaction.

Regulation M-A
Item 1014

(a)-(b)	The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET — The Merger — Recommendations of the Special Committee and JCI’s Board of Directors,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Opinion of Houlihan Lokey,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger,” “SPECIAL FACTORS — Forecasts” and “SPECIAL FACTORS — The Continuing Stockholders’ Position as to the Fairness of the Merger” is incorporated herein by reference.
(c)	The information set forth in the Proxy Statement under the caption “INTRODUCTION — Voting Rights; Vote Required for Approval” is incorporated herein by reference.
(d)	The information set forth in the Proxy Statement under the captions “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Opinion of Houlihan Lokey,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger” and “SPECIAL FACTORS — The Continuing Stockholders’ Position as to the Fairness of the Merger” is incorporated herein by reference.

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(e)

The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET — The Merger — Recommendations of the Special Committee and JCI’s Board of Directors,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger” and “SPECIAL FACTORS — The Continuing Stockholders’ Position as to the Fairness of the Merger” is incorporated herein by reference.

(f)

The information set forth in the Proxy Statement under the caption “SPECIAL FACTORS — Background of the Merger” is incorporated herein by reference.

Item  9.    Reports, Opinions, Appraisals and Negotiations.

Regulation M-A
Item 1015

(a)-(c) The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Opinion of Houlihan Lokey,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Opinion of Houlihan Lokey,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger,” “SPECIAL FACTORS — Forecasts,” “SPECIAL FACTORS — The Continuing Stockholders’ Position as to the Fairness of the Merger,” “THE MERGER — Fees and Expenses of the Merger,” “OTHER MATTERS — Information Concerning Proposal by Craig Enterprises, Inc.” and “OTHER MATTERS — Information Incorporated By Reference” is incorporated herein by reference. The full text of the written opinion of Houlihan Lokey Howard & Zukin Financial Advisors, Inc. (“Houlihan Lokey”), dated January 27, 2002, is attached to the Proxy Statement as Appendix B. The written materials presented by Houlihan Lokey to the Special Committee and the JCI Board of Directors on January 25, 2002 are set forth as Exhibit (c)(2) hereto and are incorporated herein by reference.

Item  10.   Source and Amounts of Funds or Other Consideration.

Regulation M-A
Item 1007

(a)-(d) The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Financing of the Merger,” “SPECIAL FACTORS — Financing of the Merger,” and “THE MERGER — Fees and Expenses of the Merger “ is incorporated herein by reference.

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Item  11.    Interest in Securities of the Subject Company.

Regulation M-A
Item 1008

(a)

The information set forth in the Proxy Statement under the captions “SUMMARY TERM SHEET — The Merger — Interests of Directors and Executive Officers in the Merger,” “INTRODUCTION — Voting Rights; Vote Required for Approval,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Interests of Executive Officers and Directors in the Merger,” “SPECIAL FACTORS — Certain Relationships Among ACI, DB Capital, J Holdings, J Acquisition and the Continuing Stockholders,” “THE MERGER — Voting Agreements” and “OTHER MATTERS — Security Ownership of Certain Beneficial Owners and Management” is incorporated herein by reference.

(b)(1)-(5)

Not applicable.

Item  12.    The Solicitation or Recommendation.

Regulation M-A
Item 1012

(d)

The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “INTRODUCTION — Voting Rights; Vote Required for Approval,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger,” “SPECIAL FACTORS — The Continuing Stockholders’ Reasons for the Merger” and “THE MERGER — Stockholders’ Voting Agreement” is incorporated herein by reference.

(e)

The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “SUMMARY TERM SHEET — The Merger — Recommendations of the Special Committee and JCI’s Board of Directors,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger” and “SPECIAL FACTORS — The Continuing Stockholders’ Reasons for the Merger” is incorporated herein by reference.

Item  13.    Financial Statements.

Regulation M-A
Item 1010

(a)	The information set forth in the Proxy Statement under the captions “INTRODUCTION — Selected Consolidated Financial Information,” “INTRODUCTION — Consolidated Ratios of Earnings to Fixed Charges and Book Value Per Share” and “OTHER MATTERS — Information Incorporated by Reference” is incorporated herein by reference.
(b)	Not applicable.

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Item  14.    Persons/Assets, Retained, Employed, Compensated or Used.

Regulation M-A
Item 1009

(a)-(b) The information set forth in the Proxy Statement under the captions “QUESTIONS AND ANSWERS ABOUT THE MERGER,” “INTRODUCTION — Solicitation of Proxies; Expenses of Solicitation,” “SPECIAL FACTORS — Background of the Merger,” “SPECIAL FACTORS — Opinion of Houlihan Lokey,” “SPECIAL FACTORS — Reasons for the Recommendations of the Special Committee and JCI’s Board of Directors; Fairness of the Merger,” “SPECIAL FACTORS — Financing of the Merger” and “THE MERGER — Fees and Expenses of the Merger” is incorporated herein by reference.

Item  15.    Additional Information.

Regulation M-A
Item 1011

(b) The information set forth in the Proxy Statement and appendices thereto is incorporated herein by reference.

Item  16.    Exhibits.

Regulation M-A
Item 1016

(a)(1)	Preliminary Proxy Statement of Jenny Craig, Inc. is incorporated herein by reference.
(a)(2)	Form of Proxy Card, filed with the Securities and Exchange Commission along with the Proxy Statement is incorporated herein by reference.
(a)(3)	Press Release dated January 28, 2002 (included as Exhibit 99.1 to the Report on Form 8-K filed by Jenny Craig, Inc. on January 29, 2002 and incorporated herein by reference).
(b)(1)	Senior Debt Commitment Letter, dated as of December 28, 2001, by and between Ableco Finance LLC and ACI Capital Co., Inc.
(b)(2)	Junior Subordinated Debt Commitment Letter dated January 27, 2002, by and between ACI Capital Co., Inc. and J Acquisition Corp.
(b)(3)	Sub Debt Commitment Letter dated January 27, 2002, by and among DB Capital Investors, L.P., J Holdings Corp., J Acquisition Corp. and ACI Capital Co., Inc.
(c)(1)	Opinion of Houlihan Lokey Howard & Zukin dated January 27, 2002 (included as Appendix B to the Proxy Statement and incorporated herein by reference).
(c)(2)	Materials presented by Houlihan Lokey Howard & Zukin to the Special Committee and the Jenny Craig, Inc. Board of Directors on January 25, 2002.

11

(d)(1)	Agreement and Plan of Merger, dated as of January 27, 2002, by and among J Holdings Corp., J. Acquisition Corp. and Jenny Craig, Inc. (included as Appendix A to the Proxy Statement and incorporated herein by reference).
(d)(2)	Form of Stockholders’ Agreement by and among DB Capital Investors, L.P., ACI Capital Co., Inc., on behalf of ACI Entities and affiliates, Management Stockholders, SJF Enterprises, Inc., Sid Craig, Jenny Craig and Craig Enterprises, Inc.
(d)(3)	Stockholders’ Voting Agreement, dated as of January 27, 2002, by and among J Holdings Corp., J Acquisition Corp., Jenny Craig, Inc., Sidney Craig, Jenny Craig, Craig Enterprises, Inc., SJF Enterprises, Inc. and DA Holdings, Inc. (included as Exhibit 10.1 to the Report on Form 8-K filed by Jenny Craig, Inc. on January 29, 2002 and incorporated herein by reference).
(d)(4)	Equity Capital Commitment Letter dated January 27, 2002, by and between ACI Capital Co., Inc. and J Holdings Corp.
(d)(5)	Equity Commitment Letter dated January 27, 2002, by and among DB Capital Investors, L.P., J Holdings Corp., J Acquisition Corp. and ACI Capital Co., Inc.
(d)(6)	Equity Capital Commitment Letter, dated as of January 27, 2002, by and among SJF Enterprises, Inc. and J Holdings Corp. (included as Exhibit 10.2 to the Report on Form 8-K filed by Jenny Craig, Inc. on January 29, 2002 and incorporated herein by reference).
(f)	Section 262 of the Delaware General Corporation Law (included as Appendix C to the Proxy Statement and incorporated herein by reference).
(g)	Not applicable.

12

SIGNATURE

     After due inquiry and to the best of my knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

JENNY CRAIG, INC.
By:	/s/   PATRICIA LARCHET Patricia Larchet, President and Chief Operating Officer
/s/   SIDNEY CRAIG SIDNEY CRAIG
/s/   GENEVIEVE CRAIG GENEVIEVE CRAIG
CRAIG ENTERPRISES, INC.
By:	/s/   SIDNEY CRAIG Sidney Craig, Chairman
SJF ENTERPRISES, INC.
By:	/s/   SIDNEY CRAIG Sidney Craig, Chairman
DA HOLDINGS, INC.
By:	/s/   SIDNEY CRAIG Sidney Craig, Chairman
Dated:	February 15, 2002

EX-99.(B)(1)

                                                                  Exhibit (b)(1)

                               ABLECO FINANCE LLC
                           450 Park Avenue, 28th Floor
                            New York, New York 10022



                                             December 28, 2001


Mr. Kevin S. Penn
Mr. Ezra S. Field
ACI Capital Co., Inc.
900 Third Avenue, 26th Floor
New York, NY  10022

               Re:    Financing Commitment

Gentlemen:

               An investor group formed by ACI Capital Co., Inc.("ACI Capital"
and ACI Capital together with such investor group collectively, the "Investor")
has advised Ableco Finance LLC (a special situations lending company hereinafter
referred to as the "Lender") that the Investor is directly or through a wholly
owned acquisition vehicle acquiring all of the capital stock of Jenny Craig,
Inc. ("Jenny Craig") and its subsidiaries (the "Acquisition") (Jenny Craig and
those of its subsidiaries designated by the Lender as borrowers collectively,
the "Borrower"). The Investor has also advised the Lender that the Investor
requires financing (i) to consummate the Acquisition, (ii) for the general
working capital requirements of the Borrower and (iii) to pay fees and expenses
related to the financing contemplated by this commitment letter. The Lender is
pleased to advise you that the Lender hereby commits to provide the Borrower
with a revolving credit and term loan facility totaling not more than $35
million at any one time outstanding (the "Financing Facility"), consisting of
(A) a revolving credit facility in an aggregate principal amount outstanding not
exceeding $5 million, (B) a tranche A term loan in an outstanding principal
amount of $15 million and (C) a tranche B term loan in an outstanding principal
amount of $15 million, all substantially on the terms and conditions set forth
in the Outline of Terms and Conditions attached hereto as Exhibit A (the "Term
Sheet"). The obligations of the Borrower under the Financing Facility will be
secured by a first priority lien on, and security interest in, substantially all
assets of the Borrower and its subsidiaries, in each case subject to such
exclusions as the Lender (in its sole and absolute discretion) may agree. The
Lender's commitment to provide the Financing Facility is subject in all respects
to satisfaction of the terms and conditions contained in this commitment letter
and in the Term Sheet.

               The Investor acknowledges that the Term Sheet is intended as an
outline only and does not purport to summarize all the conditions, covenants,
representations, warranties and other provisions which would be contained in
definitive legal documentation for the Financing Facility. The loan
documentation for the Financing Facility will include, in addition to the
provisions that are summarized in this commitment letter and the Term Sheet,
provisions that, in the reasonable opinion of the Lender, are customary or
typical for this type of financing





ACI Capital Co., Inc.
December 28, 2001
Page 2


transaction and other provisions that the Lender reasonably requires in the
context of the proposed transaction.

               By its execution hereof and its acceptance of the commitment
contained herein, ACI Capital agrees to indemnify and hold harmless the Lender
and each of its assignees, its affiliates and its directors, members, officers,
employees and agents (each an "Indemnified Party") from and against any and all
losses, claims, damages, liabilities or other expenses to which such Indemnified
Party may become subject, insofar as such losses, claims, damages, liabilities
(or actions or other proceedings commenced or threatened in respect thereof) or
other expenses arise out of or in any way relate to or result from the
Acquisition, this commitment letter or the extension of the Financing Facility
contemplated by this commitment letter, or in any way arise from any use or
intended use of this commitment letter or the proceeds of the Financing Facility
contemplated by this commitment letter, and ACI Capital agrees to reimburse each
Indemnified Party for any legal or other expenses incurred in connection with
investigating, defending or participating in any such loss, claim, damage,
liability or action or other proceeding (whether or not such Indemnified Party
is a party to any action or proceeding out of which indemnified expenses arise),
but excluding therefrom all expenses, losses, claims, damages and liabilities
which are finally determined in a non-appealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Indemnified Party. In the event of any litigation or dispute
involving this commitment letter or the Financing Facility, the Lender shall not
be responsible or liable to the Investor, the Borrower or any other person for
any special, indirect, consequential, incidental or punitive damages. In
addition, ACI Capital agrees to reimburse the Lender for all reasonable
out-of-pocket fees and expenses (the "Expenses") incurred by or on behalf of the
Lender in connection with the negotiation, preparation, execution and delivery
of this commitment letter, the Term Sheet and any and all definitive
documentation relating hereto and thereto, including, but not limited to, the
reasonable fees and expenses of counsel to the Lender in connection with any due
diligence, collateral reviews and field examinations. The obligations of ACI
Capital under this paragraph shall remain effective whether or not definitive
documentation is executed and notwithstanding any termination of this commitment
letter, provided, that, if, after the Acquisition, the Borrower enters into
definitive documentation for the Financing Facility, the obligations of ACI
Capital under this commitment letter and the Term Sheet shall thereupon
terminate and be superseded in all respects by the obligations of the Borrower
to the Lender.

               On the date of execution hereof, ACI Capital agrees to pay to the
Lender, in immediately available funds, a commitment fee equal to $525,000 (the
"Commitment Fee"), which fee shall be earned in full and payable on the first
date on or after the date ACI Capital accepts this commitment letter and the
Term Sheet and that the Investor has executed a definitive merger agreement (the
"Merger Agreement") for the Acquisition. In addition, ACI Capital agrees to pay
to the Lender, promptly after its request, additional expense deposits if the
Lender determines that the amount of Expenses incurred or to be incurred by the
Lender in connection with the Financing Facility exceeds or will exceed the
amount of any expense deposit previously paid to the Lender.




ACI Capital Co., Inc.
December 28, 2001
Page 3


               The Lender's commitment to provide the Financing Facility is
subject to (i) the negotiation, execution and delivery of definitive loan
documentation in form and substance satisfactory to the Lender, the Borrower and
their respective counsel, (ii) the satisfaction of the Lender that at all times
prior to and including the date on which the transactions referred to hereunder
close that there has not occurred or become known to the Lender any material
adverse change with respect to the condition, financial or otherwise, business,
operations, assets, liabilities or prospects of the Borrower, as determined by
the Lender in its sole discretion (a "Material Adverse Change"), (iii) the
absence of any material disruption or general adverse developments in the
financial markets, as determined by the Lender in its sole discretion, and (iv)
such other customary conditions as set forth in the Term Sheet. If at any time
the Lender shall determine (in its sole discretion exercised reasonably) that
either (A) the Investor or the Borrower will be unable to fulfill any condition
set forth in this commitment letter or in the Term Sheet or (B) any Material
Adverse Change has occurred, the Lender may terminate this commitment letter by
giving notice thereof to ACI Capital (subject to the obligation of ACI Capital
to pay all fees, costs, expenses and other payment obligations expressly assumed
by ACI Capital hereunder, which shall survive the termination of this commitment
letter).

               The Investor represents and warrants that (i) all written
information and other materials concerning the Investor, the Borrower or the
Acquisition (collectively, the "Information") which has been, or is hereafter,
made available by, or on behalf of the Investor is, or when delivered will be,
when considered as a whole, complete and correct in all material respects and
does not, or will not when delivered, contain any untrue statement of material
fact or omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which such
statement has been made and (ii) to the extent that any such Information
contains projections, such projections were prepared in good faith on the basis
of (A) assumptions, methods and tests stated therein which are believed by the
Investor or Jenny Craig, as applicable, to be reasonable and (B) information
believed by the Investor or Jenny Craig, as applicable, to have been accurate
based upon the information available to the Investor at the time such
projections were furnished to the Lender.

               This commitment letter is delivered to ACI Capital upon the
condition that, prior to its acceptance of this offer and the payment of the
Commitment Fee, neither the existence of this commitment letter or the Term
Sheet, nor any of their contents, shall be disclosed by the Investor, except as
may be compelled to be disclosed in a judicial or administrative proceeding, as
otherwise required by law or, on a confidential and "need to know" basis, solely
to the directors, officers, employees, advisors and agents of the Investor or
the Borrower and its representatives. In addition, the Investor agrees that it
will (i) consult with the Lender prior to the making of any filing in which
reference is made to the Lender or the commitment contained herein, and (ii)
obtain the prior approval of the Lender before releasing any public announcement
in which reference is made to the Lender or to the commitment contained herein.
The Investor acknowledges that the Lender and its affiliates may now or
hereafter provide financing or obtain other interests in other companies in
respect of which the Investor, the Borrower or their affiliates may be business
competitors, and that the Lender and its affiliates will have no obligation to
provide to the Investor, the Borrower or any of their affiliates any
confidential




ACI Capital Co., Inc.
December 28, 2001
Page 4


information obtained from such other companies. The Lender agrees that it will
not provide confidential information obtained from the Investor or the Borrower
except (i) as may, be compelled to be disclosed in a judicial or administrative
proceedings, (ii) as otherwise required by law, or (iii) on a confidential and
"need to know" basis to its directors, officers, employees, advisors and agents
and to prospective assignees or participants, provided such persons have been
instructed to keep such information confidential.

               The offer made by the Lender in this commitment letter shall
expire, unless otherwise agreed by the Lender in writing, at 5:00 p.m. (New York
City time) on January 5, 2002, unless prior thereto the Lender has received a
copy of this commitment letter, signed by ACI Capital accepting the terms and
conditions of this commitment letter and the Term Sheet. The commitment by the
Lender to provide the Financing Facility shall expire at 5:00 p.m. (New York
City time) on May 31, 2002, unless prior thereto, definitive loan documentation
shall have been agreed to in writing by all parties and the conditions set forth
therein shall have been satisfied (it being understood that the obligation of
ACI Capital to pay all amounts in respect of indemnification and Expenses shall
survive termination of this commitment letter). If after the Acquisition, the
Borrower enters into definitive documentation for the Financing Facility, the
obligations of the Investor and ACI Capital under this commitment letter and the
Term Sheet shall thereupon terminate and be superseded in all respects by the
obligations of the Borrower to the Lender.

               Should the terms and conditions of the offer contained herein
meet with your approval, please indicate your acceptance by signing and
returning a copy of this commitment letter to the Lender.





ACI Capital Co., Inc.
December 28, 2001
Page 5


               This commitment letter, including the attached Term Sheet (i)
supersedes all prior discussions, agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, of the parties with
respect thereto, (ii) shall be governed by the law of the State of New York,
(iii) shall be binding upon the parties and their respective successors and
assigns, (iv) may not be relied upon or enforced by any other person or entity,
and (v) may be signed in multiple counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same instrument.
If this commitment letter becomes the subject of a dispute, each of the parties
hereto hereby waives trial by jury. This commitment letter may be amended,
modified or waived only in a writing signed by the parties hereto.


                                            Very truly yours,

                                            ABLECO FINANCE LLC



                                            By: /s/ DANIEL E. WOLF
                                                --------------------------
                                                Name: Daniel E. Wolf
                                                Title: VP

Agreed and accepted as of
23 day of Dec. 2001:

ACI CAPITAL CO., INC.



By:  /s/ EZRA FIELD
     --------------------------
     Name: Ezra Field
     Title: VP





                                    EXHIBIT A

                     JENNY CRAIG, INC. AND ITS SUBSIDIARIES

         OUTLINE OF TERMS AND CONDITIONS FOR PROPOSED FINANCING FACILITY

This Outline of Terms and Conditions is part of the Commitment Letter, dated
December 28, 2001 (the "Commitment Letter"), addressed to ACI Capital Co., Inc.
("ACI Capital") by Ableco Finance LLC (a special situations lending company
hereinafter referred to as the "Lender") and is subject to the terms and
conditions of the Commitment Letter. Capitalized terms used herein shall have
the meanings set forth in the Commitment Letter unless otherwise defined herein.

BORROWER:                         Jenny Craig and certain of its subsidiaries as
                                  required by the Lender (collectively the
                                  "Borrower").

GUARANTORS:                       All subsidiaries of the Borrower that are not
                                  a Borrower as required by the Lender (together
                                  with the Borrower, each a "Loan Party" and
                                  collectively, the "Loan Parties").

LENDER:                           The Lender or affiliates thereof, to be
                                  designated at closing.

FINANCING FACILITY:               A revolving credit and term loan facility
                                  totaling not more than $35 million at any one
                                  time outstanding (the "Maximum Credit"),
                                  consisting of (i) a revolving credit facility
                                  in an aggregate principal amount at any time
                                  outstanding not exceeding $5 million, (ii) a
                                  tranche A term loan in an outstanding
                                  principal amount of $15 million (the "Term
                                  Loan A") and (iii) a tranche B term loan in an
                                  outstanding principal amount of $15 million
                                  (the "Term Loan B" and, together with the Term
                                  Loan A, the "Term Loans").

                                  Revolving Credit Facility

                                  Aggregate revolving credit loans under the
                                  Financing Facility ("Revolving Loans") will be
                                  limited to $5 million. Such Revolving Loans
                                  will be made to the Borrower on not less than
                                  two (2) days prior notice and shall be in
                                  minimum amounts of $100,000.

                                  Term Loan Facility

                                  A term loan facility, consisting of the Term
                                  Loan A and the Term Loan B. (The Term Loans
                                  and the Revolving Loans are, collectively, the
                                  "Loans".) The Term Loans will be fully funded
                                  on the Closing Date (as defined herein).

TERM:                             The Financing Facility will have a term of two
                                  (2) years (the "Maturity Date"), provided,
                                  that, subject to the conditions set forth in
                                  the Term Loan B Extension Fee section of this
                                  Term Sheet, at the election of the Borrower,
                                  the Term Loan B may be extended for a period
                                  of one year.





AMORTIZATION:                     The Revolving Loans, the Term Loans (except
                                  with respect to the amortization described
                                  below) and other obligations outstanding under
                                  the Financing Facility will be payable in full
                                  on the Maturity Date. The Term Loan A will
                                  amortize on a monthly basis in installments of
                                  $250,000 for the first 12 months after the
                                  Closing Date and $350,000 for months 13
                                  through 24 after the Closing Date.

MANDATORY                         Customary mandatory prepayments to be included
AND OPTIONAL PREPAYMENT:          in definitive loan documentation (e.g.,
                                  issuance of equity, debt, sale of assets, tax
                                  refunds, casualty events, etc.)., provided,
                                  that, in the absence of a continuing event of
                                  default, prepayments will not be required from
                                  the proceeds of equity issuances. Mandatory
                                  prepayments shall be applied, first, to prepay
                                  the outstanding principal amount of the Term
                                  Loan A (applied to installments thereof as
                                  selected by the Borrower if no event of
                                  default is continuing or, if an event of
                                  default is continuing, in the inverse order of
                                  maturity), second, to prepay the outstanding
                                  principal amount of the Term Loan B, and,
                                  lastly, to reduce the outstanding principal of
                                  the Revolving Loans.

                                  In addition, a prepayment of the Loans will be
                                  required if the principal amount of the Loans
                                  exceeds the cash collections of the Borrower
                                  for a period of seventy (70) days, measured at
                                  the end of each 70 day period (any such excess
                                  of the principal amount of the Loans over the
                                  cash collections is hereinafter referred to as
                                  the "Excess"). If as a result of the
                                  occurrence of an Excess any such payment is
                                  required, the Borrower will have the option of
                                  (i) prepaying the Loans to a level that would
                                  eliminate the Excess or (ii) providing cash
                                  collateral to the Lender for an amount equal
                                  to the amount of the Excess. After the Excess
                                  is eliminated and if no event of default is
                                  continuing, the Lender shall release any cash
                                  collateral provided to the Lender in
                                  connection with the Excess.

                                  Optional prepayments on the Term Loan A and
                                  the Term Loan B will be permitted, provided
                                  that the Term Loan A is repaid in full prior
                                  to any optional prepayment of the Term Loan B.
                                  Optional payments shall be applied to the
                                  installments of the Term Loan A as selected by
                                  the Borrower if no event of default is
                                  continuing, or if an event of default is
                                  continuing, in the inverse order of maturity.

                                  Amounts repaid under the Revolving Credit
                                  Facility may be re-borrowed. Except as
                                  provided above, the Borrower shall be
                                  permitted to prepay the Loans in whole or in
                                  part at any time without penalty or premium.
                                  Termination of the Financing Facility prior to
                                  the Maturity Date would not result in a
                                  prepayment fee.


                                       2



CLOSING DATE:                     The first date on which all definitive loan
                                  documentation satisfactory to the Lender (the
                                  "Loan Documents") is executed by the Loan
                                  Parties and the Lender, which date shall not
                                  be later than May 31, 2002, unless otherwise
                                  agreed in writing by the Lender and the
                                  Borrower.

COLLATERAL:                       All obligations of the Loan Parties to the
                                  Lender shall be secured by a perfected, first
                                  priority lien on and security interest in
                                  substantially all of the now owned and
                                  hereafter acquired assets of the Loan Parties,
                                  including, but not limited to, accounts
                                  receivable, inventory, real property,
                                  machinery and equipment, trademarks and
                                  tradenames, copyrights, patents and other
                                  intellectual property, general intangibles,
                                  chattel paper, all shares of all capital stock
                                  of subsidiaries of the Loan Parties and all
                                  proceeds thereof, and such other assets,
                                  tangible or intangible, as may be required, in
                                  the Lender's opinion, to fully secure the
                                  contemplated Loans under the Financing
                                  Facility (the "Collateral"). All borrowings by
                                  the Borrower, all costs, fees and expenses of
                                  the Lender and all other obligations owed to
                                  the Lender shall be secured as described above
                                  and shall be charged to the loan account to be
                                  established under the Financing Facility.

INTEREST:                         All Revolving Loans shall bear interest at the
                                  rate per annum equal to six percent (6%) above
                                  the Reference Rate from time to time in
                                  effect. The Term Loan A shall bear interest at
                                  the rate per annum equal to seven and one-half
                                  percent (7.5%) above the Reference Rate from
                                  time to time in effect. The Term Loan B shall
                                  bear interest at the rate per annum equal to
                                  nine and one-half percent (9.5%) above the
                                  Reference Rate from time to time in effect. At
                                  no time shall the Reference Rate referred to
                                  above be less than five percent (5.0%). As
                                  used herein, "Reference Rate" means the rate
                                  of interest publicly announced from time to
                                  time by JP Morgan Chase Bank in New York, New
                                  York as its prime rate. All interest and fees
                                  shall be computed on the basis of a year of
                                  360 days for the actual days elapsed. If any
                                  Event of Default shall occur and be
                                  continuing, interest shall accrue at a rate
                                  per annum equal to 3% in excess of the rate of
                                  interest otherwise in effect.

CASH MANAGEMENT:                  All proceeds of Collateral shall be deposited
                                  in cash management accounts under the sole
                                  dominion and control of the Lender. In the
                                  absence of a continuing event of default and
                                  if availability under the Revolving Credit
                                  Facility and unencumbered cash are greater
                                  than or equal to an amount to be agreed upon,
                                  all funds deposited in such cash management
                                  accounts shall be permitted to be transferred
                                  to the operating accounts of the Borrower and
                                  used by the Borrower in the


                                       3



                                  ordinary course of its business. At any time
                                  an event of default is continuing or if
                                  availability under the Revolving Credit
                                  Facility and unencumbered cash are less than
                                  an amount to be agreed upon, the Lender may
                                  require that thereafter all funds deposited in
                                  such cash management accounts will be
                                  transferred to the Lender on each business day
                                  and applied to repay the outstanding Revolving
                                  Loans. Collections will be credited to the
                                  obligations on the day received in the cash
                                  management accounts conditional on final
                                  payment to the Lender.

FEES:                             Closing Fee:     3% of the Maximum Credit,
                                                   earned in full,
                                                   non-refundable and payable on
                                                   the Closing Date less the
                                                   amount of the Commitment Fee
                                                   paid pursuant to the
                                                   Commitment Letter.

                                  Facility Fee:    1.25% of the outstanding
                                                   amount of the Term Loan B
                                                   will be earned in full,
                                                   non-refundable and payable at
                                                   the end of each period of 90
                                                   days after the Closing Date
                                                   (i.e. payable on the 90th
                                                   day, 180th day, 270th day,
                                                   etc.).

                                  Term Loan B      3% of the then outstanding
                                  Extension Fee:   Term Loan B earned in full,
                                                   non-refundable and payable
                                                   upon the Borrower's election
                                                   to extend the Term Loan B for
                                                   a period of one year. Such
                                                   extension shall be subject to
                                                   (i) the Borrower's compliance
                                                   with the terms and conditions
                                                   of the Financing Facility and
                                                   (ii) the repayment of all
                                                   Revolving Loans and the Term
                                                   Loan A on or prior to the
                                                   Maturity Date.

USE OF PROCEEDS:                  The Loans under the Financing Facility will be
                                  used, in conjunction with $42,500,000 in cash
                                  equity or other securities acceptable to the
                                  Lender, solely (i) to consummate the
                                  Acquisition, (ii) for the general working
                                  capital requirements of the Borrower and (iii)
                                  to pay fees and expenses related to the
                                  financing contemplated by the Commitment
                                  Letter.


                                       4



CONDITIONS PRECEDENT:             The obligation of the Lender to make any Loans
                                  under the Financing Facility will be subject
                                  to customary conditions precedent including,
                                  without limitation, the following initial
                                  conditions precedent:

                                 (a)    Execution and delivery of appropriate
                                        legal documentation in form and
                                        substance satisfactory to and required
                                        by the Lender and its counsel
                                        (including, without limitation, the
                                        financing agreement, the security and
                                        pledge agreements, the mortgages and
                                        title insurance policies, the
                                        guaranties, the block account agreements
                                        and the landlord waivers (for the
                                        headquarters of the Borrower), and the
                                        satisfaction of the conditions precedent
                                        contained therein.

                                 (b)    There shall have occurred no event or
                                        condition which has had, or is
                                        reasonably likely to have, a Material
                                        Adverse Change.

                                 (c)    The Lender's completion of its legal due
                                        diligence, including, without
                                        limitation, all ERISA, environmental,
                                        tax, accounting and labor matters, with
                                        results are satisfactory to the Lender;
                                        all necessary governmental and third
                                        party consents and approvals necessary
                                        in connection with the Financing
                                        Facility and the transactions
                                        contemplated thereby shall have been
                                        obtained (without the imposition of any
                                        conditions that are not reasonably
                                        acceptable to the Lender) and shall
                                        remain in effect; and no law or
                                        regulation shall be applicable in the
                                        reasonable judgment of the Lender that
                                        restrains, prevents or imposes
                                        materially adverse conditions upon the
                                        Financing Facility or the transactions
                                        contemplated thereby.

                                 (d)    The Lender shall have been granted a
                                        perfected, first priority lien on all
                                        Collateral, and shall have received UCC,
                                        tax and judgment lien searches and other
                                        appropriate evidence (including title
                                        reports and surveys relating to all
                                        owned real property comprising
                                        Collateral), evidencing the absence of
                                        any other liens on the Collateral,
                                        except existing liens acceptable to the
                                        Lender.

                                 (e)    Opinions from the Loan Parties' counsel
                                        as to such matters as the Lender and
                                        counsel to the Lender may reasonably
                                        request.

                                 (f)    The Lender shall be satisfied with the
                                        cash management system of the Borrower.


                                       5



                                 (g)    Insurance satisfactory to the Lender;
                                        such insurance to include liability
                                        insurance for which the Lender will be
                                        named as an additional insured and
                                        property insurance with respect to the
                                        Collateral for which the Lender will be
                                        named as loss payee.

                                 (h)    There shall exist no claim, action,
                                        suit, investigation, litigation or
                                        proceeding, pending or threatened in any
                                        court or before any arbitrator or
                                        governmental instrumentality which
                                        relates to the Acquisition or the
                                        Financing Facility or which, in the
                                        opinion of the Lender, has any
                                        reasonable likelihood of having a
                                        Material Adverse Change.

                                 (i)    The Borrower shall have, on the Closing
                                        Date, unrestricted cash balances of at
                                        least $7,500,000, after giving effect to
                                        (A) the Term Loans made on the Closing
                                        Date and (B) the payment of all fees and
                                        expenses related to the Financing
                                        Facility and no Revolving Loans shall be
                                        made on the Closing Date.

                                 (j)    The Lender shall be satisfied with the
                                        terms of the cash equity contribution
                                        (or other securities acceptable to the
                                        Lender) of at least $42,500,000 which
                                        will fund the Acquisition. The Lender
                                        shall be satisfied with the terms of the
                                        Merger Agreement.

                                 (k)    The Lender's loan origination costs
                                        including, without limitation, audit
                                        fees, attorneys' fees, search fees,
                                        title fees, documentation and filing
                                        fees, shall have been paid by the
                                        Borrower.

                                 (l)    The Lender shall have received such
                                        financial and other information
                                        regarding the Loan Parties as the Lender
                                        may reasonably request.

REPRESENTATIONS                   Usual representations and warranties,
AND WARRANTIES:                   including, but not limited to, corporate
                                  existence and good standing, authority to
                                  enter into loan documentation, governmental
                                  approvals, non-violation of other agreements,
                                  financial statements, litigation, compliance
                                  with environmental, pension and other laws,
                                  taxes, insurance, absence of Material Adverse
                                  Change, absence of default or unmatured
                                  default under the Financing Facility and
                                  priority of the Lender's liens.

COVENANTS:                        Usual covenants, including, but not limited
                                  to, provision of financial statements, notices
                                  of litigation, defaults and unmatured defaults
                                  and other information, compliance with
                                  pension, environmental and other laws,
                                  inspection of properties, books and records,
                                  maintenance of insurance, limitations with
                                  respect


                                       6



                                  to liens and encumbrances, dividends and
                                  retirement of capital stock, guarantees, sale
                                  and lease back transactions, consolidations
                                  and mergers, investments, capital
                                  expenditures, loans and advances,
                                  indebtedness, operating leases, transactions
                                  with affiliates, prepayment of other
                                  indebtedness and amendments to material
                                  agreements.

                                  The financial covenants for the Financing
                                  Facility shall be as set forth on Annex I
                                  attached hereto.

                                  Financial reporting to include: (i) annual,
                                  audited financial statements, (ii) quarterly,
                                  internally prepared, financial statements,
                                  (iii) monthly, internally prepared, financial
                                  statements, (iv) annual projections, including
                                  monthly balance sheet, profit and loss and
                                  cash flow figures, and (v) other reporting as
                                  required by the Lender.

EVENTS OF DEFAULT:                Usual events of default, including, but not
                                  limited to, payment, cross-default, violation
                                  of covenants, breach of representations or
                                  warranties, bankruptcy or insolvency,
                                  judgment, ERISA, environmental and change of
                                  control.

GOVERNING LAW:                    All documentation in connection with the
                                  Financing Facility shall be governed by the
                                  laws of the State of New York.

ASSIGNMENTS,
PARTICIPATIONS:                   The Lender may sell or assign its loans or
                                  commitments under the Financing Facility
                                  without the consent of the Loan Parties. The
                                  Lender may also sell participations in its
                                  loans and commitments under the Financing
                                  Facility without the consent of the Loan
                                  Parties, provided that such participants shall
                                  be limited to customary voting rights.

OUT-OF-POCKET EXPENSES:           All fees, including reasonable legal fees,
                                  costs and expenses of counsel to the Lender,
                                  and all reasonable out-of-pocket expenses
                                  associated with the transaction, are to be
                                  paid by the Loan Parties.


                                       7



                                     ANNEX I

                               Financial Covenants



                                                                       2nd Quarter Out/
                                 At Close        1st Quarter Out        Holding Level
- ----------------------------------------------------------------------------------------
                                                              
Minimum Adjusted EBITDA           $13.9               $13.9                 $13.9
Leverage Ratio                    2.35x               2.30x                 2.25x
Fixed Charge Coverage            1.6x(*)             1.6x(*)               1.7x(*)
Ratio ("FCCR")


Adjusted EBITDA                   EBITDA for the latest twelve months, treating
                                  any management fees and/or Jenny Craig
                                  consulting fees actually paid (after close) as
                                  operating expenses, and subject to the
                                  following adjustments:

                                  (i)      Trailing adjustments - litigation
                                           judgment, excess executive
                                           compensation, and public company
                                           costs;

                                  (ii)     Pro Forma adjustments from closing
                                           - litigation judgment, middle-east
                                           refund and Y2K expense.

Net Interest Expense ("NIE")      Interest on the Term Loans plus quarterly
                                  extension fee on the Term Loan B, net of
                                  interest income on cash.

Scheduled Principal Payments      Amortization on Term Loan A of $250,000 for
                                  months 1 through 12, and $350,000 for months
                                  13 through 24.

Total Debt                        Includes capital lease obligation ($1.5 mm),
                                  the Term Loans, and funded portion of
                                  Revolving Loans, if any.

Net Debt                          Total Debt less cash on the balance sheet.

Leverage Ratio                    Net Debt divided by Adjusted EBITDA.

Fixed Charge Coverage Ratio       Adjusted EBITDA less maintenance capital
                                  expenditures for the latest twelve months,
                                  divided by NIE plus Scheduled Principal
                                  Payments ("SPP"). For the purpose of this
                                  covenant, NIE and SPP during the first four
                                  (4) quarters after the Transaction closes
                                  shall be calculated on an annualized basis and
                                  thereafter on a trailing basis.

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

(*) Notwithstanding the headings of the covenant table, the FCCR shall be 1.6x
for the first four quarters, and then 1.7x thereafter.



                                       8

EX-99.(B)(2)

                                                                  Exhibit (b)(2)

January 27, 2002



J Acquisition Corp.
900 Third Avenue
26th Floor

New York, New York  10022

Re: Junior Subordinated Debt Commitment

Gentlemen:

               Reference is made to that certain Agreement and Plan of Merger
(the "Agreement"), dated as of the date hereof, by and between J Holdings Corp.,
a Delaware corporation ("Parent"), J Acquisition Corp., a Delaware corporation
and wholly owned subsidiary of Parent (the "Borrower"), and Jenny Craig, Inc., a
Delaware corporation (the "Company"), which agreement contemplates the
acquisition by Parent of 100% of the outstanding shares of the Company (such
acquisition, together with agreements related thereto or contemplated thereby,
representing the "Transaction"). In connection therewith and in order to finance
in part the Transaction, ACI Capital Co., Inc. (the "Lender") is pleased to
advise you that it hereby commits to provide the Borrower with a Junior
Subordinated Debt Financing in an aggregate principal amount of $9 million (the
"Subdebt Financing"). The obligations of the Borrower under the Subdebt
Financing will be secured by a second priority lien on, and security interest
in, substantially all assets of the Borrower (it being understood that the
Company will become the Borrower upon consummation of the Acquisition), the
Parent and all domestic subsidiaries of the Borrower, in each case subject to
such exclusions as the Lender (in its sole and absolute discretion) may agree.
The Lender's commitment to provide the Subdebt Financing is subject in all
respects to satisfaction of the terms and conditions contained in this
commitment letter and in the Outline of Terms and Conditions attached hereto as
Exhibit A (the "Term Sheet").

               The Borrower acknowledges that the Term Sheet is intended as an
outline only and does not purport to summarize all the conditions, covenants,
representations, warranties and other provisions which would be contained in
definitive legal documentation for the Subdebt Financing. The loan documentation
for the Subdebt Financing will include, in addition to the provisions that are
summarized in this commitment letter and the Term Sheet, provisions that, in the
reasonable opinion of the Lender, are customary or typical for this type of
financing transaction and other provisions that the Lender reasonably requires
in the context of the proposed transaction.

               The Lender's commitment to provide the Subdebt Financing is
subject to (i) the negotiation, execution and delivery of definitive loan
documentation in form and substance satisfactory to the Lender, the Borrower and
their respective counsel, (ii) the satisfaction of the conditions precedent to
the closing of the Transaction set forth in Sections 6.1 and 6.3 (other than
Section 6.3(c) of the Agreement), (iii) all conditions precedent to the
obligation of the Senior Lender (as defined in the Agreement) to consummate the
Senior Financing (as defined in the Agreement) having been met and the Senior
Lender shall intend to and shall be willing and prepared to consummate the
Senior Financing, in each case other than with respect to any conditions
relating to the debt capital investment contemplated by this commitment letter,
the debt capital commitment letter of DB Capital Investors, L.P. of even date
herewith or the equity capital commitment letter of SJF Enterprises, Inc., of
even date herewith, and (iv) satisfaction of the conditions as set forth in the
Term Sheet.

               The offer made by the Lender in this commitment letter is
contingent upon execution of the Agreement, and should the Agreement be
executed, the commitment by Lender to provide the Subdebt Financing shall expire
immediately upon the earlier of (i) the termination of the Agreement and (ii)
the Expiration Date (as defined in the Agreement), as may be extended in
accordance with the terms of the




Agreement.

               Should the terms and conditions of the offer contained herein
meet with your approval, please indicate your acceptance by signing and
returning a copy of this commitment letter to the Lender.

               This commitment letter, including the attached Term Sheet (i)
supersedes all prior discussions, agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, of the parties with
respect to the subject matter hereof and thereof, (ii) shall be governed by the
law of the State of New York, (iii) shall be binding upon the parties and their
respective successors and assigns, (iv) may not be relied upon or enforced by
any other person or entity other than the parties hereto and Parent, and (v) may
be signed in multiple counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same instrument. If this
commitment letter becomes the subject of a dispute, each of the parties hereto
hereby waives trial by jury. This commitment letter may be amended, modified or
waived only in a writing signed by the parties hereto.



                                       2



Please confirm that the foregoing is in accordance with your understanding by
signing and returning to the Lender the enclosed copy of this Commitment Letter
on or before the close of business on the date hereof, whereupon this Commitment
Letter shall become a binding agreement between us.

                                            Very truly yours,
                                            ACI CAPITAL CO., INC.



                                            By: /s/ KEVIN S. PENN
                                                --------------------------
                                                Name: Kevin S. Penn
                                                Title: Managing Director


Agreed and accepted on this
27th day of January, 2002:

J ACQUISITION CORP.



By:  /s/ KEVIN S. PENN
     ------------------------------
     Name: Kevin S. Penn
     Title: President




                                       3



                                    EXHIBIT A

         OUTLINE OF TERMS AND CONDITIONS FOR PROPOSED SUBDEBT FINANCING

This Outline of Terms and Conditions is part of the Commitment Letter, dated
January 27, 2002 (the "Commitment Letter"), addressed to J Acquisition Corp. by
ACI Capital Co., Inc. (together with the other lenders party to the definitive
Subdebt Financing agreement, the "Lenders") and is subject to the terms and
conditions of the Commitment Letter. Capitalized terms used herein shall have
the meanings set forth in the Commitment Letter unless otherwise defined herein.

BORROWER:                       J Acquisition Corp. Upon consummation of the
                                Merger, Jenny Craig, Inc. and certain of its
                                subsidiaries, as required by the Lenders
                                (collectively the "Borrower").

GUARANTORS:                     All domestic subsidiaries of the Borrower that
                                are not included in the "Borrower," as required
                                by the Lenders (together with the Borrower, each
                                a "Loan Party" and collectively, the "Loan
                                Parties").

LENDERS:                        The Lenders or their respective affiliates
                                thereof, to be designated at closing.

FINANCING FACILITY:             Junior Subordinated Debt Financing of up to $24
                                million (the "Subdebt Financing"). The Subdebt
                                Financing will be funded in a single draw on the
                                Closing Date (as defined below) and will be
                                structured as a term loan which may not, once
                                repaid, be drawn upon again.

                                ACI will fund $9 million of the Subdebt
                                Financing and DB Capital Investors, L.P. will
                                fund $15 million thereof.

TERM:                           The Subdebt Financing will have a term of five
                                (5) years (the "Maturity Date").

AMORTIZATION:                   The Subdebt Financing will be payable in full on
                                the Maturity Date.

MANDATORY                       Customary mandatory prepayments to be included
AND OPTIONAL PREPAYMENT:        in definitive loan documentation (e.g., issuance
                                of equity, debt, sale of assets, tax refunds,
                                casualty events, etc.). Optional prepayments on
                                the Subdebt Financing will be permitted in whole
                                or in part, and from time to time. Prepayments
                                will be subject to a one-year interest penalty
                                in the first three years following the closing
                                of the Transaction; a half-year interest penalty
                                in the fourth year following the closing of the
                                Transaction; and no prepayment penalty in the
                                fifth year following the closing of the
                                Transaction. Such penalties will be computed
                                based on the interest rate in effect at the time
                                of the prepayment.

CLOSING DATE:                   On or prior to the closing date of, and
                                immediately prior to, the Transaction (the
                                "Closing Date").

COLLATERAL:                     All obligations of the Loan Parties to the
                                Lenders shall be secured by a perfected, second
                                priority lien on and security interest in
                                substantially all of the now owned and hereafter
                                acquired assets of the Loan Parties, including,
                                but not limited to, accounts receivable,
                                inventory, machinery and equipment, trademarks
                                and tradenames, copyrights, patents and other
                                intellectual property, general intangibles,
                                chattel paper, all shares of all capital stock
                                of domestic subsidiaries of the Borrower and 65%
                                of the shares of capital stock


                                       4



                                of all foreign subsidiaries of the Borrower, and
                                all proceeds thereof, and such other assets,
                                tangible or intangible, as may be required, in
                                the Lenders' opinion, as security for the
                                contemplated Subdebt Financing (the
                                "Collateral"). All borrowings by the Borrower,
                                all costs, fees and expenses of the Lenders and
                                all other obligations owed to the Lenders shall
                                be secured as described above and shall be
                                charged to the loan account to be established
                                under the Subdebt Financing.

INTEREST:                       The Subdebt Financing shall bear interest at a
                                rate calculated in the same manner as the rate
                                payable on the Ableco Term B loan (including,
                                for the purposes of determining the rate payable
                                on the Ableco Term B loan, the facility fee
                                payable thereunder). If the Ableco Term Loan B
                                is no longer outstanding, the rate on the
                                Subdebt Financing shall continue to be the rate
                                that would have been payable had such Ableco
                                Term Loan B continued to be outstanding. The
                                interest shall be payable quarterly, and
                                in-kind, in whole or in part, at the option of
                                Borrower.

                                All interest shall be computed on the basis of a
                                year of 360 days for the actual days elapsed. If
                                any Event of Default shall occur and be
                                continuing, interest shall accrue at a rate per
                                annum equal to 3% in excess of the prevailing
                                rate.

WARRANTS:                       In connection with and consideration for the
                                Subdebt Financing, the Lenders shall be issued
                                warrants (the "Warrants") to acquire 15% of the
                                common equity of Parent on a fully diluted
                                basis, at an exercise price per share equal to
                                the price per share of the Parent's common
                                stock. The Warrants shall be allocated to the
                                Lenders ratably to their capital contributions
                                to the Subdebt Financing.

FEES:                           Closing Fee equal to 3% of the Subdebt
                                Financing.

USE OF PROCEEDS:                The Loans under the Subdebt Financing will be
                                used solely (i) to consummate the Transaction,
                                (ii) for the general working capital
                                requirements of the Borrower and (iii) to pay
                                fees and expenses related to the Subdebt
                                Financing.

CONDITIONS
PRECEDENT:                      The obligation of the Lenders to fund the
                                Subdebt Financing on the Closing Date will be
                                subject to customary conditions precedent
                                including, without limitation, the following:




                                       5



                                (a)     Execution and delivery of appropriate
                                        legal documentation in form and
                                        substance satisfactory to and as
                                        required by the Lenders and their
                                        respective counsel (including, without
                                        limitation, the Subdebt Financing
                                        agreement, the security and pledge
                                        agreements, the mortgages and title
                                        insurance policies, the guaranties, the
                                        landlord waivers, other collateral
                                        access agreements, and the satisfaction
                                        of the conditions precedent contained
                                        therein).

                                (b)     Satisfaction of all conditions precedent
                                        to Parent's and Purchaser's obligations
                                        to close under the Agreement (other than
                                        the conditions set forth in Section
                                        6.3(c) of the Agreement; provided,
                                        however, that all conditions precedent
                                        to the obligation of the Senior Lender
                                        (as defined in the Agreement) to
                                        consummate the Senior Financing (as
                                        defined in the Agreement) have been met
                                        and the Senior Lender shall intend to
                                        and shall be willing and prepared to
                                        consummate the Senior Financing, in each
                                        case other than with respect to any
                                        conditions relating to the debt capital
                                        investment contemplated by the
                                        Commitment Letter, the debt capital
                                        commitment letter of DB Capital
                                        Investors, L.P. of even date herewith,
                                        or the equity capital commitment letter
                                        of SJF Enterprises, Inc., of even date
                                        herewith).

                                (c)     The Lenders shall have been granted a
                                        perfected, second priority lien on all
                                        Collateral, and shall have received UCC,
                                        tax and judgment lien searches and other
                                        appropriate evidence (including title
                                        reports and surveys relating to all
                                        owned real property comprising
                                        Collateral), evidencing the absence of
                                        any other liens on the Collateral,
                                        except existing liens acceptable to the
                                        Lenders and the lien securing the Senior
                                        Financing.

                                (d)     Opinions from the Loan Parties' counsel
                                        as to such matters as the Lenders and
                                        the respective counsel to the Lenders
                                        may reasonably request.

REPRESENTATIONS
AND WARRANTIES:                 Bring-down of representations and warranties in
                                the Agreement, plus authority to enter into
                                Subdebt Financing documentation, non-violation
                                of other agreements, and enforceability and
                                priority of the Lenders' liens.

COVENANTS:                      Usual covenants, including, but not limited to,
                                provision of financial statements, notices of
                                litigation, defaults and unmatured defaults and
                                other information, compliance with pension,
                                environmental and other laws, inspection of
                                properties, books and records, maintenance of
                                insurance, limitations with respect to liens and
                                encumbrances, dividends and retirement of
                                capital stock, guarantees, sale and lease back
                                transactions, consolidations and mergers,
                                investments, capital expenditures, loans and
                                advances, indebtedness, operating leases,
                                transactions with affiliates, prepayment of
                                other indebtedness and amendments to material
                                agreements.

                                The loan documentation will contain the same
                                financial covenants as those contained in the
                                Senior Financing loan documents.

                                Financial reporting to include: (i) annual,
                                audited financial statements, (ii) quarterly,
                                internally prepared, financial statements, (iii)
                                monthly, internally prepared, financial
                                statements, (iv) annual projections, including
                                monthly balance sheet, profit and loss and cash
                                flow figures, and (v) other reporting as
                                required by the Lenders.


                                       6



EVENTS OF DEFAULT:              Usual events of default, including, but not
                                limited to, payment, cross-default, violation of
                                covenants, breach of representations or
                                warranties, bankruptcy or insolvency, judgment,
                                ERISA, environmental and change of control;
                                provided, that so long as the Borrower has
                                outstanding indebtedness under the Senior
                                Financing and to the extent the Subdebt
                                Financing is held by the original Lenders (or
                                their respective affiliates), the only events of
                                default that will permit the Lenders to exercise
                                their rights to accelerate the maturity of the
                                Subdebt Financing or foreclose on any security
                                will be bankruptcy and insolvency and an event
                                of default under Senior Financing pursuant to
                                which the Senior Lender accelerates and
                                forecloses on the security.

GOVERNING LAW:                  All documentation in connection with the Subdebt
                                Financing shall be governed by the laws of the
                                State of New York.

ASSIGNMENTS, PARTICIPATIONS:    The Lenders may sell or assign their respective
                                loans under the Subdebt Financing without the
                                consent of the other Loan Parties. The Lenders
                                may also sell participations in their respective
                                loans under the Subdebt Financing without the
                                consent of the other Loan Parties, provided that
                                such participants shall be limited to customary
                                voting rights.

FEES & EXPENSES:                Upon closing of the Transaction, the Borrower
                                shall be fully obligated to pay, and shall
                                immediately, reimburse the Lenders for all their
                                out-of-pocket expenses incurred in connection
                                with the Transaction and pay the Lenders a fee
                                of 3% of the Subdebt Financing.



                                       7

EX-99.(B)(3)

                                                                  EXHIBIT (b)(3)

                           DB CAPITAL INVESTORS, L.P.
                              31 WEST 52ND STREET
                                   26TH FLOOR
                            NEW YORK, NEW YORK 10019

                           SUB DEBT COMMITMENT LETTER

January 27, 2002


J Holdings Corp.
J Acquisition Corp.
ACI Capital Co., Inc.

c/o ACI Capital Co., Inc.
900 Third Avenue
26th Floor
New York, New York  10022

Ladies and Gentlemen:

We are pleased to confirm the arrangements under which DB Capital Investors,
L.P. ("DBCI") is committed to provide subordinated debt in connection with the
transactions described herein in the amount, on the terms and subject to the
conditions set forth in this letter (together, the "COMMITMENT LETTER") and the
Fee Letter (as defined below).

We understand that J Holdings Corp., a Delaware company ("PARENT", which is a
newly formed, wholly owned subsidiary of ACI Capital Co., Inc. ("ACI")), and J
Acquisition Corp., a Delaware company and a wholly owned subsidiary of Parent
("PURCHASER"), will sign, concurrently herewith, a merger agreement, dated the
date hereof, and in the form attached hereto as EXHIBIT A (along with any other
agreements or documents entered into in connection therewith or delivered
pursuant thereto, the "ACQUISITION AGREEMENT") to acquire (the "ACQUISITION")
all of the issued and outstanding common stock of Jenny Craig, Inc., a Delaware
corporation (the "COMPANY"). In addition, in connection with the Acquisition,
Parent, Purchaser, Sidney Craig, Jenny Craig, SJF Enterprises, Inc., DA
Holdings, Inc., Craig Enterprises, Inc. and the Company will enter into a
Stockholders' Voting Agreement, dated the date hereof and substantially in the
form attached hereto as EXHIBIT B (along with any other agreements or documents
entered into in connection therewith or delivered pursuant thereto, the "VOTING
AGREEMENT"). We have confirmed that the total purchase price and financing
requirements (including equity financing being



provided by ACI, Company stockholders and management) for the Acquisition will
be financed as set forth on EXHIBIT C hereto (the "FINANCINGS").

1.      Commitment. DBCI is pleased to confirm its commitment (the "COMMITMENT")
to participate in Purchaser's Junior Subordinated Debt Financing (the "SUBDEBT
Financing") in an aggregate principal amount of $15 million, on the terms and
subject to the conditions contained in this Commitment Letter and in the outline
of terms and conditions attached hereto as Exhibit D (the "TERM SHEET"). The
obligations of Purchaser under the Subdebt Financing will be secured by a second
priority lien on, and security interest in, substantially all assets of
Purchaser (it being understood that the Company will become the borrower under
the Subdebt Financing upon consummation of the Acquisition), Parent and all
domestic subsidiaries of Purchaser, in each case subject to such exclusions as
both of ACI and DBCI (in their sole and absolute discretion) may agree. DBCI's
Commitment is subject, in its discretion, to the conditions set forth in this
Commitment Letter and the Term Sheet and to the negotiation, execution and
delivery of definitive documentation evidencing the Financings (along with any
other agreements or documents entered into in connection therewith or delivered
pursuant thereto, the "FINANCING AGREEMENTS"), satisfactory to DBCI and its
counsel and the satisfaction of the terms, conditions and covenants contained
therein.

2.      Fees and Expenses. The fees for these services, among others, are to be
set forth in a separate letter (the "FEE LETTER"), to be entered into prior to
the closing of the Acquisition by and among ACI, DBCI, Parent and Purchaser.

3.      Conditions Precedent. DBCI's obligations hereunder are conditioned on
the following:

a.      The transactions contemplated by the Acquisition Agreement and the
        Voting Agreement shall have been consummated concurrently with, or shall
        be ready for consummation immediately after, DBCI's debt financing
        hereunder on the terms and conditions set forth in such agreements
        without modification, amendment or waiver, except as previously
        consented to in writing by DBCI. All conditions precedent to the
        obligations of Parent and Purchaser under such agreements (other than
        Section 6.3(c) of the Acquisition Agreement) shall have been satisfied
        without modification, amendment or waiver, except as previously
        consented to in writing by DBCI.

b.      The transactions contemplated by the Financing Agreements shall have
        been consummated prior to or concurrently with DBCI's debt financing
        hereunder in accordance with their terms, without modification,
        amendment or waiver, except as previously consented to in writing by
        DBCI. All conditions precedent to the obligations of the lenders or
        investors under the Financing Agreements shall have been satisfied,
        other than any conditions relating to the debt capital contemplated by
        this letter, the equity capital commitment letters from SJF Enterprises,
        Inc., ACI and DBCI and the junior subordinated debt commitment letter
        from ACI, each of even date herewith.


                                       2



c.      ACI, Parent and Purchaser shall have complied with their obligations
        hereunder.

4.      Covenants. DBCI, ACI, Parent and Purchaser agree as follows:

a.      DBCI shall, and shall be permitted to, consummate the investment
        contemplated by the Commitment in accordance with the terms hereof.

b.      Parent and Purchaser shall, and ACI shall cause them to, consummate the
        transactions contemplated by the Acquisition Agreement and the Voting
        Agreement and satisfy their obligations thereunder, without amendment,
        modification or waiver except as previously consented to in writing by
        DBCI.

c.      ACI, Parent and Purchaser shall, and ACI shall cause Parent and
        Purchaser to, consummate the transactions contemplated by the Financing
        Agreements without amendment, modification or waiver, except as
        previously consented to in writing by DBCI. Without limiting the
        generality of the foregoing, there shall be no equity, debt or other
        financing of any type other than as set forth on EXHIBIT C hereto,
        without the prior written consent of DBCI.

d.      Parent and Purchaser shall, and ACI shall cause them to, to the extent
        commercially reasonable, enforce their respective rights and the
        obligations of the Company and other parties to the Acquisition
        Agreement or Voting Agreement (such other parties to the Voting
        Agreement, the "JC PARTIES"), including any rights to compensation or
        payments of any kind from any of the Company or the JC Parties whether
        or not the Acquisition is consummated, whether in respect of damages for
        breach, payments of termination fees, payments of expenses, gains owing
        under the Voting Agreement or otherwise.

e.      ACI, Parent and Purchaser shall promptly keep DBCI informed of, consult
        and confer with DBCI on all matters relating to the Acquisition,
        Acquisition Agreement, Voting Agreement, Financing and Financing
        Agreements and any discussions, communications or negotiations by and
        between ACI, Parent and Purchaser on the one hand and any of the Company
        or the JC Parties on the other hand in respect thereof. Such obligation
        shall include provision of copies of material correspondence, documents
        and other information and adequate notice and opportunity to attend
        conferences and meetings in respect thereof. In addition ACI, Parent and
        Purchaser shall apprise DBCI of, and consult with DBCI concerning all
        actions they may take or consider pursuant to or as contemplated by the
        Acquisition Agreement, Voting Agreement and Financing Agreements
        including exercise of rights thereunder regarding termination,
        information, further assurances, covenants, conditions, rights upon
        breach, enforcement of nonsolicitation and other rights.

f.      Without limiting DBCI's other rights in this Commitment Letter, in the
        event that an alternate bidder for the Company emerges or for some other
        reason an altered or improved bid for the Company is necessary or
        contemplated, DBCI will be


                                       3



        given the opportunity, but will not be obligated, to participate in any
        transactions contemplated in order to improve the terms of the
        Acquisition Agreement or make an alternative offer for the Company on
        the same percentage basis relative to ACI as the percentage resulting
        from dividing DBCI's original commitment to purchase debt and equity
        capital in Parent hereunder by ACI's original commitment to purchase
        debt and equity capital in Parent.

5.      Acknowledgment. Each of ACI and DBCI has, independently and without
reliance on the other party, based on such information and due diligence it has
conducted as it has deemed appropriate, made its own analysis and decision to
enter into its commitment to invest in Parent and to enter into the other
documents and transactions contemplated by the Acquisition and the Acquisition
Agreement. Each of ACI and DBCI will independently and without reliance upon the
other party, continue to make its own decisions and to conduct its own due
diligence with respect to the operation of the Company and the matters,
transactions and any related agreements contemplated by the Acquisition and the
Acquisition Agreement. ACI represents and warrants that it has made available to
DBCI all the due diligence materials which ACI has received from the Company.

6.      Confidentiality. Please note that this Commitment Letter, the Fee
Letter, the transactions contemplated hereby and any written or oral information
provided by DBCI in connection with this arrangement is exclusively for the
information of ACI, Parent, Purchaser and the Company and may not be disclosed
to any other party or circulated or referred to publicly without DBCI's prior
written consent, except that you may disclose such information to your and the
Company's officers, directors, agents and advisors who are directly involved in
the consideration of the transactions contemplated hereby to the extent such
persons are obligated to hold such advice in confidence or if otherwise required
by law or in the event such information or documents are made public through no
fault of ACI, Parent or Purchaser.

7.      Assignment. None of DBCI, ACI, Parent or Purchaser may assign any of
their respective rights or be relieved of any of their respective obligations
hereunder without the prior written consent of the other parties hereto.

8.      Termination. The Commitment will terminate upon the first to occur of
(i) the closing of the Acquisition, (ii) the abandonment or termination of the
Acquisition Agreement, (iii) a material breach by ACI, Parent or Purchaser under
this Commitment Letter or the Fee Letter, provided, however, that DBCI shall
notify ACI in writing of such breach, whereupon ACI shall have a commercially
reasonable period of time (not to exceed twenty (20) calendar days) after ACI's
receipt of such notice to cure such breach or (iv) the Expiration Date (as
defined in the Acquisition Agreement), as may be extended in accordance with the
terms of the Acquisition Agreement.


                                       4



Please confirm that the foregoing is in accordance with your understanding by
signing and returning to DBCI the enclosed copy of this Commitment Letter on or
before the close of business on the date hereof, whereupon this Commitment
Letter shall become a binding agreement among us.

Very truly yours,

DB CAPITAL INVESTORS, L.P.

By: /s/ ROBERT SHARP
    ---------------------------
    Authorized Signatory

                                            Confirmed as of the date above:



                                            ACI CAPITAL CO., INC.

                                            By: /s/ KEVIN S. PENN
                                                ------------------------------
                                                Name: Kevin S. Penn
                                                Title: Managing Director

                                            Confirmed as of the date above:



                                            J HOLDINGS CORP.

                                            By: /s/ KEVIN S. PENN
                                                ------------------------------
                                                Name: Kevin S. Penn
                                                Title: President


                                       5



                                            Confirmed as of the date above:



                                            J ACQUISITION CORP.

                                            By: /s/ KEVIN S. PENN
                                                -----------------------------
                                                Name: Kevin S. Penn
                                                Title: President


                                       6



                                    EXHIBIT D

         OUTLINE OF TERMS AND CONDITIONS FOR PROPOSED SUBDEBT FINANCING

This Outline of Terms and Conditions is part of the Sub Debt Commitment Letter,
dated January 27, 2002 (the "Commitment Letter"), addressed to J Holdings Corp.,
J Acquisition Corp. and ACI Capital Co., Inc. ("ACI") by DB Capital Investors,
L.P. (together with the other lenders party to the definitive Subdebt Financing
agreement, the "Lenders") and is subject to the terms and conditions of the
Commitment Letter. Capitalized terms used herein shall have the meanings set
forth in the Commitment Letter unless otherwise defined herein.

BORROWER:                        J Acquisition Corp. Upon consummation of the
                                 Acquisition, Jenny Craig, Inc. and certain of
                                 its subsidiaries, as required by the Lenders
                                 (collectively the "Borrower").

GUARANTORS:                      All domestic subsidiaries of the Borrower that
                                 are not included in the "Borrower," as required
                                 by the Lenders (together with the Borrower,
                                 each a "Loan Party" and collectively, the "Loan
                                 Parties").

LENDERS:                         The Lenders or their respective affiliates
                                 thereof, to be designated at closing.

FINANCING FACILITY:              Junior Subordinated Debt Financing of up to $24
                                 million (the "Subdebt Financing"). The Subdebt
                                 Financing will be funded in a single draw on
                                 the Closing Date (as defined below) and will be
                                 structured as a term loan which may not, once
                                 repaid, be drawn upon again.

                                 ACI will fund $9 million of the Subdebt
                                 Financing and DB Capital Investors, L.P. will
                                 fund $15 million thereof.

TERM:                            The Subdebt Financing will have a term of five
                                 (5) years (the "Maturity Date").

AMORTIZATION:                    The Subdebt Financing will be payable in full
                                 on the Maturity Date.

MANDATORY
AND OPTIONAL PREPAYMENT:         Customary mandatory prepayments to be included
                                 in definitive loan documentation (e.g.,
                                 issuance of equity, debt, sale of assets, tax
                                 refunds, casualty events, etc.). Optional
                                 prepayments on the Subdebt Financing will be
                                 permitted in whole or in part, and from time to
                                 time. Prepayments will be subject to a one-year
                                 interest penalty in the first three years
                                 following the closing of the Acquisition; a
                                 half-year interest penalty in the fourth year
                                 following the closing of the Acquisition; and
                                 no prepayment penalty in the fifth year
                                 following the closing of the Acquisition. Such
                                 penalties will be computed based on the
                                 interest rate in effect at the time of the
                                 prepayment.

CLOSING DATE:                    On or prior to the closing date of, and
                                 immediately prior to, the Acquisition (the
                                 "Closing Date").

COLLATERAL:                      All obligations of the Loan Parties to the
                                 Lenders shall be secured by a perfected, second
                                 priority lien on and security interest in
                                 substantially all of the now owned and
                                 hereafter acquired assets of the Loan Parties,
                                 including, but not limited to, accounts
                                 receivable, inventory, machinery and equipment,
                                 trademarks and tradenames, copyrights, patents
                                 and other intellectual property, general
                                 intangibles, chattel paper, all shares of all
                                 capital stock of domestic subsidiaries of the
                                 Borrower and 65% of the shares of capital stock


                                       1



                                 of all foreign subsidiaries of the Borrower,
                                 and all proceeds thereof, and such other
                                 assets, tangible or intangible, as may be
                                 required, in the Lenders' opinion, as security
                                 for the contemplated Subdebt Financing (the
                                 "Collateral"). All borrowings by the Borrower,
                                 all costs, fees and expenses of the Lenders and
                                 all other obligations owed to the Lenders shall
                                 be secured as described above and shall be
                                 charged to the loan account to be established
                                 under the Subdebt Financing.

INTEREST:                        The Subdebt Financing shall bear interest at a
                                 rate calculated in the same manner as the rate
                                 payable on the Ableco Term B loan (including,
                                 for the purposes of determining the rate
                                 payable on the Ableco Term B loan, the facility
                                 fee payable thereunder). If the Ableco Term
                                 Loan B is no longer outstanding, the rate on
                                 the Subdebt Financing shall continue to be the
                                 rate that would have been payable had such
                                 Ableco Term Loan B continued to be outstanding.
                                 The interest shall be payable quarterly, and
                                 in-kind, in whole or in part, at the option of
                                 Borrower.

                                 All interest shall be computed on the basis of
                                 a year of 360 days for the actual days elapsed.
                                 If any Event of Default shall occur and be
                                 continuing, interest shall accrue at a rate per
                                 annum equal to 3% in excess of the prevailing
                                 rate.

WARRANTS:                        In connection with and consideration for the
                                 Subdebt Financing, the Lenders shall be issued
                                 warrants (the "Warrants") to acquire 15% of the
                                 common equity of Parent on a fully diluted
                                 basis, at an exercise price per share equal to
                                 the price per share of the Parent's common
                                 stock. The Warrants shall be allocated to the
                                 Lenders ratably to their capital contributions
                                 to the Subdebt Financing.

FEES:                            Closing Fee equal to 3% of the Subdebt
                                 Financing.

USE OF PROCEEDS:                 The Loans under the Subdebt Financing will be
                                 used solely (i) to consummate the Acquisition,
                                 (ii) for the general working capital
                                 requirements of the Borrower and (iii) to pay
                                 fees and expenses related to the Subdebt
                                 Financing.

CONDITIONS
PRECEDENT:                       The obligation of the Lenders to fund the
                                 Subdebt Financing on the Closing Date will be
                                 subject to customary conditions precedent
                                 including, without limitation, the following:


                                       2



                                        (a)     Execution and delivery of
                                                appropriate legal
                                                documentation in form and
                                                substance satisfactory to and
                                                as required by the Lenders and
                                                their respective counsel
                                                (including, without
                                                limitation, the Subdebt
                                                Financing agreement, the
                                                security and pledge
                                                agreements, the mortgages and
                                                title insurance policies, the
                                                guaranties, the landlord
                                                waivers, other collateral
                                                access agreements, and the
                                                satisfaction of the conditions
                                                precedent contained therein).

                                        (b)     Satisfaction of all conditions
                                                precedent to Parent's and
                                                Purchaser's obligations to
                                                close under the Acquisition
                                                Agreement (other than the
                                                conditions set forth in
                                                Section 6.3(c) of the
                                                Acquisition Agreement;
                                                provided, however, that all
                                                conditions precedent to the
                                                obligation of the Senior
                                                Lender (as defined in the
                                                Acquisition Agreement) to
                                                consummate the Senior
                                                Financing (as defined in the
                                                Acquisition Agreement) have
                                                been met and the Senior Lender
                                                shall intend to and shall be
                                                willing and prepared to
                                                consummate the Senior
                                                Financing, in each case other
                                                than with respect to any
                                                conditions relating to the
                                                debt capital investment
                                                contemplated by the Commitment
                                                Letter, the debt capital
                                                commitment letter of ACI of
                                                even date herewith, or the
                                                equity capital commitment
                                                letter of SJF Enterprises,
                                                Inc., of even date herewith).

                                        (c)     The Lenders shall have been
                                                granted a perfected, second
                                                priority lien on all
                                                Collateral, and shall have
                                                received UCC, tax and judgment
                                                lien searches and other
                                                appropriate evidence
                                                (including title reports and
                                                surveys relating to all owned
                                                real property comprising
                                                Collateral), evidencing the
                                                absence of any other liens on
                                                the Collateral, except
                                                existing liens acceptable to
                                                the Lenders and the lien
                                                securing the senior debt
                                                financing described in Section
                                                4.5(a) of the Acquisition
                                                Agreement (the "Senior
                                                Financing.")

                                        (d)     Opinions from the Loan
                                                Parties' counsel as to such
                                                matters as the Lenders and the
                                                respective counsel to the
                                                Lenders may reasonably
                                                request.

REPRESENTATIONS
AND WARRANTIES:                  Bring-down of representations and warranties in
                                 the Acquisition Agreement, plus authority to
                                 enter into Subdebt Financing documentation,
                                 non-violation of other agreements, and
                                 enforceability and priority of the Lenders'
                                 liens.

COVENANTS:                       Usual covenants, including, but not limited to,
                                 provision of financial statements, notices of
                                 litigation, defaults and unmatured defaults and
                                 other information, compliance with pension,
                                 environmental and other laws, inspection of
                                 properties, books and records, maintenance of
                                 insurance, limitations with respect to liens
                                 and encumbrances, dividends and retirement of
                                 capital stock, guarantees, sale and lease back
                                 transactions, consolidations and mergers,
                                 investments, capital expenditures, loans and
                                 advances, indebtedness, operating leases,
                                 transactions with affiliates, prepayment of
                                 other indebtedness and amendments to material
                                 agreements.

                                 The loan documentation will contain the same
                                 financial covenants as those contained in the
                                 Senior Financing loan documents.


                                       3



'                                 Financial reporting to include: (i) annual,
                                 audited financial statements, (ii) quarterly,
                                 internally prepared, financial statements,
                                 (iii) monthly, internally prepared, financial
                                 statements, (iv) annual projections, including
                                 monthly balance sheet, profit and loss and cash
                                 flow figures, and (v) other reporting as
                                 required by the Lenders.

EVENTS OF DEFAULT:               Usual events of default, including, but not
                                 limited to, payment, cross-default, violation
                                 of covenants, breach of representations or
                                 warranties, bankruptcy or insolvency, judgment,
                                 ERISA, environmental and change of control;
                                 provided, that so long as the Borrower has
                                 outstanding indebtedness under the Senior
                                 Financing and to the extent the Subdebt
                                 Financing is held by the original Lenders (or
                                 their respective affiliates), the only events
                                 of default that will permit the Lenders to
                                 exercise their rights to accelerate the
                                 maturity of the Subdebt Financing or foreclose
                                 on any security will be bankruptcy and
                                 insolvency and an event of default under the
                                 Senior Financing pursuant to which the Senior
                                 Lender accelerates and forecloses on the
                                 security.

GOVERNING LAW:                   All documentation in connection with the
                                 Subdebt Financing shall be governed by the laws
                                 of the State of New York.

ASSIGNMENTS,
PARTICIPATIONS:                  The Lenders may sell or assign their respective
                                 loans under the Subdebt Financing without the
                                 consent of the other Loan Parties. The Lenders
                                 may also sell participations in their
                                 respective loans under the Subdebt Financing
                                 without the consent of the other Loan Parties,
                                 provided that such participants shall be
                                 limited to customary voting rights.

FEES & EXPENSES:                 Upon closing of the Acquisition, the Borrower
                                 shall be fully obligated to pay, and shall
                                 immediately, reimburse the Lenders for all
                                 their out-of-pocket expenses incurred in
                                 connection with the Acquisition and pay the
                                 Lenders a fee of 3% of the Subdebt Financing.


                                       4

EX-99.(C)(2)

                                                                  Exhibit (c)(2)

                                                              [JENNY CRAIG LOGO]

JENNY CRAIG, INC.


PRESENTATION TO THE INDEPENDENT COMMITTEE
OF THE BOARD OF DIRECTORS

January 25, 2002

HOULIHAN LOKEY HOWARD & ZUKIN
Financial Advisors
1930 Century Park West
Los Angeles, California 90067
(310) 553-8871  -  http://www.hlhz.com
Los Angeles  -  New York  -  Chicago  -  San Francisco
Washington, D.C.  -  Minneapolis  -  Dallas  -  Atlanta  -  Toronto




                                                              [JENNY CRAIG LOGO]

TABLE OF CONTENTS



                                                                            SECTION
                                                                            -------
                                                                         
Engagement Overview ...................................................        A

Due Diligence .........................................................        B

Company Overview and Other Information ................................        C

Summary Conclusions ...................................................        D

Valuation Considerations and Issues ...................................        E

Auction Overview and the Purchasers' Offer ............................        F

Fairness/Valuation Analysis ...........................................        G

Appendices

       Comparable Company Descriptions ................................        1
       Comparable Company Financial Information .......................        2
       Selected Comparable Transactions ...............................        3
       Net Operating Loss Analysis ....................................        4
       Termination Fee Study ..........................................        5
       LBO Model ......................................................        6
       Valuation Summary ..............................................        7




                              Houlihan Lokey Howard & Zukin Financial Advisors i



ENGAGEMENT OVERVIEW




                                                              [JENNY CRAIG LOGO]

ENGAGEMENT OVERVIEW

ENGAGEMENT OVERVIEW

OVERVIEW OF TRANSACTION

- -       We understand that the Board of Directors (the "Board") of Jenny Craig,
        Inc. (the "Company" hereinafter) has received a proposal from a newly
        formed company controlled by ACI Capital ("ACI") and DB Capital Partners
        LP (collectively, the "Purchasers") pursuant to which the Purchasers
        will acquire all of the outstanding shares of the Company at
        $5.30/share, except for certain shares held by Sid and Jenny Craig
        (collectively, the "Craigs");

- -       We further understand that in connection with such transaction, the
        Craig's will rollover certain shares in the Company into certain equity
        securities (representing approximately 20 percent interest in the newly
        formed company);

- -       The Craig's currently own approximately 69 percent of the Company's
        common stock;

- -       The Purchasers' acquisition of the Company's stock, the Craig's equity
        rollover, and other related transactions disclosed to Houlihan Lokey are
        collectively referred to herein as the "Transaction";

- -       We understand that the Board of Directors of the Company has formed the
        Independent Committee of the Board of Directors (the "Committee") to
        consider certain matters regarding the Transaction;

ROLE OF HOULIHAN LOKEY

- -       The Committee has requested that Houlihan Lokey render an opinion (the
        "Opinion") as to the fairness, from a financial point of view, to the
        public stockholders of the Company of the consideration to be received
        by them in connection with the Transaction.

- -       The Opinion shall not address the Company's underlying business decision
        to effect the Transaction.

                              Houlihan Lokey Howard & Zukin Financial Advisors 1




DUE DILIGENCE




                                                              [JENNY CRAIG LOGO]

DUE DILIGENCE

In connection with this Opinion, we have made such reviews, analyses and
inquiries as we have deemed necessary and appropriate under the circumstances.
Among other things, we have:

        1.      reviewed the Company's annual reports on Form 10-K for the five
                fiscal years ended June 30, 2001 and quarterly report on Form
                10-Q for the quarter ended September 30, 2001, and
                Company-prepared interim financial statements for the 5-months
                ended November 30, 2001, which the Company's management has
                identified as being the most current financial statements
                available;

        2.      met with certain members of the senior management of the Company
                to discuss the operations, financial condition, future prospects
                and projected operations and performance of the Company, and met
                with representatives of Koffler & Company ("Koffler"), the
                Company's investment bankers, to discuss certain matters;

        3.      visited the business offices of the Company in La Jolla,
                California;

        4.      reviewed the Company's Confidential Information Memorandum dated
                Summer 2001 and other information and correspondence provided to
                potential investors in connection with the proposed sale of the
                Company;

        5.      reviewed forecasts and projections prepared by the Company's
                management with respect to the Company for the years ended June
                30, 2002 and 2003;

        6.      reviewed the historical market prices and trading volume for the
                Company's publicly traded securities, and reviewed
                publicly-available analyst reports, news articles, and press
                releases relating to the Company;

        7.      reviewed certain information, including a summary of offers
                received, in connection with the proposed sale of the Company,
                prepared by Koffler;

        8.      reviewed the latest available draft of the Stock Purchase
                Agreement regarding to the Transaction;

        9.      reviewed certain other publicly available financial data for
                certain companies that we deem comparable to the Company, and
                publicly available prices and premiums paid in other
                transactions that we considered similar to the Transaction; and

        10.     conducted such other studies, analyses and inquiries as we have
                deemed appropriate.

                              Houlihan Lokey Howard & Zukin Financial Advisors 3




COMPANY OVERVIEW AND OTHER INFORMATION



                                                              [JENNY CRAIG LOGO]

COMPANY OVERVIEW AND OTHER INFORMATION

COMPANY OVERVIEW AND OTHER INFORMATION

- -       The Company provides a comprehensive weight management program through a
        chain of 654 Company-owned and franchised weight loss centers;

- -       During the latest twelve months ended November 30, 2001, the Company
        reported revenues of $297 million;

- -       After several years of negative operating trends, the Company's
        prospects appear to be improving:

        -       U.S. Operations appear to be "turning the corner"

                -       Same-store sales growth in the 4th quarter of fiscal
                        year 2001 (year ended June 30, 2001),

                -       Improved marketing,

                -       Successful introduction of Ultimate Choice,

                -       Price increases implemented during the year,

                -       Ongoing "re-imaging" of the Company as more
                        service-oriented,

                -       CEO believes she has the right "management team" in
                        place.

        -       The Australian operations appear to have stabilized

                -       Operations are still cash flow positive, although
                        substantially below historical profitability levels,

                -       Several key management positions are still vacant.

        -       IN SPITE OF THE POSITIVE DEVELOPMENTS ABOVE, IT REMAINS UNCLEAR
                AS TO WHETHER SUCH RECENT RESULTS REFLECT A TRUE TURNAROUND OF
                THE BUSINESS OR JUST A SHORT-TERM ABERRATION.

                -       A KEY INDICATOR OF THIS POTENTIAL TURNAROUND WILL BE THE
                        COMPANY'S PERFORMANCE IN THE THIRD QUARTER OF THE
                        CURRENT FISCAL YEAR (JANUARY THROUGH MARCH 2002).

                              Houlihan Lokey Howard & Zukin Financial Advisors 5



                                                              [JENNY CRAIG LOGO]


COMPANY OVERVIEW AND OTHER INFORMATION

- -       Stock price performance

        -       The Company's stock price dropped immediately in August 2000
                after the announcement that the $3.75/share buyout offer was
                withdrawn by Craig.

        -       Subsequently, the stock price has generally traded at or below
                approximately $2.00 per share.(1)

        -       In May 2001, the Company disclosed the hiring of Koffler to
                explore alternatives to maximize shareholder value, including
                the possible sale of the Company.

        -       Stock was delisted from the NYSE in August 2001 and is currently
                traded in the OTC market.

        -       Current stock price appears to significantly under-value the
                Company's core operations.

- -       Other Information

        -       A substantial portion of the litigation judgment relating to the
                lease of the Company's former headquarters was reversed in
                October 2001.

        -       The sale of the Company's headquarters was completed in July
                2001, providing net proceeds of $15 million,

        -       The Company's primary shareholders (Sid and Jenny Craig), both
                nearing 70 years of age, are seeking to diversify their personal
                holding as they approach retirement.

- ----------
(1) The Company's stock price recently "spiked" to approximately $3/share in the
absence of any apparent significant announcement or market event.

                              Houlihan Lokey Howard & Zukin Financial Advisors 6



                                                              [JENNY CRAIG LOGO]

COMPANY OVERVIEW AND OTHER INFORMATION

PRICE/VOLUME CHART





                           [DAILY PRICE/VOLUME GRAPH]





                      Houlihan Lokey Howard & Zukin Financial Advisors         7



                                                              [JENNY CRAIG LOGO]

COMPANY OVERVIEW AND OTHER INFORMATION

DAILY STOCK PRICE AND TRADING VOLUME BASED ON CLOSING PRICES FROM 01/24/01 TO
01/24/02

                               SUMMARY STATISTICS

                                                               
Closing Price on 01/24/02 (pre-Announcement)                      $3.00
High Closing Price                                                $3.12
Low Closing Price                                                 $1.01
Average Closing Price                                             $1.85
Median Closing Price                                              $1.69
Total Volume                                                  4,760,100
Average Daily Trading Volume                                     19,670

Source: Factset




                              Houlihan Lokey Howard & Zukin Financial Advisors 8



                                                              [JENNY CRAIG LOGO]

COMPANY OVERVIEW AND OTHER INFORMATION

ANALYSIS OF TRADING VOLUME BASED ON CLOSING PRICES FROM 01/24/01 TO 01/24/02

               PERCENT OF VOLUME WHICH TRADED IN STOCK PRICE RANGE


                                    [GRAPH]


             PERCENT OF VOLUME WHICH TRADED AT OR BELOW STOCK PRICE


                                    [GRAPH]


                              Houlihan Lokey Howard & Zukin Financial Advisors 9




                                                              [JENNY CRAIG LOGO]

COMPANY OVERVIEW AND OTHER INFORMATION

MAJOR SHAREHOLDERS(1)



INVESTOR                                         COMMON SHARES          % OF TOTAL
- --------                                         -------------          ----------
                                                                  
Institutional Investors:
 Dimensional Fund                                    1,224,700                5.9%
 Yacktman Asset                                        580,000                2.8%
 Vanguard Group                                        203,800                1.0%
 Loeb Arbitrage                                         50,200                0.2%
                                                    ----------              -----
Total Institutions                                   2,058,700               10.0%

Sidney and Jenny Craig                              14,212,500               68.7%
Other Directors and Insiders                           672,330                3.2%
Total Insiders                                      14,884,830               71.9%

Other Public Stock Holders                           3,745,441               18.1%
                                                    ----------              -----

Basic Shares(2)                                     20,688,971              100.0%



(1)     Source: Bloomberg and Jenny Craig Definitive Proxy Statement dated
        10/11/01.

(2)     Total shares outstanding as of November 12, 2001 per Jenny Craig's 10-Q
        dated 11/14/01.

                                  [PIE CHART]

                                                                          
Other Public Stockholders                                                    18%

Total Institutions                                                           10%

Other Directors and Insiders                                                  3%

Sidney and Jenny Craig                                                       69%





                             Houlihan Lokey Howard & Zukin Financial Advisors 10



SUMMARY CONCLUSIONS




                                                              [JENNY CRAIG LOGO]

SUMMARY CONCLUSIONS

                                JENNY CRAIG, INC.
                          SUMMARY VALUATION CONCLUSIONS

                           [VALUATION APPROACH GRAPH]

   THE $5.30/SHARE OFFER FROM THE PURCHASERS IS GENERALLY ABOVE THE INDICATED
VALUATION CONCLUSIONS AND, THEREFORE, APPEARS TO BE FAIR, FROM A FINANCIAL POINT
                                    OF VIEW.

                             Houlihan Lokey Howard & Zukin Financial Advisors 12




VALUATION CONSIDERATIONS AND ISSUES




                                                              [JENNY CRAIG LOGO]

VALUATION CONSIDERATIONS AND ISSUES

VALUATION CONSIDERATIONS AND ISSUES

- -       Very Comprehensive Auction Process Performed

        -       Process publicly announced,

        -       Provides convincing indication of fair market value across
                numerous offers,

        -       The Company has achieved its projected financial results through
                November 2001; as a result, the latest twelve months EBITDA
                through November 2001 is substantially higher than the results
                through September 2001 (when final LOI's were received).

- -       Prior Offers for the Company

        -       Offer to purchase common stock for $3.75/share by Craig received
                in June 2000;

                -       Craig indicated they were not interested in selling
                        their shares, effectively excluding other prospective
                        buyers,

                -       Offer subsequently withdrawn in August 2000.

- -       Public Stock Price

        -       Lack of significant trading volume,

        -       Lack of Wall Street coverage,

        -       Significant "overhang" of Craig and institutional
                shareholders.

                             Houlihan Lokey Howard & Zukin Financial Advisors 14



                                                              [JENNY CRAIG LOGO]

VALUATION CONSIDERATIONS AND ISSUES

- -       Market Comparable Approach

        -       Lack of comparable public companies and transactions,

        -       Weight Watchers, while targeting same market/customer, has
                radically different business model than the Company.

- -       Discounted Cash Flow Approach

        -       Variability in historical operating results,

        -       "Credibility" of 2002E forecast,

                -       Projected results relative to historical operating
                        performance,

                -       Inability of management to accurately forecast operating
                        results historically,

                -       The Company exceeded its FY 2001 projection,

                -       The Company's operations are currently trending upwards,
                        after a period of substantial declines.

                             Houlihan Lokey Howard & Zukin Financial Advisors 15




                                      AUCTION PROCESS AND THE PURCHASERS' OFFER




                                                              [JENNY CRAIG LOGO]

AUCTION PROCESS AND THE PURCHASERS' OFFER

AUCTION PROCESS

- -       The Company retained Koffler & Co. in May 2001 to explore strategic
        alternatives, including a potential sale of the Company;

- -       Auction process appears to have been very thorough;

        -       Over 300 potential investors, including both strategic and
                financial buyers, were contacted in connection with the sale
                process,

        -       No restrictions placed on process by Sid & Jenny Craig nor the
                Company's management,

        -       Potential sale of the Company was disclosed in various national
                media.

- -       Strong Response from Potential Investors;

        -       62 parties reviewed the Company's information memorandum,

        -       18 preliminary indications of interest received,

        -       12 management presentations held,

        -       8 Final offers received in late October,

                -       Two additional rounds of "re-bidding" were held,

                -       Ultimately, 3 final bids ranged from $5.25/share to
                        $5.30/share.

        -       The Company has elected to proceed with the Purchasers.

                             Houlihan Lokey Howard & Zukin Financial Advisors 17



                                                              [JENNY CRAIG LOGO]

AUCTION PROCESS AND THE PURCHASERS' OFFER

THE PURCHASERS' OFFER

- -       Highlights of Purchasers' Offer

        -       $5.30/share cash to all shareholders,

        -       Equity roll-over of $4 million (total) for the Craigs and other
                management,

        -       The Craig's will receive $600k annually for 5 years ($3 million
                in total) in connection with consulting/non- compete agreement.

- -       Rationale cited by the Company, Craig, and Koffler to proceed with the
        Purchasers:

        -       Valuation: $5.30/share offer at top of range

        -       Higher certainty of close

                -       Willingness to commit significantly more equity capital
                        (approximately $40 million)

                -       Commitment letters in place from senior lenders

                -       High degree of due diligence already completed

        -       Subsequent discussions with other finalists

                -       Koffler has held discussions with certain other
                        potential buyers that submitted bids in the final round,

                -       Such potential buyers were informed that the Company's
                        performance is "at or slightly above budget",

                -       No indications were made as to willingness to submit
                        revised bids.

                             Houlihan Lokey Howard & Zukin Financial Advisors 18



                                                              [JENNY CRAIG LOGO]

AUCTION PROCESS AND THE PURCHASERS' OFFER

ANALYSIS OF OFFER PRICE

PREMIUM ANALYSIS

                                                             
Deal Price                                                      $         5.30

Current Trading Price                                           $         3.00


Other Historical Price Information
20-day average                                                  $         3.01
90-day average                                                  $         2.74
6-month average                                                 $         2.28
1-year average                                                  $         1.80


PREMIUM
Current Trading Price                                                     76.7%
20-day average                                                            75.9%
90-day average                                                            93.4%
6-month average                                                          132.9%
1-year average                                                           194.2%


IMPLIED VALUATION MULTIPLES

 Fully-diluted Shares outstanding                                   22,189,971
 Offer Price                                                    $         5.30
Implied Equity before Option Proceeds                           $      117,607
Add:  Transaction-related Expenses                                       8,000
                                                                --------------
Subtotal                                                        $      125,607
 Less: Assumed Option Proceeds upon Exercise                             3,087
                                                                --------------
 IMPLIED EQUITY VALUE                                           $      122,520

 Adjustments to Arrive at Implied EV of Operations
 "Excess" Cash                                                         (40,000)
 Interest-bearing debt                                                   1,394
 NOL Value inherent in stock price                                      (2,744)
 IMPLIED ENTERPRISE VALUE - OPERATIONS                          $       81,170

Historical and Projected Operating Results

LTM Adjusted EBITDA                                             $       14,522
FY 2002E Adjusted EBITDA                                                24,472
                                                                --------------

LTM Revenues                                                           296,713
FY 2002E Revenues                                                      308,146

Implied Multiples

EV / LTM EBITDA                                                            5.6
EV / FY 2002E EBITDA                                                       3.3

EV / LTM Revenues                                                         0.27
EV / FY 2002E Revenues                                                    0.26




                             Houlihan Lokey Howard & Zukin Financial Advisors 19



                                                              [JENNY CRAIG LOGO]


AUCTION PROCESS AND THE PURCHASERS' OFFER

ANALYSIS OF THE BREAK-UP FEES AND RELATED ITEMS

- -       The Purchase Agreement calls for a break-up fee of $4.75 million in the
        event the Transaction is not consummated.

        -       This amount represents 4% of the total Transaction value
                (including the cash on-hand) and 6% of the enterprise value of
                the Company (i.e. (excluding cash).

        -       Houlihan Lokey conducted a study of disclosed termination (or
                break-up) fees in 144 publicly-announced M&A transactions in
                2000 (see appendix),

                -       For all 144 transactions in the study, termination fees
                        as a percentage of transaction value ranged from a low
                        0.7% to a high of 6.6% with a median of 2.9%,

                -       For transactions in the range of $50 million to $250
                        million (110 deals), the median termination fee was
                        3.3%.

        -       While at the top of the range, the termination fee provision in
                the Transaction does not seem unreasonable.

- -       In addition to the above termination fees, the Purchase Agreement
        provides for an "upside" sharing agreement between the Purchasers and
        the Craigs in the event a better purchase offer is received (and
        accepted) by the Company;

        -       Provision provides for the following "profit split":

                -       1(st) dollar above the current $5.30/share offer (i.e.
                        new offers between $5.31 to $6.30) will be split 50/50
                        with the Purchasers.

                -       Any amounts in excess of $6.30/share will be split 80/20
                        between Craig & the Purchasers.

        -       Although such fees could "dis-incentive" the Craig's from
                accepting a superior offer, this arrangement does not directly
                impact the Company's other shareholders.


                             Houlihan Lokey Howard & Zukin Financial Advisors 20



                                                              [JENNY CRAIG LOGO]

AUCTION PROCESS AND THE PURCHASERS' OFFER

ANALYSIS OF THE CRAIG'S EQUITY ROLL-OVER

- -       The current proposed deal structure calls for the Purchasers and other
        equity investors to acquire (i) $25 million of subordinated debt, (ii)
        $18 million of preferred stock, and (iii) $2 million of common stock in
        a "strip" on a pro-rata basis.

- -       The Purchasers' Offer requires the Craigs to roll-over approximately $4
        million of their cash proceeds received in the Transaction.

        -       The Craig's, at their option, elected to forego investment in
                the subordinated debt; rather, their entire $4 million roll-over
                will consist of preferred and common equity.

        -       To the extent that the subordinated debt is "over-priced" (i.e.
                projected returns are below market norms), the Craig's equity
                roll-over could represent "hidden value" conveyed in the
                Transaction at the expense of the Company's minority
                shareholders.

- -       The projected returns on the subordinated debt (in the range of 20% to
        25%)(1) appear to approximate market norms.

- ----------
(1) Based on review of the terms of the various securities, discussions with the
    Company and Koffler & Co., and certain financial assumptions.

                             Houlihan Lokey Howard & Zukin Financial Advisors 21



                                                              [JENNY CRAIG LOGO]

AUCTION PROCESS AND THE PURCHASERS' OFFER

ANALYSIS OF THE CRAIG'S NON-COMPETE/CONSULTING AGREEMENT

Selected Going-Private Transactions Identified Between 02/01/95 to 12/01/01

($ in Millions)



                                                                                                                       Individuals
                                                                      Deal        Aggregate    Percentage of             Bound by
  Date   Buyer                   Seller                          Consideration   Non-Compete   Consideration   Term     Agreement
  ----   -----                   ------                          -------------   -----------   -------------   ----    -----------
                                                                                                  
 7/15/01 Coca-Cola
         Amatil Ltd.             San Miguel Corp.                  $ 2,700         $116.00           4.3%     10 yrs.    Multiple
  6/4/01 American Capital
         Strategies Ltd.         Roy F. Weston, Inc.               $ 66.00         $  0.72           1.1%      3 yrs.     Two
 4/10/01 Vestar Capital
         and Goldner Hawn        Michael Foods, Inc.               $800.00          None             0.0%      2 yrs.     Multiple
         Johnson & Morrison
 11/5/99 Preferred Employers
         Holdings, Inc.          82% of Stockholders               $ 16.12          None             0.0%      1 yr.      Multiple
  2/1/99 Saratoga Beverage
         Group                   Fresh Juice Company               $ 19.80         $   1.21         6.12%      2 & 3 yrs. Two
 1/14/99 NNG                     Sahara                            $  6.80         $   0.15         2.21%      N/A        One
  6/9/98 Fresh Foods, Inc.       Tyson Foods, Inc. (Pierre Foods)  $129.00          None             0.0%      1 yr.      N/A
 5/19/98 Coffee People Inc.      The Coffee Plantation             $  8.20          None            0.00%      1.5 yrs.   Multiple
  1/5/98 Pacific Security
         Companies               Minority Shareholders             $  1.84         $   0.13          6.8%      5 yrs.     One
10/21/97 Integrated Health
         Services, Inc.          RoTech Medical Corporation        $514.75         $   5.00          1.0%      N/A        Multiple
 8/28/97 Vermont Pure Hldg       Excelsior Spring Water            $  3.32         $   0.21         6.24%      5 yrs.     One
  3/1/97 Fresh Foods, Inc.       14 Franchised Restaurants         $  3.77       98,750 shares       NA        15 yrs.    One
  5/2/96 BAB Holdings, Inc.      Bagels Unlimited Inc.             $  1.54         $   0.10         6.48%      6 yrs.     Two
 8/10/95 Triarc, Inc.            Mistic                            $ 98.32         $   3.00         3.05%      3 yrs.     N/A
  6/2/95 BAB Holdings, Inc.      Greenberg's L.P.                  $  2.00         $   0.13         6.25%      5 yrs.     N/A
  2/1/95 Odwalla, Inc.           J.S. Grants, Inc.                 $  2.48         $   0.89        35.89%      10 yrs.    Two

                                                                    HIGH                            6.80%      15 YRS.
                                                                    LOW                             0.97%      1 YRS.

                                                                    MEDIAN                          5.21%      4 YRS.
                                                                    MEAN                            4.35%      5 YRS.


NA ACI Capital                   Jenny Craig, Inc.                 $109.65         $   3.00         2.74%      5 years    Two

Excluded from Range


BASED UPON THE ABOVE ANALYSIS, THE VALUE OF THE CRAIG'S CONSULTING / NON-COMPETE
                    AGREEMENT DOES NOT APPEAR UNREASONABLE.

                             Houlihan Lokey Howard & Zukin Financial Advisors 22




                                                    FAIRNESS/VALUATION ANALYSIS




                                                              [JENNY CRAIG LOGO]

FAIRNESS/VALUATION ANALYSIS

VALUATION SUMMARY

($ in Thousands)



                                                          VALUATION CONCLUSIONS
                                                    ---------------------------------
                                                        Low                  High
                                                    ------------         ------------
                                                                   
Valuation Approach

     Implied Public Market Valuation                         NMF                  NMF
     Market Approach                                $     69,000         $     80,000
     Income Approach                                      66,000               81,000

CONCLUDED ENTERPRISE VALUE                          $     66,000         $     81,000

Excess Cash(1)                                            40,000               40,000

Interest-bearing Debt(2)                                  (1,394)              (1,394)

Value of Net Operating Loss Carryforwards(3)               2,744                2,744
                                                    ------------         ------------
AGGREGATE EQUITY VALUE                              $    107,350         $    119,606

Proceeds - "in the money" Options(4)                       3,087                3,087
ADJUSTED EQUITY VALUE                               $    110,437         $    122,693

Shares outstanding                                    20,688,971           20,688,971
Total "in the money" Options Outstanding               1,501,000            1,501,000
                                                    ------------         ------------

Fully Diluted Shares Outstanding                      22,189,971           22,189,971

INDICATED PRICE PER SHARE                           $       4.98         $       5.53(5)


                                   CONCLUSION

 Based upon the above analysis, the proposed Transaction at $5.30 per share is
                      fair to the Company's stockholders.

NMF Implied valuation not considered meaningful; therefore, indication excluded
from valuation conclusion.

(1)     Excess Cash estimated as follows:

                                                                     
        Cash on-hand as of December 31, 2001 (per Koffler & Co.)                $  50,000
        Less:  Cash required for working capital plus litigation liability         10,000 (per management)
                                                                                ---------
        Excess Cash                                                             $  40,000
                                                                                =========

        

(2)     Interest-bearing debt as of November 30, 2001 is comprised entirely of
        certain capital lease obligations.

(3)     Represents the estimated value of the Company's net operating loss
        carryforwards; see analysis attached in Appendix.

(4)     Represents approximately 1.5 million options outstanding with a
        weighted-average exercise price of $2.06/share.

(5)     In June 2000, Sid & Jenny Craig, the Company's primary shareholders,
        offered to purchase the remaining outstanding shares of the Company for
        $3.75/share. This offer was later withdrawn in August 2000.


                             Houlihan Lokey Howard & Zukin Financial Advisors 24




                                                              [JENNY CRAIG LOGO]

FAIRNESS/VALUATION ANALYSIS

IMPLIED PUBLIC MARKET VALUATION

($ in Thousands)



                                                                           Current         20 - Day         90 - Day
                                                                         Stock Price       Average          Average
                                                                         -----------       --------         --------
                                                                                                   
Fully-diluted Shares Outstanding (in 000's)                                 22,190           22,190           22,190
Price Per Share                                                           $ 3.0000         $ 3.0132         $ 2.7400
                                                                          --------         --------         --------
Total Equity Market Capitalization                                        $ 66,570         $ 66,863         $ 60,801

Adjustments to Equity Value to Determine Value of Core Operations:
Less: "Excess" Cash                                                       $(40,000)        $(40,000)        $(40,000)
Less: NOL Value Inherent in Stock Price(1)                                  (2,744)          (2,744)          (2,744)
Add:  Interest-bearing Debt                                                  1,394            1,394            1,394
                                                                          --------         --------         --------
Implied Enterprise Value (Operations)                                     $ 25,220         $ 25,513         $ 19,451
                                                                          --------         --------         --------



(1)  Represents the estimated value of the Company's net operating loss
     carryforwards; see analysis attached in Appendix.

                             Houlihan Lokey Howard & Zukin Financial Advisors 25



                                                              [JENNY CRAIG LOGO]

FAIRNESS/VALUATION ANALYSIS

MARKET APPROACH - SELECTION OF PUBLICLY-TRADED COMPARABLE COMPANIES

- -       Houlihan Lokey performed an extensive review of publicly available
        information and held discussions with the Company for the purpose of
        determining appropriate public companies (i.e. public companies of
        similar size, profitability, market capitalization, and line of
        business).

- -       Houlihan Lokey's search included both weight loss industry participants
        as well as food companies with controlled distribution.

- -       Based on our research, Houlihan Lokey considers the Company to have very
        unique business characteristics that are difficult to match with other
        publicly traded companies.

- -       Nonetheless, Houlihan Lokey selected 9 publicly traded providers of
        nutritional / weight-management products as comparable companies.

        -       Advantage Marketing Systems, Inc.

        -       Herbalife International, Inc.

        -       Nature's Sunshine Products, Inc.

        -       Usana Health Sciences, Inc.

        -       Weight Watchers International, Inc.

        -       Hain Celestial Group, Inc.

        -       Natrol, Inc.

        -       Reliv International, Inc.

        -       Weider Nutrition International, Inc.


                             Houlihan Lokey Howard & Zukin Financial Advisors 26



                                                              [JENNY CRAIG LOGO]

FAIRNESS/VALUATION ANALYSIS

MARKET APPROACH -  MARKET MULTIPLES OF COMPARABLE COMPANIES



                                                                    ENTERPRISE VALUE /
                                   ---------------------------------------------------------------------------------------
                                   LTM EBITDA         LTM EBIT          LTM REVENUE        NFY EBITDA        NFY +1 EBITDA
                                   ----------         --------          -----------        ----------        -------------
                                                                                              
ADVANTAGE MARKETING                    7.8              18.6               0.48                 NA                 NA
HAIN CELESTIAL                         NMF               NMF               1.92               11.1                9.3
HERBALIFE INTERNATIONAL                3.3               4.2               0.31                 NA                 NA
NATROL INC                             NMF               NMF               0.53                3.7                 NA
NATURES SUNSHINE                       5.9               7.5               0.58                4.2                 NA
RELIV INTERNATIONAL                    NMF               NMF               0.33                8.0                4.8
USANA HEALTH SCIENCES                  3.0               5.9               0.21                2.6                 NA
WEIDER NUTRITION                       6.6              14.2               0.36                 NA                 NA
WEIGHT WATCHERS                        6.6               7.1               2.26                 NA                 NA

MINIMUM                                3.0               4.2                0.2                2.6                4.8
MAXIMUM                                7.8              18.6                2.3               11.1                9.3

MEAN                                   5.5               9.6               0.78                5.9                7.0
MEDIAN                                 6.2               7.3               0.48                4.2                7.0


LTM   Latest twelve months
NFY   Next fiscal year
NMF   Multiple not considered meaningful; excluded from analysis.
 NA   Not Available

                             Houlihan Lokey Howard & Zukin Financial Advisors 27


                                                              [JENNY CRAIG LOGO]

FAIRNESS/VALUATION ANALYSIS

WEIGHT WATCHERS, INC. COMPARISON



                                              JENNY CRAIG, INC.                          WEIGHT WATCHERS INTERNATIONAL, INC.
                                              -----------------                          -----------------------------------
                                                                              
DESCRIPTION                   Company provides weight management program through    Leading provider of weight-loss services in 27
                              chain of Company-owned and franchised weight loss     countries worldwide. At core of the business are
                              centers. Through these centers, the Company sells     weekly meeting promoting weight loss through
                              JENNY CRAIG cuisine to participants in the            education and group support in conjunction with
                              program.                                              healthy diet. Meetings held in temporary rented
                                                                                    space.

                              Revenues are principally derived from the             Revenues are principally derived from the
                              following:                                            following:
                              Food sales: (93%) - food sales under the JENNY'S      Meeting Fees: (69%) weekly fee paid by members
                              CUISINE brand name                                    Product Sales: (23%) sale of propriety products
                              Service fees: fixed service fee paid by each          including snack bars, books, and CD-ROMs.
                              participant at commencement of program ($200-$300     Franchise Royalties: (6%) franchisees pay
                              each)                                                 approximately 10% of meeting fees

BUSINESS MODEL                Fixed cost, food company, with leases                 Variable cost, service company, without leases

ENTERPRISE VALUE              $17.7 million (implied public valuation)              $1.2 billion

LTM REVENUES                  $291 million                                          $541 million

LTM EBITDA                    $7.9 million (reported)                               $185 million

EBITDA %                      2.7%                                                  34%

EV / LTM EBITDA               2.2x                                                  6.5x

EMPLOYEES                     Over 3,500 worldwide                                  Approximately  800  employees  full-time; in
                                                                                    addition, company employs over 30,000 part-time
                                                                                    employees and/or commission based service
                                                                                    providers.

MEMBERSHIP                    89,000 participants worldwide (68,000 - U.S.,         Over 1 million worldwide; attending 37,000
                              21,000 - foreign markets).                            weekly Weight Watcher meetings

PROPERTIES / LOCATIONS        657 locations - principally throughout U.S. and       5 leased offices in North America and 26 other
                              Australia Company-owned - 544 (429 - U.S., 115 -      leased offices worldwide. Meetings are held in
                              Australia). All 544 locations are leased.             third party leased facilities such as shopping
                                                                                    malls and civic centers.

FRANCHISE OPERATIONS          111 franchise location in U.S. and foreign markets;   Represents approximately 33% of worldwide
                              contributed approximate 7.5% of total revenues.       attendance. No additional franchises are
                                                                                    anticipated in the future.

LICENSING                     Licensing agreement with Kraft Foods, Inc. for a      Name licensed to 3(rd) parties for sale of
                              "bar" and drink product. Other opportunities          books, apparel, and food products. Heinz,
                              currently being explored                              previous owner of the Company, receives
                                                                                    royalties of approximately $4 million
                                                                                    annually through 2004 associated with certain
                                                                                    food products. After 2004, such royalties
                                                                                    will be payable to the company.

MARKETING / PROMOTION         Highly marketing intensive; generally 10% of          Highly marketing intensive, generally 10%-15%
                              revenues spent on advertising.                        of revenues spent in marketing

BRAND NAME RECOGNITION        Jenny Craig has 99% brand awareness. Over $700        Most widely recommended weight loss program by
                              million in vested-to-date.                            U.S. doctors. Name recognized by 97% of women in
                                                                                    U.S.

MARKET POSITION                                                                     Market leader in weight-loss services in nearly
                                                                                    every country the company operates

STRATEGIC                     Initiatives New products (incl. Ultimate Choice),
                              re-imaging of brand Entering new markets (in
                              Europe), and increasing penetration in existing
                              markets and centers, & other changes to the Jenny
                              Craig program.

OTHER INFORMATION             Postured as the "personal trainer" of the weight      Discontinued sale of pre-packaged meals several
                              LOSS industry - high level of service.                years ago. Postured as a "cheap gym" - with low
                                                                                    service yet inexpensive.


                             Houlihan Lokey Howard & Zukin Financial Advisors 28









































































                                                              [JENNY CRAIG LOGO]

FAIRNESS/VALUATION ANALYSIS

MARKET APPROACH SUMMARY

($ in Thousands)



                                                               Rep               Selected Multiple              Enterprise Value
                                                              Level            Low              High          Low             High
                                                                                                             
BASED ON LATEST TWELVE MONTHS ENDED 11/30/01 RESULTS
EV / EBITDA                                                 $ 14,522           4.5               5.5        $ 65,349        $ 79,871
EV / EBIT                                                      8,700           7.0               9.0          60,900          78,300
EV / Revenue                                                 296,713          0.20              0.25          59,343          74,178

PROJECTED FY 2002E RESULTS
EV / EBITDA                                                 $ 24,472           3.0               3.5        $ 73,416        $ 85,652
EV / EBIT                                                     19,581           3.5               4.0          68,534          78,324

PROJECTED FY 2003E RESULTS
EV / EBITDA                                                 $ 29,360           2.5               3.0        $ 73,400        $ 88,080
EV / EBIT                                                     24,060           3.0               3.5          72,180          84,210

CONCLUDED ENTERPRISE VALUE                                                                                  $ 69,000        $ 80,000



                             Houlihan Lokey Howard & Zukin Financial Advisors 29



                                                              [JENNY CRAIG LOGO]

FAIRNESS/VALUATION ANALYSIS

DETERMINATION OF REPRESENTATIVE LEVELS OF EARNINGS

($ in Thousands)



                                                            ACTUAL RESULTS - YEAR ENDED
                                               -----------------------------------------------------        LTM            EST.
                                                JUNE 98       JUNE 99        JUNE 00        JUNE 01        NOV 01         JUNE 02
                                               ---------     ---------      ---------      ---------      ---------      ---------
                                                                                                       
REVENUES                                       $ 352,249     $ 320,952      $ 290,985      $ 283,552      $ 296,713      $ 308,146
   Revenue Growth                                                 -8.9%          -9.3%          -2.6%                          8.7%

Reported Operating Income (EBIT)                   2,040        (2,784)       (12,871)        (2,711)        14,055         19,681
Depreciation / Amortization                        7,101         5,854          5,541          6,053          5,822          4,891
                                               ---------     ---------      ---------      ---------      ---------      ---------
Reported EBITDA                                    9,141         3,070         (7,330)         3,342         19,877         24,572
                                                     2.6%          1.0%         -2.5%            1.2%           6.7%           8.0%
Adjustments

Litigation Judgment                                   --         8,203          1,446            876         (8,649)            --
Licensing Revenues                                                                               480            480             --
Restructuring Charge                                  --            --          6,910             --             --             --
Legal Fees - Litigation Judgement                     --            --            775            291            274             --
Inventory Write-off ("On-the-Go")                     --            --          3,068             --             --             --
Public Company Costs                                  --            --            500            500            502             --
Normalized Senior Level Compensation                  --            --          1,400          1,100          1,100             --
One-time Expenses (Tender Offer)                      --            --            141            297            292             --
Non-recurring Marketing Costs
 (Lewinski P/R Campaign)                              --            --            783             25             --             --
Feeling Fine (co-branding agreement)                  --            --            475             --             --             --
One-time Expenses (Strategic Alternatives)            --            --             --            303            746             --
Consulting Fees Payable to Sid & Jenny Craig          --            --             --           (600)          (600)          (600)
Savings upon Headquarters Move                        --            --             --            500            500            500
TOTAL ADJUSTMENTS                                     --         8,203         15,498          3,772         (5,355)          (100)

ADJUSTED EBITDA                                $   9,141     $  11,273      $   8,168      $   7,114      $  14,522      $  24,472
   Adjusted EBITDA margins                           2.6%          3.5%           2.8%           2.5%           4.9%           7.9%

Less:  Depreciation / Amortization                 7,101         5,854          5,541          6,053          5,822          4,891
ADJUSTED EBIT                                      2,040         5,419          2,627          1,061          8,700         19,581
   Adjusted EBIT margins                             0.6%          1.7%           0.9%           0.4%           2.9%           6.4%


                             Houlihan Lokey Howard & Zukin Financial Advisors 30



                                                              [JENNY CRAIG LOGO]

FAIRNESS/VALUATION ANALYSIS

COMPARABLE TRANSACTIONS

- -       Houlihan Lokey performed an extensive review of publicly available
        information regarding the sales of companies with operations similar to
        that of the Company.

- -       Based on our research, other than the acquisition of Weight Watchers
        (discussed below), Houlihan Lokey did not identify any transactions
        involving companies with sufficiently similar business characteristics.

- -       Weight Watchers was acquired in September 1999 for approximately $735
        million, or 7.3x trailing EBITDA (see appendix for further information).

                             Houlihan Lokey Howard & Zukin Financial Advisors 31



                                                              [JENNY CRAIG LOGO]

FAIRNESS/VALUATION ANALYSIS

INCOME APPROACH

($ in Thousands)



                                                         LTM
                                                       NOV 2001    FY 2002E    FY 2002E     FY2003E      Terminal
                                                       --------    --------    --------     -------      --------
                                                                                       
 Revenues                                              $296,713    $308,146    $183,644     $318,860     $334,803
   % Growth                                                                                      3.5%         5.0%

 Adjusted EBITDA                                         14,522      24,572      16,865       29,360
   EBITDA %                                                 4.9%        8.0%        9.2%         9.2%

 Depreciation / Amortization                                         (4,891)     (2,036)      (5,300)
                                                                    -------    --------     --------

 Projected EBIT                                                      19,681      14,829       24,060       25,263
   EBIT Margins                                                         6.4%        8.1%         7.5%         7.5%

 Less: Income Tax Expense                     40.0%                   7,872       5,932        9,624       10,105
                                                                    -------    --------     --------     --------
 Debt-free Earnings                                                 $11,809    $  8,898     $ 14,436     $ 15,158

 Depreciation / Amortization                                          4,891       2,036        5,300        =CAPX
 Capital Expenditures                                                (6,300)     (5,500)      (5,000)       =DEPR
 Working Capital                                                     (3,600)     (2,700)         800           94
 Debt-free Cash Flow                                                $ 6,800    $  2,734     $ 15,536     $ 15,252





                                               ENTERPRISE VALUE
                                             Terminal Growth Rate
                              -----------------------------------------------
                                 3.0%       4.0%      5.0%      6.0%      7.0%
                                                     
Discount Rate(1)     21.00%   74,950     78,492    82,478    86,994    92,156
                     22.00%   70,811     73,934    77,424    81,351    85,802
                     23.00%   67,093     69,863    72,940    76,380    80,250
                     24.00%   63,735     66,205    68,935    71,968    75,359
                     25.00%   60,688     62,902    65,336    68,027    71,017




                        Low              Mid             High
                     --------         --------         --------
                                              
Concluded Range      $ 66,000         $ 73,000         $ 81,000


NOTE:  All projections above based on information furnished by management.

(1) Discount rate estimated based on consideration pro-forma capital structure
(post-Transaction) and estimated IRR's of various investors. Certain key
assumptions include: (1) Senior Debt: 40% LTV, IRR approximately 18%; (ii) Sub
Debt, Preferred, Common Stock: assumes strip investments across all securities,
60% LTV, IRR approximately 30% - 35%.

                             Houlihan Lokey Howard & Zukin Financial Advisors 32





APPENDICES





COMPARABLE COMPANY DESCRIPTIONS




                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

ADVANTAGE MARKETING SYSTEMS, INC.

Advantage Marketing Systems, Inc. (AMM) markets a product line consisting of
more than 100 products in three categories: weight management, dietary
supplement and personal care products. The products are marketed through a
network marketing organization in which independent distributors purchase
products for resale to retail customers as well as for their own personal use.
The number of active distributors has increased from approximately 33,000 at
December 31, 1998, and about 61,200 at December 31, 1999, to approximately
86,600 at December 31, 2000. On January 4, 2001, AMM purchased the LifeScience
Technologies group of companies for $1.2 million and a five-year payment of
$41,667 per month or 5 percent of the gross sales of LifeScience Technologies
products, whichever is greater. As a result of this acquisition the company
added 14 products and over 5,000 distributors.


[DAILY PRICE/VOLUME GRAPH]


The company's growth strategy is to expand its product line and network of
independent distributors to increase sales. It also seeks to increase sales
through initiatives designed to enhance sales in its existing markets. These
initiatives include increasing the number of its training and motivational
events and teleconferences, hiring additional distributor support personnel and
establishing more convenient regional support centers in targeted geographic
markets.

The principal objective of AMM's acquisition strategy is to acquire other
network marketing organizations that can be combined with its network marketing
organization, resulting in increased sales volume with minimal additional
administrative cost. The company does not consummate an acquisition unless, at
the time, it anticipates that such acquisition will contribute to profitability
and provide positive cash flows from operations.

                             Houlihan Lokey Howard & Zukin Financial Advisors 35



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

ADVANTAGE MARKETING SYSTEMS, INC. (CONTINUED)

AMM believes that the weight management and dietary supplement category is
expanding because of heightened public awareness of reports about the positive
effects of weight management and dietary supplements on health. During the years
ended December 31, 2000 and 1999, 67.6 percent and 70.9 percent respectively, of
AMM's net sales were derived from the seven products in the weight management
category that were marketed under the Advantage Marketing Systems label.

The company also believes that the personal care products market is a mature
category that has been historically immune to swings in the economy. With an
aging population, the company believes there may be a growing demand for a wide
spectrum of new products in the area of skin care.

                             Houlihan Lokey Howard & Zukin Financial Advisors 36



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

HAIN CELESTIAL GROUP, INC.

Hain Celestial Group, Inc. (HAIN), formerly Hain Food Group, Inc., is a natural,
specialty and snack food company. On May 30, 2000, the company acquired
Celestial Seasonings, Inc. with stockholders of Celestial receiving 1.265 Common
shares of the company for each Common share of Celestial.

[DAILY PRICE/VOLUME GRAPH]


The company markets, distributes and sells natural, organic, and specialty food
products under brand names. The product categories encompass natural and organic
foods, medically- directed foods, weight-loss and portion control foods, snack
foods, kosher foods, and specialty teas, including herb, green, black, wellness,
and organic. The products are sold primarily to specialty and natural food
distributors, and are marketed nationally to supermarkets, natural food stores,
and other retail classes of trade. The company also sells specialty gifts.

The company believes it is a leader in 13 of the top 15 natural food categories,
with such well-known natural food brands as Celestial Seasonings teas, including
Sleepytime, Lemon Zinger, Red Zinger, and Tension Tamer varieties, Hain Pure
Foods, Westbrae, Westsoy, Arrowhead Mills, Health Valley, Breadshop's, Casbah,
Garden of Eatin, Terra Chips, DeBoles, Earth's Best, and Nile Spice. The
company's principal specialty product lines include Hollywood cooking oils,
Estee sugar-free products, Weight Watchers dry and refrigerated products,
Kineret kosher foods, Boston Better Snacks, and Alba Foods.

                             Houlihan Lokey Howard & Zukin Financial Advisors 37



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

HERBALIFE INTERNATIONAL, INC.

Herbalife International, Inc. (HERBA) is a network marketing company that sells
a wide range of weight management products, food and dietary supplements and
personal care products worldwide. As of December 31, 2000, the company conducted
business in 49 countries located in Asia/Pacific Rim, Europe and The Americas.
Retail sales in those regions represented 41.2 percent, 23.9 percent and 34.9
percent, respectively, of its total retail sales in 2000. Products are made to
company specifications by outside manufacturers, and are marketed through a
network of independent distributors.

HERBA's products are marketed exclusively through a network marketing system
that enables its independent distributors to earn profits by selling Herbalife
products to retail consumers or other distributors. Distributors may also
develop their own distributor downline organizations by sponsoring other
distributors to do business in any market where HERBA operates. In doing so,
sponsors are entitled to receive royalty overrides (cash incentives, including
royalties and bonuses) on product sales within their downline organizations.


[DAILY PRICE/VOLUME GRAPH]


The company currently markets a total of 179 products which include Formula 1, a
protein powder in four different flavors designed as a meal replacement; four
Thermojetics weight management tablets; Thermojetics Herbal Concentrate, an
herbal beverage; and a variety of other nutritional products.

                             Houlihan Lokey Howard & Zukin Financial Advisors 38



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

HERBALIFE INTERNATIONAL, INC. (CONTINUED)

All personal care products are grouped under the name Dermajetics, which was
initiated in 1995. Products include the Skin Survival Kit, which has four skin
care products, Parfums Vitessence, made up of six eau de toilettes, and other
specialty care products. Food and dietary supplements include a variety of
products, each containing herbs, vitamins, minerals and other natural
ingredients. The company also sells products for nutrition and weight management
as part of a Health & Fitness Program and Bulk & Muscle Program. The programs
consist of a protein powder, multivitamin- mineral, herbal tablet and cell
activator.

                             Houlihan Lokey Howard & Zukin Financial Advisors 39



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

NATROL, INC.

Natrol, Inc. (NTOL) manufactures and markets branded, high- quality dietary
supplements, herbal teas, nutraceutical ingredients, and more recently, through
its acquisition of Prolab Nutrition, Inc., sports nutrition products.


[DAILY PRICE/VOLUME GRAPH]


Supplements are sold primarily under the NTOL's Natrol brand. These supplements
include vitamins, minerals, hormonal supplements, herbal products, and specialty
combination formulas that contribute to an individual's mental or physical
well-being. The company sells its products through multiple distribution
channels throughout the United States. These channels include domestic health
food stores and mass market drug, retail, and grocery store chains. NTOL also
sells its products through independent catalogs, Internet shopping sites, and,
to a limited degree, within select foreign countries. The company's strategy
emphasizes building strong recognition of the Natrol brand across multiple
distribution channels through a widespread multi-media marketing and advertising
strategy.

Herbal teas are sold under its Laci Le Beau brand name. The company uses
essentially the same sales people and brokers to sell teas as it does
supplements.

The company's recently acquired Prolab sports nutrition line of products is
targeted to body builders and health minded individuals seeking a high degree of
physical fitness.

The company also sells nutraceutical grade ingredients, primarily garlic,
vegetable powders, kava, melatonin and cetyl myristoleate complex to other
manufacturers.

                             Houlihan Lokey Howard & Zukin Financial Advisors 40



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

NATURE'S SUNSHINE PRODUCTS, INC.

Nature's Sunshine Products, Inc. (NATR) primarily manufactures and distributes
nutritional and personal care products. The company's extensive product line
includes herbs, vitamins, mineral supplements, and homeopathic remedies, as well
as natural skin, hair and beauty care products.

[DAILY PRICE/VOLUME GRAPH]

The company's herbal products (approximately 69 percent of sales in 2000) are
sold in the form of tablets, capsules or liquid extracts. NATR manufactures a
wide variety of single vitamins, which are sold in the form of chewable or non-
chewable tablets, and also manufactures several multiple vitamins and mineral
supplements, including a line containing natural antioxidants. Combined sales of
vitamins and mineral supplements were about 23 percent of total sales in 2000.
NATR manufactures or contracts with independent manufacturers to supply a
variety of personal care products for external use. Sales of personal care
products accounted for approximately 2 percent of the company's total sales in
2000. NATR markets a line of more than 40 distinctive homeopathic products
designed for the treatment of certain common ailments, including various
allergies.

NATR buys herbs and other raw materials in bulk, and, after quality control
testing, encapsulates, tabulates or concentrates them, and then packages them
for shipment. Most products are manufactured at the company's headquarters in
Spanish Fork, Utah. Certain personal care and homeopathic products are
manufactured for the company by contract manufacturers in accordance with
company specifications. NATR also operates regional warehouses in Columbus,
Ohio, Dallas, Texas, and Atlanta, Georgia.

                             Houlihan Lokey Howard & Zukin Financial Advisors 41



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

NATURE'S SUNSHINE PRODUCTS, INC. (CONTINUED)

The company sells its products primarily through an independent sales force of
managers and distributors. Managers resell the products to the distributors in
their sales group or to consumers, or use the products themselves. Demand for
the products is created largely by the number of active members of the
independent distributor sales force.

Synergy Worldwide, Inc., acquired in 2000, is a direct marketer involved in the
distribution and sale of nutritional, personal care and other products with an
emphasis on the Asian markets.

                             Houlihan Lokey Howard & Zukin Financial Advisors 42



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

RELIV INTERNATIONAL, INC.

Reliv International, Inc. produces a line of food products including nutritional
supplements, diet management products, functional foods, a line of granola bars
and a sports drink mix. Functional foods are products designed to influence
specific functions of the body. The company also distributes a line of premium
skin care products. These products are sold by subsidiaries of the company to a
sales force of independent distributors who sell products directly to consumers.
Reliv and its subsidiaries sell products to distributors throughout the United
States and in Australia, Canada, New Zealand, Mexico and the United Kingdom.


[DAILY PRICE/VOLUME GRAPH]

The nutritional supplements include Reliv NOW and Reliv Classic. Both products
are designed to provide a balanced nutritional supplement for an individual's
diet and contain a variety of vitamins and minerals, soy and other protein
sources and various herbs. The products are in powdered form to be mixed with
juice or other beverages. The Reliv Classic formula has a United States patent
and the Reliv NOW formula is a no-yeast derivative of the Reliv Classic formula.
Reliv NOW is available with all natural flavoring or in the original formula.

The company also markets a line of skin care products which is based on
compounds found only in the avocado. The products are designed to be used
individually or in combination with each other. The product line includes: Reliv
Face and Body Bar, a mild face and body soap; Reliv Pathway, a skin cleanser and
primer which contains a variety of avocado based ingredients; Reliv Reavo, a
skin care cream designed to reduce the appearance of aging in the skin caused by
natural and environmental causes; and Reliv R.P. 1.5, a skin care cream having
the active ingredient retinyl palmitate is designed to reduce the appearance of
aging caused by environmental causes such as exposure to the sun. The company's
skin care line also includes toners, moisturizers, sunless tanning lotions and
related items.

                             Houlihan Lokey Howard & Zukin Financial Advisors 43



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

RELIV INTERNATIONAL, INC. (CONTINUED)

In January 2000, Reliv International, Inc. announced the launch of two new
products and the reformulation of two existing products, each focused on meeting
the specific nutritional needs of particular sets of consumers. The new products
include Reliv NOW for Kids, a supplement designed to provide important vitamins,
minerals and other nutrients for growing bodies; and Reliv SoySense, a new
supplement that provides a significant source of soy protein, a nutrient proven
to lower the risk of heart disease.

                             Houlihan Lokey Howard & Zukin Financial Advisors 44



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

USANA HEALTH SCIENCES, INC.

USANA Health Sciences, Inc. (USNA) is a Utah corporation that develops and
manufactures high-quality nutritional, personal care and weight management
products. USNA distributes its products through a network marketing system. As
of December 30, 2000, the company had approximately 93,000 Independent
distributors or Associates in the United States, Canada, Australia, New Zealand,
Hong Kong, Japan and the United Kingdom.

[DAILY PRICE/VOLUME GRAPH]

USNA also offers a Preferred Customer program specifically designed for
customers who desire to purchase USANA's products for personal use and do not
desire to resell or distribute products. At December 30, 2000, the company had
approximately 76,000 Preferred Customers worldwide. The company defines a
current Associate and a current Preferred Customer as one that has purchased
product from USNA at any time during the most recent twelve-month period. During
2000, Preferred Customer purchases accounted for approximately 17 percent of net
sales.

USNA's three primary product lines consist of USANA Nutritionals (approximately
69 percent of net sales in 2000), LEAN Lifelong (12 percent) and Sens# (9
percent). The company's top-selling products are USANA Essentials (32 percent)
and Proflavanol (13 percent). Sens# is a completely new line, introduced in June
2000, of scientifically developed natural products designed to support healthy
skin and hair by providing protection and nourishment on both the inside and
outside of the dermal layers of skin.

                             Houlihan Lokey Howard & Zukin Financial Advisors 45



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

USANA HEALTH SCIENCES, INC. (CONTINUED)

The strategic shift in USNA's customer base continued during 2000. In February
2000, USANA introduced a value initiative that decreased prices on its products
by an average of approximately 24 percent. The value initiative reduced the
price of its top selling product, the Essentials, by 35 percent and offers a 10
percent discount for all customers who are active on the USANA Autoship
(standing monthly order) program. These pricing changes were made in an effort
to better attract and retain customers.

North America is the primary market for the company's products. Sales in the
United States and Canada collectively represented approximately 79.3 percent of
net sales in 2000. Sales in the Australia-New Zealand market represented
approximately 15.4 percent of net sales in 2000. Hong Kong, the company's first
market in Asia, accounted for 5.3 percent of net sales in 2000.

                             Houlihan Lokey Howard & Zukin Financial Advisors 46



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

WEIDER NUTRITION INTERNATIONAL, INC.

Weider Nutrition International, Inc. (WNI) began as the nutritional products
division of its parent, Weider Health and Fitness, whose predecessor was formed
by Joe Weider in 1940. The division, along with the parent's publications and
exercise equipment divisions, established the Weider name as a leading brand in
the health and fitness industry.

WNI now produces capsules and tablets, powdered drink mixes, bottled beverages
and nutrition bars. It markets its branded products in four principal
categories: sports nutrition; vitamins, minerals and herbs; diet; and healthy
snacks. WNI makes and markets some 1,400 products.

[DAILY PRICE/VOLUME GRAPH]


The company's products are sold in over 48,000 retail outlets in all 50 states.
Customers in the mass volume retail channel include mass merchandisers, drug
stores, warehouse clubs and supermarkets. The company services the health food
market by distributing its products to General Nutrition Center and the leading
health food distributors. It also sells through other distribution channels,
including its network of exclusive distributors to health clubs and gyms,
international markets and private-label manufacturing for other nutritional
supplement companies and certain retail customers. WNI also distributes products
to major markets worldwide.

As part of its multi-brand, multi-channel strategy, WNI has created a portfolio
of brands designed for specific distribution channels. The positioning of WNI's
brand names is supported by significant advertising and marketing expenditures,
as well as the company's historical association with the Weider name. As a
result, WNI believes that it has many of the leading brands in the nutritional
supplement industry, including Great American Nutrition, Joe Weider Signature,
Tiger's Milk, Fi-Bar, and Schiff.

                             Houlihan Lokey Howard & Zukin Financial Advisors 47



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

WEIDER NUTRITION INTERNATIONAL, INC. (CONTINUED)

In July 1998, WNI acquired Germany-based Haleko Hanseatisches Lebensmittel
Kontor GmbH ($65 million in annual sales), the largest sports nutrition company
in Europe, for $25 million in cash, stock, assumption of debt, and other costs,
as well as contingency payments.

                             Houlihan Lokey Howard & Zukin Financial Advisors 48



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY DESCRIPTIONS

WEIGHT WATCHERS INTERNATIONAL, INC.

Weight Watchers International, Inc. is the largest provider of weight control
programs in the world and operates in 30 countries through a network of
Company-owned and franchise operations. At the core of the business are weekly
meetings, in which is presented a scientifically designed program, incorporating
group support and education about healthy eating patterns, behavior modification
and physical activity. The Company has developed the Weight Watchers program
through continuous improvement over its 37-year history and the brand name is
recognized globally today as the standard for healthy, safe and drug free weight
control. Careful management of the brand identity and reputation is a
fundamental element of the Company's long-term success. The Company believes
that the combination of its brand
recognition, extensive global network and 8,600 classroom leaders in
Company-owned operations provide a significant competitive advantage..


[DAILY PRICE/VOLUME GRAPH]


Throughout its history, the Company has based its program on four core elements:
group support, behavior modification, diet and exercise. The group support
system remains the cornerstone method of presenting the program. Group support
assists members in dealing with issues such as depression-eating and habitual
eating behaviors. This support is offered through meetings that are interactive
and encourage learning through group activities and discussions. Members learn
strategies from leaders who have learned how to lose weight and maintain their
weight loss on the program. These leaders are trained to respond to member needs
by using internally developed techniques and actively modeling the Company's
principles. The group support system continues throughout the maintenance period
of the program when members learn how to stay within their appropriate weight
range.

                             Houlihan Lokey Howard & Zukin Financial Advisors 49



COMPARABLE COMPANY FINANCIAL INFORMATION




                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY FINANCIAL INFORMATION

COMPARABLE COMPANY FINANCIAL ANALYSIS

(Figures in millions, except per share data)



                                                                                                      WEIDER
                               ADVANTAGE   HAIN    HERBALIFE            NATURES     RELIV    USANA   NUTRITION   WEIGHT     CRAIG
                               MARKETING CELESTIAL   INTL      NATROL   SUNSHINE INTERNATIO  HEALTH    INTL     WATCHERS   (JENNY)
                                SYS INC  GROUP INC INC -CL A    INC     PRODS INC  NAL INC  SCIENCES   -CL A    INTL INC     INC
                                                                                             
General Market Information

Ticker Symbol                   AMM      HAIN      HERBA      NTOL      NATR       RELV     USNA     WNI       WTW         JCGI
Exchange                        AMEX     NASDAQ    NASDAQ     NASDAQ    NASDAQ     NASDAQ   NASDAQ   NYSE      NYSE        OTC
Fiscal Year End                 12/2000  06/2001   12/2000    12/2000   12/2000    12/2000  12/2000  05/2001   12/01/00    06/2001
Latest Financial Information    09/2001  09/2001   09/2001    09/2001   09/2001    09/2001  09/2001  08/2001   09/01/01    09/2001

Closing Price as of
  Valuation Date                $  2.44  $  23.59  $  14.01   $  2.70   $  12.31   $  1.37  $  1.44  $   2.01  $    33.15  $   2.95
20-Day Average Stock Price      $  2.80  $  23.06  $  12.85   $  3.05   $  12.43   $  1.21  $  1.47  $   1.53  $    30.61  $   2.70
52 Week Price Range
    High                        $  3.50  $  36.38  $  13.90   $  4.40   $  14.75   $  1.75  $  3.06  $   3.05  $    31.70  $   3.28
    Low                         $  2.00  $  17.80  $   6.88   $  0.95   $   5.69   $  0.89  $  0.88  $   1.35  $    29.50  $   0.17
52 Week Return                   -18.7%    -18.1%      75.1%     35.0%      77.4%   -12.6%   -30.2%    -26.9%          NA     105.2%

Market Valuation
  Information

Fully Diluted Shares              4.754    34.586    32.223    13.843     17.091     9.724    9.752    26.251      22.743    23.151
Closing Price as of
  Valuation Date                $  2.44  $  23.59  $  14.01   $  2.70   $  12.31   $  1.37  $  1.44  $   2.01  $    33.15  $   2.95

Market Value of Equity (MVE)    $11.600  $815.887  $451.445   $37.377   $210.385   $13.273  $14.043  $ 52.764  $  753.914  $ 68.295
    plus: Total Debt (book)       3.331    13.284    11.571     8.428      0.000     6.100   13.808    74.732     480.786     1.508
    less: Converted Debt          0.000     0.023     0.000     0.000      0.000     0.000    0.000     0.000       0.000     0.000
    plus: Preferred Stock
          Redemption/Market/Liq
          Value                   0.000     0.000     0.000     0.000      0.000     0.000    0.000     0.000      25.621     0.000
    less: Converted Preferred     0.000     0.000     0.000     0.000      0.000     0.000    0.000     0.000       1.000     0.000
    less: Cash & Cash
          Equivalents (book)      2.078    13.990   195.290     3.535     26.447     1.357    4.105     2.603      37.904    52.078
    plus: Minority Interest
          in Subsidiaries         0.000     0.000     1.761     0.000      0.000     0.000    0.000     0.000       0.000     0.000
                                -------  --------  --------   -------   --------   -------  -------  --------  ----------   -------
Enterprise Value                $12.853  $815.158  $269.487   $42.270   $183.938   $18.016  $23.746  $124.893  $1,221.417   $17.725
                                -------  --------  --------   -------   --------   -------  -------  --------  ----------   -------


                             Houlihan Lokey Howard & Zukin Financial Advisors 51



                                                              [JENNY CRAIG LOGO]
COMPARABLE COMPANY FINANCIAL INFORMATION

COMPARABLE COMPANY DEBT-FREE MULTIPLES

($ in Millions)



                                                                EV / EBITDA
                                               ----------------------------------------------
                                                3-YR
                                      EV        Avg.      FYE       LTM       NFY      NFY + 1
                                   --------    ------    ------    ------    ------    -------
                                                                     
Advantage Marketing Sys Inc(1)     $   12.9      8.1x      8.5x      7.8x        NA        NA
Hain Celestial Group Inc(2)           815.2       NMF       NMF       NMF     11.1x      9.3x
Herbalife Intl Inc -Cl A(1)           269.5      2.8x      3.1x      3.3x        NA        NA
Natrol Inc(3)                          42.3      4.6x       NMF       NMF      3.7x        NA
Natures Sunshine Prods Inc(3)         183.9      5.1x      5.5x      5.9x      4.2x        NA
Reliv International Inc(4)             18.0     13.6x       NMF       NMF      8.0x      4.8x
Usana Health Sciences Inc(3)           23.7      1.5x      2.5x      3.0x      2.6x        NA
Weider Nutrition Intl  -Cl A(1)       124.9      5.2x      6.1x      6.6x        NA        NA
Weight Watchers Intl Inc(1)         1,221.4     11.4x     10.0x      6.6x        NA        NA

Low                                              1.5x      2.5x      3.0x      2.6x      4.8x
High                                            13.6x     10.0x      7.8x     11.1x      9.3x
Median                                           5.2x      5.8x      6.2x      4.2x      7.0x
Mean                                             6.6x      5.9x      5.5x      5.9x      7.0x

JENNY CRAIG                            81.2      9.2X     11.4X      5.6X      3.3X        NA




                                                                EV / REVENUE
                                               -----------------------------------------------
                                                3-YR
                                      EV        Avg.      FYE       LTM       NFY      NFY + 1
                                   --------    ------    ------    ------    ------    -------
                                                                     
Advantage Marketing Sys Inc(1)     $   12.9     0.62x     0.48x     0.48x        NA        NA
Hain Celestial Group Inc(2)           815.2     2.16x     1.97x     1.92x     1.97x        NA
Herbalife Intl Inc  -Cl A(1)          269.5     0.29x     0.29x     0.31x        NA        NA
Natrol Inc(3)                          42.3     0.54x     0.49x     0.53x        NA        NA
Natures Sunshine Prods Inc(3)         183.9     0.61x     0.58x     0.58x        NA        NA
Reliv International Inc(4)             18.0     0.29x     0.29x     0.33x     0.33x     0.30x
Usana Health Sciences Inc(3)           23.7     0.19x     0.19x     0.21x        NA        NA
Weider Nutrition Intl -Cl A(1)        124.9     0.36x     0.35x     0.36x        NA        NA
Weight Watchers Intl Inc(1)         1,221.4     3.13x     3.01x     2.26x        NA        NA

Low                                             0.19x     0.19x     0.21x     0.33x     0.30x
High                                            3.13x     3.01x     2.26x     1.97x     0.30x
Median                                          0.54x     0.48x     0.48x     1.15x     0.30x
Mean                                            0.91x     0.85x     0.78x     1.15x     0.30x

JENNY CRAIG                            81.2     0.27X     0.29X     0.27X     0.26X        NA




                                                                 EV / EBIT
                                               -----------------------------------------------
                                                3-YR
                                      EV        Avg.      FYE       LTM       NFY      NFY + 1
                                   --------    ------    ------    ------    ------    -------
                                                                     
Advantage Marketing Sys Inc(1)     $   12.9     12.7x     17.9x     18.6x        NA        NA
Hain Celestial Group Inc(2)           815.2       NMF       NMF       NMF     13.2x     10.7x
Herbalife Intl Inc -Cl A(1)           269.5      3.3x      3.8x      4.2x        NA        NA
Natrol Inc(3)                          42.3      6.4x       NMF       NMF      5.5x        NA
Natures Sunshine Prods Inc(3)         183.9      6.1x      6.9x      7.5x      5.0x        NA
Reliv International Inc(4)             18.0       NMF       NMF       NMF     11.9x      5.9x
Usana Health Sciences Inc(3)           23.7      2.1x      4.4x      5.9x      4.7x        NA
Weider Nutrition Intl -Cl A(1)        124.9     10.6x     13.2x     14.2x        NA        NA
Weight Watchers Intl Inc(1)         1,221.4     12.6x     11.0x      7.1x        NA        NA

Low                                              2.1x      3.8x      4.2x      4.7x      5.9x
High                                            12.7x     17.9x     18.6x     13.2x     10.7x
Median                                           6.4x      9.0x      7.3x      5.5x      8.3x
Mean                                             7.7x      9.5x      9.6x      8.1x      8.3x

JENNY CRAIG                            81.2       NMF       NMF      9.3x      4.1x        NA




                                                      EV / TOTAL ASSETS (NET OF CASH)
                                               -----------------------------------------------
                                                3-YR
                                      EV        Avg.      FYE       LTM       NFY      NFY + 1
                                   --------    ------    ------    ------    ------    -------
                                                                     
Advantage Marketing Sys Inc(1)     $   12.9     1.81x     1.58x     0.98x        NA        NA
Hain Celestial Group Inc(2)           815.2     2.08x     1.87x     1.80x        NA        NA
Herbalife Intl Inc -Cl A(1)           269.5     1.02x     0.97x     1.00x        NA        NA
Natrol Inc(3)                          42.3     0.56x     0.50x     0.52x        NA        NA
Natures Sunshine Prods Inc(3)         183.9     2.12x     2.05x     1.78x        NA        NA
Reliv International Inc(4)             18.0     0.97x     0.94x     1.06x        NA        NA
Usana Health Sciences Inc(3)           23.7     0.68x     0.73x     0.70x        NA        NA
Weider Nutrition Intl -Cl A(1)        124.9     0.55x     0.60x     0.61x        NA        NA
Weight Watchers Intl Inc(1)         1,221.4     3.88x     4.05x     3.17x        NA        NA

Low                                             0.55x     0.50x     0.52x     0.00x     0.00x
High                                            3.88x     4.05x     3.17x     0.00x     0.00x
Median                                          1.02x     0.97x     1.00x        NA        NA
Mean                                            1.52x     1.48x     1.29x        NA        NA

JENNY CRAIG                            81.2     1.28x     1.72x     2.10x        NA        NA


Footnotes:

(1)  No projections available.

(2)  Projected financial figures are based on the average of several analyst
     reports.

(3)  Projected financial figures are based on the Houlihan Lokey Howard & Zukin
     build-up method.

(4)  Projected financial figures are based on a Taglich Brothers, Inc. report
     dated November 27, 2001.

                             Houlihan Lokey Howard & Zukin Financial Advisors 52



                                                              [JENNY CRAIG LOGO]
COMPARABLE COMPANY FINANCIAL INFORMATION

COMPARABLE COMPANY DEBT-FREE MULTIPLES (CONT.)

($ in Millions)



                                                           PRICE / EARNINGS
                                             -----------------------------------------------
                                              3-YR
                                    MVE       AVG.      FYE       LTM       NFY      NFY + 1
                                   ------    ------    ------    ------    ------    -------
                                                                   
Advantage Marketing Sys Inc(1)     $ 11.6     14.3x     23.5x     32.4x        NA        NA
Hain Celestial Group Inc(2)         815.9       NMF     33.7x     36.1x     22.4x     18.0x
Herbalife Intl Inc  -Cl A(1)        451.4      9.1x     10.6x     11.2x        NA        NA
Natrol Inc(3)                        37.4      9.8x       NMF       NMF      9.0x        NA
Natures Sunshine Prods Inc(3)       210.4     10.7x     12.0x     12.7x      9.5x        NA
Reliv International Inc(4)           13.3       NMF       NMF       NMF     19.5x      8.4x
Usana Health Sciences Inc(3)         14.0      2.0x      5.3x      7.3x      5.8x        NA
Weider Nutrition Intl  -Cl A(1)      52.8       NMF       NMF       NMF        NA        NA
Weight Watchers Intl Inc(1)         753.9     20.0x     33.8x     16.5x        NA        NA

Low                                            2.0x      5.3x      7.3x      5.8x      8.4x
High                                          20.0x     33.8x     36.1x     22.4x     18.0x
Median                                        10.2x     17.8x     14.6x      9.5x     13.2x
Mean                                          11.0x     19.8x     19.4x     13.2x     13.2x

JENNY CRAIG                         122.5       NMF       NMF       NMF        NA        NA




                                                         PRICE / NET BOOK VALUE
                                             -----------------------------------------------
                                              3-YR
                                    MVE       AVG.      FYE       LTM       NFY      NFY + 1
                                   ------    ------    ------    ------    ------    -------
                                                                   
Advantage Marketing Sys Inc(1)     $ 11.6     1.47x     1.36x     1.89x        NA        NA
Hain Celestial Group Inc(2)         815.9    10.51x     5.89x     2.04x        NA        NA
Herbalife Intl Inc  -Cl A(1)        451.4     2.32x     2.06x     1.80x        NA        NA
Natrol Inc(3)                        37.4     1.10x     1.46x     1.24x        NA        NA
Natures Sunshine Prods Inc(3)       210.4     2.86x     2.79x     2.49x        NA        NA
Reliv International Inc(4)           13.3     2.01x     2.35x     2.29x        NA        NA
Usana Health Sciences Inc(3)         14.0     0.75x     1.09x     0.99x        NA        NA
Weider Nutrition Intl  -Cl A(1)      52.8     1.33x     1.25x     1.26x        NA        NA
Weight Watchers Intl Inc(1)         753.9       NMF       NMF       NMF        NA        NA

Low                                           0.75x     1.09x     0.99x     0.00x     0.00x
High                                         10.51x     5.89x     2.49x     0.00x     0.00x
Median                                        1.74x     1.76x     1.85x        NA        NA
Mean                                          2.79x     2.28x     1.75x        NA        NA

JENNY CRAIG                         122.5     3.25x     6.17x     2.80x        NA        NA




                                                          PRICE / CASH FLOW
                                             ----------------------------------------------
                                              3-YR
                                    MVE       Avg.      FYE       LTM       NFY      NFY + 1
                                   ------    ------    ------    ------    ------    -------
                                                                   
Advantage Marketing Sys Inc(1)     $ 11.6      8.4x      9.0x      8.8x        NA        NA
Hain Celestial Group Inc(2)         815.9     33.1x     22.0x     23.7x     16.9x     14.3x
Herbalife Intl Inc  -Cl A(1)        451.4      7.0x      7.7x      7.9x        NA        NA
Natrol Inc(3)                        37.4      5.9x       NMF       NMF      4.8x        NA
Natures Sunshine Prods Inc(3)       210.4      8.2x      8.6x      8.9x      7.2x        NA
Reliv International Inc(4)           13.3     15.5x     27.7x       NMF      9.4x      5.8x
Usana Health Sciences Inc(3)         14.0      1.3x      2.1x      2.4x      2.2x        NA
Weider Nutrition Intl  -Cl A(1)      52.8      4.2x      5.0x      5.6x        NA        NA
Weight Watchers Intl Inc(1)         753.9     15.6x     22.2x     12.9x        NA        NA

Low                                            1.3x      2.1x      2.4x      2.2x      5.8x
High                                          33.1x     27.7x     23.7x     16.9x     14.3x
Median                                         8.2x      8.8x      8.8x      7.2x     10.1x
Mean                                          11.0x     13.0x     10.0x      8.1x     10.1x

JENNY CRAIG                         122.5       NMF       NMF       NMF        NA        NA


Footnotes:

(1)  No projections available.

(2)  Projected financial figures are based on the average of several analyst
     reports.

(3)  No projections available.

(4)  Projected financial figures are based on a Taglich Brothers, Inc. report
     dated November 27, 2001.


                             Houlihan Lokey Howard & Zukin Financial Advisors 53



                                                              [JENNY CRAIG LOGO]
COMPARABLE COMPANY FINANCIAL INFORMATION

RISK ANALYSIS RANKINGS

                                    
                      SIZE
              (Revenue, millions)

HERBALIFE INTL INC  -CL A              $  881.5
WEIGHT WATCHERS INTL INC               $  540.7
HAIN CELESTIAL GROUP INC               $  424.1
WEIDER NUTRITION INTL  -CL A           $  348.7
NATURES SUNSHINE PRODS INC             $  318.0
JENNY CRAIG                            $  291.1
USANA HEALTH SCIENCES INC              $  115.3
NATROL INC                             $   79.3
RELIV INTERNATIONAL INC                $   53.8
ADVANTAGE MARKETING SYS INC            $   26.7



                                    
               HISTORICAL GROWTH
                (2-Year EBITDA)

JENNY CRAIG                                57.5%
HAIN CELESTIAL GROUP INC                   17.3%
ADVANTAGE MARKETING SYS INC                16.1%
WEIGHT WATCHERS INTL INC                   14.5%
HERBALIFE INTL INC  -CL A                  -4.4%
WEIDER NUTRITION INTL  -CL A               -4.6%
NATURES SUNSHINE PRODS INC                 -9.4%
USANA HEALTH SCIENCES INC                 -28.0%
RELIV INTERNATIONAL INC                   -50.1%
NATROL INC                                  NMF



                                    
                 PROFITABILITY
              (EBITDA to Revenue)

WEIGHT WATCHERS INTL INC                   34.3%
HAIN CELESTIAL GROUP INC                   11.5%
NATURES SUNSHINE PRODS INC                  9.9%
HERBALIFE INTL INC  -CL A                   9.2%
USANA HEALTH SCIENCES INC                   7.0%
ADVANTAGE MARKETING SYS INC                 6.2%
WEIDER NUTRITION INTL  -CL A                5.5%
JENNY CRAIG                                 5.0%
RELIV INTERNATIONAL INC                     0.7%
NATROL INC                                 -5.1%



                                    
                     SIZE
         (Enterprise Value, millions)

WEIGHT WATCHERS INTL INC               $1,221.4
HAIN CELESTIAL GROUP INC               $  815.2
HERBALIFE INTL INC  -CL A              $  269.5
NATURES SUNSHINE PRODS INC             $  183.9
WEIDER NUTRITION INTL  -CL A           $  124.9
JENNY CRAIG                            $   81.2
NATROL INC                             $   42.3
USANA HEALTH SCIENCES INC              $   23.7
RELIV INTERNATIONAL INC                $   18.0
ADVANTAGE MARKETING SYS INC            $   12.9



                                    
               HISTORICAL GROWTH
                (1-Year EBITDA)

HAIN CELESTIAL GROUP INC                   56.4%
WEIGHT WATCHERS INTL INC                   15.3%
NATURES SUNSHINE PRODS INC                  1.2%
JENNY CRAIG                               -11.7%
HERBALIFE INTL INC  -CL A                 -19.2%
ADVANTAGE MARKETING SYS INC               -27.9%
WEIDER NUTRITION INTL  -CL A              -29.2%
USANA HEALTH SCIENCES INC                 -47.9%
RELIV INTERNATIONAL INC                  -249.0%
NATROL INC                                  NMF



                                    
             RELATIVE DEPRECIATION
           (Depreciation to EBITDA)

RELIV INTERNATIONAL INC                   235.2%
ADVANTAGE MARKETING SYS INC                58.2%
WEIDER NUTRITION INTL  -CL A               53.8%
USANA HEALTH SCIENCES INC                  50.4%
JENNY CRAIG                                40.1%
HAIN CELESTIAL GROUP INC                   24.1%
NATURES SUNSHINE PRODS INC                 22.1%
HERBALIFE INTL INC  -CL A                  21.0%
WEIGHT WATCHERS INTL INC                    6.9%
NATROL INC                                -91.2%



                                    
               HISTORICAL GROWTH
               (2-Year Revenue)

ADVANTAGE MARKETING SYS INC                41.8%
HAIN CELESTIAL GROUP INC                   14.3%
NATROL INC                                 13.0%
RELIV INTERNATIONAL INC                     7.1%
WEIGHT WATCHERS INTL INC                    5.5%
HERBALIFE INTL INC  -CL A                   4.4%
WEIDER NUTRITION INTL  -CL A                2.5%
NATURES SUNSHINE PRODS INC                  2.2%
USANA HEALTH SCIENCES INC                  -1.2%
JENNY CRAIG                                -6.0%



                                    
               PROJECTED GROWTH
                (1-Year EBITDA)

JENNY CRAIG                               206.3%
RELIV INTERNATIONAL INC                   145.8%
HAIN CELESTIAL GROUP INC                   40.3%
NATURES SUNSHINE PRODS INC                 31.1%
USANA HEALTH SCIENCES INC                  -5.7%
NATROL INC                                  NMF
ADVANTAGE MARKETING SYS INC                  NA
HERBALIFE INTL INC  -CL A                    NA
WEIDER NUTRITION INTL  -CL A                 NA
WEIGHT WATCHERS INTL INC                     NA



                                    
              INTERNAL INVESTMENT
       (Capital Expenditures to Revenue)

ADVANTAGE MARKETING SYS INC                 7.6%
USANA HEALTH SCIENCES INC                   6.7%
NATURES SUNSHINE PRODS INC                  4.8%
HAIN CELESTIAL GROUP INC                    4.6%
HERBALIFE INTL INC  -CL A                   1.2%
WEIDER NUTRITION INTL  -CL A                1.0%
WEIGHT WATCHERS INTL INC                    0.9%
JENNY CRAIG                                 0.9%
RELIV INTERNATIONAL INC                     0.6%
NATROL INC                                  0.4%



                                    
               HISTORICAL GROWTH
               (1-Year Revenue)

ADVANTAGE MARKETING SYS INC                19.1%
NATURES SUNSHINE PRODS INC                  6.8%
NATROL INC                                  6.7%
HAIN CELESTIAL GROUP INC                    2.3%
WEIGHT WATCHERS INTL INC                    1.6%
HERBALIFE INTL INC  -CL A                  -1.3%
JENNY CRAIG                                -2.6%
WEIDER NUTRITION INTL  -CL A               -3.3%
USANA HEALTH SCIENCES INC                  -8.3%
RELIV INTERNATIONAL INC                   -11.5%



                                    
               PROJECTED GROWTH
                 (5-Year EPS)

ADVANTAGE MARKETING SYS INC                  NA
HAIN CELESTIAL GROUP INC                     NA
HERBALIFE INTL INC  -CL A                    NA
NATROL INC                                   NA
NATURES SUNSHINE PRODS INC                   NA
RELIV INTERNATIONAL INC                      NA
USANA HEALTH SCIENCES INC                    NA
WEIDER NUTRITION INTL  -CL A                 NA
WEIGHT WATCHERS INTL INC                     NA
CRAIG (JENNY) INC                            NA
JENNY CRAIG                                  NA



                                    
                   LIQUIDITY
                (Current Ratio)

ADVANTAGE MARKETING SYS INC                 2.9
NATROL INC                                  2.9
HAIN CELESTIAL GROUP INC                    2.8
NATURES SUNSHINE PRODS INC                  2.2
HERBALIFE INTL INC  -CL A                   2.0
JENNY CRAIG                                 1.8
WEIDER NUTRITION INTL  -CL A                1.7
RELIV INTERNATIONAL INC                     1.1
USANA HEALTH SCIENCES INC                   1.0
WEIGHT WATCHERS INTL INC                    0.7



                                    
               PROJECTED GROWTH
               (1-Year Revenue)

JENNY CRAIG                                 7.1%
HAIN CELESTIAL GROUP INC                    0.0%
RELIV INTERNATIONAL INC                   -11.2%
ADVANTAGE MARKETING SYS INC                  NA
HERBALIFE INTL INC  -CL A                    NA
NATROL INC                                   NA
NATURES SUNSHINE PRODS INC                   NA
USANA HEALTH SCIENCES INC                    NA
WEIDER NUTRITION INTL  -CL A                 NA
WEIGHT WATCHERS INTL INC                     NA



                                    
                 PROFITABILITY
               (EBIT to Revenue)

WEIGHT WATCHERS INTL INC                   31.9%
HAIN CELESTIAL GROUP INC                    8.7%
NATURES SUNSHINE PRODS INC                  7.7%
HERBALIFE INTL INC  -CL A                   7.3%
USANA HEALTH SCIENCES INC                   3.5%
JENNY CRAIG                                 3.0%
ADVANTAGE MARKETING SYS INC                 2.6%
WEIDER NUTRITION INTL  -CL A                2.5%
RELIV INTERNATIONAL INC                    -0.9%
NATROL INC                                 -9.8%



                                    
                   LEVERAGE
                 (Debt to EV)

NATURES SUNSHINE PRODS INC                  0.0%
HAIN CELESTIAL GROUP INC                    1.6%
JENNY CRAIG                                 1.7%
HERBALIFE INTL INC  -CL A                   4.3%
NATROL INC                                 19.9%
ADVANTAGE MARKETING SYS INC                25.9%
RELIV INTERNATIONAL INC                    33.9%
WEIGHT WATCHERS INTL INC                   39.4%
USANA HEALTH SCIENCES INC                  58.1%
WEIDER NUTRITION INTL  -CL A               59.8%




                             Houlihan Lokey Howard & Zukin Financial Advisors 54



                                                              [JENNY CRAIG LOGO]

COMPARABLE COMPANY FINANCIAL INFORMATION

OPERATING PERFORMANCE PARAMETERS

(figures in millions)



                                           LTM OPERATING INDICATIONS                              LTM MARGINS
                             --------------------------------------------------  ----------------------------------------------
                                                              ADJUSTED ADJUSTED                              ADJUSTED  ADJUSTED
                                     GROSS  ADJUSTED ADJUSTED   CASH     NET     GROSS   ADJUSTED  ADJUSTED    CASH       NET
                             REVENUE PROFIT  EBITDA    EBIT     FLOW    INCOME   PROFIT   EBITDA     EBIT      FLOW     INCOME
                             ------- ------ -------- -------- -------- --------  ------  --------  --------  --------  --------
                                                                                      
ADVANTAGE MARKETING SYS INC  $ 26.7  $  9.0  $  1.7   $  0.7   $  1.3   $  0.4     33.8%      6.2%      2.6%      4.9%       1.3%

HAIN CELESTIAL GROUP INC      424.1   172.8    48.7     37.0     34.4     22.6     40.7%     11.5%      8.7%      8.1%       5.3%

HERBALIFE INTL INC -CL A      881.5   411.1    81.2     64.2     57.2     40.2     46.6%      9.2%      7.3%      6.5%       4.6%

NATROL INC                     79.3    26.5    (4.1)    (7.7)    (5.3)    (9.0)    33.5%     -5.1%*    -9.8%*    -6.7%*    -11.3%*

NATURES SUNSHINE PRODS INC    318.0   261.0    31.4     24.4     23.5     16.6     82.1%      9.9%      7.7%      7.4%       5.2%

RELIV INTERNATIONAL INC        53.8    20.3     0.4     (0.5)     0.1     (0.8)    37.7%      0.7%     -0.9%*      0.2%     -1.4%*

USANA HEALTH SCIENCES INC     115.3    80.9     8.0      4.0      6.0      1.9     70.2%      7.0%      3.5%      5.2%       1.7%

WEIDER NUTRITION INTL -CL A   348.7   131.1    19.0      8.8      9.5     (0.8)    37.6%      5.5%      2.5%      2.7%      -0.2%*

WEIGHT WATCHERS INTL INC      540.7   285.9   185.3    172.6     58.3     45.6     52.9%     34.3%*    31.9%*    10.8%*      8.4%*

Low                          $ 26.7  $  9.0  $ (4.1)  $ (7.7)  $ (5.3)  $ (9.0)    33.5%      0.7%      2.5%      0.2%       1.3%
High                         $881.5  $411.1  $185.3   $172.6   $ 58.3   $ 45.6     82.1%     11.5%      8.7%      8.1%       5.3%

Median                       $318.0  $131.1  $ 19.0   $  8.8   $  9.5   $  1.9     40.7%      7.0%      5.4%      5.2%       4.6%
Mean                         $309.8  $155.4  $ 41.3   $ 33.7   $ 20.6   $ 13.0     48.4%      7.1%      5.4%      5.0%       3.6%

Jenny Craig                  $296.7  $ 24.7  $ 14.5   $  8.7   $ 11.0   $  5.2      8.3%      4.9%      2.9%      3.7%       1.8%




                               2-YEAR COMPOUND ANNUAL GROWTH RATES
                               ------------------------------------
                                                          ADJUSTED
                                        ADJUSTED ADJUSTED   NET
                               REVENUE   EBITDA    EBIT    INCOME
                               -------  -------- -------- --------
                                              
ADVANTAGE MARKETING SYS INC      41.8%     16.1%    -1.4%   -14.1%

HAIN CELESTIAL GROUP INC         14.3%     17.3%    14.4%    30.4%

HERBALIFE INTL INC -CL A          4.4%     -4.4%    -5.2%    -6.3%

NATROL INC                       13.0%     NMF*     NMF*     NMF*

NATURES SUNSHINE PRODS INC        2.2%     -9.4%   -14.1%   -13.4%

RELIV INTERNATIONAL INC           7.1%    -50.1%    NMF*     NMF*

USANA HEALTH SCIENCES INC        -1.2%    -28.0%   -40.1%   -47.4%

WEIDER NUTRITION INTL -CL A       2.5%     -4.6%     7.1%    NMF*

WEIGHT WATCHERS INTL INC          5.5%     14.5%    15.0%   -31.8%

Low                              -1.2%    -50.1%   -40.1%   -47.4%
High                             41.8%     17.3%    15.0%    30.4%

Median                            5.5%     -4.5%    -1.4%   -13.7%
Mean                             10.0%     -6.1%    -3.5%   -13.8%

Jenny Craig                      -6.0%     57.5%     NMF      NMF


*    Excluded from range.


                             Houlihan Lokey Howard & Zukin Financial Advisors 55



                                                              [JENNY CRAIG LOGO]
COMPARABLE COMPANY FINANCIAL INFORMATION

BALANCE SHEET RATIOS

(figures in millions)




                                            NET         NET                                                                  NET
                                TOTAL      INCOME      INCOME      CURRENT    QUICK     INVENTORY    A/R        A/P        WORKING
                                ASSETS      ROA         ROE        RATIO      RATIO     TURNOVER     DAYS       DAYS       CAPITAL
                                ------     ------      ------      -------    ------    ---------   ------     ------     ---------
                                                                                               
ADVANTAGE MARKETING SYS INC     $ 15.2        2.7%        2.0%        2.9        1.7       14.2       14.1        6.4     $   2.156

HAIN CELESTIAL GROUP INC         467.4        5.0%        5.9%        2.8        1.4        4.9       43.2       67.7     $  77.138

HERBALIFE INTL INC -CL A         465.4        9.1%       16.9%        2.0        1.3        5.0       13.3       15.9     ($ 10.950)

NATROL INC                        84.9      -10.0%      -13.7%        2.9        1.4        3.9       56.9       47.2     $  17.146

NATURES SUNSHINE PRODS INC       129.8       13.2%       18.1%        2.2        1.0        2.0        9.6       36.5     $  13.310

RELIV INTERNATIONAL INC           18.3       -3.6%      -15.8%        1.1        0.3        6.5       15.6       57.3     $   0.453

USANA HEALTH SCIENCES INC         38.3        4.9%       16.2%        1.0        0.3        3.0        1.4       48.3     $   2.430

WEIDER NUTRITION INTL -CL A      206.4       -0.4%       -2.4%        1.7        0.7        4.1       51.9       52.2     $  64.349

WEIGHT WATCHERS INTL INC         423.4       11.9%      -21.9%        0.7        0.4       16.9        8.6       11.2     ($ 56.966)

Low                             $ 15.2      -10.0%      -21.9%        0.7        0.3        2.0        1.4        6.4     ($ 56.966)
High                            $467.4       13.2%       18.1%        2.9        1.7       16.9       56.9       67.7     $  77.138

Median                          $129.8        4.9%        2.0%        2.0        1.0        4.9       14.1       47.2     $   2.430
Mean                            $205.5        3.7%        0.6%        1.9        0.9        6.7       23.8       38.1     $  12.118

Jenny Craig                     $ 90.7       11.5%       10.2%        1.8        1.4       48.6        1.4        9.3     ($ 21.397)




                                                               LEVERAGE
                                             --------------------------------------------
                                OTHER LT     DEBT/       DEBT/       DEBT/    INTEREST
                                 LIAB/EV     EBITDA     MVE (1)       EV     COVERAGE (2)
                                --------     ------     -------     ------   ------------
                                                                
ADVANTAGE MARKETING SYS INC         0.5%       2.0x       28.7%       0.3x       4.8x

HAIN CELESTIAL GROUP INC            1.0%       0.3x        1.6%       0.0x      35.5x

HERBALIFE INTL INC -CL A           15.2%       0.1x        2.6%       0.0x       NMF*

NATROL INC                          0.5%       NMF*       22.5%       0.2x       NMF*

NATURES SUNSHINE PRODS INC          1.1%       0.0x        0.0%       0.0x       NMF*

RELIV INTERNATIONAL INC             2.1%      16.8x       46.0%       0.3x       0.8x

USANA HEALTH SCIENCES INC           0.0%       1.7x       98.3%       0.6x       9.8x

WEIDER NUTRITION INTL -CL A         0.0%       3.9x      141.6%       0.6x       2.0x

WEIGHT WATCHERS INTL INC            0.3%       2.6x       63.8%       0.4x       3.4x

Low                                 0.0%       0.0x        0.0%       0.0x       0.8x
High                               15.2%      16.8x      141.6%       0.6x      35.5x

Median                              0.5%       1.9x       28.7%       0.3x       4.1x
Mean                                2.3%       3.4x       45.0%       0.3x       9.4x

Jenny Craig                          NA        0.1x         NA          NA         NA


*  Excluded from range.


                             Houlihan Lokey Howard & Zukin Financial Advisors 56




SELECTED COMPARABLE TRANSACTIONS




                                                              [JENNY CRAIG LOGO]
SELECTED COMPARABLE TRANSACTIONS

TRANSACTION ANALYSIS - WEIGHT WATCHERS

 ($ in Millions)

Announce Date:          7/22/99
Close Date;             9/29/99

Target:                 H.J. HEINZ CO.
Unit Sold:              WEIGHT WATCHERS BUSINESS
Business Line:          Provides dieting classes and sells prepackaged food
                        products

Buyer:                  ARTAL LUXEMBOURG SA

Transaction Value:      $ 735.0

Terms:                  - Weight Watchers redeemed shares of common stock from
                          Heinz for $349.5 million, paying $324.5 million in
                          cash and $25 million in preferred stock issues to
                          Heinz.

                        - Artal bought 94% of the remaining common stock from
                          Heinz for $223.7 in cash.

                        - Heinz used $14.3 million of the proceeds to retain a 6
                          percent stake in Weight Watchers.

                        - Senior lenders provided $239 million under new,
                          secured bank credit facilities which provide for
                          borrowings of up to $267 million.

                        - Weight Watchers International issues $255 million
                          worth of high yield bonds.

                        - The notes and the senior borrowings together were used
                          to finance the purchase of shares from Heinz and to
                          refinance the existing debt of the company.

FINANCIAL ANALYSIS

                            12 months to 2Q FY00 (a)

                                                                 
 Revenue                $    406.0              EV/Revenue                1.8 x
 EBIT                   $     96.1              EV/EBIT                   7.6 x
 EBITDA                 $    101.0              EV/EBITDA                 7.3 x



OPERATIONAL ANALYSIS

- -    Acquisition allows Heinz to use the savings to boost marketing of its
     ketchup, Ore-Ida frozen potatoes and other food products.

- -    Acquisition gives Heinz the opportunity to focus on its long-term food
     growth strategy, including Weight Watchers foods and other global food
     businesses.

- -    With Artal's strong track record of success in consumer branded goods and
     services, the acquiring company believes that it can strengthen the Weight
     Watchers brand in weight loss services and work with Heinz to grow the
     Weight Watchers branded food businesses.

(a)  Per ING Barings High-Yield Research Paper dated January 10, 2000, without
     adjustments.


                             Houlihan Lokey Howard & Zukin Financial Advisors 58



NET OPERATING LOSS ANALYSIS



                                                              [JENNY CRAIG LOGO]
NET OPERATING LOSS ANALYSIS

NET OPERATING LOSS ANALYSIS

($ IN MILLIONS)

                                           
ASSUMPTIONS:
Growth Rate (pre-tax income)                     0.0%
NOL usage Limitation (% of pre-tax)(2)         90.00%
Federal Tax Rate                               35.00%
State Tax Rate                                  9.30%
Cost of Equity                                  25.0%
Federal NOL - Beginning Balance               10.000
State NOL - Beginning Balance                  0.000
State NOL usage limitation(4)                  100.0%





                                                    2002    2003    2004    2005    2006    2007    2008    2009    2010    2011
                                                     1       2       3       4       5       6       7       8       9       10
                                                   ------  ------  ------  ------  ------  ------  ------  ------  ------  ------
                                                                                             
PRE-TAX INCOME(1)                                  10.000  10.000  10.000  10.000  10.000  10.000  10.000  10.000  10.000  10.000

Maximum NOL Usage, if change of control            10.000   1.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000

FEDERAL TAX SAVINGS:
Potential Federal NOL Usage(2)                      9.000   1.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
Allowed Federal NOL Usage(2)                        9.000   1.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
Federal Tax Savings at 35 percent                   3.150   0.350   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000

STATE TAX SAVINGS

State NOL Usage(2)                                  0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
State NOL Usage(2)                                  0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
State Tax Savings at 6.045 percent.(3)     6.05%    0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000

TOTAL TAX SAVINGS (FEDERAL AND STATE)               3.150   0.350   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
Number of Years(4)                                   1.00    2.00    3.00    4.00    5.00    6.00    7.00    8.00    9.00   10.00
Present Value Factor                               0.8000  0.6400  0.5120  0.4096  0.3277  0.2621  0.2097  0.1678  0.1342  0.1074
                                                   ------  ------  ------  ------  ------  ------  ------  ------  ------  ------
PRESENT VALUE OF TAX SAVING                         2.520   0.224   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
SUM OF PRESENT VALUE OF TAX SAVING                  2.744

FEDERAL NOL

Beginning Balance                                  10.000   1.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
Usage                                               9.000   1.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
Additions                                           0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
                                                   ------  ------  ------  ------  ------  ------  ------  ------  ------  ------
Ending Balance                                      1.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000

STATE NOL

Beginning Balance                                   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
Usage                                               0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
Additions(5)                                        0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000
                                                   ------  ------  ------  ------  ------  ------  ------  ------  ------  ------
Ending Balance                                      0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000   0.000


NOTES:

(1)  Projected pre-tax income assumes $10 million in pre-tax income in FY 2002
     (annualized results for quarter ended 9/30/01) with an assumed growth rate
     equal to 0 percent thereafter.

(2)  Assumes Federal and State NOL's can be used to offset 90 percent of taxable
     income. In addition, annual NOL usage is limited under a 'change of
     control' scenario to the Company's equity value multiplied by the Fed Funds
     Rate.

(3)  The state tax rate of 9.3 percent is adjusted by 65 percent or (1-Federal
     tax rate) to reflect the federal tax benefit received if the Company had
     paid state taxes.

(4)  Assumes tax benefit associated with the usage of NOL to be received at end
     of each year.

(5)  Assumes that additions to the State NOL are limited to 100 percent of the
     pre-tax loss, if any, in a given year.


                             Houlihan Lokey Howard & Zukin Financial Advisors 60



TERMINATION FEE STUDY



                                                              [JENNY CRAIG LOGO]
TERMINATION FEE STUDY

SUMMARY OF ANALYSIS

- -   This study includes 144 announced M&A transactions in 2000 involving U.S.
    publicly traded target companies with an aggregate Transaction Value of at
    least $50.0 million in which there was a disclosed Termination Fee.

- -   The magnitude of each Termination Fee was measured as a percentage of
    "Transaction Value." Transaction Value is defined as the total amount of
    consideration payable in the transaction, excluding transaction fees and
    expenses. Liabilities and preferred stock were included in Transaction Value
    only if they were publicly disclosed as part of the consideration.

- -   Transaction Value was determined to be a more appropriate reference point
    than Equity Value for determining the magnitude of a Termination Fee
    because, unlike Equity Value, Transaction Value is not affected by the
    target company's capital structure.

- -   Based on the 144 transactions analyzed, Termination Fees in 2000 as a
    percent of Transaction Value ranged from a high of 6.6 percent to a low of
    0.7 percent, with a median of 2.9 percent.

                  TRANSACTION TERMINATION FEE STUDY SUMMARY(1)
                                ($ IN MILLIONS)



                                                         TERMINATION FEE
                                                        AS A PERCENTAGE OF
                           TRANSACTION    TERMINATION      TRANSACTION
                              VALUE          FEE              VALUE
                           -----------    -----------   ------------------
                                               
High                       $172,494.0      $3,900.0              6.6%
Low                        $     55.7      $    1.8              0.7%

Mean                       $  3,483.4      $   88.1              3.0%
Median                     $    685.3      $   20.7              2.9%


- ----------

(1)  High, low, mean and median summary results are exclusive of each other.
     Results shown for transaction value, termination fee and termination fee as
     a percentage of transaction value may be from different transactions.


                             Houlihan Lokey Howard & Zukin Financial Advisors 62



                                                              [JENNY CRAIG LOGO]
TERMINATION FEE STUDY

- -    Illustrated below is an analysis of 2000 and 1999 Termination Fees relative
     to transaction size and form of consideration.

       TERMINATION FEE STUDY BY TRANSACTION SIZE AND FORM OF CONSIDERATION
                                 ($ IN MILLIONS)



                                                                                                   MEDIAN TERMINATION
                                      NUMBER                MEDIAN               MEDIAN          FEE AS A PERCENTAGE OF
                                  OF TRANSACTIONS     TRANSACTION VALUE      TERMINATION FEE        TRANSACTION VALUE
                                 ----------------    --------------------    ----------------    ----------------------
                                  2000      1999       2000        1999       2000      1999      2000            1999
                                 ------    ------    --------    --------    ------    ------    ------          ------
                                                                                         
MEDIAN TERMINATION FEES BY
TRANSACTION SIZE

 $50 million to $250 million         37       110    $  153.6    $  115.3    $  5.0    $  4.0       3.3%            3.4%
 $250 million to $500 million        28        61    $  387.9    $  389.6    $ 10.3    $ 12.0       2.7%            3.1%
 $500 million to $1 billion          18        52    $  732.2    $  707.2    $ 23.8    $ 15.3       3.6%            2.5%
 $1 billion and greater              61        99    $2,559.1    $2,327.9    $ 85.0    $ 54.0       2.8%            2.5%
                                 ------    ------    --------    --------    ------    ------    ------          ------
TOTAL                               144       322    $  730.4    $  450.4    $ 20.0    $ 12.5       2.9%            2.9%

MEDIAN TERMINATION FEES BY
TRANSACTION CONSIDERATION

 All Stock                           62       133    $1,475.4    $  569.3    $ 45.0    $ 20.0       3.0%            2.9%
 All Cash                            77       164    $  412.0    $  295.9    $ 10.0    $  9.0       2.8%            2.8%
 Cash and Stock                       5        25    $1,755.6    $1,291.7    $ 65.0    $ 30.0       2.6%            2.6%
                                 ------    ------    --------    --------    ------    ------    ------          ------

TOTAL                               144       322    $  730.4    $  450.4    $ 20.0    $ 12.5       2.9%            2.9%



                             Houlihan Lokey Howard & Zukin Financial Advisors 63



LBO MODEL



LBO MODEL

LBO MODEL SUMMARY



SOURCES:
                            $000s     % TOTAL     RATE      PIK RATE   EQUITY         AMORTIZATION
                            ------    -------    ------     --------   ------        --------------
                                                                   
Senior Term A               15,000      19.5%      15.0%       0.0%       0.0%       2.0   in   2.0
Senior Term B               15,000      19.5%      17.0%       0.0%       0.0%       3.0   in   3.0
Revolving Line of Credit     2,000       2.6%      11.0%       0.0%       0.0%        --   --    --
Subordinated Debt           25,000      32.5%      17.0%       0.0%      20.0%       5.0   in   5.0
Seller Note                     --       0.0%      10.0%       0.0%       0.0%       5.0   in   5.0
Preferred Equity            18,000      23.4%      10.0%       0.0%      57.6%       0.0   in   7.0
Common Equity                2,000       2.6%       0.0%       0.0%      22.4%        --   --    --
Other Common                    --       0.0%       0.0%       0.0%       0.0%        --   --    --
Total Sources               77,000     100.0%                           100.0%




USES:
                        $000s      % TOTAL
                       --------     -------
                              
Cash Stock Purchase     115,000     149.4%
Cash Asset Purchase          --       0.0%
Refinance Debt               --       0.0%
Seller Note                  --       0.0%
Reinvested Equity            --       0.0%
Transaction Costs         8,000      10.4%
Other                        --       0.0%

Change in Cash          (46,000)    -59.7%
Total Uses               77,000     100.0%




INTERNAL RATES OF RETURN:
                                       
Exit Multiple (Yr. 5)      4.0x       5.0x       6.0x

Subordinated Debt          24.8%      27.1%      29.3%

Pref. & Comm Eqty          42.2%      48.1%      53.1%




                                                           PROJECTED AS OF JUNE 30
DEBT BALANCE:               OPENING AT    ------------------------------------------------------------
                             11/30/01       2002         2003         2004         2005         2006
                            ----------    --------     --------     --------     --------     --------
                                                                            
Senior Term A                  15,000       13,250        9,550           --           --           --
Senior Term B                  15,000       12,083        7,083           --           --           --
Revolving Line of Credit        2,000        3,302        2,422        5,000           --        5,000
Subordinated Debt              25,000       25,000       25,000       25,000       25,000           --
Seller Note                        --           --           --           --           --           --
Total Debt                     57,000       53,635       44,055       30,000       25,000        5,000

Less: Cash                     (7,665)      (5,000)      (5,000)      (2,506)     (10,332)      (4,811)
Net Debt                       49,335       48,635       39,055       27,494       14,668          189

EQUITY:
Preferred Equity               18,000       18,000       18,000       18,000       18,000       18,000
Common Equity                  73,622       73,622       73,622       73,622       73,622       73,622
Paid in Capital               (58,499)     (58,499)     (58,499)     (58,499)     (58,499)     (58,499)
Retained Earnings                 201        2,361       11,941       22,993       35,296       49,239
Treasury Stock                (74,762)     (74,762)     (74,762)     (74,762)     (74,762)     (74,762)
                             --------     --------     --------     --------     --------     --------
Total Stockholder' Equity     (41,438)     (39,278)     (29,698)     (18,646)      (6,343)       7,600
                             --------     --------     --------     --------     --------     --------




OPERATING SUMM:                     ACTUAL FYE JUNE 30,                                         PROJECTED FYE JUNE 30,
                    -----------------------------------------     LTM       7 MOS.    -----------------------------------------
                      1998       1999       2000       2001      NOV-01    6/30/02      2003       2004      2005        2006
                    --------   --------   --------   --------   --------   --------   --------   --------   --------   --------
                                                                                         
Revenue              352,249    320,952    290,985    283,552    296,713    183,644    318,860    326,832    335,002    343,377
   % Growth               NA      -8.9%      -9.3%      -2.6%        4.6%        NA        3.5%       2.5%       2.5%       2.5%

Gross Profit          28,617     30,856     20,346     20,396     28,642     26,186     45,432     46,568     47,732     48,925
   % of Sales            8.1%       9.6%       7.0%       7.2%       9.7%      14.3%      14.2%      14.2%      14.2%      14.2%

Adjusted EBITA         2,040      5,419      2,627        481     20,235     16,856     25,532     26,089     26,657     27,236
   % of Sales            0.6%       1.7%       0.9%       0.2%       6.8%       9.2%       8.0%       8.0%       8.0%       7.9%

Adjusted EBITDA        9,141     11,273      8,168      6,534     26,057     17,639     28,760     29,017     29,585     30,164
   % of Sales            2.6%       3.5%       2.8%       2.3%       8.8%       9.6%       9.0%       8.9%       8.8%       8.8%

CAPX                   4,678      5,073      4,747      1,961        800      5,500      5,000      5,000      5,000      5,000
   % of Sales            1.3%       1.6%       1.6%       0.7%       0.3%       3.0%       1.6%       1.5%       1.5%       1.5%

Adj. EBITDA - CAPX     4,463      6,200      3,421      4,573     25,257     12,139     23,760     24,017     24,585     25,164
   % of Sales            1.3%       1.9%       1.2%       1.6%       8.5%       6.6%       7.5%       7.3%       7.3%       7.3%




COVERAGE & LIQUIDITY:                                                           PROJECTED FYE JUNE 30,
                                   OPENING AT  EST. FYE    7 MOS.     ---------------------------------------
                                    11/30/01     2002       2002       2003       2004       2005       2006
                                   ----------  --------    ------     ------     ------     ------     ------
                                                                                  
EBITDA - CAPX - Taxes/
Cash Interest+Sch. Prin+Cash Div      1.15x      0.75x      0.73x      0.93x      0.67x      2.54x      0.53x
EBITDA - CAPX/Cash Interest             NMF      1.97x      2.32x      3.01x      4.02x      5.43x     10.48x
EBITDA/Cash Interest                    NMF      2.67x      3.37x      3.64x      4.86x      6.54x     12.57x
Financing/EBITDA                         NA       6.1x       8.2x       4.7x       4.2x       3.9x       3.2x
Total Debt/EBITDA                     2.19x      2.24x      3.04x      1.53x      1.03x      0.85x      0.17x
Senior Debt/EBITDA                    1.23x      1.10x      1.62x      0.66x      0.17x      0.00x      0.17x
Financing/EBITDA - CAPX                5.9x       8.2x      12.0x       5.7x       5.1x       4.7x       3.8x
Total Debt/EBITDA - CAPX               2.3x       3.0x       4.4x       1.9x       1.2x       1.0x       0.2x
Senior Debt/EBITDA - CAPX              1.3x       1.6x       2.4x       0.8x       0.2x       0.0x       0.2x




                                                                PROJECTED FYE JUNE 30,
REVOLVER AVAILABILITY:               OPENING AT   --------------------------------------------------
                                      11/30/01     2002       2003       2004       2005       2006
                                     ----------   ------     ------     ------     ------     ------
                                                                            
Actual Revolver Balance                 2,000      3,302      2,422      5,000         --      5,000
Eligible Accounts Receivable @ 75%      1,792      1,800      2,175      2,229      2,285      2,342
Eligible Inventory @ 50%                5,013      6,050      6,400      6,560      6,724      6,892
                                       ------     ------     ------     ------     ------     ------
Maximum Availability                    5,000      5,000      5,000      5,000      5,000      5,000
Revolver Availability                   3,000      1,698      2,578         --      5,000         --



                             Houlihan Lokey Howard & Zukin Financial Advisors 65


VALUATION SUMMARY



VALUATION SUMMARY

($ in Thousands, except per share information)



                                                     MARKET APPROACH                    DCF APPROACH           IMPLIED PUBLIC MARKET
                                               ----------------------------    ----------------------------    ---------------------
                                                   Low            High             Low            High          Low          High
                                                                                                       
ENTERPRISE VALUE                               $     69,000    $     80,000    $     66,000    $     81,000
                                               ------------    ------------    ------------    ------------

  Excess Cash                                  $     40,000    $     40,000    $     40,000    $     40,000
  Interest-bearing Debt                              (1,394)         (1,394)         (1,394)         (1,394)
  Value of Net Operating Loss Carryforwards           2,744           2,744           2,744           2,744
                                               ------------    ------------    ------------    ------------
  Aggregate Equity Value                       $    110,350    $    121,350    $    107,350    $    122,350

  Proceeds - "in the money" Options                   3,087           3,087           3,087           3,087
                                               ------------    ------------    ------------    ------------
  Adjusted Equity Value                        $    113,437    $    124,437    $    110,437    $    125,437
                                               ============    ============    ============    ============
  Shares outstanding                             20,688,971      20,688,971      20,688,971      20,688,971
  Total "in the money" Options Outstanding        1,501,000       1,501,000       1,501,000       1,501,000
                                               ------------    ------------    ------------    ------------
  Fully Diluted Shares Outstanding               22,189,971      22,189,971      22,189,971      22,189,971

  Indicated Price Per Share                    $       5.11    $       5.61    $       4.98    $       5.65    $ 2.74    $ 3.00



                             Houlihan Lokey Howard & Zukin Financial Advisors 67

EX-99.(D)(2)

                                                                 EXHIBIT (d)(2)



================================================================================


                                JENNY CRAIG, INC.

                             STOCKHOLDERS' AGREEMENT

                                      DATED

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




================================================================================




                                TABLE OF CONTENTS





                                                                                                        Page
                                                                                                        ----
                                                                                                
Section 1.        Definitions ............................................................................1

Section 4.        Action by Stockholders; Irrevocable Proxy..............................................12

Section 5.        Other Arrangements.....................................................................13

Section 6.        Preemptive Rights .....................................................................15

Section 7.        Restrictions on Transfer...............................................................15

Section 8.        Right of First Refusal.................................................................16

Section 9.        Rights and Obligations of Inclusion (Tag-Along and Drag-Along Rights)..................17

Section 10.       Share Certificates.....................................................................19

Section 11.       After-Acquired Shares..................................................................20

Section 12.       Severability ..........................................................................20

Section 13.       Governing Law .........................................................................20

Section 14.       Assignment ............................................................................20

Section 15.       Notices ...............................................................................20

Section 16.       Termination ...........................................................................21

Section 17.       Section and Other Headings.............................................................21

Section 18.       Remedies ..............................................................................21

Section 19.       Entire Agreement ......................................................................21

Section 20.       Amendment; Waiver .....................................................................21

Section 21.       Counterparts ..........................................................................21

Section 22.       Fees and Expenses .....................................................................21

Section 23.       Affiliate Transactions.................................................................21




                             STOCKHOLDERS' AGREEMENT


        STOCKHOLDERS' AGREEMENT, dated as of ___________, 2002 (this
"Agreement"), among J Holdings Corp., a Delaware corporation (the "Company"), DB
Capital Investors, L.P., a Delaware limited partnership (collectively with its
Affiliates who shall, from time to time, own, beneficially or of record,
securities of the Company "DBCP"), [ACI Capital Co., Inc. on behalf of ACI
Entities] (collectively with its Affiliates who shall, from time to time, own,
beneficially or of record, securities of the Company, "ACI") and _____________,
and __________, each an individual (each, a "Management Stockholder"), SJF
Enterprises, Inc., a Delaware corporation ("SJF"), Craig Enterprises, Inc., a
__________ corporation ("CEI"), and Sidney Craig and Jenny Craig, each an
individual (collectively the "Craigs", and together with SJF and CEI, the "Craig
Group").

W I T N E S S E T H:

        WHEREAS, the Major Investors, the Management Stockholders and SJF own
the shares of common stock of the Company (the "Common Stock") and other
securities of the Company listed on Exhibit A attached hereto and desire to
enter into this Stockholders' Agreement;

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

        Section 1. Definitions. (a) The following terms have the meanings set
forth below:

        "Accepting Offeree" has the meaning set forth in Section 9.

        "ACI" has the meaning set forth in the recitals.

        "ACI Director" has the meaning set forth in Section 2(b)(ii).

        "Acquisition Notice" has the meaning set forth in Section 9(b).

        "Acquisition Proposal" has the meaning set forth in Section 9(b).

        "Affiliate" shall mean, with respect to any Person, any Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with such other Person (by contract or otherwise, including any entity
to which such other Person is the exclusive provider of management or other
investment advisory services).

        "Agreement" has the meaning set forth in the recitals.

        "Annual Budget" has the meaning set forth in Section 3(a)(i)(xvii).

        "Board" has the meaning set forth in Section 2.

        "Business Day" means any day (other than a Saturday or Sunday) on which
banks in New York City are open for business.

        "Capital Expenditures" means all commitments to pay or payments for any
fixed assets or improvements or for replacements, substitutions or additions
thereto, that have a useful life of more than one year and which are required to
be capitalized under GAAP.



        "CEI" has the meaning set forth in the preamble.

        "Common Stock" means the common stock, par value $.01 per share, of the
Company, of which there are ________ shares issued and outstanding (all of which
are voting shares) as of the date of this Agreement.

        "Company" has the meaning set forth in the recitals.

        "Convertible Securities" means any option, warrant or share of preferred
stock of the Company or any other security, in any case, which is convertible
into or exercisable or exchangeable for Common Stock, either immediately or upon
the occurrence of a specified date or a specified event.

        "Craigs" has the meaning set forth in the preamble.

        "Craig Director" has the meaning set forth in Section 2(b).

        "Craig Group" has the meaning set forth in the preamble.

        "DAH" has the meaning set forth in the preamble.

        "DBCP Director" has the meaning set forth in Section 2(b)(i).

        "DBCP" has the meaning set forth in the preamble.

        "Excess New Securities" has the meaning set forth in Section 6.

        "Fiscal Year" has the meaning set forth in Section 3(a)(ii)(B)(iii).

        "GAAP" means United States generally accepted accounting principles.

        "Initial Public Offering Date" means the first date on which the Common
Stock shall have been registered pursuant to an effective registration statement
on Form S-1 (or any equivalent general registration form) under the Securities
Act.

        "Joint Director" has the meaning set forth in Section 2.

        "Lien" means any pledge, claim, lien, charge, encumbrance or security
interest of any kind or nature whatsoever.

        "Major Investor Directors" has the meaning set forth in Section
2(b)(ii).

        "Major Investors" means each of DBCP and ACI.

        "Management Stockholder" has the meaning set forth in the preamble.

        "New Securities" means any authorized but unissued shares, and any
treasury shares, of capital stock of the Company and all rights, options or
warrants to purchase capital stock, or securities of any type whatsoever that
are, or may become, convertible into capital stock.

        "New Securities Notice" has the meaning set forth in Section 6.

        "Notice" has the meaning set forth in Section 9.



                                       2


        "Obligated Party" has the meaning set forth in Section 3(c)(vii).

        "Offer" has the meaning set forth in Section 8.

        "Offeree" has the meaning set forth in Section 9.

        "Option Period" has the meaning set forth in Section 8.

        "Parent" means any entity that has beneficial ownership or the right to
control, directly or indirectly, the voting of more than 50% of the voting
securities of any other entity.

        "Permitted Transferees" means (i) in the case of an individual, his
estate or legal representative and trusts solely for the benefit of him, his
spouse or his children, (ii) in the case of a  partnership, (A) any of its
partners (limited or general) who are partners as of the date of this Agreement,
(B) any individual or entity who becomes a partner after the date of this
Agreement (except that if Shares constituting more than 5% of the outstanding
shares of Common Stock (on a fully diluted basis) are Transferred to any
individual or entity who becomes a partner after the date of this Agreement,
such transferee shall not qualify as a Permitted Transferee), (C) the estates of
such partners and (D) any Affiliate of such partnership or any of its partners
(limited or general) who are partners as of the date of this Agreement (but
shall not include any Person to whom Shares or other Stock are sold); (iii) in
the case of a corporation, any Subsidiary, any Parent corporation and any
Subsidiary of a Parent corporation; provided that any Transfer to such a
transferee was not consummated (and, in the case of clause (ii)(B), such
transferee was not made a partner) in contemplation of a transaction intended to
circumvent the restrictions on Transfer of Shares set forth in this Agreement;
and (iv) in the case of SJF, a member of the Craig Family (defined below) or a
Craig Entity (defined below), any one or more of the following shall (subject to
the proviso to this sentence) be a Permitted Transferee, (A) Sidney Craig or
Jenny Craig or (B) any lineal descendant of either of the Craigs (with the
Craigs, collectively the "Craig Family") or (C) any trust solely for the benefit
of a member or members of the Craig Family or (D) any partnership, limited
liability company, corporation or other entity more than 75% of the equity
securities of which are beneficially owned directly or indirectly by a member or
members of the Craig Family (a "Craig Entity") (the Persons listed in this
subparagraph each being a "Craig Stockholder" and collectively the "Craig
Stockholders"); provided, however, and not withstanding the foregoing, a
Permitted Transferee may not effect a further transfer, directly or indirectly
(other than a transfer in accordance with clause (i) above) of his, her or its
Securities to any Person unless such Person is both a Permitted Transferee of
(x) the original holder of such Securities being transferred and (y) the
Permitted Transferee who is transferring such Securities; provided further, that
in the discretion of Deutsche Bank AG, unlimited transfers may be made by itself
or by any of its direct or indirect majority owned subsidiaries, to itself or to
any of its direct or indirect majority owned subsidiaries which is also a
Permitted Transferee. In addition, the Small Business Administration (the
"SBA"), or any Person designated by the SBA in accordance with applicable SBA
regulations, shall be deemed a Permitted Transferee of ACI for the purposes of
this Agreement. After a Permitted Transferee becomes a party to this Agreement
pursuant to Section 7(b), each reference in this Agreement to a party to this
Agreement shall be deemed to include such Permitted Transferee of such party and
such Permitted Transferee shall have all the rights of the transferring party
hereunder, subject to the limitations on such rights contained herein, including
but not limited to limitations based on ownership of required minimum amounts of
Stock.

        "Person" shall mean a corporation, limited liability company,
partnership or other entity or person.



                                       3


        "Preferred Stock" means the Senior Preferred Stock, par value $_____ per
share, of the Company, having an aggregate liquidation preference of $18,000,000
of which _____ shares having a liquidation preference of $_____ per share are
issued and outstanding as of the date of this Agreement.

        "Prohibited Payment" has the meaning set forth in Section 3.

        "Registrable Securities" shall mean (1) any Common Stock now or
hereafter owned by the Stockholders, (2) any Common Stock issuable or issued
upon conversion or exercise of any warrant, right or other security now or
hereafter owned by the Stockholders, and (3) any Common Stock issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a distribution with respect to, or in exchange for or in
replacement of, or upon conversion of, such Common Stock, warrants, rights or
other securities.

        "Sale Notice" has the meaning set forth in Section 8.

        "Securities" means Common Stock, Preferred Stock, Warrants or other
Stock, provided that, for purposes of Sections 7, 8 and 9, the term "Securities"
shall not include the Warrants if the same are being Transferred together with
the Transfer of the Subordinated Debt.

        "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.

        "Selling Stockholder" has the meaning set forth in Section 8.

        "Shares" means the shares of Common Stock held by any of the
Stockholders on the date of this Agreement and any other shares of Common Stock
hereafter acquired by any Stockholder, including shares issued upon conversion
or exercise of any Convertible Security.

        "Stock" means any and all shares, interests, participations or other
equivalents (however designated) of the Company's capital stock (or equivalent
ownership interests or membership interests) whether now outstanding or
hereafter issued, including, without limitation, the Common Stock and the
Preferred Stock, all common or preferred stock of any other class issued after
the date of this Agreement, any convertible securities and rights, warrants
(including the Warrants) or options to purchase the Company's capital stock.

        "Stockholders" means, collectively, the Major Investors, the Management
Stockholders, SJF and any Permitted Transferees of such parties which become
party to this Agreement pursuant to Section 7(b).

        "Subordinated Debt" means the junior subordinated debt of J Acquisition
Corp., a Delaware corporation, and its successors and assigns, due _________,
2007.

        "Subsidiary" means any entity, more than 50% of whose voting securities
are beneficially owned or controlled, directly or indirectly, by any other
entity.

        "Third Party Offeror" has the meaning set forth in Section 9(b).

        "Transfer" means any direct or indirect transfer, sale, assignment,
pledge, encumbrance, hypothecation or other disposition, whether with or without
consideration and whether voluntary or involuntary or by operation of law.



                                       4


        "Warrants" means warrants exercisable for _____________ shares of Common
Stock of the Company, subject to adjustment as respectively provided therein, at
a price of $_____ per share, which may be exercised at any time from _____, 200_
to _______, 200_. As of the date of this Agreement the Warrants are held as
follows: DBCP holds Warrants for ____ shares, ACI holds Warrants for _______
shares, and the Management Stockholders collectively hold Warrants for ________
shares.

        (b) Dilution Calculations. Whenever in this Agreement it is specified
that a calculation based on a percentage of outstanding shares of Common Stock
is to be done on a "fully diluted basis" the denominator of the fractional
equivalent of such percentage shall be the aggregate of (i) all shares of
outstanding Common Stock, plus (ii) the shares of Common Stock issuable upon
exercise of all options granted to employees and management of the Company plus
(iii) the shares of Common Stock issuable upon exercise of conversion or
exchange rights under all other Convertible Securities including, without
limitation, the Warrants.

        Section 2. Election and Removal of Directors. Each Stockholder shall
vote all of its Shares and any other voting securities of the Company over which
such Stockholder has voting control and shall take all other necessary or
desirable actions within its control (including, without limitation, attendance
at meetings in person or by proxy for purposes of obtaining a quorum and
execution of written consents in lieu of meetings), and the Company shall take
all necessary or desirable actions within its control (including, without
limitation, calling special board and stockholder meetings), so that:

        (a) Number of Directors. The authorized number of directors on the Board
of Directors of the Company (the "Board") shall be nine directors.

        (b) Nominations Prior to the Initial Public Offering Date. Immediately
after the date of this Agreement, the Board shall consist of (i) three nominees
designated by DBCP (each a "DBCP Director"), who shall initially be
__________________; (ii) three nominees designated by ACI (each an "ACI
Director," and collectively with the DBCP Directors, the "Major Investor
Directors"), who shall initially be ____________________; (iii) one designee of
SJF (the "Craig Director"), who shall at all times be either Sidney Craig or
Jenny Craig; and (iv) up to two members designated by mutual consent of the
Major Investors or the Major Investor Directors designated by them, who shall
initially be Kent Kreh and Patricia Larchet (for purposes of this Section 2,
each a "Joint Director"). If (x) both Sidney Craig and Jenny Craig shall be
unable to serve as director or (y) SJF fails to designate either of them as
director, the number of Joint Directors shall be increased to three. In
addition, DBCP and ACI shall each have the right to appoint an observer (each,
an "Observer") to attend all meetings of the Board and all committees (whether
in person, telephonic or other) in a non-voting, observer capacity and the
Company shall provide to each Observer, concurrently with the members of the
Board and each such committee, and in the same manner, notice of such meeting
and a copy of all materials provided to such members, provided that each such
Observer shall execute a confidentiality agreement with respect to such
materials and information on standard terms. On the first date a Major Investor
owns less than seven percent (7%) of the outstanding Common Stock, calculated on
a fully diluted basis, such Major Investor shall immediately lose, from and
after such date, (i) its rights under this Agreement to appoint, remove or fill
vacancies with respect to two of its designated Major Investor Directors and any
Observer, but shall retain such rights under this Section 2 with respect to one
member of the Board, but such director shall no longer be considered a Major
Investor Director and (ii) its rights under Section 3. At the discretion of the
Board, either or both of the directors formerly designated by such Major
Investor may thereafter be nominated by a majority of the then current directors
for reelection in accordance with the Company's by-laws and applicable law, but
such director(s) shall no longer be considered Major Investor Director(s), or
the size of the Board may be reduced accordingly (in which case such Major
Investor shall cause such director(s) to resign from the Board). On the first
date SJF owns less than seven percent (7%) of the outstanding Common Stock,
calculated on a fully diluted basis, SJF shall immediately lose, from and after
such date, its rights under



                                       5


this Agreement to appoint, remove or fill vacancies with respect to the Craig
Director. At the discretion of the Board, the director formerly designated by
SJF may thereafter be nominated by a majority of the then current directors for
reelection in accordance with the Company's by-laws and applicable law, but such
director shall no longer be considered a Craig Director, or the size of the
Board may be reduced accordingly (in which case SJF shall cause such director to
resign from the Board).

        (c) Removal. DBCP and ACI shall each be entitled at any time and for any
reason (or for no reason) to designate any of its respective nominees for
removal from the Board as a director. Each of DBCP and ACI, by mutual consent,
shall be entitled at any time and for any reason (or for no reason) to designate
any of the Joint Directors for removal from the Board as a director. SJF shall
be entitled at any time and for any reason (or for no reason) to designate its
nominee for removal from the Board as a director. The Stockholders agree to take
such action, and to cause the remaining directors to take such action, as
promptly as practicable but no later than twenty (20) days after such
designation, as is necessary to remove such directors from the Board.

        (d) Filling Vacancies. If at any time a vacancy is created on the Board
by reason of the death, removal or resignation of any director, the Stockholders
agree to take such action, and to cause the remaining directors to take such
action, within twenty (20) days after such occurrence, to approve and elect an
individual to fill such vacancy, which individual shall be designated for
election as a director by (i) DBCP, if the individual who has ceased to be a
director was a nominee designated by DBCP, (ii) ACI, if the individual who has
ceased to be a director was a nominee designated by ACI, or (iii) subject to
Section 2(b), SJF, if the individual who has ceased to be a director was Sidney
Craig or Jenny Craig, or (iv) mutual consent of the Major Investors or the Major
Investor Directors. If both Sidney Craig and Jenny Craig are unable to serve on
the Board or SJF does not designate either of them to serve on the Board, then
such vacancy shall be filled by the mutual consent of the Major Investors or the
Major Investor Directors.

        (e) Failure to Designate. If any Major Investor fails to designate a
nominee to fill a vacancy in a directorship controlled by it or the Major
Investors fail to designate a nominee to fill a vacancy for a Joint Director, in
each case within twenty (20) days of the occurrence of such vacancy , the
election of an individual to such directorship shall be accomplished in
accordance with the Company's by-laws and applicable law.

        (f) Subsidiary Boards. The identity of the directors, managing members,
general partners, or similar office holders, depending on the structure thereof,
as the case may be, of each Subsidiary of the Company shall be identical to the
directors of the Company unless otherwise agreed to by the Major Investors, and
if not identical to the directors of the Company, SJF shall be entitled to
designate one director, managing member, general partner or similar office
holder, as applicable, to such Subsidiary of the Company.

        (g) Meetings. The Board shall meet at least quarterly.

        (h) Committees. At all times a DBCP Director and an ACI Director shall
serve on the following committees of the Board if and when created: (i) the
Executive Committee, (ii) the Audit Committee and (iii) the Compensation
Committee. No committee of the Board shall be created, and the powers and duties
thereof determined, except with the mutual consent of each of the Major
Investors. At least one Major Investor Director and, at the discretion of DBCP
and ACI, at least one DBCP Director and one ACI Director, shall serve on each
additional committee of the Board.



                                       6


        (i) Quorum. At all times this Agreement is in effect and DBCP and ACI
are Major Investors, a quorum of the Board shall consist of a majority of the
entire Board and must include at least two DBCP Directors and two ACI Directors.

        Section 3. Certain Corporate Actions.

        (a) Each Stockholder shall vote all of its Shares and any other voting
securities of the Company over which such Stockholder has voting control and
shall take all other necessary or desirable actions within its control
(including, without limitation, attendance at meetings in person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the Company shall take all necessary or desirable actions within
its control (including, without limitation, calling special board and
stockholder meetings), so that at all times the charter documents of the
Company, including but not limited to the by-laws and the certificate of
incorporation, shall provide, subject to the provisions of Section 3(b), that
the affirmative vote of a majority of the Directors then in office, including
the affirmative vote of all Major Investor Directors designated by each of DBCP
and ACI, shall be required in order for the Company or any Subsidiary to take
any of the following actions (or series of actions that, on a cumulative basis,
produce the same result) and the Company shall not (and shall cause its
Subsidiaries not to) take any such action (or series of actions) without such
consent:

                (i) declare or pay any dividends or authorize or make any
        distribution upon or with respect to any Stock (except for dividends or
        distributions by any wholly-owned Subsidiary to another wholly-owned
        Subsidiary);

                (ii) enter into a merger, consolidation or other business
        combination involving the Company or any Subsidiary (whether or not the
        Company would be the surviving entity of such merger, consolidation or
        other business combination);

                (iii) approve the acquisition, or a related series of
        acquisitions, of any material properties or assets of any Person
        (regardless of the type of consideration used in connection therewith)
        (1) either not provided therefor or exceeding by $50,000 or more the
        amount approved therefor, in the Annual Budget, (2) in excess of
        $500,000 notwithstanding whether such acquisition has been approved in
        the Annual Budget or (3) in excess of $1,000,000 in the aggregate for
        all such transactions (regardless of the size of any one such
        transaction), in each case other than the purchase of inventory in the
        ordinary course of business;

                (iv) approve the assignment, transfer, conveyance, lease or
        other disposition of any of the material properties or assets of the
        Company and its Subsidiaries, or a related series of such transactions
        (1) exceeding by $50,000 or more in value the amount approved therefor
        in the Annual Budget, (2) in excess of $500,000 in value notwithstanding
        whether any such disposition has been approved in the Annual Budget or
        (3) in excess of $1,000,000 in value in the aggregate for all such
        transactions (regardless of the size of any one such transaction), in
        each case other than sales of inventory in the ordinary course of
        business;

                (v) during any Fiscal Year, make any investment in another
        Person whether in the form of equity or debt (including in connection
        with a joint venture) in an amount that exceeds $50,000 in the
        aggregate;

                (vi) adopt any plan of recapitalization, liquidation, voluntary
        bankruptcy or dissolution of the Company, unless otherwise required by
        law;



                                       7


                (vii) redeem or repurchase any Stock or rights to purchase Stock
        of the Company other than pursuant to employee or management stock
        option or purchase plans approved by the Major Investor Directors.;

                (viii) borrow any money or incur any indebtedness, including
        purchase money indebtedness, in excess of $100,000 in the aggregate;

                (ix) waive a right or debt owed to the Company or its
        Subsidiaries exceeding $50,000 individually or $500,000 in the
        aggregate;

                (x) satisfy or discharge any indebtedness or make payment of any
        obligation of the Company or its Subsidiaries in excess of $50,000,
        other than in the ordinary course of business consistent with past
        practice;

                (xi) permit or allow any assets of the Company or its
        Subsidiaries to be subjected to any material Lien in excess of $50,000,
        other than Liens on equipment in the ordinary course of business
        consistent with past practices;

                (xii) make any material change in any method of accounting or
        accounting practice or appoint auditors;

                (xiii) enter into transactions with Affiliates of the Company in
        excess of $50,000, including, without limitation, financial advisory or
        other services agreements;

                (xiv) issue or sell any shares of Stock, rights to acquire Stock
        (by conversion, exercise of a warrant or option or otherwise) or debt
        securities of the Company or any Subsidiary (provided that the Company
        may issue such securities pursuant to a stock incentive plan previously
        approved by the Major Investor Directors), or authorize a Transfer of
        Stock or rights to purchase Stock of any Subsidiary where approval of
        the Board is required;

                (xv) adopt any stockholder rights plan or amend the certificate
        of incorporation or by-laws of the Company;

                (xvi) appoint, elect or terminate the chairman of the Board or
        any executive officer and member of senior management;

                (xvii) with respect to any fiscal year, approve an annual
        business plan, budget and any long range strategic plan therefor
        (collectively, the "Annual Budget"); provided that in the event the
        Major Investor Directors do not approve an Annual Budget for any fiscal
        year, the officers shall operate the company consistent with past
        practice and the prior Annual Budget;

                (xviii) approve any individual or series of related capital
        expenditures (1) either not provided therefor or exceeding by $50,000 or
        more the amount approved therefor, in the Annual Budget, (2) in excess
        of $500,000 notwithstanding whether such expenditure has been approved
        in the Annual Budget other than as approved by the Executive Committee
        or (3) in excess of $1,000,000 in the aggregate for all such
        expenditures (regardless of the size of any one such expenditure);



                                       8


                (xix) approve or adopt any compensation, incentive, benefit,
        pension or similar plan for senior management or other employees in
        excess of $50,000, including any equity or equity-based plan;

                (xx) approve contracts having a value that exceeds $50,000
        (other than contracts regarding the purchase of inventory) or that
        contain any covenants or other terms restricting the business of the
        Company;

                (xxi) prepare to register Common Stock pursuant to a
        registration statement on Form S-1 (or any equivalent general
        registration form) under the Securities Act;

                (xxii) assume, guarantee, endorse or otherwise become liable or
        responsible (whether directly, contingently or otherwise) for the
        material obligations of any other Person or make any loans, advances or
        capital contributions to any other Person; or

                (xxiii) materially change, add to, or eliminate any of the
        Company's lines of business other than as approved in the Annual Budget.

                (xxiv) provided, a motion to take such action with respect to
        any of the foregoing may be made by any Major Investor Director and such
        motion shall thereafter be voted upon, with or without a second or any
        other additional requirement, by the Board no later than at its next
        regularly scheduled meeting. For avoidance of doubt, the foregoing
        actions shall not require the approval of all Major Investor Directors
        of a Major Investor if such Major Investor has lost its designation
        rights under Section 2(b).

        (b) If at any time after the fourth anniversary of the date of this
Agreement the Major Investor Directors do not agree with respect to any of the
items brought to a vote pursuant to Sections 3(a)(i), 3(a)(ii), 3(a)(vi),
3(a)(xvi) or 3(a)(xvii) hereof, and such disagreement continues after such
initial vote until the later of (A) the six month anniversary thereof or (B) the
conclusion of the second consecutive Board meeting held thereafter, each of the
Stockholders (other than SJF and its Permitted Transferees) shall, and shall
cause members of the Board designated by them to cooperate to cause the Company
to sell its assets and liquidate or to arrange a transaction for the sale of all
outstanding Stock (through a merger or otherwise) as promptly as commercially
practicable thereafter. The sale shall be supervised and directed by a
representative of each of the Major Investors, in consultation and cooperation
to the extent practicable with the Company, in a manner (including use of an
investment banking firm of recognized standing selected by mutual consent of
such representatives) structured, in the reasonable judgment of such
representatives, to achieve the highest available price. It is understood and
agreed that each Stockholder (other than, subject to the provisions of Section
9(b) hereof, SJF and its Permitted Transferees) shall vote its Shares and shall
take all other necessary or desirable actions within its control (including,
without limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings) and,
if applicable, shall direct its Board nominee(s) to take all necessary or
desirable actions to approve and consummate any sale pursuant to this Section
3(b), including exercise of the proxy granted under Section 4(c) in the event of
any failure to vote in accordance with the preceding sentence. SJF and its
Permitted Transferees shall cooperate with the reasonable joint requests of the
Major Investors in furtherance of the foregoing. Without the written consent of
the Major Investors, no Stockholder or Affiliate of any Stockholder shall be
eligible to purchase assets or Stock pursuant to such a sale. Any such sale or
transaction shall be on terms and conditions that are identical for all
Stockholders.

        (c) The Company covenants and agrees that from and after the date hereof
(except as otherwise provided herein), until termination of this Agreement:



                                       9


                (i) Books and Records. The Company shall, and shall cause its
        Subsidiaries to, keep adequate records and books of account and prepare
        periodic statements of accounts with respect to their business
        activities in which proper entries reflecting all of their financial
        transactions are made in accordance with accounting practices and
        procedures established by the Company, which shall be in accordance with
        GAAP and applicable law. These practices and procedures shall provide
        that the Company shall (x) make and keep books, records, and accounts,
        which, in reasonable detail, accurately and fairly reflect the
        transactions and dispositions of the assets of the Company and (y)
        devise and maintain a system of internal accounting controls sufficient
        to provide reasonable assurances that (1) transactions are executed and
        access to assets is given only in accordance with management's general
        or specific authorization, (2) transactions are recorded as necessary to
        permit preparation of periodic financial statements and to maintain
        accountability for assets and (3) recorded accountability for assets is
        compared with the existing assets at reasonable intervals and
        appropriate action is taken with respect to any differences.

                (ii) Financial and Business Information. The Company will
        deliver as soon as practicable (x) to each Major Investor and, for so
        long as SJF holds at least seven percent (7%) of the outstanding Common
        Stock, calculated on a fully diluted basis, SJF, the information listed
        in A, B, C, D and E below and (y) to each Stockholder, the information
        listed in C below:

                        (A) Monthly Information. Commencing with the month
                ending _____________, after the end of each month, but in any
                event within 30 days thereafter: (x) an unaudited consolidated
                balance sheet of the Company and its Subsidiaries as of the end
                of such month; and (y) unaudited consolidated statements of
                income, retained earnings and cash flows of the Company and its
                Subsidiaries, for such month and for the portion of such year
                ending with such month.

                        (B) Quarterly Information. After the end of each of the
                first three quarterly fiscal periods in each Fiscal Year of the
                Company, but in any event within 45 days thereafter, (x) an
                unaudited consolidated balance sheet of the Company and its
                Subsidiaries as of the end of such quarter, and (y) unaudited
                consolidated statements of income, retained earnings and cash
                flows of the Company and its Subsidiaries for such quarter and
                (in the case of the second and third quarters) for the portion
                of the Fiscal Year ending with such quarter, setting forth in
                each case in comparative form the projected consolidated figures
                for such period and the actual consolidated figures for the
                comparable period of the prior Fiscal Year. Such statements
                shall be (i) prepared in accordance with GAAP consistently
                applied, (ii) in reasonable detail and (iii) certified by the
                principal financial or accounting officer of the Company.

                        (C) Annual Information. After the end of each fiscal
                year of the Company (each a "Fiscal Year"), but in any event
                within 90 days thereafter, (x) an audited consolidated balance
                sheet of the Company and its Subsidiaries as of the end of such
                Fiscal Year, and (y) audited consolidated statements of income,
                retained earnings and cash flows of the Company and its
                Subsidiaries for such year Fiscal Year, setting forth in each
                case in comparative form the figures for the previous year. Such
                statements shall be (i) prepared in accordance with



                                       10


                GAAP consistently applied, (ii) in reasonable detail and (iii)
                certified by KPMG or such other auditor selected in accordance
                with Section 3(a)(xii) hereof

                        (D) Projections. Not less than thirty (30) days prior to
                the beginning of each Fiscal Year: (x) projected consolidated
                balance sheets of the Company and its Subsidiaries, if any, for
                such Fiscal Year, on a monthly basis; (y) projected consolidated
                cash flow statements of the Company and its Subsidiaries, if
                any, including summary details of cash disbursements (including
                for Capital Expenditures), for such Fiscal Year, on a monthly
                basis; and (z) projected consolidated income statements of the
                Company and its Subsidiaries, if any, for such Fiscal Year, on a
                monthly basis; in each case, approved by the Board of Directors
                of the Company, together with appropriate supporting details.

                        (E) Supplemental Information. Concurrently and in
                connection with the supply of any historical financial
                information by the Company pursuant to subsections (A), (B) and
                (C) above, the Company will, but only to the extent it prepares
                such reports, provide reports containing comparisons and
                analyses of any variances between budgeted amounts and actual
                performance by the Company for the period of time covered by any
                such historical financial information.

                (iii) Tax Compliance. The Company shall pay all transfer, excise
        or similar taxes (not including income or franchise taxes) in connection
        with the issuance, sale, delivery or transfer by the Company to each
        Major Investor and SJF of Stock, and shall indemnify and save each Major
        Investor and SJF harmless without limitation as to time against any and
        all liabilities with respect to such taxes. The Company shall not be
        responsible for any taxes in connection with the transfer of Common
        Stock by the holder thereof. The obligations of the Company under this
        paragraph (iii) shall survive the termination or expiration of this
        Agreement.

                (iv) Access. The Company shall permit representatives of each
        Major Investor to visit and inspect any of the properties of the Company
        and its Subsidiaries, to examine the corporate books and make copies or
        extracts therefrom and to discuss the affairs, finances and accounts of
        the Company and its Subsidiaries with the principal officers of the
        Company, at such times and as often as each Major Investor may
        reasonably request upon prior notice. In addition, for so long as Sidney
        Craig, Jenny Craig and their respective Affiliates own at least seven
        percent (7%) of the Company's Common Stock calculated on a fully diluted
        basis, Sidney Craig, or a representative thereof, shall have access to
        the Chief Executive Officer and the Chief Financial Officer once each
        quarter for two (2) hours to discuss the status of the Company.

                (v) Restrictive Trade Practices; Boycotts. The Company will
        avoid any role in restrictive trade practices or boycotts prohibited or
        penalized under U.S. law.

                (vi) Prohibited Payments. The Company, its Subsidiaries and the
        officers, directors, employees, or representatives of the Company and
        its Subsidiaries shall use only legitimate practices in commercial
        operations and in promoting the Company's position on issues before
        governmental authorities. No officer, director, employee, or
        representative of the Company or its Subsidiaries shall pay, offer,
        promise or authorize the payment, directly or indirectly through any
        other Person, of any monies or anything



                                       11


        of value to (x) any Person employed by or acting for or on behalf of any
        customer, whether private or governmental, or (y) any government
        official or employee or any political party or candidate for political
        office or any or employee of, or any person acting on behalf of, a
        public international organization, for the purpose of inducing or
        rewarding any favorable action by the customer in any commercial
        transaction or in any governmental matter (any such act being a
        "Prohibited Payment"). A Prohibited Payment shall not include the
        payment of reasonable and bona fide expenditures, such as travel and
        lodging expenses, which are directly related to the promotion,
        demonstration or explanation of products or services, or the execution
        or performance of a contract with a foreign government or agency
        thereof; provided such payments are permissible under local law and
        customer guidelines.

                (vii) Confidentiality. Each party hereto or made a party hereto
        agrees to keep (A) this Agreement and the terms hereof and (B) any
        non-public information about the Company received pursuant to rights
        under this Agreement ((A) and (B) collectively, the "Confidential
        Information"), strictly confidential and to disclose such Confidential
        Information only to those Persons who have a need to know such terms in
        order to allow such party to properly perform their obligations
        hereunder and who are themselves bound by confidentiality obligations
        with respect thereto; provided (x) ACI may disclose Confidential
        Information to its limited partners (who shall be advised of the
        confidential nature of such information) and to the SBA and (y) that if
        a party (the "Obligated Party") is requested to, or required by,
        applicable law, rule, regulation or by court order, subpoena, other
        legal process, to disclose any of the Confidential Information, such
        party shall provide the Company with prompt written notice of the
        request or requirement so that the Company may seek a protective order
        or other appropriate remedy or, in the absence of seeking such
        protective order or other remedy, waive compliance by such party with
        the provisions of this Agreement; provided that, in the case of DBCP,
        upon the request of any government or regulatory or self-regulatory body
        having or claiming authority to regulate or oversee any aspect of its
        business or that of its Affiliates, DBCP may disclose such Confidential
        Information upon advising such requesting party of the confidential
        nature of such information. In the absence of a protective order or
        other remedy or the receipt of a waiver from the Company, if the
        Obligated Party is, in its good faith determination, legally compelled
        to disclose any of the Confidential Information, it may, without
        liability hereunder, disclose only such portion of the Confidential
        Information that it determines is legally required to be disclosed,
        provided that in that connection the Obligated Party shall use its
        reasonable best efforts to preserve the confidentiality thereof,
        including cooperating with the Company to obtain an appropriate
        protective order or other reliable assurance that confidential treatment
        will be accorded that portion of the Confidential Information disclosed.
        For avoidance of doubt, the marketing or transfer of Stock by any
        Stockholder is subject to the terms of this subsection (vii).

        Section 4. Action by Stockholders; Irrevocable Proxy.

        (a) Action by Written Consent. Any action required or permitted to be
taken by the Stockholders under this Agreement, including any action with
respect to the designation of members of the Board, may be taken pursuant to a
written consent setting forth the action so taken and signed by the holders of
the requisite percentage of the Shares then held by the Stockholders.

        (b) Special Meetings. In the event that the holders of the requisite
percentage of the outstanding Shares have not consented in writing to any action
required to be taken by the Stockholders



                                       12


within ten days after such action is required to be taken, then the Chairman of
the Board shall call a stockholders meeting for the purpose of determining the
decision of stockholders in accordance with the By-Laws, the Certificate of
Incorporation and applicable law.

        (c) Irrevocable Proxy. If any Stockholder fails for any reason to vote
its Shares in accordance with the requirements of this Agreement, then the
applicable proxy holder (as hereinafter determined) shall have the right to vote
such Shares. Each Major Investor hereby constitutes and appoints the other Major
Investor, with full power of substitution, its true and lawful proxy and
attorney-in-fact, to vote, or to give a written consent with respect to, all of
the Shares owned by the appointing Major Investor for the election to or the
removal from the Board of the other Major Investor's nominee(s), or to vote upon
any other matter upon any failure by such appointing Major Investor to vote its
Shares in accordance with this Agreement. Each non-Major Investor Stockholder
hereby constitutes and appoints each of the Major Investors, with full power of
substitution, its true and lawful proxy and attorney-in-fact, to vote, or to
give a written consent with respect to, all of the Shares owned by each such
Stockholder for the election to or the removal of directors from the Board or to
vote upon any other matter, upon any failure by such non-Major Investor to vote
its Shares in accordance with this Agreement; provided that the Major Investor
that first gives notice to the other Major Investor of its intent to exercise
the proxy of any non-Major Investor Stockholder with respect to the votes taken
at a particular stockholders meeting or with respect to a particular consent
shall be the only Major Investor entitled to exercise such proxy with respect to
such vote or consent. Any proxy granted hereunder shall only be valid to the
extent that the holder thereof uses such proxy to vote the shares relating
thereto in accordance with the terms of this Agreement. Each such appointment
shall terminate at such time as the grantor no longer is obligated to vote his,
her or its Shares in accordance with the requirements of this Agreement and, in
all events, with respect to particular Shares upon the sale of such Shares by
such grantor pursuant to an effective registration statement or Rule 144 under
the Securities Act. The proxy granted hereby shall be binding on any transferee
that acquires Shares in a transaction permitted pursuant to Section 7(b). EACH
STOCKHOLDER ACKNOWLEDGES THAT THE PROXY GRANTED HEREBY IS COUPLED WITH AN
INTEREST AND IS IRREVOCABLE TO THE FULL EXTENT PERMITTED BY THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE.

        Section 5. Other Arrangements.

        (a) No Stockholder shall grant any proxy or enter into or agree to be
bound by any voting trust with respect to any of its Shares nor shall any
Stockholder enter into any stockholder agreement or arrangement of any kind with
any Person with respect to any of its Shares or other Stock, in each case
inconsistent with the provisions of this Agreement (whether or not such
agreement and arrangement is with other Stockholders or holders of shares of
other Stock that are not bound by this Agreement), including, but not limited
to, agreements or arrangements with respect to the acquisition, disposition or
voting of Shares or other Stock, or act, for any reason, as a member of a group
or in concert with any other Persons in connection with the acquisition,
disposition or voting of its Shares or other Stock in any manner which is
inconsistent with the provisions of this Agreement.

        (b) The Company shall, as a condition to grants of additional Stock to
executive officers or employees of the Company or its Subsidiaries, require such
employees to enter into an agreement with the Company restricting the Transfer
of the Stock so acquired and other Stock, except with the consent of the Board,
and imposing such other restrictions required by the Board and allowing the
Company to repurchase such Stock at fair market value, as determined in good
faith by the Board, or other price acceptable to the Board in the event that
such employees cease to be employed by the Company.



                                       13


        (c) SJF shall be entitled to the following registration rights in
respect of its Registrable Securities:

                (i) If the Company at any time proposes to register (including
        for this purpose a registration effected by the Company in connection
        with its initial public offering, only if shares are being sold in such
        offering for the account of a Major Investor or with respect to the
        shares transferred to any transferee of such Major Investor) any of its
        equity Securities under the Securities Act in connection with the public
        offering of such securities solely for cash (other than a registration
        on Form S-8 relating solely to the sale of securities to participants in
        a Company stock plan or to other compensatory arrangements to the extent
        includable on Form S-8, or a registration on Form S-4), the Company
        shall, at such time, promptly give SJF written notice of such
        registration at least thirty (30) days before the initial filing of such
        registration statement. Upon the written request of SJF given within
        twenty (20) days after mailing of such notice by the Company, the
        Company shall use its reasonable best efforts to cause to be registered
        under the Securities Act all of the Registrable Securities that SJF has
        requested to be registered. Notwithstanding anything to the contrary
        contained in this Section 5(c), if in connection with any offering
        described in this Section 5(c) involving an underwriting of securities
        (whether solely for Company's own account or for the account of others),
        the managing underwriter or the underwriters shall impose a limitation
        on the number of shares of Common Stock which may be included in the
        registration statement, then, in the discretion of such managing
        underwriter or underwriters, the Company shall include in such
        registration statement only such portion of the Registrable Securities
        with respect to which SJF shall have requested inclusion pursuant hereto
        as such limitation permits after the inclusion of all shares of
        Securities to be registered by Company for its own account or the
        account of others, other than the Major Investors or with respect to any
        of the shares transferred to any such Major Investor's transferees;
        provided, however, that if the offering is being made for the account of
        other persons as well as the Company, then the aggregate number of
        Registrable Securities that may be included in the underwriting shall be
        allocated (as nearly as practicable) among all holders of Registrable
        Securities participating in such registration in proportion to the
        amount of Registrable Securities owned by each such holder. The Company
        shall have no obligation under this Section 5(c) to make any offering of
        its securities, or to complete an offering of its securities that it
        proposes to make, and shall incur no liability to SJF for its failure to
        do so.

                (ii) At the time and in connection with any registered offering,
        the Company and SJF shall provide customary indemnification to one
        another in connection with its obligations under this Section 5(c). The
        Company shall furnish to SJF such number of copies of a summary
        prospectus or other prospectus, including a preliminary prospectus, in
        conformity with the requirements of the Securities Act, and such other
        documents, as SJF may reasonably request. In connection with an
        underwritten registered offering of Registrable Securities, SJF will
        enter into an underwriting agreement in customary form and (whether or
        not SJF participates in such offering) will enter into a market standoff
        agreement in customary form and not more restrictive than comparable
        agreements entered into by any other holders of Registrable Securities.

                (iii) All expenses incident to the Company's performance of or
        compliance with the provisions of this Section 5(c), including, without
        limitation, all registration and filing fees, fees and expenses of
        compliance with securities or "blue sky" laws, printing expenses and
        reasonable fees and disbursements of counsel for the Company and of all
        independent certified public accountants of the Company, underwriters,
        securities acts



                                       14


        liability insurance if the Company so desires and fees and expenses of
        other Persons retained by the Company (all such expenses being herein
        called "Registration Expenses") will be borne by the Company, regardless
        of whether the registration statement becomes effective. SJF is liable
        for any (X) fees, discounts or commissions to any underwriter in respect
        of the Securities sold by SJF and (Y) any fees, expenses or
        disbursements of counsel and other legal and financial advisors to SJF.

                (iv) The rights under this Section 5(c) shall expire immediately
        as to any Registrable Securities owned by SJF when (i) a registration
        statement with respect to the sale of such securities shall have become
        effective under the Securities Act and such securities have been
        disposed of in accordance with such registration statement, (ii) such
        securities shall have been distributed or sold to the public pursuant to
        Rule 144 promulgated under the Securities Act (or any successor rule
        thereto or any complementary rule thereto) or they shall become eligible
        for sale under Rule 144(k) provided such Registrable Securities
        represent less than one percent (1%) of the issued and outstanding
        Common Stock or (iii) they shall have ceased to be issued and
        outstanding for any reason.

        Section 6. Preemptive Rights.

        In case the Company proposes to issue or sell any New Securities to
either ACI and/or DBCP or their respective Affiliates, the Company shall, no
later than thirty (30) Business Days prior to the consummation of such
transaction, give notice in writing (the "New Securities Notice") to SJF of such
proposed issuance of New Securities. The New Securities Notice shall describe
the proposed issuance of New Securities (including the amount and price of such
New Securities), identify the proposed purchaser(s), and contain an offer (the
"Preemptive Rights Offer") to sell to SJF at the same price and for the same
consideration to be paid by the proposed purchaser(s), all or part of SJF's pro
rata portion of the New Securities to be issued to ACI and/or DBCP. Following
receipt of such notice, SJF shall have twenty (20) Business Days during which it
may elect to purchase a pro rata portion of the New Securities proposed to be
issued to ACI and/or DBCP, determined by dividing the number of Shares held by
SJF by the aggregate number of Shares held by all Stockholders before the
proposed issuance of New Securities. If the Company does not effectuate such
sale within ninety (90) days after the expiration of such twenty (20) Business
Day period, the Company shall be required to again comply with this Section 6
prior to effectuating any such sale. Notwithstanding the foregoing, this Section
6 shall not apply to (i) shares of Common Stock issued to ACI and/or DBCP upon
their exercise of any Convertible Securities, including, without limitation, the
Warrants; (ii) any payment-in-kind interest payable to ACI and/or DBCP pursuant
to that certain Junior Subordinated Debt Facility, dated as of _____________,
among _________________; (iii) dividends payable in kind, if and when declared,
on the Preferred Stock; (iv) dividends or distributions on its Securities
payable in shares of its Common Stock or other equity interests of the Company,
(v) a subdivision of the Company's outstanding shares of Common Stock into a
larger number of shares of Common Stock, (vi) a combination of the Company's
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (vii) an increase or decrease in the number of shares of Common Stock
outstanding by reclassification of the Company's Common Stock.

        Section 7. Restrictions on Transfer.

        (a) Transfer Restricted. No Stockholder may Transfer any interest in any
of the Securities held by such Stockholder except in accordance with Section
7(b). No Transfer of Securities in violation of this Agreement shall be made or
recorded on the books of the Company.



                                       15


        (b) Permitted Transfers by Stockholders. The parties acknowledge and
agree that any of the following Transfers of Securities are deemed to be in
compliance with this Agreement:

                (i) a Transfer by any Stockholder in compliance with Section 8
        and/or Section 9; and

                (ii) a Transfer by any Stockholder to a Permitted Transferee of
        such Stockholder.

        (c) Additional Restrictions on Shares Owned by Major Investors. On or
prior to the fourth (4th) anniversary of the date hereof, none of the Major
Investors may Transfer, pursuant to Section 7(b)(i) hereof, more than forty nine
percent (49%) in the aggregate of any class of Securities owned by such Major
Investor as of the date of this Agreement without the consent of the
non-transferring Major Investor, such consent not to be unreasonably withheld;
provided that notwithstanding the foregoing, in the case of DB Capital, if
Deutsche Bank AG, in its good faith, reasonably determines that such Transfer is
required in order to comply with any law, regulation or order applicable to DB
Capital Partners or its Affiliates, such Transfer shall be permitted.

        (d) Restrictions on Certain Transferees. Without the mutual consent of
the Major Investors, no transferee of Shares from a Major Investor pursuant to a
Transfer approved under this Section 7 shall have any of the rights of a Major
Investor hereunder including rights deriving from the number of shares of Common
Stock owned by such transferee; provided, that in the event that Deutsche Bank
AG transfers or causes all or substantially all of the Shares owned by DBCP to
be transferred to itself or to one or more of its direct or indirect
subsidiaries, Deutsche Bank AG may designate, at its discretion, which of itself
or any such subsidiary shall succeed to the rights and obligations of DBCP as a
Major Investor hereunder.

provided, however, that, except for Transfers to the Company or Stockholders in
accordance with this Agreement, no Transfer pursuant to this Section 7 shall be
permitted unless and until each transferee delivers to the Company an executed
copy of this Agreement, in which it agrees to be bound by and take the
Securities so transferred subject to all the terms of this Agreement.

        (e) Transfers by the Craig Group. Notwithstanding anything herein to the
contrary, so long as CEI or any Subsidiary of CEI beneficially owns, directly or
indirectly, Stock representing more than seven percent (7%) of the Common Stock
of the Company on a fully diluted basis, the Craigs will not Transfer more than
fifty percent (50%) of the voting securities of CEI or any Subsidiary of CEI
owning such Stock or any Person owning more than fifty percent (50%) of the
voting securities of such Subsidiary to any Person other than a Permitted
Transferee of the Craigs.

        Section 8. Right of First Refusal.

        (a) Except for Transfers to Permitted Transferees or Transfers pursuant
to Section 9, if any Stockholder (a "Selling Stockholder") desires to dispose of
any or all of its Securities, (i) such proposed Transfer must be pursuant to a
bona fide written offer received from a proposed third party purchaser who is
not an Affiliate of the Selling Stockholder (the "Offer"), (ii) such Stockholder
shall give written notice (the "Sale Notice") to the Company and each
non-selling Major Investor not fewer than thirty (30) Business Days before the
date of the proposed disposition, which notice shall specify the terms and
conditions of the Offer and the identity of the offeror and (iii) each
non-selling Major Investor shall have the option, but not the obligation, by
providing written notice to the Selling Stockholder within thirty (30) Business
Days following the receipt of the Sale Notice (the "Option Period"), to purchase
in the aggregate, all, but not less than all, of the Securities for which the
Offer was made at the price and



                                       16


upon the terms and conditions set forth in the Offer. Such option shall be
exercisable by each non-selling Major Investor on a pro-rata basis with a right
to purchase the full allotment of Securities unsubscribed for by any other
non-selling Major Investor. Subject to the compliance with the tag-along right
provisions of Section 9(a) hereof, such purchase will close, unless otherwise
agreed to by the Selling Stockholder and the non-Selling Major Investor, on the
thirtieth (30th) Business Day after the latest day on which a Sale Notice was
received by any of the purchasing Major Investors.

        (b) If, for any reason, the non-selling Major Investors fail to exercise
the option to purchase all of the Securities of the Selling Stockholders for
which the Offer was made provided for in Section 8(a) within the thirty (30)
Business Day period described in Section 8(a), it shall be deemed to be a waiver
of such non-Selling Major Investors' option and the option shall expire and the
Selling Stockholder shall have the right, subject to Section 9(a), for a period
of ninety (90) days following the expiration of such option, to sell all of the
Securities subject to the Offer; provided, that such sale may only be to the
original offeror and on the same terms and conditions of the Offer, and
provided, further, that such third party purchaser shall agree in writing to be
bound by all of the terms and conditions of this Agreement which apply to the
Selling Stockholder.

        Section 9. Rights and Obligations of Inclusion (Tag-Along and
        Drag-Along Rights).

        (a) Tag Along Rights.

                (i) Except for Transfers to Permitted Transferees, no Selling
        Stockholder or group of Selling Stockholders shall, individually or
        collectively, in any one transaction or any series of transactions,
        Transfer to any third party or group of third parties any or all of such
        Stockholder's or Stockholders' Securities unless the Major Investors
        have not exercised their rights of first refusal with respect to such
        Securities under Section 8. If any Selling Stockholder or group of
        Selling Stockholders receives and intends to accept a bona fide offer
        from a third party to purchase or otherwise acquire a number of
        Securities, then such Selling Stockholder or group of Selling
        Stockholders shall cause the third party's offer to be reduced to
        writing (which writing shall include an offer to purchase or otherwise
        acquire Securities from each non-selling Stockholder (each an "Offeree")
        according to the terms and conditions of this Section 9(a)) and shall
        send written notice of the third party's offer (the "Notice") to each
        Offeree, which notice may be the same notice and given at the same time
        as the Sale Notice under Section 8. The Notice shall be accompanied by a
        true and correct copy of the third party's offer. At any time within
        thirty (30) Business Days after receipt of the Notice, each Offeree may
        accept the offer included in the Notice (an "Accepting Offeree") for up
        to such number of Securities as is determined in accordance with the
        provisions of Section 9(b) by furnishing written notice of such
        acceptance to the Selling Stockholders and delivering to the Selling
        Stockholders the certificate or certificates representing the maximum
        number of Securities that may be sold or otherwise disposed of pursuant
        to such offer by such Offerees, together with a limited
        power-of-attorney authorizing the Selling Stockholders to sell or
        otherwise dispose of such Securities pursuant to the terms of such third
        party's offer.

                (ii) Each Offeree shall have the right, pursuant to Section
        9(a)(i) above, to sell, at the price and upon the terms and conditions
        set forth in the Notice, a number of any class of equity Securities
        (rounded down to the nearest whole number of Securities) equal to the
        product of (A) the total number of such class of equity Securities to be
        acquired by the third party, times (B) a fraction, the numerator of
        which shall be the total number of such class of equity Securities owned
        by such Offeree, and the denominator of



                                       17


        which shall be the total number of such class of equity Securities owned
        by the Selling Stockholders and each participating Offeree. The Selling
        Stockholders shall reduce the number of such class of equity Securities
        they are to sell accordingly to allow for that amount of Securities of
        such class owned by the Accepting Offerees to be sold.

                (iii) The purchase from each Accepting Offeree pursuant to this
        Section 9(a) shall be on the same terms and conditions, including the
        price per unit and the date of sale or other disposition, as are
        received by the Selling Stockholders and stated in the Notice provided
        to the Offerees by the Selling Stockholders.

                (iv) Simultaneously with the consummation of the sale or other
        disposition of the Securities of the Selling Stockholders and the
        Accepting Offerees to the third party pursuant to the third party's
        offer, the Selling Stockholders shall notify the Accepting Offerees of
        the consummation of such sale or other disposition, shall cause the
        third party purchaser to remit to each Accepting Offeree the total sale
        price of the Securities of such Accepting Offeree sold or otherwise
        disposed of pursuant to such sale or other disposition and shall furnish
        such other evidence of the completion and time of completion of such
        sale or other disposition and the terms of such sale or other
        disposition as may be reasonably requested by the Accepting Offeree. The
        Selling Stockholders may deduct from the sales price payable to each
        Accepting Offeree pursuant to this Section 9(a) such Accepting Offeree's
        pro rata portion of the reasonable out-of-pocket fees and expenses
        payable in respect of the completion of such sale, including, without
        limitation, brokers', legal and accounting fees and expenses.

                (v) If within thirty (30) Business Days after the receipt of the
        Notice, any Offeree has not accepted the offer contained in the Notice,
        such Offeree will be deemed to have waived any and all rights with
        respect to the sale or other disposition of the Securities described in
        the Notice and the Selling Stockholders shall have ninety (90) days from
        the expiration of the tag-along option provided by this Section 9 in
        which to sell or otherwise dispose of not more than the amount of
        Securities described in the Notice, to the offeror named in the Notice
        and on terms not more favorable to the Selling Stockholders than were
        set forth in the Notice. If, at the end of such ninety (90) days
        following the receipt of the Notice, the Selling Stockholders have not
        completed the sale or other disposition of the Securities of the Selling
        Stockholders and any Accepting Offeree in accordance with the terms of
        the third party's offer, the Selling Stockholders shall return to each
        Accepting Offeree all certificates representing the Securities which
        such Accepting Offeree delivered for sale or other disposition pursuant
        to this Section 9(a), and all the restrictions on sale or other
        disposition contained in this Agreement with respect to the Securities
        owned by the Selling Stockholders shall again be in effect.

        (b) Drag-Along Obligations. If any Stockholder or the Company shall
receive an offer in writing from a third party which is not an Affiliate of such
Stockholder or the Company (a "Third-Party Offeror") to purchase all of the
Common Stock of the Company, on a fully diluted basis, to effect a business
combination of the Company with such Third Party Offeror or an Affiliate thereof
or to purchase all or substantially all the assets of the Company (any such
proposal, including any subsequent amendments thereto accepted by the Third
Party Offeror and the Major Investors, an "Acquisition Proposal"), such
Stockholder or the Company, as the case may be, shall deliver a notice (an
"Acquisition Notice") to the Major Investors within three (3) Business Days of
receipt thereof. Such Acquisition Notice shall contain a copy of such
Acquisition Proposal, including the name and address of the Third-Party Offeror
and the terms of the Acquisition Proposal. In the event that the Major Investors
send



                                       18


written notice (a "Joint Acceptance Notice") to the Company and the other
Stockholders within thirty (30) Business Days after receipt of the Acquisition
Notice of their acceptance of the terms of the Acquisition Proposal (which
notice shall include a description of any changes to the terms of the
Acquisition Proposal accepted by the Major Investors that differ from the terms
of the Acquisition Proposal distributed as part of the initial Acquisition
Notice), and provided that pursuant to the terms of the Acquisition Proposal as
accepted by the Major Investors, the Securities held by Management Stockholders
and SJF will receive the same consideration as the corresponding Securities if
held by DBCP or ACI, the other Stockholders severally agree that, upon receipt
of such Joint Acceptance Notice, they shall be obligated to sell, at the same
time as the Major Investors sell, all of their Securities to the Third-Party
Offeror upon the terms and conditions set forth in the Acquisition Proposal, or,
as the case may be, to vote all of their Securities entitled to vote in favor of
the merger or sale of all or substantially all of the assets of the Company as
described in the Acquisition Proposal, and otherwise to take all actions
reasonably necessary or appropriate to cause the Company to consummate the
proposed transaction.

        Section 10. Share Certificates.

        (a) Each certificate or other instrument representing the Securities or
Subordinated Debt now or hereafter held by a Stockholder shall be stamped with a
legend in substantially the following form:

        "THE [SECURITIES][DEBT] EVIDENCED BY THIS [CERTIFICATE] [INSTRUMENT]
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
        UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
        COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144
        UNDER THE ACT OR COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER
        OF THESE SECURITIES REASONABLY SATISFACTORY TO COMPANY STATING THAT SUCH
        SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
        REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.

        (b) Each instrument representing the Securities now or hereafter held by
a Stockholder shall be stamped with a legend substantially in the following
form:

        THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS
        AGREEMENT, DATED ______________, A COPY OF WHICH IS ON FILE AT THE
        OFFICE OF COMPANY AND WILL BE FURNISHED TO ANY PROSPECTIVE PURCHASER ON
        REQUEST. SUCH STOCKHOLDERS AGREEMENT PROVIDES, AMONG OTHER THINGS, FOR
        CERTAIN RESTRICTIONS ON THE SALE, TRANSFER, PLEDGE, HYPOTHECATION OR
        OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE AND THAT
        UNDER CERTAIN CIRCUMSTANCES THE HOLDER THEREOF MAY BE REQUIRED TO SELL
        THE SHARES REPRESENTED BY THIS CERTIFICATE. BY ACCEPTANCE OF THIS
        CERTIFICATE, EACH HOLDER HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF
        THE STOCKHOLDERS AGREEMENT"

        Each Stockholder agrees that he or it will deliver all certificates for
or other instruments evidencing Securities or Subordinated Debt owned by him to
the Company for the purpose of affixing such legend to such certificates or
instruments.



                                       19


        Section 11. After-Acquired Shares. All of the provisions of this
Agreement shall apply to all of the Securities now owned or hereafter issued or
transferred to a Stockholder or to his or its Permitted Transferees in
consequence of any additional issuance, purchase, exchange, exercise of
conversion rights or reclassification of Securities, corporate reorganization,
or any other form or recapitalization, or consolidation, or merger, or share
split, or share dividend, or which are acquired by a Stockholder in any other
manner.

        Section 12. Severability. If one or more provisions of this Agreement
are held to be unenforceable to any extent under applicable law, such provision
shall be interpreted as if it were written so as to be enforceable to the
maximum extent permitted by law so as to effectuate the parties' intent to the
maximum extent, and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its terms
to the maximum extent permitted by law.

        Section 13. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Delaware
without regard to the conflict of law principles of such state to the extent
that they would apply the law of a different jurisdiction. Each of the parties
irrevocably elects as the sole judicial forum for, and consents to the
jurisdiction of, the courts of the United States of America located in Delaware
and of the State of Delaware in connection with the adjudication of any matter
arising under or in connection with this Agreement, and waives any objection to
such jurisdiction or venue that it may have. Service of process on the parties
in any action arising out of or relating to this Agreement shall be effective if
mailed to the parties in accordance with Section 15. The parties waive all right
to trial by jury in any action, suit or proceeding to enforce or defend any
rights or remedies under this Agreement.

        Section 14. Assignment. Neither this Agreement nor any right or
obligation arising under this Agreement may be assigned by any party without the
prior written consent of the other parties, other than to a Permitted Transferee
of the assignor and except that each Major Investor may assign its rights in
whole or in part to an Affiliate of such Major Investor without the prior
written consent of any other party, provided such assignor or Major Investor
shall remain liable for all of its respective obligations under this Agreement.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, and no other
Person shall have any right, benefit or obligation under this Agreement.

        Section 15. Notices. All notices and communications to be given or made
by any party under this Agreement shall be in writing and delivered by
hand-delivery, registered first class mail (return receipt requested),
facsimile, or air courier guaranteeing overnight delivery, addressed as follows,
or to such other Person or address as the party named below may designate by
notice:

        (a) If to the Company:

        (b) If to DBCP:

        (c) If to ACI:

        (d) If to the Management Stockholder:

        (e) If to SJF:

Each such notice or other communication shall be deemed to have been duly given
or served on the date on which personally delivered, with receipt acknowledged,
telecopied and confirmed by telecopy answerback, or three Business Days after
the same shall have been deposited with the United States mail.



                                       20


        Section 16. Termination. This Agreement shall terminate and be of no
further force or effect with respect to any Stockholder (i) upon such
Stockholder's Transfer of all of such Stockholder's Securities in accordance
with the terms of this Agreement or (ii) upon the Initial Public Offering Date;
provided, however, that no such termination shall relieve any Stockholder from
any liability arising from any breach of this Agreement by such Stockholder
prior to such termination.

        Section 17. Section and Other Headings. The section and other headings
in this Agreement are for convenience only and shall not affect the meaning or
interpretation of this Agreement.

        Section 18. Remedies. Each party, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. Each party
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate. In any action or proceeding brought to enforce
any provision of this Agreement or where any provision of this Agreement is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.

        Section 19. Entire Agreement. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral, of
the parties with respect to the subject matter hereof.

        Section 20. Amendment; Waiver.

        (a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by each Major Investor, or in the case of a waiver, by the party
against whom the waiver is to be effective; provided that no amendment may
impair the rights of, or impose any additional liability or obligation on, any
Stockholder without such Stockholder's consent.

        (b) No failure or delay by any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver of such right, power or
privilege nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. Except as
otherwise provided in this Agreement, the rights and remedies provided under
this Agreement shall be cumulative and not exclusive of any rights or remedies
provided by law.

        Section 21. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which together shall be deemed to be one and the same document.

        Section 22. Fees and Expenses. Except as otherwise provided in this
Agreement, each party shall bear its own costs and expenses incurred in
connection with this Agreement, including the fees and expenses of their
respective accountants and counsel.

        Section 23. Affiliate Transactions. Except for the transactions
contemplated by (a) the Agreement and Plan of Merger, dated as of January ___,
2002 ("Merger Agreement"), among J Holdings Corp., J Acquisition Corp. and Jenny
Craig, Inc., (b) the Fee Letter, dated the date hereof, among J Holdings Corp.,
J Acquisition Corp., DBCP and ACI, (c) this Agreement and (d) the equity and
debt commitment letters of ACI and DBCP executed in connection with the Merger
Agreement, the Company



                                       21


shall not enter into any transaction with a Major Investor or Affiliate thereof
without the consent of the other Major Investor.


                         [SIGNATURES BEGIN ON NEXT PAGE]





                                       22


        IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.



                            J HOLDINGS CORP.


                            By:
                               ------------------------------------------------
                               Name:
                               Title:


                            DB CAPITAL INVESTORS, L.P.
                            By: DB Capital Partners, L.P., its general partner
                            By: DB Capital Partners, Inc., its general partner


                            By:
                               ------------------------------------------------
                               Name:
                               Title:


                            [ACI CAPITAL CO., INC.], on behalf of ACI Entities

                            By:
                               ------------------------------------------------
                               Name:
                               Title:


                            [MANAGEMENT STOCKHOLDER]


                            By:
                               ------------------------------------------------
                               Name:
                               Title:


                            SJF ENTERPRISES, INC.


                            By:
                               ------------------------------------------------
                               Name:
                               Title:






                            ---------------------------------------------------
                            SID CRAIG
                            [Only with respect to Section 7(e) hereof]



                            ---------------------------------------------------
                            JENNY CRAIG
                            [Only with respect to Section 7(e) hereof]


                            CRAIG ENTERPRISES, INC.


                            By:
                               ------------------------------------------------
                               Name:
                               Title:
                            [Only with respect to Section 7(e) hereof]




                                       2




                                                                       EXHIBIT A



      SECURITIES OWNED BY MAJOR INVESTORS, MANAGEMENT STOCKHOLDERS AND SJF







                                       3

EX-99.(D)(4)

                                                                  EXHIBIT (d)(4)

January 27, 2002

J Holdings Corp.
900 Third Avenue
26th Floor
New York, New York  10022


Re: Equity Capital Commitment

Gentlemen:

                Reference is made to that certain Agreement and Plan of Merger
(the "Agreement"), dated as of the date hereof, by and among J Holdings Corp., a
Delaware corporation ("Parent"), J Acquisition Corp., a Delaware corporation and
wholly owned subsidiary of Parent (the "Purchaser"), and Jenny Craig, Inc., a
Delaware corporation (the "Company"), which agreement contemplates the
acquisition by Parent of 100% of the outstanding shares of the Company (such
acquisition, together with agreements related thereto or contemplated thereby,
representing the "Transaction"). In connection therewith and in order to
finance, in part, the Transaction, ACI Capital Co., Inc. (the "Investor") is
pleased to advise you that it hereby commits to provide Parent with $6 million
of equity capital (the "Investment"), to be allocated between preferred stock
(the "Senior Preferred") and common stock of Parent on a nine-to-one basis. The
Investor's commitment to provide the Investment is subject in all respects to
satisfaction of the terms and conditions contained in this commitment letter and
in the Outline of Terms and Conditions attached hereto as Exhibit A (the "Term
Sheet").

                The Investor's commitment to provide the Investment is subject
to (i) the negotiation, execution and delivery of definitive documentation
thereof, including, without limitation, a Certificate of Designations of the
Senior Preferred, in form and substance satisfactory to the Investor, Parent and
their respective counsel, (ii) the satisfaction of the conditions precedent to
the closing of the Transaction set forth in Sections 6.1 and 6.3 (other than
Section 6.3(c) of the Agreement), (iii) all conditions precedent to the
obligation of the Senior Lender (as defined in the Agreement) to consummate the
Senior Financing (as defined in the Agreement) having been met and the Senior
Lender shall intend to and shall be willing and prepared to consummate the
Senior Financing, in each case other than with respect to any conditions
relating to the equity capital investment contemplated by this commitment
letter, the equity commitment letter of each of DB Capital Investors, L.P.
("DBCI") and SJF Enterprises, Inc., of even date herewith, and the subordinated
debt facility commitment letter of each of ACI and DBCI, each of even date
herewith, and (iv) satisfaction of the conditions set forth in the Term Sheet
attached hereto.





                The offer made by the Investor in this commitment letter is
contingent upon execution of the Agreement, and should the Agreement be
executed, the commitment by the Investor to provide the Investment shall expire
immediately upon the earlier of (i) the termination of the Agreement and (ii)
the Expiration Date (as defined in the Agreement), as may be extended in
accordance with the terms of the Agreement.

                Should the terms and conditions of the offer contained herein
meet with your approval, please indicate your acceptance by signing and
returning a copy of this commitment letter to the Investor.

                This commitment letter, including the attached Term Sheet (i)
supersedes all prior discussions, agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, of the parties with
respect to the subject matter hereof and thereof, (ii) shall be governed by the
law of the State of New York, (iii) shall be binding upon the parties and their
respective successors and assigns, (iv) may not be relied upon or enforced by
any other person or entity other than the parties hereto and Purchaser, and (v)
may be signed in multiple counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same instrument.
If this commitment letter becomes the subject of a dispute, each of the parties
hereto hereby waives trial by jury. This commitment letter may be amended,
modified or waived only in a writing signed by the parties hereto.



                                       2


Please confirm that the foregoing is in accordance with your understanding by
signing and returning to the Investor the enclosed copy of this Commitment
Letter on or before the close of business on the date hereof, whereupon this
Commitment Letter shall become a binding agreement between us.

                                            Very truly yours,
                                            ACI CAPITAL CO., INC.



                                            By: /s/ KEVIN S. PENN
                                                --------------------------------
                                                Name: Kevin S. Penn
                                                Title: Managing Director

Agreed and accepted on this
27th day of January, 2002:

J HOLDINGS CORP.



By:  /s/ KEVIN S. PENN
     ----------------------------
     Name: Kevin S. Penn
     Title: President



                                       3


                                    EXHIBIT A

          OUTLINE OF TERMS AND CONDITIONS FOR PROPOSED EQUITY FINANCING

This Outline of Terms and Conditions is part of the Commitment Letter, dated
January __, 2002 (the "Commitment Letter"), addressed to J Holdings Corp. by ACI
Capital Co., Inc. (the "Investor") and is subject to the terms and conditions of
the Commitment Letter. Capitalized terms used herein shall have the meanings set
forth in the Commitment Letter unless otherwise defined herein.

ISSUER:               J Holdings Corp.

TOTAL ISSUANCE
OF PREFERRED:         $18 million

TOTAL ISSUANCE
OF COMMON:            $2 million

COMMITMENT
BY INVESTOR:          $5.4 million in senior preferred stock (the "Preferred"),
                      having an aggregate liquidation preference of $5.4
                      million, and $600,000 in shares of Common Stock (the
                      "Common"), at a price of $0.10 per share.

MANDATORY
REDEMPTION
OF PREFERRED:         Five years.

PREFERRED
DIVIDENDS:            Cumulative undeclared dividends (declarable only in cash),
                      payable at the rate of 15% per annum, or such lower rate
                      as would ensure for any time in which ACI remains a holder
                      of the Preferred that the combined interest + dividend
                      rate payable on the Issuer's capital (which shall be an
                      amount equal to the sum of the Purchaser Debt Financing
                      (as defined in the Agreement), Preferred and Common (which
                      includes paid in capital and additional paid in capital))
                      does not exceed 15% for any annual period (the applicable
                      rate at any time being the "Base Rate"); provided,
                      however, that the foregoing limitation shall only apply to
                      the extent that ACI remains subject to applicable
                      limitations prescribed by the Small Business
                      Administration ("SBA"). The rate paid on the Issuer's
                      capital shall be calculated in a manner consistent with
                      applicable regulations of the SBA.

USE OF PROCEEDS:      To finance the Transaction and the general working capital
                      needs of the Issuer.



                                       4


OPTIONAL
REDEMPTION:           At the option of the Issuer, with no penalty.

TRANSFERABILITY:      Subject to restrictions contained in the Stockholders'
                      Agreement.

COVENANTS:            Standard for this type of security, including, but not
                      limited to, reporting requirements, change of control
                      restrictions, approval of mergers, acquisitions, equity
                      issuances, payment of dividends, debt incurrence,
                      redemption of equity or debt, amendments to the preferred
                      stock, amendments of equity rights, amendments to the
                      Issuer's charter and bylaws, changes in the Issuer's
                      management, material changes in business strategy,
                      increase in size of Board, etc. Such covenants will not
                      restrict the Issuer's ability to incur debt for the sole
                      purpose of prepaying Preferred.

CONDITIONS:           Customary conditions precedent, including, without
                      limitation:
                      1) Negotiation, execution, delivery of definitive
                      documentation.
                      2) Closing of the Transaction contemplated by the
                      Agreement.



                                       5

EX-99.(D)(5)

                                                                  EXHIBIT (d)(5)

                           DB CAPITAL INVESTORS, L.P.
                              31 WEST 52ND STREET
                                   26TH FLOOR
                            NEW YORK, NEW YORK 10019

                            EQUITY COMMITMENT LETTER

January 27, 2002


J Holdings Corp.
J Acquisition Corp.
ACI Capital Co., Inc.

c/o ACI Capital Co., Inc.
900 Third Avenue
26th Floor
New York, New York  10022

Ladies and Gentlemen:

We are pleased to confirm the arrangements under which DB Capital Investors,
L.P. ("DBCI") is committed to provide equity capital in connection with the
transactions described herein in the amount, on the terms and subject to the
conditions set forth in this letter (together, the "COMMITMENT LETTER") and the
Fee Letter (as defined below).

We understand that J Holdings Corp., a Delaware company ("PARENT", which is a
newly formed, wholly owned subsidiary of ACI Capital Co., Inc. ("ACI")), and J
Acquisition Corp., a Delaware company and a wholly owned subsidiary of Parent
("PURCHASER"), will sign, concurrently herewith, a merger agreement, dated the
date hereof, and in the form attached hereto as EXHIBIT A (along with any other
agreements or documents entered into in connection therewith or delivered
pursuant thereto, the "ACQUISITION AGREEMENT") to acquire (the "ACQUISITION")
all of the issued and outstanding common stock of Jenny Craig, Inc., a Delaware
corporation (the "COMPANY"). In addition, in connection with the Acquisition,
Parent, Purchaser, Sidney Craig, Jenny Craig, SJF Enterprises, Inc., DA
Holdings, Inc., Craig Enterprises, Inc. and the Company will enter into a
Stockholders' Voting Agreement, dated the date hereof and substantially in the
form attached hereto as EXHIBIT B (along with any other agreements or documents
entered into in connection therewith or delivered pursuant thereto, the "VOTING
AGREEMENT"). We have confirmed that the total purchase price and financing
requirements (including equity financing




January 27, 2002
Page 2


being provided by ACI, Company stockholders and management) for the Acquisition
will be financed as set forth on EXHIBIT C hereto (the "FINANCINGS").

1. Commitment. DBCI is pleased to confirm its commitment (the "COMMITMENT") to
invest $10 million in the equity capital of Parent, of which $9 million shall be
invested in the preferred stock of Parent and $1 million shall be invested in
the common stock of Parent, on the terms and subject to the conditions contained
in this Commitment Letter and in the outline of terms and conditions attached
hereto as Exhibit D (the "TERM SHEET"). DBCI's Commitment is subject, in its
discretion, to the conditions set forth in this Commitment Letter and in the
Term Sheet and to the negotiation, execution and delivery of definitive
documentation evidencing the Financings (along with any other agreements or
documents entered into in connection therewith or delivered pursuant thereto,
the "FINANCING Agreements"), satisfactory to DBCI and its counsel and the
satisfaction of the terms, conditions and covenants contained therein.

2. Fees and Expenses. The fees for these services, among others, are to be set
forth in a separate letter (the "FEE LETTER"), to be entered into prior to the
closing of the Acquisition by and among ACI, DBCI, Parent and Purchaser.

3. Conditions Precedent. DBCI's obligations hereunder are conditioned on the
following:

a.      The transactions contemplated by the Acquisition Agreement and the
        Voting Agreement shall have been consummated concurrently with, or shall
        be ready for consummation immediately after, DBCI's equity financing
        hereunder on the terms and conditions set forth in such agreements
        without modification, amendment or waiver, except as previously
        consented to in writing by DBCI. All conditions precedent to the
        obligations of Parent and Purchaser under such agreements (other than
        Section 6.3(c) of the Acquisition Agreement) shall have been satisfied
        without modification, amendment or waiver, except as previously
        consented to in writing by DBCI.

b.      The transactions contemplated by the Financing Agreements shall have
        been consummated prior to or concurrently with DBCI's equity financing
        hereunder in accordance with their terms, without modification,
        amendment or waiver, except as previously consented to in writing by
        DBCI. All conditions precedent to the obligations of the lenders or
        investors under the Financing Agreements shall have been satisfied,
        other than any conditions relating to the equity capital contemplated by
        this letter, the equity capital commitment letters from SJF Enterprises,
        Inc. and ACI and the junior subordinated debt commitment letter from ACI
        and DBCI, each of even date herewith.

c.      ACI, Parent and Purchaser shall have complied with their obligations
        hereunder.

4. Covenants. DBCI, ACI, Parent and Purchaser agree as follows:

a.      DBCI shall, and shall be permitted to, consummate the investment
        contemplated by the Commitment in accordance with the terms hereof.



                                       2


January 27, 2002
Page 3


b.      Parent and Purchaser shall, and ACI shall cause them to, consummate the
        transactions contemplated by the Acquisition Agreement and the Voting
        Agreement and satisfy their obligations thereunder, without amendment,
        modification or waiver except as previously consented to in writing by
        DBCI.

c.      ACI, Parent and Purchaser shall, and ACI shall cause Parent and
        Purchaser to, consummate the transactions contemplated by the Financing
        Agreements without amendment, modification or waiver, except as
        previously consented to in writing by DBCI. Without limiting the
        generality of the foregoing, there shall be no equity, debt or other
        financing of any type other than as set forth on EXHIBIT C hereto,
        without the prior written consent of DBCI.

d.      Parent and Purchaser shall, and ACI shall cause them to, to the extent
        commercially reasonable, enforce their respective rights and the
        obligations of the Company and other parties to the Acquisition
        Agreement or Voting Agreement (such other parties to the Voting
        Agreement, the "JC PARTIES"), including any rights to compensation or
        payments of any kind from any of the Company or the JC Parties whether
        or not the Acquisition is consummated, whether in respect of damages for
        breach, payments of termination fees, payments of expenses, gains owing
        under the Voting Agreement or otherwise.

e.      ACI, Parent and Purchaser shall promptly keep DBCI informed of, consult
        and confer with DBCI on all matters relating to the Acquisition,
        Acquisition Agreement, Voting Agreement, Financing and Financing
        Agreements and any discussions, communications or negotiations by and
        between ACI, Parent and Purchaser on the one hand and any of the Company
        or the JC Parties on the other hand in respect thereof. Such obligation
        shall include provision of copies of material correspondence, documents
        and other information and adequate notice and opportunity to attend
        conferences and meetings in respect thereof. In addition ACI, Parent and
        Purchaser shall apprise DBCI of, and consult with DBCI concerning all
        actions they may take or consider pursuant to or as contemplated by the
        Acquisition Agreement, Voting Agreement and Financing Agreements
        including exercise of rights thereunder regarding termination,
        information, further assurances, covenants, conditions, rights upon
        breach, enforcement of nonsolicitation and other rights.

f.      Without limiting DBCI's other rights in this Commitment Letter, in the
        event that an alternate bidder for the Company emerges or for some other
        reason an altered or improved bid for the Company is necessary or
        contemplated, DBCI will be given the opportunity, but will not be
        obligated, to participate in any transactions contemplated in order to
        improve the terms of the Acquisition Agreement or make an alternative
        offer for the Company on the same percentage basis relative to ACI as
        the percentage resulting from dividing DBCI's original commitment to
        purchase debt and equity capital in Parent hereunder by ACI's original
        commitment to purchase debt and equity capital in Parent.



                                       3


January 27, 2002
Page 4


5. Acknowledgment. Each of ACI and DBCI has, independently and without reliance
on the other party, based on such information and due diligence it has conducted
as it has deemed appropriate, made its own analysis and decision to enter into
its commitment to invest in Parent and to enter into the other documents and
transactions contemplated by the Acquisition and the Acquisition Agreement. Each
of ACI and DBCI will independently and without reliance upon the other party,
continue to make its own decisions and to conduct its own due diligence with
respect to the operation of the Company and the matters, transactions and any
related agreements contemplated by the Acquisition and the Acquisition
Agreement. ACI represents and warrants that it has made available to DBCI all
the due diligence materials which ACI has received from the Company.

6. Confidentiality. Please note that this Commitment Letter, the Fee Letter, the
transactions contemplated hereby and any written or oral information provided by
DBCI in connection with this arrangement is exclusively for the information of
ACI, Parent, Purchaser and the Company and may not be disclosed to any other
party or circulated or referred to publicly without DBCI's prior written
consent, except that you may disclose such information to your and the Company's
officers, directors, agents and advisors who are directly involved in the
consideration of the transactions contemplated hereby to the extent such persons
are obligated to hold such advice in confidence or if otherwise required by law
or in the event such information or documents are made public through no fault
of ACI, Parent or Purchaser.

7. Assignment. None of DBCI, ACI, Parent or Purchaser may assign any of their
respective rights or be relieved of any of their respective obligations
hereunder without the prior written consent of the other parties hereto.

8. Termination. The Commitment will terminate upon the first to occur of (i) the
closing of the Acquisition, (ii) the abandonment or termination of the
Acquisition Agreement, (iii) a material breach by ACI, Parent or Purchaser under
this Commitment Letter or the Fee Letter, provided, however, that DBCI shall
notify ACI in writing of such breach, whereupon ACI shall have a commercially
reasonable period of time (not to exceed twenty (20) calendar days) after ACI's
receipt of such notice to cure such breach or (iv) the Expiration Date (as
defined in the Acquisition Agreement), as may be extended in accordance with the
terms of the Acquisition Agreement.



                                       4


January 27, 2002
Page 5


Please confirm that the foregoing is in accordance with your understanding by
signing and returning to DBCI the enclosed copy of this Commitment Letter on or
before the close of business on the date hereof, whereupon this Commitment
Letter shall become a binding agreement among us.

Very truly yours,

DB CAPITAL INVESTORS, L.P.

By: /s/ ROBERT SHARP
    ------------------------------
        Authorized Signatory

                                            Confirmed as of the date above:



                                            ACI CAPITAL CO., INC.

                                            By:/s/ KEVIN S. PENN
                                               ----------------------------
                                               Name: Kevin S. Penn
                                               Title: Managing Director

                                            Confirmed as of the date above:



                                            J HOLDINGS CORP.

                                            By:/s/ KEVIN S. PENN
                                               ----------------------------
                                               Name: Kevin S. Penn
                                               Title: President



                                       5


January 27, 2002
Page 6


                                            Confirmed as of the date above:



                                            J ACQUISITION CORP.

                                            By: /s/ KEVIN S. PENN
                                                -----------------
                                            Name: Kevin S. Penn
                                            Title: President



                                       6


January 27, 2002
Page 10


                                    EXHIBIT D

          OUTLINE OF TERMS AND CONDITIONS FOR PROPOSED EQUITY FINANCING

This Outline of Terms and Conditions is part of the Equity Commitment Letter,
dated January 27, 2002 (the "Commitment Letter"), addressed to J Holdings Corp.,
J Acquisition Corp. and ACI Capital Co., Inc. ("ACI") by DB Capital Investors,
L.P. (the "Investor"), and is subject to the terms and conditions of the
Commitment Letter. Capitalized terms used herein shall have the meanings set
forth in the Commitment Letter unless otherwise defined herein.

ISSUER:               J Holdings Corp.

TOTAL ISSUANCE
OF PREFERRED:         $18 million

TOTAL ISSUANCE
OF COMMON:            $2 million

COMMITMENT
BY INVESTOR:          $9 million in senior preferred stock (the "Preferred"),
                      having an aggregate liquidation preference of $9 million,
                      and $1 million in shares of Common Stock (the "Common"),
                      at a price of $0.10 per share.

MANDATORY
REDEMPTION
OF PREFERRED:         Five years.


PREFERRED             Cumulative undeclared dividends (declarable only in cash),
DIVIDENDS:            payable at the rate of 15% per annum, or such lower rate
                      as would ensure for any time in which ACI remains a holder
                      of the Preferred that the combined interest + dividend
                      rate payable on the Issuer's capital (which shall be an
                      amount equal to the sum of the Purchaser Debt Financing
                      (as defined in the Acquisition Agreement), Preferred and
                      Common (which includes paid in capital and additional paid
                      in capital)) does not exceed 15% for any annual period
                      (the applicable rate at any time being the "Base Rate");
                      provided, however, that the foregoing limitation shall
                      only apply to the extent that ACI remains subject to
                      applicable limitations prescribed by the Small Business
                      Administration ("SBA"). The rate paid on the Issuer's
                      capital shall be calculated in a manner consistent with
                      applicable regulations of the SBA.

USE OF PROCEEDS:      To finance the Acquisition and the general working capital
                      needs of the Issuer.

OPTIONAL              At the option of the Issuer, with no penalty.
REDEMPTION:

TRANSFERABILITY:      Subject to restrictions contained in the Stockholders'
                      Agreement.



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COVENANTS:            Standard for this type of security, including, but not
                      limited to, reporting requirements, change of control
                      restrictions, approval of mergers, acquisitions, equity
                      issuances, payment of dividends, debt incurrence,
                      redemption of equity or debt, amendments to the preferred
                      stock, amendments of equity rights, amendments to the
                      Issuer's charter and bylaws, changes in the Issuer's
                      management, material changes in business strategy,
                      increase in size of Board, etc. Such covenants will not
                      restrict the Issuer's ability to incur debt for the sole
                      purpose of prepaying Preferred.

CONDITIONS:           Customary conditions precedent, including, without
                      limitation:
                      1) Negotiation, execution, delivery of definitive
                      documentation.
                      2) Closing of the Acquisition contemplated by the
                      Acquisition Agreement.



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